Clearford Announces Results for the second quarter of fiscal 2016
Jul 29, 2016, 08:00 ET
OTTAWA, July 29, 2016 /CNW/ - Clearford Water Systems Inc. ("Clearford" or the "Company"), (TSXV: CLI), a TSX Venture 50 Company, today released results for its three months ended June 30, 2016. The unaudited consolidated financial statements are presented in accordance with IFRS (all figures in Canadian dollars).
Revenue for the quarter was $1,041,011 compared with $785,913 for the prior year's quarter. Operating loss before net financing costs were $816,879 for the quarter compared with $823,912 for the prior year's quarter. Net financing costs for the quarter were $629,347 compared with $689,715 for the prior year's quarter, with net loss for the year of $1,446,226 or $0.02 per share compared with $1,514,217 or $0.02 per share for the prior year's quarter.
For the six months ended June 30, 2016 revenue was $1,961,790 compared with $1,562,062 in the prior year and our operating loss was $3,039,586 compared to $2,851,767 in the prior year. Net financing costs were $1,282,676 compared to $1,222,610 in the prior year. The net loss for the six month period was $3,039,586 compared to $2,857,876 in the prior year period.
UV Pure segmented sales for the three and six months ended June 30th were $900,020 and $1,636,410 compared to $682,212 and $1,428,860 in the prior year representing a 32% and 15% increase in sales respectively.
Costs of sales increased to $614,784 during the quarter from $404,875 in the prior year's quarter due to completion of Clearford One™ project implementations in Ontario and India and the start of Phase 2 of the Clearford One™ project implementation in Colombia. Additionally, cost of sales increased at UV Pure based on sales increases and its product and channel sales mix which reduced its overall gross margin for the six month period to 46% from 51% in the prior year comparable period.
Sales and marketing costs increased to $401,321 and $814,830 from $385,484 and $704,202 in the prior year's three and six month periods respectively reflecting additional sales efforts for Clearford OneTM in Ontario and the addition of new sales resources in UV Pure.
Costs of engineering and research and development decreased to $221,902 and $427,885 from $227,268 and $441,129 in the prior year's three and six months periods respectively reflecting a decrease in spending on the Clearford One™ System and additional capitalized development costs for new product development in the UV Pure segment.
General and administration costs increased to $621,977 from $600,423 in the prior year's quarter primarily reflecting additional costs for legal and corporate overheads for changes in the Company's stock option plan which was approved by shareholders at its annual general meeting and legal costs associated with its South American subsidiaries. General and administrative costs decreased in the six month period ended June 30th to $1,256,259 from $1,274,810 primarily related to the reduced spending in on legal counsel and external consultants.
Kevin Loiselle, President and CEO of Clearford, expressed enthusiasm for the future of Clearford: "We are very pleased with our continued progress in the quarter. Clearford One™ systems are now in operation in Ontario and India. These provide the key reference for customers in both of these markets, to support strong sales growth of our product in the South Asian market and our P4P™ offering in Ontario" said Mr. Loiselle.
"Ontario municipalities spend approximately $1 billion a year in capital on wastewater collection and treatment systems. We believe the Clearford One System with its smaller footprint and capital costs, should be very well accepted by the smaller municipalities in Ontario who need to ensure that their capital investments are not only affordable to build, but are capable of being operated on an long-term basis without creating undue burdens for their constituents", he said.
"The India market is expected exceed US$5 billion dollars by 2018 as the India government continues to place its focus via public policy to set priority on delivering sanitation and clean water to its people continue to look very positive, Mr. Loiselle continued. "With our first Clearford One™ system in Prime Minister Modi's home state of Gujarat now operational, our subsidiary Clearford India Pvt. Ltd. has a live demonstration site of our technology. We believe the operational system in Gujarat will lead to additional contract signings in India", he concluded.
Mr. Loiselle also added that, "the strong growth in sales in UV Pure is very encouraging and reflects the competitive strength of the Crossfire technology. The next generation of products based on Crossfire, currently in development, will allow UV Pure to continue to grow and increase its market share in this $1 billion dollar market."
Clearford ended the June 30, 2016 quarter with unrestricted cash of $$224,819 compared with $585,885 on December 31, 2015. The Company's quarterly unaudited consolidated financial statements and MD&A are available at www.SEDAR.com.
During the quarter, the Company announced that it had entered into a new US$5.25 million 10 year loan for working capital and project financing requirement. The loan bears 9.75% interest payable annually with principal repayment required at the end of the 10 year term. Subsequent to its quarter end, the Company received the second tranche of its new funding in the amount of US$250,000 (C$323,625).
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
About Clearford Water Systems Inc.
Clearford Water Systems Inc. (TSXV: CLI) is a provider of unified water management and sanitation systems based on Clearford One™. Clearford One™ is a proprietary system comprised of ClearDigest™ smart digester, ClearConvey™ small bore sewer, and ClearRecover™ final treatment facility. For more information on Clearford Water Systems, please visit www.clearford.com .
About UV Pure Technologies Inc.
UV Pure Technologies manufactures technically advanced UV water purification systems. The Company has won an Artemis Top 50 Clean Tech Company award, two Frost and Sullivan Best Practices awards, a Canadian Drinking Water Association award for innovation, and is a Going Green Global Top 200 company.
There are currently over 15,000 UV Pure systems in residential, commercial, industrial, public and municipal applications, with flow rates up to 1 million gallons per day. An aerospace version of UV Pure's system is being used by Boeing to purify water on its new 787 Dreamliner.
UV Pure's patented Crossfire Technology® is dramatically advantaged compared to conventional UV systems. Lamps are mounted in air surrounded by elliptical reflectors providing more effective deactivation of pathogens, facilitating easy lamp changes and visual quartz inspection. They are self-cleaning, smart – with multiple sensors and on-board diagnostics guiding maintenance, engineered to be fail-safe, virtually maintenance free, and are plug-in ready for remote monitoring. For more information on UV Pure Technologies, please visit www.uvpure.com.
Forward Looking Statements
This news release contains certain statements that constitute forward-looking statements as they relate to the Company and its management. Forward-looking statements are not historical facts but represent management's current expectation of future events, and can be identified by words such as "believe", "expects", "will", "intends", "plans", "projects", "anticipates", "estimates", "continues" and similar expressions. Although management believes that the expectations represented in such forward-looking statements are reasonable, there can be no assurance that they will prove to be correct.
By their nature, forward-looking statements include assumptions and are subject to inherent risks and uncertainties that could cause actual future results, conditions, actions or events to differ materially from those in the forward-looking statements. If and when forward-looking statements are set out in this news release, Clearford will also set out the material risk factors or assumptions used to develop the forward-looking statements. Except as expressly required by applicable securities law, the Company assumes no obligation to update or revise any forward looking statements. The future outcomes that relate to forward-looking statements may be influenced by many factors, including, but not limited to: industry cyclicality; the ability to secure third party agreements; successful integration of Clearford's system with third party technology; competition; reduction in demand for products; collection from customers; relationships with suppliers; product liability; intellectual property; reliance on key personnel; environmental; interest rates; uninsured and underinsured losses; operating hazards; risks of future legal proceedings; income tax matters; credit facilities; availability and terms of financing; distribution of securities; restrictions on potential growth; effect of market interest rates on price of securities; and potential dilution.
SOURCE Clearford Water Systems Inc.
For further information: Kevin Loiselle, President & CEO, Clearford Water Systems Inc., Phone: (613) 599-6474 ext. 303, www.clearford.com
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