Alternext: MNEMO: ALHEO
Results for the three-month period ended December 31, 2013
Revenues of $8.8 million, down by 6.6% from $9.4 million for the same
period in fiscal year 2013.
Gross profit stable at 26.2%, compared to 26.1% for the same period in
fiscal year 2013.
Adjusted EBITDA1 at ($90,179), compared to $561,888 for the same period in fiscal year
Operating, selling and administrative expenses up by $380,000, at 25.9%
of revenues, compared to 20.1% for the same period in fiscal year 2013.
Net loss of ($500,581), down compared to a net earnings of $488,854 for
the same period in fiscal year 2013.
Operating activities used ($3,012,537) in net cash, compared to
$1,024,161 generated for the same period in fiscal year 2013.
Results for the six-month period ended December 31, 2013
Revenues of $17.1 M, down by 11.8% from $19.4 M for the same six-month
period in fiscal year 2013.
Gross profit up at 26.0%, compared to 25.4% for the same six-month
period in fiscal year 2013.
Adjusted EBITDA at ($20,509), compared to $1,288,581 for the same
six-month period in fiscal year 2013.
Operating, selling and administrative expenses up by $606,000, at 25.4%
of revenues, compared to 19.3% for the same six-month period in fiscal
Net loss of ($970,575), down compared to a net earnings of $758,550 for
the same six-month period in fiscal year 2013.
Operating activities used ($2,517,833) in net cash, compared to
$2,234,375 generated for the same six-month period in fiscal year 2013.
All amounts in Canadian dollars unless otherwise stated.
QUEBEC CITY, Feb. 12, 2014 /CNW Telbec/ - (TSXV: HEO) - H2O Innovation Inc. ("H2O Innovation" or the "Company") announces its results for the second
quarter of fiscal year 2014 ended on December 31, 2013. During this
quarter, the Company's revenues decreased by 6.6% to $8.8 M, down from
$9.4 M in the comparable quarter of the previous fiscal year -
generating a stable gross profit of 26.2% compared to 26.1% in the
second quarter of fiscal year 2013. "This strong margin is the result
of our business mix, which allows the Company to cover an important
part of its fixed costs with its recurring revenues coming from its
specialty products, generally sold at higher margin, even though the
project business is lumpy. It is in the continuation of that purpose
that H2O Innovation completed the acquisition of Piedmont in December", stated FrÉdÉric DugrÉ, President and Chief Executive Officer of H2O Innovation.
The Company's revenues for the second quarter of fiscal year 2014
totaled $8.8 M, compared with $9.4 M in the comparable quarter in
fiscal year 2013. This decrease of $0.6 M or 6.6% is largely
attributable to the low level of revenues from projects deliveries and
projects progress. These revenues reached $4.7 M for this quarter
compared to $5.9 M in the comparable quarter of last fiscal year. As
mentioned in the first quarter of fiscal year 2014, some of the
Company's water treatment projects clients have delayed the delivery or
the commissioning of their systems, a situation the Company cannot
control. This situation has postponed to the second half of fiscal year
2014 the revenue recognition of these projects.
However, revenues from sales of specialty products and services are
still progressing, reaching $4.1 M for this quarter compared with $3.4
M in the comparable quarter of fiscal year 2013. This 19.6% increase is
the result of our sustained efforts to: i) enlarge our specialty
chemicals distributors' network, ii) provide after sale services to our
systems' clients, iii) increase our market shares in Northeastern
United States for equipment and products sales of maple syrup
production and iv) integrate in December 2013 Piedmont's activities.
"The continuous growth of our recurring revenues contributes to
stabilize our business model, increases our gross profit and preserves
long-term relationships with our clients", added FrÉdÉric DugrÉ.
Selected financial data
ended on December 31,
|Six-month period ended|
on December 31,
Research and development expenses - net
Net earnings (loss)
Basic and diluted earnings (loss) per share
During the quarter, the Company added $9.6 M in new bookings for water
treatment projects. These new bookings, coupled with the revenues
realized from water treatment projects during the quarter, have brought
up the backlog at $17.3 M as at December 31, 2013, compared to $18.7 M
a year ago. This quarter's new bookings include $6.1 M from the energy
sector. These new contracts are expected to be delivered within the
next 12 months. "A significant portion of these contracts should be
recognized as revenues during the current fiscal year 2014 and shall
allow the Company to reach a level of revenues sufficient to generate
profits in the next two quarters" stated FrÉdÉric DugrÉ.
The Company's ratio of selling, operating and administrative expenses
("SG&A") as a whole over revenues amounted to 25.9% for this quarter,
up from 20.1% for the corresponding quarter of the previous fiscal
year. This increase is largely attributable to the decline in volume of
water treatment projects business due to some clients-related delays
and to a higher level of SG&A expenses. With the acquisition of
Piedmont, management aims to keep the SG&A ratio to a level similar to
last year through an increase of revenues and tighter management of
Adjusted EBITDA for the quarter was recorded at ($90,179), compared with
$561,888 for the same period ended December 31, 2012. The lower
revenues recorded during the quarter compared with the corresponding
quarter of the previous fiscal year, combined with the significantly
higher SG&A expenses also contributed to generating a negative adjusted
Operating activities used ($3,012,316) in cash for the period ended
December 31, 2013, compared with $1,024,161 of cash generated during
the corresponding period ended December 31, 2012. The decrease is
mainly attributable to the significant decline in net loss in the
second quarter of fiscal year 2014 as compared with the net earnings in
corresponding period ended December 31, 2012 and to the negative change
in working capital items.
Over the six-month period ended December 31, 2013, the Company's
revenues totaled $17.1 M, compared to $19.4 M for the corresponding
period ended December 31, 2012, showing a decrease of 11.8%. During
this same period the Company recorded net loss amounting to ($970,575)
and a negative adjusted EBITDA of ($20,509), compared to a net earnings
of $758,550 and a positive adjusted EBITDA of $1,288,581 for the
corresponding period of fiscal year 2013. For the six-month period
ended December 31, 2013, the Company used ($2,517,833) of cash flows
from its operating activities, compared to $2,234,375 generated by its
operating activities for the corresponding period of fiscal year 2013.
The second quarter financial report is available on www.h2oinnovation.com and on NYSE Euronext Alternext's site. Additional information on the
Company is also available on SEDAR (www.sedar.com).
Certain statements set forth in this press release regarding the
operations and the activities of H2O Innovation as well as other communications by the Company to the
public that describe more generally management objectives, projections,
estimates, expectations or forecasts may constitute forward-looking
statements within the meaning of securities legislation.
Forward-looking statements concern analysis and other information based
on forecast future results, performance and achievements and the
estimate of amounts that cannot yet be determined. Forward-looking
statements include the use of words such as "anticipate", "if",
"believe", "continue", "could", "estimate", "expect", "intend", "may",
"plan", "potential", "predict", "project", "should" or "will", and
other similar expressions, as well as those usually used in the future
and the conditional, notably regarding certain assumptions as to the
success of a venture. Those forward-looking statements, based on the
current expectations of management, involve a number of risks and
uncertainties, known and unknown, which may result in actual and future
results, performance and achievements of the Company to be materially
different than those indicated. Information about the risk factors to
which the Company is exposed is provided in the Annual Information Form
dated September 24, 2013 available on SEDAR (www.sedar.com). Unless required to do so pursuant to applicable securities
legislation, H2O Innovation assumes no obligation to update or revise forward-looking
statements contained in this press release or in other communications
as a result of new information, future events and other changes.
About H2O Innovation
H2O Innovation provides integrated technological water treatment solutions
based on membrane filtration technology to municipal, energy & mining
end-users. H2O Innovation designs state-of-the-art custom-built water treatment
projects for the production of drinking water and industrial process
water, the reclamation and reuse of water, and the treatment of
wastewater. Also, directly and through its affiliates, H2O Innovation provides services and products complementary to its
membrane filtration and reverse osmosis systems. These products consist
of a complete line of specialty chemicals and consumables and a
complete line of couplings. For more, visit www.h2oinnovation.com.
Neither TSX Venture Exchange nor its Regulation Services Provider (as
that term is defined in the policies of the TSX Venture Exchange) nor
the Alternext Exchange accepts responsibility for the adequacy or
accuracy of this release.
1 The definition of adjusted earnings before interest, tax depreciation
and amortization (adjusted EBITDA) does not take into account the
Company's changes in fair value of contingent considerations,
impairment of intangible assets, impairment of goodwill, stock-based
compensation costs, gain on settlement agreement, and share of
(earnings) loss in a joint venture. The definition of adjusted EBITDA
used by the Company may differ from those used by other companies.
SOURCE H2O Innovation Inc.