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EDMONTON, AB, April 29 /CNW/ - Seair Inc. ("Seair" or the "Company")(SDS:TSX Venture Exchange) today released its unaudited financial statements for the quarter ending February 28, 2010. Full financial statements are available at www.sedar.com.
Revenue for the quarter ending February 28, 2010 was $623,499, or 57% lower than the second quarter of fiscal 2009. Approximately 20% of total second quarter revenue came from Septic's rental of wastewater treatment units. At present, Septic's fleet deployment is linked directly to oil and gas camp usage, with such usage normally peaking during winter months. However, thus far in fiscal 2010 camp activity levels have been extremely low and, therefore, demand for on-site wastewater treatment has been very weak.
Apart from Septic's fleet rentals, the other main revenue sources were from groundwater treatment systems on rental to a major oil sands company (for mine dewatering) and Wolf Creek Golf Resort. Seair's oil sands dewatering solution was presented by a customer's representative at the April 2010 CONRAD Symposium. Seair is currently approaching other oil sands companies about this production-ready solution.
Western Canadian drilling activity, and development drilling in particular, remains weak. Septic's customers have advised that major projects continue to be deferred until industry conditions become more favourable. As a result the majority of Septic's fleet remained idle through the second quarter and will not realistically be deployed until fall, at the earliest. In light of these weak market conditions, Seair has developed a plan whereby some of the existing Septic units can be modified for use in water sweetening (i.e., H(2)S reduction) applications. Management intends to closely monitor the status of the remote wastewater treatment sector and will assess the business case for converting units to water sweetening in late summer.
The Wolf Creek wastewater treatment plant is Seair's first complete turnkey facility for a residential community. The plant will use essentially the same technologies and processes as Septic's portable units, although on a much larger scale. The Wolf Creek plant is expected to be completed in spring 2010. Seair's total revenue from this project is estimated to be around $1.1 million. The completed plant is expected to be Seair's reference site in pursuing similar opportunities in other residential communities.
Gross profit for the quarter ending February 28, 2010 was $489,446 (78% of revenue) compared to $949,552 (66% of revenue) in the quarter ending February 28, 2009. This $460,106 decrease in gross profit is due to the decrease in Septic fleet deployment. The gross profit percentage is up slightly from the prior year because Seair reduced costs and streamlined fleet service and maintenance practices in anticipation of decreased rental demand.
Revenue and gross profit recognized on the Wolf Creek project was relatively minor in the quarter but will increase in the third quarter with completion of the project. That said, gross margins on the Wolf Creek project are lower than those typically realized on other Seair lines of business, including Septic rentals and sale/rental of dewatering units. The Wolf Creek installation is the first of its kind and will serve as the reference site for similar projects in the future. Reduced overall margins were required as an inducement to win this initial project.
Total operating expenses decreased by $166,887 to $1,009,951 (14% decrease) from fiscal 2009 to fiscal 2010. The largest net contributors to this decrease were:
Amortization of equipment held for rental $ 78,607 41% decrease
Repairs and maintenance 41,224 50% decrease
Shop supplies 29,268 65% decrease
Professional fees 23,383 52% decrease
Compliance and investor relations (23,085) 723% increase
Other smaller items (aggregate) 17,490
Total year-over-year decrease $ 166,887
Amortization of equipment held for rental or resale, or essentially the Septic fleet, was changed from a declining balance basis to a usage basis. Low fleet deployment rate results in decreased amortization.
Repairs and maintenance and shop supplies are down as a result of reduced fleet activity and due to a comprehensive streamlining of practices and procedures undertaken in summer 2009 in anticipation of the winter 2010 rental season.
Professional fees and contract services are down as a result of scaling back and termination of projects that do not have strong prospects for near-term revenues.
Compliance and investor relations increased as Seair began efforts to introduce the newly commercialized dewatering solution to the investment community.
Research and development expenses were essentially unchanged from the prior year. Work continues on municipal wastewater treatment and oilfield water treatment applications. Seair has applied for and been granted federal government funding for specific research and development initiatives. This funding will serve to reduce the net R&D cost to Seair for future periods while allowing the Company to continue a very active project agenda.
Net loss for the quarter ending February 28, 2010 was $535,229, a $313,170 increase over the same quarter in fiscal 2009.
The complete Seair unaudited financial statements and associated Management Discussion and Analysis can be viewed 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 liquids, thereby facilitating numerous applications in a wide variety of industries, including wastewater treatment, pulp and paper production, food processing, aquaculture, agriculture/horticulture, sterilization, 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 supersaturated solution. The major difference between Seair's and others' 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.
Seair Inc. is proud to have been selected as one of the "2008 TSX Venture 50", a ranking of the top 10 public venture capital companies in 5 industry sectors listed on the TSX Venture Exchange.
Parties interested in obtaining further information or receiving news releases and corporate documents from Seair may email such requests to firstname.lastname@example.org or visit the Seair website at www.seair.ca.
This news release contains forward-looking statements relating to the future operations of the Seair Inc. and other statements that are not historical facts. Forward-looking statements are often identified by terms such as "may", "should", "anticipate", "expects" and similar expressions. Any statements that are contained in this news release that are not statements of historical fact may be deemed to be forward-looking statements. Such forward-looking statements are subject to important risks, uncertainties and assumptions. The reader is cautioned that assumptions used in the preparation of any forward-looking information may prove to be incorrect. Events or circumstances may cause actual results to differ materially from those predicted, as a result of numerous known and unknown risks, uncertainties, and other factors, many of which are beyond the control of Seair Inc. As a result, we cannot guarantee that any forward-looking statement will materialize and the reader is cautioned not to place undue reliance on any forward-looking information. Such information, although considered reasonable by management at the time of preparation, may prove to be incorrect and actual results may differ materially from those anticipated. Forward-looking statements contained in this news release are expressly qualified by this cautionary statement.
The forward-looking statements contained in this news release are made as of the date of this news release, and Seair Inc. does not undertake any obligation to update publicly or to revise any of the included forward-looking statements, whether as a result of new information, future events or otherwise, except as expressly required by Canadian securities law.
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SOURCE Seair Inc.
For further information: For further information: Harold Kinasewich, Seair Inc., T: (780) 477-7188, F: (780) 477-6622, E: email@example.com