CALGARY, May 12, 2014 /CNW/ - Pure Technologies Ltd. ("Pure" or the "Company") (TSX: PUR) announces its financial performance for the three month period ended March 31, 2014. For the first quarter, the Company recorded revenue of $12.6 million, EBITDA of $99,000 and profit of $607,000. This compares to revenue of $12.4 million, EBITDA of $504,000 and a loss of $1.2 million in the first quarter of last year.
"Following a strong 2013, Pure captured record backlog and delivered sound quarterly results," said Jamie Paulson, Chairman of Pure. "Backlog is more than $75 million as a result of new, long-term contracts awarded by existing customers. This is an increase of over 50% compared to December figures. The major contributor was the Miami-Dade award which is our largest North American contract to date, and highlights our client's commitment to a cost-effective, proactive asset management strategy for critical water pipelines. We expect to be awarded additional long-term contracts from new and existing customers over time. Backlog does not include yearly recurring revenues of more than $7 million expected from pipeline monitoring and technical support. Early this year we also announced our first ever dividend payment to shareholders, a major Company milestone, reflecting Pure's strong capital position, cash flow generation and our confidence to enhance shareholder return while continuing with investments important to the Company's growth."
Table of Selected Financial Results:
For further details on the results, please refer to Pure's Management Discussion and Analysis (MD&A) and Consolidated Financial Statements which are available on the Company's website (www.puretechltd.com).
| ($000's CAD, unless otherwise
indicated and per share amounts)
| Three months
ended March 31,
| Three months
ended March 31,
|$ Change||% Change|
|Cost of sales||2,727||3,093||(366)||(12)|
|Gross margin (%)||78||75|
|Profit (loss) for the period||607||(1,159)||1,766||n/a|
|Per share - basic||0.01||(0.02)|
|Per share - diluted||0.01||(0.02)|
Three months ended March 31, 2014
- Total quarterly revenue increased to $12.6 million from $12.4 million in the prior quarter primarily from Equipment sales (17% of total) growing by 43% due to new customers in the U.S., and Consulting revenue (20% of total) increasing by 59% from new pipeline condition assessment programs added in the Americas and Australia.
- Total operating expenses were $11.0 million compared to $10.6 million in the prior quarter. The overall increase is from Marketing expenses (27% of total) up 25% and Engineering and Operations (45% of total) up 9%, reflecting business development initiatives and additional technical staff to manage future work.
- EBITDA of $99,000 compared to $504,000 in the prior quarter, and profit of $607,000 compared to a loss of $1.2 million in the prior period.
- Profit for the quarter resulted from the recognition of deferred tax assets accumulated in prior periods.
- Working Capital at March 31, 2014 was $75.2 million.
- Includes $36.6 million in cash and no debt.
Business, Operations & Outlook
The Americas region, Pure's main growth area, generated 87% of total revenue for the quarter and increased 12% compared to the prior period. Some projects, previously planned for the first quarter, have been moved by our clients to accommodate their schedules; the second half of the year is expected to be very busy for the Company. Preparations continue for these major condition assessment programs aimed to extend the useful life of water pipelines.
Pure made announcements during the quarter underscoring the strength and stability of its business and operations. Pure was awarded with a new US$23.2 million, four year contract by a long-term client in Miami-Dade. This award demonstrates the client's commitment to a cost-effective, proactive asset management strategy for their critical water pipeline assets and adds to the work Pure has performed since 2010. It is expected that additional long-term programs, which will include engineering and condition assessment services for water and wastewater pipelines, will be put into place with existing customers.
In addition, Pure announced its first ever dividend payment to shareholders, a major Company milestone. This significant development reflects Pure's strong capital position and its confidence to enhance shareholder return while continuing with investments important to the Company's growth. Pure's business is characterized by low capital expenditures, stable Research & Development expenditures, significant recurring revenues, growing cash flow and expanding addressable markets. These attributes will allow the Company's Board of Directors to consider future dividend increases over time.
The Company's Board of Directors has declared a quarterly dividend of $0.03 per common share ($0.12 per common share annualized), payable on June 13, 2014 to shareholders of record on May 30, 2014. Pure's first ever dividend was paid on April 15, 2014 to shareholders of record as of the close of business on March 31, 2014.
The Company hereby notifies all shareholders that the dividend payable on June 13, 2014 will be designated as an "eligible dividend" for Canadian income tax purposes pursuant to subsection 89(14) of the Income Tax Act (Canada).
The Company further advises that Dr. Helge Daebel (Director since March 1, 2012) will not stand for re-election at the annual meeting of shareholders to be held on May 13, 2014.
"On behalf of our management team and Board of Directors, I want to thank Helge for his valuable service and contributions to the Company and its shareholders," said Jamie Paulson, Chairman of Pure.
A teleconference will be held to discuss these results on May 13, 2014, at 10:30 am ET. Presentation slides will be made available on the Company's website prior to the call.
Teleconference: The telephone numbers for the conference are toll-free 1-888-231-8191 (within North America) and 647-427-7450 (Local / International). Please provide the operator with the Conference Call ID or Topic when dialing in to the call.
- Conference ID: 31132796
- Topic: Pure Technologies Ltd., 2014 First Quarter Results
- A replay will be available approximately two hours after the call and will be available for two weeks. Access the replay by calling 1-855-859-2056 (toll-free within North America) or 416-849-0833 (Local / International). Use the following Passcode followed by the number sign: 31132796
Webcast & Presentation Slides: Investors will be able to listen to the conference over the Internet as well as access presentation slides (in pdf format) to follow along during the call.
- Links to the webcast and presentation slides will be available approximately 30 minutes prior to the call on Pure's website. Under the "Investors" main menu tab, select "Presentations and Webcasts".
- The webcast will be archived for 90 days.
About Pure Technologies Ltd.
Pure Technologies Ltd. is an international asset management technology and services company which has developed patented technologies for inspection, monitoring and management of critical infrastructure around the world. Pure's business model incorporates four distinct but complementary business streams:
- Sales of proprietary monitoring technologies for pipelines, bridges and structures (SoundPrint®, SoundPrint® AFO);
- Recurring revenue from data analysis and site maintenance for these technologies, and from technology licensing;
- Premium technical services including pipeline inspection, leak detection and condition assessment (PureEM™, SmartBall®, Sahara®, PipeDiver®, PureRobotics™, PureMFL™);
- Specialized engineering services in areas related to asset management, primarily in the area of pipeline condition assessment for water and wastewater infrastructure.
This release contains forward-looking statements. Forward-looking statements, without limitation, may contain the words "believes", "expects", "anticipates", "estimates", "intends", "plans", or similar expressions. Forward-looking statements are not guarantees of future performance. They involve risks, uncertainties and assumptions and the Company's actual results could differ materially from those anticipated. Forward-looking statements are based on the opinions and estimates of Management at the date the statements are made, and are subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those projected in the forward-looking statements. In the context of any forward-looking information please refer to risk factors detailed in, as well as other information contained in, the Company's filings with Securities Regulators (www.sedar.com).
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"The TSX has not reviewed and does not accept responsibility for the adequacy or accuracy of this release"
SOURCE: Pure Technologies Ltd.
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