Wavefront Technology Solutions Inc. Second Quarter Results



    
    TSX-V: WEE
    Pink Sheets:   WEESF
    

    EDMONTON, April 29 /CNW/ - Wavefront Technology Solutions Inc.
("Wavefront" or the "Corporation"), a leader in technology development and
implementation for improved oil recovery and optimized groundwater remediation
announces its financial and operating results for the second quarter ended
February 28, 2009.
    During the second quarter of fiscal 2009, the Corporation revenues
related to the tubing pump and bailer product lines decreased due to economic
and commodity price conditions. However, with certain oil producers' desire to
replace or increase production, this decline was offset by increases in
Powerwave revenues as well as increases in Primawave revenue in the
environmental sector. The Corporation anticipates securing additional
contracts for Powerwave and Primawave as positive outcomes are disseminated to
the user community.
    Revenues for the six months ended February 28, 2009 were $698,759, an
increase of $71,655 over the comparative period in 2008 that recognized
revenues of $627,104. The increase in revenues relate primarily to the
interest generated from the investments of cash from prior periods private
placements, and growth in the commercialization Powerwave and Primawave
technologies.
    The basic and dilute net loss for the six months ended February 28, 2009
was $4,239,680 ($0.06 per share), compared to $2,145,810 ($0.04 per share) for
the comparative period of February 29, 2008. During the first quarter ended
November 30, 2008, there was a material decline in commodity prices. The
Corporation recorded a write-down of its Rogers County oilfield property,
plant and equipment and intangible assets by $1,689,148 (representing a basic
and diluted loss per share of $0.024 per share). No write-down was provided
for in the second quarter ended February 28, 2009.
    The basic and diluted net loss, before the extraordinary non-cash
write-downs of property, plant and equipment and intangible assets, for the
period ended February 28, 2009 was $2,550,532 ($0.036 per share), compared to
$2,145,810 ($0.041 per share) in 2008. The increase in losses, before the
extraordinary non-cash write-downs of property, plant and equipment and
intangible assets, of $404,722 was primarily from:

    
    -   General and administrative expenses increased due principally to
        increased wage, office, and consultant expenses. The increases
        reflect increased sales personnel and personnel required for
        Powerwave and Primawave training and installations. Although the
        Corporations business model is not to be a services company, as the
        Powerwave and Primawave systems are designed for end-customer "plug
        and play", it is believed that ensuring proper initial installation
        and operation of Powerwave and Primawave systems will warrant greater
        customer acceptance of the technologies and provide long-term
        strategic value.

        Increases in consulting expense relate to using external resources to
        develop a new wireline deployable Powerwave tool. This new Powerwave
        tool is deployed in a well by simply lowering it through the
        injection tubing and securing it to the end of the tubing using
        readily available oilfield equipment thereby reducing installation
        cost, which should reduce barriers to the adaptation of Powerwave.
        Additionally, during the quarter the Corporation completed the
        development of a new Primawave tool. The new Primawave tool is a
        rotary, surface-mounted tool that permits the Corporation to market
        across the entire remedial injection spectrum. Manufacturing costs of
        the new Powerwave and Primawave tools are expected to be lower than
        the current proven and established versions. Both new tools have been
        successfully field-deployed.

    -   Increases in stock based compensation due to increased volatility in
        the financial markets that affect the valuation of such stock
        options, and the prior period's stock options being predominately
        expensed.

    -   Increases in selling and marketing expense as the Corporation
        expanded its sales network focusing on the United States southeast
        and west coast locations, and as it continues to provide strategic
        Powerwave customers inducements to enter into long-term contracts and
        for rapid installation. In order to control cost, any additional
        expansion of sales efforts will be through agents in key
        international and domestic territories.
    

    Offsetting the above noted increases were gains in foreign currency
translation of US dollar denominated expenses, assets and liabilities related
to the devaluation of the Canadian dollar against the United States dollar.
    Total assets decreased by $3,989,021 to $27,939,706. The decrease was
primarily due to a decrease of $3,820,993 in cash that was used to fund
working capital and for the purchase of property, plant and equipment. Assets
were also affected by the Corporation's Acquisition of Predator Pumps Ltd.
that was completed on January 31, 2009 (which increased its property, plant
and equipment by $213,490), its decision to write-down its oilfield related
property, plant and equipment and Royalty Rights in the prior quarter.
    As at February 28, 2009, the Corporation had working capital of
$18,298,819. The Corporation believes that its working capital position will
continue to decline despite having a significant increase in the number of
Powerwave contracts in-hand, as the Corporation continues to assemble an
inventory of Powerwave and Primawave systems (that are categorized as
non-current assets) in advance of installing and the commencement of billing
of Powerwave clients that have executed contracts in-hand. The Corporation
cannot control the installation rate of such Powerwave systems, which is
dictated by the oil producers, who often want such installations to occur when
other work is being performed on the well targeted for the Powerwave
installation.
    The Corporation continues believe that lower commodity prices may also
force certain producers to look at alternatives to replacing produced
reserves, which may be favorable to the adaptation rate Corporation's
Powerwave technology. However, the Corporation is not immune to the global
economic conditions that continue to deteriorate, inclusive of increases in
United States and Canadian unemployment rate, or the volatility in the
commodity markets and foreign exchange rates. As a result, the Corporation
undertook certain cost cutting measures to ensure that its labour force was in
line with the current economic environment.
    The above financial highlights should be read in conjunction with the
unaudited consolidated financial statements and management discussion and
analysis of results for Wavefront's most recently completed quarter, ended
February 28, 2009, which was filed on SEDAR on April 28, 2009.
    The Corporation would like to update the market on Primawave results
reported in an earlier release dated April 20, 2009. As reported the two acre
former industrial site in New Jersey was being redeveloped for residential use
and had high concentration levels of chlorinated and non-chlorinated organic
compounds which required treatment. The schedule called for rapid remediation
of the contamination with minimal impact to adjacent property owners. New
information provided to the Corporation indicates that Primawave resulted in
an overall project cost saving $US176,100 or 44% in remedial costs ($US401,500
to $US225,400). The client is now employing Primawave at another high profile
site in New Jersey.

    About Wavefront Technology Solutions Inc.

    Wavefront specializes in designing and developing leading-edge techniques
for oil well stimulation, improved oil recovery, and environmental groundwater
remediation.

    
    ON BEHALF OF THE BOARD OF DIRECTORS

    WAVEFRONT TECHNOLOGY SOLUTIONS INC.

    "D. Brad Paterson" (signed)

    D. Brad Paterson, CFO & Director

    Cautionary Disclaimer - Forward Looking Statements
    --------------------------------------------------
    

    Certain statements contained herein regarding Wavefront and its
operations constitute "forward-looking statements" within the meaning of
Canadian securities laws and the United States Private Securities Litigation
Reform Act of 1995. All statements that are not historical facts, including
without limitation statements regarding future estimates, plans, objectives,
assumptions or expectations or future performance, are "forward-looking
statements". In some cases, forward-looking statements can be identified by
terminology such as "may", "will", "should", "expect", "plan", "anticipate",
"believe", "estimate", "predict", "potential", "continue" or the negative of
these terms or other comparable terminology. We caution that such
"forward-looking statements" involve known and unknown risks and uncertainties
that could cause actual results and future events to differ materially from
those anticipated in such statements. Such factors include fluctuations in the
acceptance rates of Wavefront's Powerwave and Primawave Processes, demand for
products and services, fluctuations in the market for oil and gas related
products and services, the ability of Wavefront to attract and maintain key
personnel, technology changes, global political and economic conditions, and
other factors that were described in further detail in Wavefront's continuous
disclosure filings, available on SEDAR at www.sedar.com. Wavefront expressly
disclaims any obligation to up-date any "forward-looking statements", other
than as required by law.

    
    THE TSX VENTURE EXCHANGE NEITHER APPROVES NOR DISAPPROVES THE CONTENTS OF
    THIS RELEASE WHICH WAS PREPARED SOLELY AT THE DISCRETION OF MANAGEMENT
    





For further information:

For further information: D. Brad Paterson, CFO, (780) 486-2222 ext. 224
Tel, investor.info@onthewavefront.com

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WAVEFRONT TECHNOLOGY SOLUTIONS INC.

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