Pure Technologies Ltd. announces results for quarter and year ended December 31, 2007

    CALGARY, March 19 /CNW/ - Pure Technologies Ltd., TSX-V: PUR, announces
revenues of $14,747,000 for the year ended December 31, 2007. Sales revenue
for the year increased from $7,370,000 in the previous year to $13,118,000 and
monitoring and technical support revenue increased from $1,324,000 to
$1,629,000. Net income for the year was $2,022,000 resulting in earnings per
share of $0.07 on a basic and diluted basis compared to a loss of $3,949,000
in 2006 with earnings per share of $(0.18).
    Net income for the fourth quarter of 2007 was $3,390,000 compared with a
loss of $843,000 in 2006. Earnings per share on both a basic and diluted basis
was $0.11 compared to $(0.04) in 2006. Total revenue for the quarter was
$8,452,000 compared with $2,873,000 in 2006. Fourth quarter results were
significant as the first phase of a large international project was completed.
    Pure has experienced an increase in commercial activity in all sectors of
our business. Having secured our capital base through a $15 million financing
in April of 2007, and following the sale of our non-core video analytics
division, we are well positioned to grow our business in the environmental
technology and infrastructure management sectors.
    Our SoundPrint(R) AFO optical-fibre distributed sensing technology was a
major contributor to revenues for the year, as a result of the installation of
a number of systems for pipeline agencies in the US and the shipping of the
first stage of a large order for the Great Man-Made River Authority in Libya.
In Canada, we completed the first phase of an inspection and monitoring
program for the City of Montreal using our P-Wave(R) and AFO technologies. The
results generated by our efforts in Montreal initiated emergency repairs on a
critical water transmission main, and may have thus prevented a catastrophic
failure on a major thoroughfare.
    Following commercialization of the SmartBall(R) leak detection system for
water pipelines in the second half of the year, we are beginning to generate
meaningful revenues and we have embarked on a program of international
demonstration projects, which we expect will increase the market for the
technology. In the latter part of 2007, we formed a new oil and gas division
to exploit opportunities for SmartBall and AFO in leak detection and pipeline
integrity monitoring.
    In the bridge sector, we installed a SoundPrint system on the Veterans
Memorial Bridge in Port Arthur, Texas, the second project we have completed
for Texas Department of Transportation, and we supplied another system for a
post-tensioned bridge in the UK. We also moved to expand our business in the
bridge sector by starting a new specialty bridge engineering division,
Bridge Engineering Solutions, to exploit opportunities in inspection,
assessment and monitoring resulting from increased scrutiny of these
structures following the tragic bridge failure in Minneapolis, Minnesota.

    Financial Overview

    Revenue for the year increased 70% during the year. In September 2007,
the Company finalized its largest contract ever with the Great Man-Made River
Authority (GMRA) in Libya. This is a multi-year contract to provide SoundPrint
AFO systems for long term pipeline monitoring and technical support. During
the last quarter, the first shipment for this contract was completed and
resulted in the recognition of $7.1 million in revenue.
    As in 2006, the Company continues to diversify its product line through
the introduction of new technologies. SoundPrint AFO was introduced in 2005
and has become the largest product line for the Company. In the latter part of
2007, SmartBall for water was introduced on a commercial basis. While many
projects were done on a demonstration basis, this product resulted in revenues
of approximately $275,000.
    As a percentage of sales, gross margin for 2007 was 65% versus 57% in
2006 (59% in 2005 and 64% in 2004). Gross margins were targeted to increase in
2007 to over 60% and this was accomplished. The increase in monitoring and
technical support revenue assisted in raising gross margin as this type of
revenue has low costs associated with it. With the increased experience with
installations of SoundPrint AFO, the gross margins for these projects have
also increased by reducing unanticipated costs that were responsible for the
margin decrease in 2006.
    Marketing and promotion expenses have increased 53% in 2007 with an
increase of 22% in the prior year. Late in 2006, the Company opened an office
in Benghazi, Libya to support the contract with GMRA and further pursue
opportunities in the Middle East and Africa. In the last quarter of 2007, a
new division was created to market and further develop the oil and gas
SmartBall. A general manager was hired and is currently pursuing opportunities
for 2008. Resources in the US were also added to market SmartBall for the
water and wastewater industries.
    General and administration expenses decreased 6% over 2006 with a 46%
increase from 2005 to 2006. Staffing was increased in 2006 as revenue was
anticipated to grow at a substantial rate. Engineering staff require training
time to ensure that project operations are effectively managed. Staffing
levels remained consistent throughout 2007.
    Research and development expenditures for the year were consistent with
2006, and an increase from 2005 to 2006 of 13% was experienced. These expenses
can fluctuate from year to year depending upon whether projects underway meet
our capitalization policy described in note 1 of the financial statements. In
2007, SmartBall and SoundPrint AFO development costs were capitalized.
Staffing levels were increased to meet the demands of current product lines,
the further development of SmartBall for oil and gas, and for new research
projects for the oil and gas markets.
    Depreciation and amortization in 2007 fell slightly from 2006 but rose in
relation to 2005. Patent amortization accounted for the slight decrease as
some assets are reaching full amortization and additions are proportionately
    A large portion of the Company's activities are generated through its
wholly-owned U.S. subsidiaries. Upon consolidation, the Company is subject to
foreign exchange gains or losses due to the use of the temporal method to
translate the accounts of the subsidiaries. These gains or losses are
recognized in current year earnings or losses. In 2007, this accounted for the
majority of the loss on foreign exchange, and in 2006 accounted for 40% of the
    In addition, a large portion of international contracts are or were
denominated in U.S. dollars or Euros. Accordingly, the Company is susceptible
to foreign exchange fluctuations. The Company does not currently engage in
currency hedging activities.
    Pure's working capital is strong and at December 31, 2007 was $25,903,000
including $16,452,000 in cash and cash equivalents. The Company currently has
no debt.
    The Company currently has a confirmed order backlog in excess of
$12 million plus annualized recurring revenues under contract of over
$2.5 million. In addition, Pure has received verbal confirmation of awards in
excess of $1.4 subject to the completion of the normal contract review process
and final documentation.
    The Company will also file its Annual Information Form and Annual Report

    2007 Financial Highlights
                             Three months ended:        Twelve months ended:
    Consolidated Statement   Dec. 31,     Dec. 31,      Dec. 31,     Dec. 31,
     of Operations              2007         2006          2007         2006

    Sales revenue        $ 7,751,000  $ 2,560,000  $ 13,118,000  $ 7,370,000
    Monitoring &
     technical support       701,000      313,000     1,629,000    1,324,000
                         ------------ ------------ ------------- ------------
    Total revenue          8,452,000    2,873,000    14,747,000    8,694,000

    Cost of sales          2,986,000    1,095,000     5,214,000    3,764,000

    Marketing              1,050,000      284,000     2,158,000    1,411,000
    General and
     administrative        1,213,000    1,185,000     3,854,000    4,085,000
    Research and
     development             489,000      218,000       758,000      769,000
    Depreciation and
     amortization            195,000      195,000       760,000      769,000
    Foreign exchange
     loss (gain)             307,000      197,000       480,000      298,000
    Interest expense
     (income)               (186,000)     (47,000)     (477,000)    (137,000)
                         ------------ ------------ ------------- ------------
    Net income (loss)
     before following      2,398,000     (254,000)    2,000,000   (2,265,000)

    Write-down of
     property and
     equipment                     -      214,000             -      213,000
    Loss from
     operations                    -      375,000       970,000    1,471,000
    (Gain) from sale
     of discontinued
     operations             (992,000)           -      (992,000)           -
                         ------------ ------------ ------------- ------------

    Net income (loss)      3,390,000     (843,000)    2,022,000   (3,949,000)

    Income per share
     - basic and diluted $      0.11  $     (0.04) $       0.07  $     (0.18)

    Weighted avg.
     shares - basic       31,755,168   23,544,457    29,027,258   21,502,065
            - diluted     32,505,146   23,544,457    29,279,481   21,502,065

                                                         As at         As at
                                                       Dec. 31,      Dec. 31,
    Consolidated Balance Sheet                            2007          2006

    Current assets
      Cash                                        $ 16,452,000  $  4,297,000
      Accounts receivable                            8,883,000     3,565,000
      Inventory                                        908,000       497,000
      Prepaid expenses                                 277,000       256,000
      Net investment in lease                           70,000        94,000
      Current assets - Assets of
       discontinued operations                               -       540,000
                                                    26,590,000     9,249,000

    Property and equipment                           2,612,000     2,104,000
    Intangible Assets                                  550,000       500,000
    Net investment in lease                            176,000       281,000
    Other assets                                        27,000        74,000
    Non-current assets - Assets of
     discontinued operations                                 -     1,295,000
                                                  $ 29,955,000  $ 13,503,000

    Liabilities and Equity
    Current liabilities
      Accounts payable                            $    657,000  $    861,000
      Deposits on sales contracts                       31,000       123,000
      Current liabilities - Liabilities
       of discontinued operations                            -       104,000
                                                       688,000     1,088,000
    Shareholders' equity
      Share capital                                 42,161,000    27,702,000
      Contributed surplus                              655,000       507,000
      Warrants                                         272,000        49,000
      Deficit                                      (13,821,000)  (15,843,000)
                                                  $ 29,955,000  $ 13,503,000

    About Pure Technologies Ltd.

    Pure Technologies is an international technology company which has
developed patented technologies for inspection, monitoring and management of
critical infrastructure around the world. Pure operates from its headquarters
in Calgary, Canada and through subsidiaries in Maryland and New Jersey. Pure's
proprietary product portfolio includes SoundPrint(R), a continuous acoustic
structural monitoring system for buildings, bridges and structures;
SoundPrint(R) AFO, a fiber-optic distributed acoustic sensing system for
monitoring and surveillance of pipelines; and SmartBall(R), a revolutionary
new leak detection technology for water, wastewater and hydrocarbon pipelines.

    Forward-Looking Statements

    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).

    (R) Registered Trademarks, property of Pure Technologies Ltd.
    (TM) Trademark, property of Pure Technologies Ltd.

    "The TSX Venture Exchange has not reviewed and does not accept
    responsibility for the adequacy or accuracy of this release"

    %SEDAR: 00006060E

For further information:

For further information: To find out more about Pure Technologies Ltd.
(TSX-V: PUR), visit our website at www.puretechnologiesltd.com.; or contact
James E. Paulson, Chairman, or Karen Keebler, Chief Financial Officer, at
(403) 266-6794, or e-mail to info@puretechnologiesltd.com

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