TORR Canada Reports 2008 First Quarter Results



    MONTREAL, Nov. 14 /CNW/ - TORR Canada Inc. (TSX: TOR) ("TCI"), dedicated
to providing process solutions to the oil and gas industry, today reported its
financial results for the first quarter ended September 30, 2007. The
Company's financial statements and Management Discussion and Analysis are
available at www.torrcanada.com or at www.sedar.com.

    
    Q1 2008 highlights and subsequent events include:

    -   Completion of the acquisition of Pure Group AS
    -   Training and supervision for start-up of the seven TORR systems in
        Kuwait
    -   Successful commissioning and start-up of a TORR system on the Cervia
        ENI gas platform in the Adriatic Sea
    -   Appointment of Jacques L. Drouin as President and CEO
    

    "With the integration of Pure Group well underway, I am very confident
that we will have all the elements in place to become a premier global
provider of process solutions for the O&G industry. We will focus on a three
pronged approach: reach profitability as soon as possible, continue to grow
our pipeline to achieve sustainable sales growth and build 'value added' for
our customers and shareholders," said Jacques L. Drouin, President and Chief
Executive Officer of TORR Canada. "We are already starting to see solid sales
growth coming from our US and Norwegian operations, procurement synergies and
better cost control, which will contribute to the improvement of our bottom
line."
    "In regards to the TORR system, the sales cycle has been longer than
expected. During the last year, we have made significant progress demonstrated
with the delivery of our systems to Kuwait and the successful field trials
performed in the Middle-East, obtained status of approved supplier by Qatar
Petroleum and lined-up several field trials in Saudi Arabia. In addition, two
of our top ten projects have reached the preliminary engineering phase,"
concluded Jacques L. Drouin.

    Financial Results

    The following results do not include financial results for Pure Group AS.
    Revenue for the three months ended September 30, 2007, totalled $102,405,
compared to $68,385 in the same period a year ago. Increased revenue in the
quarter was primarily attributable to field trials from services rendered to
Expro in Angola and on-site training services rendered in Kuwait related to
the seven water treatment TORR systems delivered in the spring 2007. Other
revenue recorded during the quarter includes RPA cartridges sold to Wood Group
for the Triton platform located in the North Sea as well as the sale of RPA
cartridges to Schlumberger.
    For the first quarter of 2008, the gross loss amounted to $140,370,
compared to a gross loss of $234,000 in the first quarter of 2007. Most of the
costs relate to the production of cartridges, field trials and training
conducted in Kuwait.
    Sales and marketing expenses were slightly higher in the first quarter of
2008, totalling $238,159 compared to $210,391 during the same period a year
ago.
    General and administrative ("G&A") expenses for the first quarter of
2008, totalled $665,677 compared to $831,743 for the same quarter in 2007. The
significant decrease in G&A expenses is mainly due to a decrease in
professional fees. Professional fees related to the acquisition of Pure Group
have been capitalized in the balance sheet as deferred costs.
    Net loss for the first quarter of 2008 totalled $3,062,925 or $0.07 per
share, compared to $1,367,702 or $0.03 per share for the same period in 2007.
    As at September 30, 2007, the Company had cash and cash equivalents of
$9.0 million and access to a line of credit of $5.5 million.
    The Company previously announced that approximately $9.0 million of its
liquidities was invested in R1-High non-extensible asset-backed commercial
paper ("ABCP") and currently remains outstanding. On November 6, 2007, DBRS
downgraded the ABCP from R1-High to R4 indicating that 37.5% of the
outstanding papers were exposed to US non-prime residential mortgage-backed
securities. DBRS stated that the remaining 62.5% was considered strong from a
credit and ratings migration perspective and the agency did not expect that
portion to suffer losses. In line with several other ABCP holders and
guidelines provided by the Canadian Institute of Chartered Accountants, TORR
has adjusted the estimated fair value of this investment with the write-down
of $1,620,000, representing 18% of its total exposure to ABCPs. This
investment will be classified as a long term investment.
    As a subsequent event, TORR Canada is granting a total of 274,000 stock
options to employees recently promoted. The stock options are vested into four
equal tranches over the next three years, allowing for the purchase of one
common share per option, and are exercisable at the November 14, 2007 closing
price of $0.42, subject to regulatory approval.
    TCI will also be changing its fiscal year-end from June 30 to December
31. December 31, 2007, will mark TORR Canada's new fiscal year-end and will
represent only six months of operations.

    2008 First Quarter Results Conference Call & Web Cast

    Management of TORR Canada will host a conference call to discuss its 2008
first quarter financial results on November 15, 2007 at 8:30 a.m. EST. The
conference call will also be audio-cast live at www.newswire.ca and archived
for 90 days at www.torrcanada.com. For replay please call either
1-877-289-8525 or 1-416-640-1917 and enter in reference number 21252933
followed by the number sign.

    About TORR Canada Inc.

    TCI is dedicated to providing process solutions to the oil and gas
industry. TCI designs, develops, manufactures and commercializes technologies
to separate oil, water and gas generated by oil and gas production. TCI
recently acquired Pure Group AS of Norway. For more information, please visit
www.torrcanada.com.

    Caution concerning forward-looking statements
    ---------------------------------------------
    This press release contains forward-looking statements. Such statements
inherently involve numerous risks and uncertainties. Actual future results may
differ from the anticipated results expressed in the forward-looking
statements contained in this press release and TCI does not undertake to
update this information. Investors are cautioned against placing undue
importance on forward-looking information contained herein and should consult
the final short form prospectus and the documents incorporated by reference
therein, which contain a more exhaustive analysis of risks and uncertainties
connected to TCI's business.



    
    TORR CANADA Inc.
    Consolidated statements of loss and comprehensive loss
    For three-month periods ended September 30, 2007 and 2006
    (Unaudited)

                                                     3 months      3 months
    -------------------------------------------------------------------------
                                                    September     September
                                                     30, 2007      30, 2006
    -------------------------------------------------------------------------
                                                         $             $

    Revenue                                            102,405        68,385
    Cost of goods sold                                 142,019       224,107
    Amortization                                       100,756        87,278
    -------------------------------------------------------------------------
                                                      (140,370)     (243,000)
    -------------------------------------------------------------------------

    Expenses

      Sales and marketing (net of Government
        grant amounting to nil; $165,391 in 2006)      238,159       210,391
      Research and development                          85,396       147,281

      General and administrative (net of
       Government grant amounting to nil;
       $14,127 in 2006)                                665,677       831,743
    -------------------------------------------------------------------------
    Total expenses                                     989,232     1,189,415
    -------------------------------------------------------------------------
                                                    (1,129,602)   (1,432,415)

    Financial charges (income), net                    313,323       (64,713)
    Write-down on investment                         1,620,000             -
    -------------------------------------------------------------------------
    Net loss and comprehensive loss                 (3,062,925)   (1,367,702)


    Basic and diluted loss per share                     (0.07)        (0.03)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------



    TORR CANADA Inc.
    Consolidated Statement of Deficit
    For three-month periods ended September 30, 2007 and 2006
    (Unaudited)

                                                    September     September
                                                     30, 2007      30, 2006
    -------------------------------------------------------------------------
                                                         $             $
    -------------------------------------------------------------------------

    Balance, beginning of period                   (38,661,224)  (30,725,679)
    Adjustment related to the adoption of
     new accounting policies                           100,758             -
    -------------------------------------------------------------------------
    Balance as restated, begining of period        (38,560,466)  (30,725,679)
    Net loss                                        (3,062,925)   (1,367,702)
    -------------------------------------------------------------------------
    Balance, end of period                         (41,623,391)  (32,093,381)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------



    TORR CANADA Inc.
    Consolidated balance sheets
    As at September 30, 2007
    (Unaudited)

                                                   September 30,   June 30,
                                                       2007          2007
    -------------------------------------------------------------------------
                                                         $             $
    -------------------------------------------------------------------------

    Assets
    Current assets
      Cash and cash equivalents                      9,003,669    16,507,702
      Receivables                                    2,796,415     4,420,479
      Deferred contract costs                           67,619        76,411
      Inventories                                      367,134       383,627
      Prepaid expenses                                 189,589       159,450
      Investment                                       158,253     2,491,971
      Derivative Financial instrument                        -       103,550
    -------------------------------------------------------------------------
                                                    12,582,679    24,143,190

    Investment                                       7,380,000             -
    Capital assets                                     828,060       887,318
    Patents and technology                             567,233       594,420
    Deferred financing costs                                 -        68,657
    Deferred acquisition costs                       1,089,507       562,809
    -------------------------------------------------------------------------
                                                    22,447,479    26,256,394
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Liabilities
    Current liabilities
      Accounts payable and accrued liabilities       5,592,196     6,621,331
      Deferred revenue                                 366,315       383,908
      Current obligation under a capital lease           2,275         2,275
    -------------------------------------------------------------------------
                                                     5,960,786     7,007,514


    Interest payable                                   633,272       713,262
    Long-term debt                                   1,083,747     1,616,327
    -------------------------------------------------------------------------
                                                     7,677,805     9,337,103
    -------------------------------------------------------------------------

    Shareholders' equity
      Share capital                                 47,201,606    46,382,045
      Contributed surplus                            9,191,459     9,198,470
      Deficit                                      (41,623,391)  (38,661,224)
    -------------------------------------------------------------------------
                                                    14,769,674    16,919,291
    -------------------------------------------------------------------------
                                                    22,447,479    26,256,394
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------



    TORR CANADA Inc.
    Consolidated Statements of cash flows
    For three-month periods ended September 30, 2007 and 2006
    (Unaudited)

                                                     3 months      3 months
    -------------------------------------------------------------------------
                                                    September     September
                                                     30, 2007      30, 2006
    -------------------------------------------------------------------------
                                                         $             $
    Operating activities

      Net loss                                      (3,062,925)   (1,367,702)
      Items not affecting cash
        Stock-based compensation                       149,818       122,171
        Amortization of capital assets                  73,569        60,866
        Amortization of patents and technology          27,187        26,412
        Amortization of financing related costs         70,583        70,583
        Accreted interest                              133,291       113,786
        Gain on derivative financial instrument        103,550             -
        Accrued interest on investment                     753       (31,432)
        Loss on investment                           1,620,000             -
    -------------------------------------------------------------------------
                                                      (884,174)   (1,005,316)

      Changes in non-cash operating
       working capital items                           569,198      (232,127)
    -------------------------------------------------------------------------
                                                      (314,976)   (1,237,443)
    -------------------------------------------------------------------------

    Investing activities

      Acquisition of capital assets                    (11,027)     (172,611)
      Investment                                    (6,667,035)            -
      Deferred acquisition costs                      (526,698)            -
    -------------------------------------------------------------------------
                                                    (7,204,760)     (172,611)
    -------------------------------------------------------------------------

    Financing activities

      Reimbursement of long-term debt                     (547)         (552)
      Issuance of share capital                         16,250         2,850
    -------------------------------------------------------------------------
                                                        15,703         2,298
    -------------------------------------------------------------------------


    Decrease in cash and cash equivalents           (7,504,033)   (1,407,756)
    Cash and cash equivalents, beginning of period  16,507,702    23,441,741
    -------------------------------------------------------------------------
    Cash and cash equivalents, end of period         9,003,669    22,033,985
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    





For further information:

For further information: TORR Canada Inc., Jacques L. Drouin, President
& CEO, (514) 522-5550, ext. 226, jdrouin@torrcanada.com; The Equicom Group
Inc., Danielle Ste-Marie, (514) 844-6064, dste-marie@equicomgroup.com

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TORR CANADA INC.

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