MONTREAL, Aug. 25 /CNW/ - AAER Inc. (TSX-V: AAE), ("AAER" or the
"Company"), Canada's only original equipment manufacturer of wind turbines of
1 megawatt ("MW") and more, released today its financial results for the
second quarter ended June 30, 2008. The Company's unaudited interim
consolidated financial statements, Management Discussion and Analysis and
Annual Information Form are available on the Company's Website at www.aaer.ca
and on www.sedar.com.
Q2 2008 Highlights:
- Completed $7.5 million bought deal equity financing to implement
production plan for 2008
- Secured global insurance policy with Boiler Inspection and Insurance
Company of Canada to provide financial backing for turbine
manufacturer warranty program
- Established permanent representation office in the United States to
target small- to medium-size wind farms
- Concluded $3 million turbine supply agreement with the town of
Portsmouth, Rhode Island for the delivery of AAER's first 1.5 MW wind
- Concluded reservation agreement for the delivery of two 1.5 MW wind
turbines to Windland, a small wind farm project developer in
- Signed agreement for the delivery of one 1.5 MW wind turbine to the
U.S. Marine Corps Logistics Base in Barstow, California
"During the second quarter of 2008 we began to execute on our strategy of
selling wind turbines to small-to-medium sized wind projects in the one to
50 megawatt range," said Dave Gagnon, President and Chief Executive Officer of
AAER. "We believe this niche market is currently underserved by the large
OEM's and represents a major growth opportunity for AAER."
"With five turbines sold during the first half of 2008, we have now
completed sales on both coasts of the United States as well as in Europe.
These agreements will increase our geographic presence and provide us with
important visibility in the markets in which we are licensed to operate,"
continued Mr. Gagnon. "We are currently in the process of commissioning our
300,000 square foot facility in Bromont, Quebec in order to start of
production scheduled for the end of September 2008."
The Company is currently concentrating all of its efforts on implementing
its development strategy, and has not generated any revenue as of June 30,
2008. The results given below are based on material information, and reflect
the results for the three and six-month periods ended June 30, 2008.
For the quarter ended June 30, 2008, net loss totaled $3,372,026 or
$0.04 per share (basic and diluted), compared to $815,315 or $0.02 per share
(basic and diluted) for the corresponding period ended June 30, 2007. The
increased net loss during the second quarter of 2008 is largely attributable
operating expenses, which increased by $2,556,711 to $3,372,026 when compared
to $815,315 during the second quarter on 2007.
AAER's operating expenses for the second quarter of 2008 stood at
$3,372,026 compared to $815,315 for the second quarter of 2007. The increase
in these expenses is mainly driven by the increase in salary and benefits
resulting from increased personnel in preparation for the beginning of
commercial production in the fourth quarter of 2008 ($1,319,933 for Q2-2008
compared to $103,977 for Q2-2007); in rent and occupancy charges for the
Bromont facility due to increased square footage utilization ($698,096 for
Q2-2008 compared to $152,633 for Q2-2007); and in marketing expenses for
ongoing commercialization efforts ($465,240 for Q2-2008 compared to $213,075
For the six-month period ended June 30, 2008, AAER's net loss was
$5,324,089 or $0.06 per share (basic and diluted) compared to $1,393,087 or
$0.03 per share (basic and diluted) for the comparable period the prior year.
As at June 30, 2008, the Company had 102,937,818 common shares issued and
outstanding, and $3,583,029 in cash and cash equivalents. As of December 31,
2007, the Company had 82,667,101 shares issued and outstanding and cash and
cash equivalents totaling $5,928,246. The $2,345,217 decrease in cash and cash
equivalents is mainly due to inventory purchases, investment in capital assets
and support of operating activities in preparation for the start of commercial
production. This decrease was partially offset by the proceeds of the
$7,500,000 equity financing the Company completed on May 20, 2008.
On August 7, 2007, AAER announced the execution of a memorandum of
understanding with Positive Power Co-op for the sale of two 1.5MW wind
turbines. As of August 22, 2008, Positive Power Co-op is awaiting the
necessary upgrades on the local transfer station owned by Hydro One to allow
the connection of different wind projects, including theirs, to the Ontario
electricity grid. AAER and Positive Power have signed amendments to the
memorandum so it can remain in force in the meantime.
On April 23, 2008, AAER announced the execution of a reservation
agreement with Windland Inc. for two 1.5MW wind turbines. As of August 22,
2008, the Company has met all of the conditions required by the reservation
agreement, including a technical due diligence and the issuance of the
appropriate financial guaranties, and the parties have executed the Turbine
Supply Agreement and the Warranty, Maintenance and Service Agreement
representing a total contract value of approximately $4,425,000. The Turbine
Supply Agreement also provides Windland Inc. with an option to buy an
additional 20 1.5MW wind turbines for deliveries between 2010 and 2013. The
delivery of the two A1500 turbines is scheduled for the 4th quarter of 2008,
as provided for in the original reservation agreement.
About AAER Inc., (TSX-V: AAE)
AAER is a wind turbine manufacturer located in Bromont, Quebec that
manufactures and maintains high capacity 1 Megawatt or more wind turbines
principally for the North American market. Its strategy is to progressively
build its product's components to provide a high level of reliability and a
competitive pricing to its customers. AAER uses proven European technologies
to ensure the performance of its turbines in various wind conditions and
terrains. Its stock is listed on the TSX Venture Exchange (AAE). Additional
information is available on the Company's Website at www.aaer.ca.
This news release contains certain forward-looking statements. These
statements relate to future events or AAER's future economic performance and
reflect the current assumptions and expectations of management. Certain
unknown factors may affect the events, economic performance and results of
operations described herein. AAER undertakes no obligation, and does not
intend to, update or revise any forward-looking statements, whether as a
result of new information, future events or otherwise, except as may be
required under applicable law.
The TSX Venture Exchange does not accept responsibility for the adequacy
or accuracy of this release.
For further information:
For further information: AAER Inc., Dave Gagnon, President, Telephone:
(450) 534-5155, www.aaer.ca; The Equicom Group Inc., Glen Williams, Telephone:
(416) 815-0700 x272, firstname.lastname@example.org