TORR Canada Reports Fiscal 2007 Year End Results



    MONTREAL, March 12 /CNW/ - TORR Canada Inc. (TSX: TOR) ("TCI" or the
"Company"), dedicated to providing process solutions to the Oil and Gas
industry, today reported unaudited selected financial results for the fiscal
year ended December 31, 2007, representing only six months of operations. The
Company changed its fiscal year end from June 30 to December 31.
    "Fiscal 2007 has been a turnaround year for TORR Canada. We concluded the
acquisition of Pure Group, changed leadership, significantly reduced our
operating expenses and implemented our new business model," said Jacques L.
Drouin, President and Chief Executive Officer of TORR Canada. "We made
significant progress towards becoming a complete solutions provider to the
upstream Oil and Gas industry and I believe our new corporate structure will
bring us closer to our objective of obtaining important sales growth and
profitability." Mr. Drouin adds: "As we have reorganized the Company and
significantly cut expenses, the following results, which only include two
months of Pure Group, clearly do not represent adequately the potential of the
new combined entity. Effects of the restructuring are expected to occur during
the second quarter of the current fiscal year."

    
    Key Corporate Developments:

    -   Completed acquisition of Pure Group AS;
    -   Concluded $16 million in sales establishing the backlog at
        $23 million;
    -   Completed reorganization of the Company in three business units and
        appointed respective managers;
        -  Where all conventional products in North and South American
           markets are managed out of Houston (USA)
        -  Bergen (Norway) will oversee novel technologies, product
           development and European and Middle Eastern activities
        -  Kuala Lumpur (S.E. Asia) will oversee selected manufacturing
           activities and commercialization to the Asian market and its
           growing offshore platform market
        -  Montreal will be home to administrative offices
        -  Opened a small office in Bahrain to provide better access to
           existing clients and increased opportunities in that market.
    -   Completed most of the cost reduction program and reduced annual
        operating expenses by more than $3 million;
        -  Closed Pure Group's head office in Stavanger
        -  Cut half of the staff in Montreal down to 15 employees
        -  Introduced a new management team
        -  Changed suppliers to reduce operational costs
    -   Commenced implementation of the new strategic plan;
    -   Completed several successful field trials for the TORR(TM) and C-Tour
        systems for produced water treatment and initiated new trials:
        -  Saudi Aramco initiated tests on the ProSalt for crude desalting
        -  Saudi Aramco confirmed TORR water treatment field testing for this
           spring
        -  BP confirmed field trials for the TORR system in Pakistan and for
           the C-Tour process in the North Sea
        -  Petrobas will also test the water treatment C-Tour process in
           Brazil
    -   Three super major O&G producers confirmed their participation in the
        Phase II development of ProDry, a new product for gas dehydration;
    -   Achieved excellent operational results from the TORR(TM) system
        installed in the North Sea and Petro-Canada confirmed the performance
        of the system;
    -   Completed $4 million subordinated debt financing and $8 million
        senior debt and credit facility financing with DnB Nor; and
    -   Appointed Jacques L. Drouin as President and CEO;
    

    Financial Results

    The Company changed its fiscal year end from June 30, 2007 to December
31, 2007. The following results represent six months of operations for TORR
Canada and include two months of financial results for Pure Group AS, as the
acquisition was completed on October 25, 2007.
    Revenues for the six-month period ended December 31, 2007 were
$5,785,229. Of this amount, $267,702 was generated through TCI's commercial
activities that include field trials and revenues from RPA(R) cartridges.
Sales from Pure Group, representing slightly more than two months of
operations, amounted to $5,517,527.
    Total revenue backlog is currently $23M. Since the conclusion of the
acquisition, engineering services, a C-Tour and ProSalt systems were sold
(signed contracts) as well as gas separation membranes, representing almost
$16 million in future revenues.
    Gross margin was $628,296 for the six-month period ended December 31,
2007. Most of the expenses relate to production costs from the ProSep
subsidiary that amounted to $4,091,688. Other significant costs of goods sold
during the period include salaries and general expenses totalling $430,709 for
TCI operations relating to the manufacturing of TORR(TM) RPA(R) coalescing
cartridges.
    Sales and marketing expenses were $628,622 for the six-month period ended
December 31, 2007. TCI incurred $436,838 mostly relating to salaries, travel
expenses and professional fees paid to sales and marketing experts.
    Research and development ("R&D") expenses, net of R&D tax credits, were
$279,315 for the six-month period ended December 31, 2007 and are mostly
comprised of salaries.
    General and administrative ("G&A") expenses reached $4,321,438 for the
six-month period ended December 31, 2007. TCI incurred $2,174,563 in G&A
expenses, mostly comprised of professional fees. Other significant G&A
expenses are from Pure Group activities, more specifically from the ProPure AS
subsidiary where G&A expenses amount to $1,440,941, mostly salary related
expenses.
    Financing charges reached $2,549,561 for the six-month period ended
December 31, 2007. This amount includes interest revenues of $262,491 on short
term investments, total foreign exchange net charges of $210,133, mainly
interest expenses, amortization of the conversion feature attached to the
convertible loan issued in 2004. During the last six months, a write-down on
investment of $1,800,000 has been accounted for in relation to a
$9,000,000 investment in third-party asset-backed commercial paper ("ABCP")
rated R1 (High) at the time of purchase, the highest credit rating issued for
commercial paper. The ABCP in which the Company has invested has not traded in
an active market since mid-August 2007 and there are currently no market
quotations available. As a result, the Company has classified its ABCP as
long-term investments.
    The working capital of the Company has been affected negatively by the
reclassification of the $7,200,000 investment from short term to long term.
Without this reclassification, the working capital of the Company would have
been positive that is $951,877 instead of ($6,248,123).
    Net loss for the six-month period ended December 31, 2007 reached
$8,075,311 or ($0.15) per share, compared to $7,935,545 or ($0.17) per share
for the year ended June 30, 2007. Excluding the impairment charge of
$1.8 million dollars in relation to the ABCP held, net loss for six-month
period 2007 would have reached $6,275,311. For the second quarter of fiscal
2007, net loss amounted to $5,012,386 or ($0.09) per share compared to
$1,776,695 or ($0.04) per share in the second quarter of the previous year.
Excluding the loss on the ABCP, net loss for the second quarter of 2007 would
have been $4,832,386.
    TCI had $6,315,939 in cash and cash equivalents as at December 31, 2007,
and 62,556,566 shares issued and outstanding. At June 30, 2007, TCI had
$16,507,702 in cash and cash equivalents.
    Considering the closing of the Pure Group acquisition near year end and
the high complexity of consolidation, the Company expects to file audited
financial statements and a management discussion and analysis by the end of
the month respecting filing deadlines. Management is highly confident that
actual audited results will not materially differ from the results issued in
this press release.

    2007 Year End Results Conference Call & Webcast

    Management of TORR Canada will host a conference call to discuss its
2007 year end financial results on March 13th, 2008 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 the reference number 21265513
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
    Six-month period ended December 31, 2007
     and years ended June 30, 2007 and 2006

    -------------------------------------------------------------------------
                                       Six-month    Year ended    Year ended
                                    period ended
                                     December 31,      June 30,      June 30,
                                            2007          2007          2006
    -------------------------------------------------------------------------
                                       unaudited
                                           $             $             $

    Revenue                            5,785,229    26,055,117     3,232,270
    Cost of goods sold                 5,156,933    28,494,797     2,916,585
    -------------------------------------------------------------------------
    Gross margin                         628,296    (2,439,680)      315,685
    -------------------------------------------------------------------------

    Expenses

      Sales and marketing                628,622     1,525,820     1,723,360
      Research and development           279,315       474,198       543,375
      General and administrative       4,321,438     3,222,026     2,351,083
    -------------------------------------------------------------------------
                                       5,229,375     5,222,044     4,617,818
    -------------------------------------------------------------------------
                                      (4,601,079)   (7,661,724)   (4,302,133)

    Financial charges (income), net    2,549,561      (134,727)      667,266
    Write-off of intangible,
     property & equipment                321,260             -        29,773
    Amortization                         592,272       408,548       327,371
    -------------------------------------------------------------------------
    Loss before income taxes          (8,064,172)   (7,935,545)   (5,326,543)
    -------------------------------------------------------------------------

    Current income taxes                  22,683             -             -
    Deferred income taxes                (11,544)            -             -
    -------------------------------------------------------------------------
    Loss and comprehensive loss       (8,075,311)   (7,935,545)   (5,326,543)
    -------------------------------------------------------------------------

    Weighted average
     number of shares                 53,036,426    46,477,317    32,513,050
    Basic and diluted
     loss per share                        (0.15)        (0.17)        (0.16)
                                     ----------------------------------------
                                     ----------------------------------------



    TORR CANADA Inc.
    Consolidated balance sheets
    As at December 31, 2007 and June 30, 2007
                                                  ---------------------------
                                                   December 31,      June 30,
                                                          2007          2007
    -------------------------------------------------------------------------
                                                     unaudited
                                                         $             $
    Assets

    Current assets
      Cash and cash equivalents                      6,315,939    16,507,702
      Receivables                                   11,299,053     4,420,479
      Deferred contract costs                           66,048        76,411
      Inventories                                      615,430       383,627
      Prepaid expenses                                 418,222       159,450
      Investment                                             -     2,491,971
      Derivative financial instrument                   12,450       103,550
    -------------------------------------------------------------------------
                                                    18,727,142    24,143,190

    Long term investment                             7,200,000             -
    Property and equipment                           2,093,671       887,318
    Goodwill                                        21,098,626             -
    Intangibles assets                               8,530,759       594,420
    Future tax assets                                   72,596             -
    Deferred financing costs                                 -        68,657
    Deferred acquisition costs                               -       562,809
    -------------------------------------------------------------------------
                                                    57,722,794    26,256,394
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Liabilities

    Current liabilities
      Bank credit facility                           7,200,000             -
      Accounts payable and accrued liabilities      15,765,232     6,621,331
      Deferred revenue                                 349,515       383,908
      Current portion of long term debt              1,660,518         2,275
    -------------------------------------------------------------------------
                                                    24,975,265     7,007,514


    Interest payable                                   651,493       713,262
    Long-term debt                                  11,178,087     1,616,327
    Future tax liabilities                           1,162,791             -
    Pension obligation                               1,083,150             -
    -------------------------------------------------------------------------
                                                    39,050,786     9,337,103
    -------------------------------------------------------------------------

    Commitments and contingencies

    Shareholders' equity

      Share capital                                 55,144,398    46,382,045
      Contributed surplus                           10,132,726     9,198,470
      Deficit                                      (46,605,116)  (38,661,224)
    -------------------------------------------------------------------------
                                                    18,672,008    16,919,291
    -------------------------------------------------------------------------
                                                    57,722,794    26,256,394
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    

    %SEDAR: 00009317E




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

Organization Profile

TORR CANADA INC.

More on this organization


Custom Packages

Browse our custom packages or build your own to meet your unique communications needs.

Start today.

CNW Membership

Fill out a CNW membership form or contact us at 1 (877) 269-7890

Learn about CNW services

Request more information about CNW products and services or call us at 1 (877) 269-7890