OTTAWA, Aug. 1, 2018 /CNW/ - Clearford Water Systems
Inc. ("Clearford" or the "Company"), (TSXV: CLI), today released
results for its three months and six months ended June 30, 2018. The unaudited consolidated
financial statements are presented in accordance with IFRS (all
figures in Canadian dollars).
The Company continues to execute on its strategic business plan
originally disclosed on June 22,
2017, whereby the Company announced pursuing strategic
acquisitions to support the Company's growth. The new business
model provides a path for the Company to become an operating
utility with equipment supply capability for effective technologies
capable of delivering water and wastewater infrastructure at a
lower life-cycle cost. During the quarter, the Company continued
the expansion of its business through the acquisition of Long Beach
Waterworks, a private water utility that provides water services
directly to consumers. The Company will continue to review
opportunities such as this in Ontario to acquire water and wastewater assets
that generate positive earnings and cashflows.
Revenue for the quarter was $1,632,545 compared with $972,731 for the prior year's quarter. Operating
loss before net financing costs was $1,343,200 for the quarter compared with
$520,580 for the prior year's
quarter. Net financing costs for the quarter were $1,315,577 compared with $823,975 for the prior year's quarter, with net
loss for the year of $2,658,757 or
$0.02 per share compared with
$1,344,555 or $0.02 per share for the prior year's quarter. The
revenue increase related primarily to Clearford Waterworks, the
operations and maintenance division acquired in November 2017 as part of the Koester Canada Inc.
acquisition. Included in the operating and net loss for the three
and six-months periods were unrealized foreign exchange losses of
approximately $5,700 and $656,331 compared to unrealized foreign exchange
gains in the prior year's three and six-months periods of
$166,075 and $218,654 respectively.
For the six months ended June 30,
2018, revenue was $3,301,426
compared with $1,809,499 in the prior
year and operating loss was $3,120,146 compared to $1,162,682 in the prior year. Net financing costs
were $2,253,103 compared to
$1,565,680 in the prior year. The net
loss for the six-month period was $5,373,249 or $0.05
per share compared to $2,728,362 or
$0.03 per share in the prior year
period.
UV Pure segmented sales for the three and six months ended
June 30th, 2018 were $811,170 and $1,505,923 compared to $938,357 and $1,730,011 in the prior year.
Costs of sales increased to $1,053,125 during the quarter compared to
$498,148 in the prior year's quarter
due to the start of two Clearford One®
project implementations in India,
and the addition of Koester Canada Inc. for the full quarter.
Additionally, cost of sales was higher at UV Pure due to lower
sales and product mix.
Sales and marketing costs decreased during the second quarter to
$331,068 from $339,355 in the prior year's quarter primarily
due to the departure of staff allocated to sales in UV Pure, who
were not replaced until after the end of the quarter. Sales and
marketing costs increased to $706,858
from $674,977 in the prior year's
six-month periods, respectively, reflecting additional travel
between the Company's Ontario
locations and rebranding efforts relating to the Koester Canada
Inc. acquisition.
Costs of engineering, and research and development decreased to
$169,917 and $382,746 from $207,195 and $411,444 in the prior year's three- and
six-months periods, respectively, reflecting a decrease in spending
on the Clearford One system and staff reductions in the first half
of the fiscal year.
General and administration costs increased to $1,279,839 and 2,481,153 from $659,155 and $1,149,759 in the prior year's quarters,
respectively, primarily reflecting additional costs associated with
the Koester Canada Inc. acquisition, legal and corporate overheads,
and accounting and legal costs. General and administrative costs
decreased in the six-month period ended June
30th to $1,149,759 from
$1,256,259 primarily related to the
reduced spending on external consultants.
Kevin Loiselle, President and CEO
of Clearford, expressed enthusiasm for the future of Clearford: "We
continue to build the foundation of our new business plan with the
augmentation of recurring revenue with the expansion, through both
new sales and by acquisition, of cash generating utility assets.
With the enlargement of our production facility in Hamilton now complete, our treatment plant
fabrication business segment is in position to address the backlog
in sales generated over the last two quarters". He said "Our
projects in India for McCain's and
Hilti continue to demonstrate the potential of the Clearford One
system in India and should lead to
additional and larger projects in the future". He continued "We
expect in 2018 we will complete a foundation for our business that
should deliver sustain revenue and earnings growth into the future"
he concluded".
Mr. Loiselle also added: "The next generation of UV
Pure® products based on Crossfire
Technology®, currently undergoing industry
certification and validation testing, are expected to be released
to market in the latter half of fiscal year 2018. This will allow
UV Pure to continue to increase its market share in this
$1 billion dollar market."
Clearford ended the June 30, 2018
quarter with unrestricted cash of $830,883 compared with $1,217,373 on December 31,
2017. The Company's quarterly unaudited consolidated
financial statements and MD&A are available at
www.SEDAR.com.
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 is a provider of unified water
management solutions for the design, deployment, finance and
operation of water infrastructure systems. The Company's
technology-based water solutions include
Clearford One® wastewater
infrastructure systems, Clearford M-brane™ packaged
treatment solutions, and a full range of
UV Pure® water disinfection products.
Clearford is the winner of the Frost & Sullivan 2017
Enabling Technology Leadership Award for Global Decentralized
Water & Wastewater Treatment. For more information, visit
www.clearford.com.
About Clearford Koester Canada Inc.
Clearford Koester Canada Inc. is a manufacturer of packaged
water and wastewater treatment systems for municipal, commercial
and industrial applications. The company designs and builds custom
modular and containerized treatment systems that integrate advanced
technologies like membrane filters, ultraviolet disinfection, and
smart instrumentation and control systems for highly efficient
treatment solutions that address any site constraints and water
quality challenges. The company's M-brane™ membrane
bioreactor (MBR) treatment plant has been installed at sites in
Ontario and New York State.
About Clearford Waterworks Inc.
Clearford Waterworks Inc. is a full-service provider of water
and wastewater systems management including in-field operations and
maintenance, emergency operations, regulatory compliance support,
technical assistance and troubleshooting, and asset management
services. The company operates over 80 treatment plants, water
distribution and wastewater collection systems in Ontario for private developments, golf
courses, camps and campgrounds.
About UV Pure Technologies Inc.
UV Pure Technologies is a manufacturer of advanced ultraviolet
water disinfection systems for residential, commercial, industrial,
public, and municipal applications. The company's patented
Crossfire Technology® is an innovative
water disinfection solution with over 18,000 installations
worldwide. UV Pure has earned an Artemis Top 50 Clean Tech Company
award, Going Green Global Top 200 award, two Frost & Sullivan
Best Practices Awards, and a Canadian Drinking Water Association
award for innovation. For more information, 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.
