Pure Technologies Ltd. announces results for quarter and year ended December 31, 2006



    CALGARY, April 4 /CNW/ - Pure Technologies Ltd., TSX-V: PUR, announces
revenues of $9,356,000 for the year ended December 31, 2006. Sales revenue for
the year increased from $5,510,000 in the previous year to $8,033,000 and
monitoring and technical support revenue decreased from $1,406,000 to
$1,323,000. Net loss for the year was $3,949,000 compared to $3,341,000 in
2005.
    Net loss for the fourth quarter of 2006 was $843,000 compared with a loss
of $1,674,000 in 2005. Total revenue for the quarter was $3,135,000 compared
with $1,392,000 in 2005. Fourth quarter results were lower than anticipated
due to a write-down of equipment and inventory as well as an increased loss on
foreign exchange.
    2006 was marked by meaningful growth in revenue from our core business
activities and continuing investment in product and market development.
Significant achievements during the year include:

    
    -   An increase of 35% in total revenue over 2005. This was due to an
        increase in general business activity rather than a single large
        project, as has been the case in the past where such projects have
        generated one-time revenue spikes.

    -   Increasing commercial deployment of our SoundPrint(R) AFO optical
        fibre monitoring system. Systems have now been deployed in Tucson,
        AZ, San Diego County, CA, Providence, RI, Baltimore, MD, Phoenix, AZ,
        and Calgary, Alberta. A successful AFO pilot project was completed in
        Libya for the Great Man-Made River Authority. The Authority is now
        considering wide-scale deployment of the technology in its conveyance
        system. We expect the expanding deployment of AFO systems to generate
        increasing recurring revenues going forward.

    -   The installation of SoundPrint(R) systems on two major suspension
        bridges, the Forth Road Bridge in Scotland and the William Preston
        Lane Bridge over Chesapeake Bay in Maryland. These projects emphasize
        the important role that SoundPrint(R) plays in the long-term
        management of strategic infrastructure.

    -   The award of a large pipeline inspection contract for the City of
        Montreal. Up to now, most of our water-related revenues have come
        from the U.S. and Libya. However, Canadian water utilities are
        beginning to appreciate the need to implement comprehensive
        assessment and monitoring programs for their pipeline infrastructure
        and we expect more commercial activity in Canada in the future.

    -   Growing commercial momentum in PureTech Systems Inc., our video
        analytics subsidiary. PureTech has now established a technology
        leadership position with its PureActiv(R) product in the field of
        GIS-based surveillance, a rapidly-growing sector of the security
        business. This has led to PureTech's recent selection as the video
        analytics solution on two strategically important projects for the
        Port of Seattle and Minneapolis-St. Paul Metropolitan Airports
        Commission.
    


    Financial Overview

    Sales revenue for the year increased 35% during the year. This increase
shows the diversification Pure has obtained in its product line. The growth
came from all product lines with the largest increase resulting from sales of
the SoundPrint AFO(R) fibre-optic monitoring systems. Two significant bridge
projects were completed during the year. PureService Inc. had a full year of
results which contributed 32% of the increase. PureTech Systems contributed a
further 24% of the increase. Monitoring and technical support revenue
decreased 6% for the year. This was largely attributable to lower technical
support revenue for the ongoing Libyan contract. This decrease was partially
offset by increased monitoring revenues from other projects.
    Gross margin percentage in 2006 was 58% compared to 59% in 2005 and 64%
in 2004. While the gross margin was consistent with the prior year, there has
been a reduction since 2004. As monitoring and technical support revenues
decrease, the gross margin percentage will fall as these sales generally
produce substantial margins. As well, the deployment of new technologies over
the past two years resulted in higher than anticipated costs. With a focus on
the experience gained over the last 2 years, Pure expects to return to margins
at or above 60%.
    Marketing and promotion expenses have increased 19% in 2006 with an
increase of 17% in the prior year. Significant marketing resources were added
in 2005 and the increases are attributable to these additions. These resources
were added in the US for two subsidiaries, Pure Technologies US Inc. and
PureTech Systems Inc. Late in 2006, the Company opened an office in Benghazi,
Libya to further pursue opportunities in the Middle East and Africa.
    General and administration expenses for the year were $4,619,000 as
compared with $3,551,000 in the prior year, an increase of 30%. This increase
is attributable to several factors including a full year of expenses for
PureService, increased legal expense for a patent infringement claim, and
general increases due to expanding markets.
    Research and development expenditures for the year have increased a
further 27% over the 2005 increase of 55%. Research and development is a key
focus of the Company and has resulted in the diversification of revenue
streams. Further resources were added in 2006 to continue the development of
the Soundprint Smartball(TM) leak detection product. Significant technical
challenges were overcome in 2006 and commercialization is planned for 2007.
    Depreciation and amortization in 2006 increased from the prior year by
$336,000 to $1,046,000. Increases in the capital assets since 2004 have
resulted in the increase in depreciation as the costs are amortized over the
useful lives. During 2006, Pure continued to capitalize software development
costs for both SoundPrint AFO and PureActiv. These capitalized costs were
$740,000 compared to $467,000 in 2005.
    A large portion of the Company's activities are generated through its
wholly-owned U.S. subsidiaries. Upon consolidation, the Company is subject to
foreign exchange gains or losses due to the use of the temporal method to
translate the accounts of the subsidiaries. These gains or losses are
recognized in current year earnings or losses. For 2006, this accounted for
40% of the loss. In 2005, this accounting treatment resulted in a gain of
$143,000.
    In addition, a large portion of international contracts are or were
denominated in U.S. dollars or Euros. Accordingly, the Company is susceptible
to foreign exchange fluctuations. The Company does not currently engage in
currency hedging activities.
    Pure's working capital is strong and at December 31, 2006 was $8,161,000
including $4,297,000 in cash and cash equivalents. The Company currently has
no debt.
    The Company currently has a confirmed order backlog in excess of
$4 million plus recurring revenues under contract totaling $2.5 million. In
addition, Pure has received verbal confirmation of awards in excess of
$12 million plus over $3 million in recurring revenues, subject to the
completion of the normal contract review process and final documentation.
    The Company has also filed its Annual Information Report and Annual
Report on SEDAR.



    
    2006 Financial Highlights

                              Three months ended:      Twelve months ended:
    Consolidated Statement   Dec. 31,     Dec. 31,     Dec. 31,     Dec. 31,
     of Operations            2006         2005         2006         2005
    -------------------------------------------------------------------------

    Sales revenue         $ 2,822,000  $ 1,124,000  $ 8,033,000  $ 5,510,000
    Monitoring & technical
     support                  313,000      268,000    1,323,000    1,406,000
                          ------------ ------------ ------------ ------------
    Total revenue           3,135,000    1,392,000    9,356,000    6,916,000

    Cost of sales           1,168,000      759,000    3,937,000    2,819,000

    Marketing                 558,000      556,000    2,419,000    2,033,000
    General and
     administrative         1,351,000      910,000    4,619,000    3,551,000
    Research and
     development              260,000      192,000      909,000      719,000
    Depreciation and
     amortization             276,000      211,000    1,046,000      710,000
    Foreign exchange
     loss (gain)              197,000      (46,000)     298,000       60,000
    Interest expense
     (income)                 (46,000)     (42,000)    (137,000)    (161,000)
                          ------------ ------------ ------------ ------------

    Net income before
     following               (629,000)  (1,148,000)  (3,735,000)  (2,815,000)

    Write-down of property
     and equipment            214,000      408,000      214,000      408,000
    Write-down of
     intangible assets              -      118,000            -      118,000
                          ------------ ------------ ------------ ------------

    Net income               (843,000)  (1,674,000)  (3,949,000)  (3,341,000)

    Income per share -
     basic                $     (0.04) $     (0.08) $     (0.18) $     (0.17)
    Income per share -
     diluted              $     (0.04) $     (0.08) $     (0.18) $     (0.17)

    Weighted avg. shares -
     basic and diluted     23,544,457   20,174,432   21,502,065   20,092,143




                                                   As at           As at
    Consolidated Balance Sheet                 Dec. 31, 2006   Dec. 31, 2005
    -------------------------------------------------------------------------

    Assets
    Current assets
      Cash                                      $  4,297,000    $  5,552,000
      Accounts receivable                          4,020,000       3,237,000
      Inventory                                      527,000         601,000
      Prepaid expenses                               311,000         288,000
      Net investment in lease                         94,000               -
                                                -------------   -------------
                                                   9,249,000       9,678,000

    Property and equipment                         3,399,000       2,709,000
    Intangible Assets                                500,000         541,000
    Net investment in lease                          281,000               -
    Other assets                                      74,000          71,000
                                                -------------   -------------
                                                $ 13,503,000    $ 12,999,000

    Liabilities and Equity
    Current liabilities
      Accounts payable                          $    961,000    $    840,000
      Deposits on sales contracts                    127,000         128,000
                                                -------------   -------------
                                                   1,088,000         968,000
    Shareholders' equity
      Share capital                               27,702,000      23,558,000
      Contributed surplus                            507,000         286,000
      Warrants                                        49,000          81,000
      Deficit                                    (15,843,000)    (11,894,000)
                                                -------------   -------------
                                                $ 13,503,000    $ 12,999,000
    


    About Pure Technologies Ltd.

    Pure Technologies is an international technology company which has
developed patented and proprietary technologies for management and
surveillance of critical infrastructure around the world. Applications for
these technologies include water and wastewater pipelines, bridges, oil and
gas pipelines, transportation infrastructure, high-rise buildings, parking and
other critical structures. Pure provides its technologies from its
headquarters in Calgary, Canada and subsidiaries in Maryland, Arizona, and New
Jersey.

    Forward-Looking Statements

    This release contains forward-looking statements. Forward-looking
statements, without limitation, may contain the words "believes", "expects",
"anticipates", "estimates", "intends", "plans", or similar expressions.
Forward-looking statements are not guarantees of future performance. They
involve risks, uncertainties and assumptions and the Company's actual results
could differ materially from those anticipated. Forward-looking statements are
based on the opinions and estimates of Management at the date the statements
are made, and are subject to a variety of risks and uncertainties and other
factors that could cause actual events or results to differ materially from
those projected in the forward-looking statements. In the context of any
forward-looking information please refer to risk factors detailed in, as well
as other information contained in, the Company's filings with Securities
Regulators (www.sedar.com).

    (R) Registered Trademarks, property of Pure Technologies Ltd.
    (TM) Trademark, property of Pure Technologies Ltd.

    "The TSX Venture Exchange has not reviewed and does not accept
    responsibility for the adequacy or accuracy of this release"

    %SEDAR: 00006060E




For further information:

For further information: about Pure Technologies Ltd. (TSX-V: PUR),
visit our website at www.puretechnologiesltd.com; Or contact James E. Paulson,
Chairman or Karen Keebler, Chief Financial Officer at (403) 266-6794 or e-mail
to info@puretechnologiesltd.com


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