TSO3 announces financial results for Q1 2009



    
    Stock symbol: TSX: TOS
    Outstanding shares: 47,863,402

                       The Company posts sales growth;
                   takes decisive steps in its development

    Highlights of Q1 2009 and recent weeks:

    - The sale of three units and accessories for total revenues of $533,488,
      compared to revenues of $91,147 in the first quarter of 2008 generated
      by the sale of accessories only;

    - Health Canada's authorization for the sterilization of multi-channel
      flexible endoscopes and Food and Drug Administration filing for similar
      expanded claims;

    - Announced second cycle to be added to new and current base of already
      installed TSO3 STERIZONE(R) 125L sterilizers, further enhancing the
      technologies utility.

    - Election of Mr. W. Barry McDonald and Mr. Jean-François Bureau to the
      Company's Board of Directors.
    

    QUEBEC, May 15 /CNW Telbec/ - TSO3 Inc. ("TSO3") (TSX: TOS) posted
revenues of $533,488 during the first quarter of 2009, compared to $91,147 for
the same period last year. During the first three months of the current fiscal
year, the Company sold three units of its STERIZONE(R) 125L sterilizer and
accessories, whereas it sold only accessories in the same quarter of 2008.
    The Company's net loss during the first quarter of 2009 was almost $2.0
million or $0.04 per share, whereas it was $2.2 million or $0.05 per share
during the same period last year.
    "Our sales growth in the first quarter of 2009, compared to the same
period last year, is encouraging and indicates that our technology is
receiving increasing support from our target clientele. Various initiatives
which we have recently implemented to expand the range of medical instruments
that can be processed by our STERIZONE(R) 125L sterilizer should further drive
this trend in the coming months and strengthen our competitive position in our
target markets," said Mr. R.M. (Ric) Rumble, President and Chief Executive
Officer of TSO3.

    The first true alternative to ethylene oxide

    In recent weeks, the Company took decisive steps in its development by
introducing various initiatives that are positioning TSO3's STERIZONE(R) 125L
sterilizer as the first true alternative to legacy ethylene oxide-based
sterilization systems commonly used in hospitals, which is a toxic chemistry
and an environmental pollutant.
    On March 31, 2009, Health Canada authorized the use of TSO3's
STERIZONE(R) for the sterilization of multi-channel flexible endoscopes. A
submission for clearance for similar expanded claims has also been filed with
the Food and Drug Administration (FDA). The Company is currently awaiting a
decision on this filing.
    On April 30, 2009, during its Annual General Meeting, the Company also
announced its decision to add a second cycle to its STERIZONE(R) 125L
sterilizer. This new cycle, while offering the same sterilization efficacy as
the current base cycle, will allow TSO3's STERIZONE(R) 125L to sterilize a
wider range of fragile and delicate medical instruments causing less wear and
tear.
    TSO3 expects that its existing clients will have access to this
additional cycle through the use of a field upgrade after the cycle has
cleared the appropriate regulatory requirements. Later this year, the Company
will file for clearance with Canadian and American regulatory authorities for
approval of this new cycle currently under development.

    Promising initiatives

    "These various initiatives are highly promising for TSO3 since they
permit hospitals to have a true alternative solution to ethylene oxide, a
toxic process that is presently the only method of sterilizing the most
delicate and complex medical instruments. Compared to ethylene oxide-based
systems, our solution is more efficacious, more economical and is not a threat
for employee safety and the environment. In accordance with our vision, we now
have all the tools necessary to make our technology the new standard for low
temperature sterilization in a hospital environment," said Mr. Rumble.
    Ethylene oxide-based sterilization uses an inflammable gas that is toxic
for employees and the environment. TSO3's STERIZONE(R) 125L uses only oxygen,
water and electricity to create a safe system for users that is highly
effective and leaves no toxic residue after use.

    Two new appointments to the Board of Directors

    Furthermore, TSO3 also had the pleasure of welcoming two new members to
its Board of Directors, Mr. W. Barry Mcdonald and Mr. Jean-François Bureau.
They were elected as board members during TSO3's Annual General Meeting held
on April 30, 2009. Mr. McDonald, who held the position of interim President
and Chief Executive Officer of TSO3 in 2008, is Managing Partner and founder
of McDonald & Associates, a strategic and transactional global health care
advisory firm. Mr. Bureau is Senior Vice-President and Chief Financial Officer
of DiagnoCure, a company specialized in the development and marketing of
diagnostic tests for cancer detection.

    Conference call

    TSO3 will host a telephone conference call today, May 15, 2009 at 10:30
a.m. (ET). Analysts and institutional investors are invited to participate.
The numbers to dial for access are 514 807-8791 (Montréal area), 416 644-3424
(Toronto area) or the toll-free number 1-800-594-3790. Journalists and other
interested parties may listen to the live Webcast of the Conference Call
accessible via TSO3's Website at: www.tso3.com. The Webcast will be archived
for 90 days.

    
    SUMMARY OF OPERATING RESULTS
    Three-month periods ended March 31 (Unaudited)

    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
                                                            FIRST QUARTER
                                                            -------------
                                                          2009          2008
    -------------------------------------------------------------------------
    SALES                                         $    533,488  $     91,147
    -------------------------------------------------------------------------
    EXPENSES
      Operating                                        594,273       370,984
      Sales & Marketing                                611,553       925,775
      Research and Development                         739,056       472,444
      Administrative                                   695,828       778,278
      Financial                                          4,308         5,498
    -------------------------------------------------------------------------
                                                     2,645,018     2,552,979
    -------------------------------------------------------------------------
    OPERATING LOSS                                   2,111,530     2,461,832
      Other Revenues                                   124,186       301,500
    -------------------------------------------------------------------------
    NET LOSS                                      $  1,987,344  $  2,160,332
    -------------------------------------------------------------------------
    BASIC AND DILUTED NET LOSS PER SHARE          $       0.04  $       0.05
    -------------------------------------------------------------------------
    WEIGHTED AVERAGE NUMBER OF SHARES
     OUTSTANDING                                    47,863,402    47,863,402
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    OPERATING RESULTS

    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    

    Three-month period ended March 31, 2009, compared with the three-month
period ended March 31, 2008.

    Sales

    Sales for the three-month period ended March 31, 2009 amounted to
$533,488 representing the sale of three sterilizers and related accessories,
compared to $91,147, representing the sale of accessories only in 2008.

    Operation

    For the three-month period ended March 31, 2009, Operating expenses were
$594,273 compared to $370,984 for the same period in 2008. Operating expenses
are related to production, manufacturing and after-sales service departments.
The variance between the two periods is the result of an increase in the cost
of goods sold due to a superior number of devices sold.

    Sales and Marketing

    Sales and Marketing expenses amounted to $611,553 for the three-month
period ended March 31, 2009 compared to $925,775 for the same period in 2008.
The variance between the two periods is mainly due to a decrease in salaries
and representation fees related to a reduction in the number of regional sale
managers. Conversely, expenses related to marketing, primarily salaries,
increased between the two periods due to the hiring of a new vice president
marketing at the beginning of the period.

    Research and Development

    For the three-month period ended March 31, 2009, R&D expenses before tax
credits amounted to $739,056 compared to $472,444 for the same period in 2008.
The variance between the two periods is caused by an increase in salary costs
resulting from the addition of employees to the R&D department. The variance
is also explained by an increase in material purchases.

    Administrative

    Administrative expenses amounted to $695,828 for the three-month period
ended March 31, 2009, compared to $778,278 for the same period in 2008. The
variance between the two periods is explained by a decrease in Stock-based
Compensation, insurance and expenses related annual information documents.
Conversely, expenses related to professional fees increased between the two
periods.

    Other Revenues

    For the three-month period ended March 31, 2009, the Company realized
other revenues of $124,186 compared to $301,500 for the same period in 2008.
The variance between the two periods is due to a decrease in investment
revenues.

    Net Loss

    The Company recorded a net loss of $1,987,344 or $0.04 per share for the
first quarter of 2009, compared to a net loss of $2,160,332, or $0.05 per
share for the same period in 2008.

    Liquid Assets and Financial Situation

    As of March 31, 2009, cash, cash equivalents and temporary investments
amounted to $15,914,834 and accounts receivable to $984,503 for a total of
$16,899,337 compared to $24,602,770 as of March 31, 2008.

    About TSO3

    TSO3, founded in Québec City in 1998, specializes in the research and
development of innovative, high-performance medical instrument sterilization
technology with high commercial potential. The Company's first product, the
TSO3 STERIZONE(R) 125L Sterilizer, is designed for sterile processing centers
in the hospital environment.
    The Company believes that its technology represents an advantageous
replacement solution to other low temperature sterilization processes
currently used in hospitals.
    TSO3's STERIZONE(R) 125L Sterilizer is cleared for commercialization by
the US Food and Drug Administration and by Health Canada for sterilization of
metal and heat sensitive instruments and devices with diffusion-restricted
spaces, such as the hinged portion of haemostats, forceps and scissors and
rigid endoscopes having a single stainless steel lumen as small as 0.9 mm
internal diameter and 485 mm long is in commercialization phase for this first
product since 2006.
    For more information about TSO3, visit the Company's Web site at
www.tso3.com.

    The statements in this release and oral statements made by
representatives of TSO3 relating to matters that are not historical facts
(including, without limitation, those regarding the timing or outcome of any
financing undertaken by TSO3) are forward-looking statements that involve
certain risks, uncertainties and hypotheses, including, but not limited to,
general business and economic conditions, the condition of the financial
markets, the ability of TSO3 to obtain financing on favourable terms and other
risks and uncertainties.

    
    The TSX has neither approved nor disapproved the information contained
    herein and accepts no responsibility for it.
    




For further information:

For further information: Marc Boisjoli, Chief Financial Officer, (418)
651-0003, ext. 228, mboisjoli@tso3.com; Frédéric Tremblay, (514) 658-8033,
ir@tso3.com; Source: TSO3 Inc.


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