EDMONTON, April 29 /CNW/ - Seair Inc. (SDS:TSX Venture Exchange) today
released its unaudited financial statements for the quarter ending February
Revenue for the quarter ending February 28, 2009 was $1,448,349, or 34%
lower than the corresponding quarter in fiscal 2008 and 99% higher than the
first quarter of fiscal 2009. Rental revenue from Septic's fleet of portable
wastewater treatment provided approximately 98% of total revenue. The 34%
revenue decrease was a result of reduced fleet deployment. Although September
2008 started relatively strong (compared to prior Septembers) the dramatic
economic downturn in autumn 2008 led to the deferral and/or reduction in
oilfield activity. Reduced activity led to fewer active camps which, in turn,
reduced the overall market size in the quarter for Septic's portable
wastewater treatment units. The Company's second quarter is traditionally the
peak for Septic's portable wastewater treatment business, which currently has
a rental fleet of approximately 100 units. For fiscal 2009 the second quarter
fleet deployment did not exceed 50% at any time and, although realized day
rates were slightly better than in the prior year, fleet inactivity led to a
significant revenue reduction. The combination of low oil and gas prices,
depressed capital and credit markets and general economic uncertainty
continues to depress oil patch activity.
Oil patch activity in the quarter ending and six months ending February
28, 2009 was even lower than the same periods the year before, when
uncertainty over royalty revisions led to what was then considered low
Septic has historically limited its portable wastewater treatment
business to the rental model. However, in order to bolster short-term cash
flows, Septic management is now prepared to sell portable wastewater treatment
units, particularly to customers with long-term projects or operating outside
of Septic's western Canadian service area. Seair closed its first portable
wastewater treatment unit sale in April 2009.
Construction has begun on a turn-key end-to-end Seair wastewater
treatment plant at the Village at Wolf Creek. This project is expected to be
completed by summer 2009 and to-date approximately 10% of the project work has
been completed and billed.
Gross profit for the quarter ending February 28, 2009 was $953,053 (66%
of revenue) compared to $1,594,714 (73% of revenue) in the quarter ending
February 29, 2008 and $491,700 for the quarter ending November 30, 2008 (67%
of revenue). A certain portion of direct costs are essentially fixed in the
short-term, so the decrease in year-over-year gross profit percentage is due
to these fixed costs being spread over a slightly smaller revenue base.
In general, operating expenses have decreased on a year-over-year basis
as a result of across the board cost reductions. Total operating expenses
decreased by $1,480,496 to $1,176,838 from fiscal the second quarter in fiscal
2008 to the same quarter in fiscal 2009 (decrease of 56%). The largest
contributors to this decrease were:
Stock-based compensation decrease $ 1,296,000
Salaries and benefits decrease 67,793
Compliance and investor relations decrease 44,672
Contract services decrease 33,130
Professional fees decrease 29,677
Amortization increase (66,573)
Other net decreases 75,797
Total year-over-year decrease $ 1,480,496
No incentive stock options have been granted in fiscal 2009 and,
accordingly, no stock-based compensation has been recorded. Management
continues to believe that incentive stock options have considerable potential
to motivate employees, but the non-cash expense that must be recorded upon
granting of options continues to make such an incentive plan cost unviable as
a result of the detrimental impact on the Company's income statement.
Salaries and wages decreased compared to the prior year and the prior
quarter as a result of headcount reductions. The Company reduced the number of
head office and field personnel in response to the general economic downturn.
Seasonal staff were let go earlier than has typically been the case as a
result of the significant portion of the Septic fleet remaining idle during
the winter and spring months.
In the quarter ending November 30, 2008 compliance and investor relations
included some environmental assessment and consulting costs incurred in
connection with projects being done on behalf of customers. These costs were
re-billed to customers in the quarter ending February 28, 2009, resulting in
unusually low net compliance and investor relations costs in the quarter.
Professional fees and contract services are down as a result of scaling
back and termination of projects that are do not have strong prospects for
near-term revenues. Amortization expense increased as a result of the fleet
size increase compared to fiscal 2008. Repairs and maintenance increased
compared to the quarter ending November 30, 2008 as a result of repairs to
Septic's service trucks.
Research and development work continues on municipal wastewater treatment
and oilfield water treatment applications.
Net loss for the quarter ending February 28, 2009 was $222,059 compared
to a loss of $1,077,352 in the quarter ending February 29, 2008 and $986,892
for the quarter ending November 30, 2008. Earnings before interest, taxes,
depreciation and amortization ("EBITDA") for the quarter ending February 28,
2009 were $218,876.
The complete financial statements are available at www.sedar.com.
Seair is a leading developer of patent protected diffusion and
sterilization technologies which allow for the efficient diffusion of gases
into a liquid, thereby facilitating numerous applications in a wide variety of
industries including wastewater treatment, pulp and paper, food processing,
aquaculture, agriculture/horticulture, sterilization, food safety, golf course
irrigation and pond treatment, animal enhancement and oil and gas. Seair's
primary focus is developing and selling equipment that diffuses gases, such as
oxygen, ozone or carbon dioxide, into a liquid, resulting in a supersaturate
solution. The major difference between Seair and other diffusion technologies
is Seair's ability to achieve extremely small bubble size, which in turn
allows for the mass transfer of gas to fluid. The result is a stable condition
where gases remain in solution for extended periods of time, leading to
increased productivity and lower operating costs. Seair provides
diffusion-enhanced portable wastewater treatment plants through its
subsidiary, Seair Septic.
Parties interested in obtaining further information or receiving news
releases and corporate documents from Seair may email such request to
email@example.com or visit the Seair website at www.seair.ca.
This news release may contain certain forward-looking statements that
reflect the current views and/or expectations of Seair Inc. with respect to
its performance, business or future events. Such statements are subject to a
number of risks, uncertainties and assumptions. Actual results and events may
THE TSX VENTURE EXCHANGE HAS NOT REVIEWED AND DOES NOT ACCEPT
RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS RELEASE.
For further information:
For further information: Harold Kinasewich, Seair Inc., T: (780)
477-7188, F: (780) 477-2523, E: firstname.lastname@example.org