H2O Innovation : H2O Innovation reports fiscal year 2013 second quarter
results - Revenues increase 33.5%, Company records net earnings
Results for the three-month period ended December 31, 2012
*Revenues of $9.4 million, up by 33.5% from $7.1 million for the same
period in fiscal year 2012.
*Gross profit up at 26.1%, compared to 22.6% for the same period in fiscal
*Adjusted EBITDA^ at $561,888, compared to ($404,906) for the same
period in fiscal year 2012.
*Operating, selling and administrative expenses down by $157,000, at 20.1%
of revenues, compared to 29.1% for the same period in fiscal year 2012.
*Net earnings of $488,854, up compared to a net loss of ($1,214,510) for
the same period in fiscal year 2012.
*Operating activities generated $1,024,161 in net cash, compared to
($1,408,003) used for the same period in fiscal year 2012.
Results for the six-month period ended December 31, 2012
*Revenues of $19.4 million, up by 37.3% from $14.1 million for the same
six-month period in fiscal year 2012.
*Gross profit up at 25.4%, compared to 23.6% for the same six-month period
in fiscal year 2012.
*Adjusted EBITDA at $1,288,581, compared to ($72,098) for the same
six-month period in fiscal year 2012.
*Operating, selling and administrative expenses down by $140,000, at 19.3%
of revenues, compared to 27.5% for the same six-month period in fiscal
*Net earnings of $758,550, up compared to a net loss of ($1,302,726) for
the same six-month period in fiscal year 2012.
*Operating activities generated $2,234,375 in net cash, compared to
($325,470) used for the same six-month period in fiscal year 2012.
All amounts in Canadian dollars unless otherwise stated.
Quebec City, February 13, 2013- (TSXV: HEO) - HOInnovation Inc.
("HOInnovation" or the "Company") announces its results for the second
quarter of fiscal year 2013 ended on December 31, 2012. During this quarter,
the Company's revenues increased by 33.5% to $9.4 M, up from $7.1 M in the
comparable quarter of the previous fiscal year - generating a solid gross
profit of 26.1% compared to 22.1% in the second quarter of fiscal year 2012.
"This is a significant improvement from the gross profit generated in the last
two quarters. This performance is partly attributable to various factors such
as the rise in our business volume and the changes we have initiated and
implemented since June 30, 2012 meant to enhance our operations and increase
our gross profit. Many challenges remain as we continue to seek operational
excellence in project execution", stated Frédéric Dugré, President and Chief
Executive Officer of HOInnovation.
The Company's revenues for the second quarter of fiscal year 2013 totaled $9.4
M, representing a $2.3 M or 33.5% increase, as compared with revenues of $7.1
M for the same quarter of fiscal year 2012. The increase is largely
attributable to revenues from water treatment projects which reached $6.0 M
compared to $4.0 M in the corresponding period of the previous fiscal year,
representing a 47.7% increase. Nearly half of these $6.0M revenues come from
the oil & gas sector in Western Canada and 25% from the municipal sector in
the United States. This is a direct consequence of the materialisation of the
Company's order backlog which stood at $18.7M as at December 31, 2012.
Revenues from sales of specialty chemicals and consumables increased by $0.4 M
for this quarter, reaching $3.4 M compared with $3.0 M in the comparable
quarter in fiscal year 2012, showing a steady growth.
The Company generated net earnings of $488,854 or $0.008 per share compared to
a net loss of ($1,214,510) or ($0.020 per share) for the same period in fiscal
year 2012. This improvement is attributable to four main factors. First, the
Company recorded a high level of revenues. Second, management has applied a
tight control on project execution, notably for procurement, and on hours
spent on projects. Third, management closely monitors the SG&A and is diligent
in finding additional savings. Finally, the Company recorded a gain on
settlement agreement related to the Company's wastewater activities. "Over the
last two quarters we have made an important restructuration in our wastewater
activities, both on the technical and commercial sides. We believe this will
springboard the growth momentum in this sector as we are consolidating our
sales rep network", added Frédéric Dugré.
CONSOLIDATED RESULTS Three-month period Six-month period
Selected financial data ended on December 31, ended on December 31,
2012 2011 2012 2011
$ $ $ $
Revenues 9,418,908 7,056,495 19,401,802 14,126,263
Gross profit 2,461,061 1,592,624 4,923,632 3,337,558
Gross profit 26.1% 22.6% 25.4% 23.6%
Operating expenses 139,369 181,538 275,141 286,644
Selling expenses 904,630 954,006 1,747,784 1,818,673
Administrative expenses 853,853 919,647 1,717,116 1,774,739
Net earnings (loss) 488,854 (1,214,510) 758,550 (1,302,726)
Basic and diluted earnings (loss)
per share 0.008 (0.020) 0.013 (0.022)
Adjusted EBITDA 561,888 (404,906) 1,288,581 (72,098)
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.
During the quarter, the Company added $4.3 M in new bookings for water
treatment projects. These new bookings, coupled with the level of revenues
realized from systems projects during the quarter, have brought down the
backlog at $18.7 M as at December 31, 2012. Management remains confident to
grow the Company's sales backlog again above the $20M mark as its sales
pipeline is rich with multiple opportunities in its targeted markets. In the
coming months, the Company will focus on increasing its footprint in North
America for water and wastewater treatment projects.
The Company's ratio of selling, operating and administrative expenses ("SG&A")
as a whole over revenues amounted to 20.1% for this quarter, down from 29.1%
for the corresponding quarter of the previous fiscal year. This decrease is
partially attributable to the increase in volume of business and reflects the
Company's efforts to reach profitability and maximize the use of its internal
resources, showing the benefit and scalability of its business model. Overall,
the Company's SG&A expenses show a decrease of approximately $160,000 compared
to the corresponding quarter of fiscal year 2012 and remain in line with the
Company's fiscal year 2013 budget.
Adjusted EBITDA for the quarter was recorded at $561,888, compared with
($404,906) for the same period ended December 31, 2011. The higher revenues
recorded during the quarter compared with the corresponding quarter of the
previous fiscal year, combined with the significant gross profit improvement
from 22.6% to 26.1% and the somewhat stable SG&A expenses also contributed to
generating positive adjusted EBITDA.
Operating activities generated $1,024,161 in cash for the period ended
December 31, 2012, compared with ($1,408,003) of cash used during the
corresponding period ended December 31, 2011. The rise is mainly attributable
to the significant improvement in net earnings in the second quarter of fiscal
year 2013 as compared with the corresponding period ended December 31, 2011
and to the positive change in working capital items.
Over the six-month period ended December 31, 2012, the Company's revenues
totaled $19.4M, compared to $14.1M for the corresponding period ended
December 31, 2011, showing an increase of 37.3%. During this same period the
Company recorded net earnings amounting to $758,550 and a positive adjusted
EBITDA of $1,288,581, compared to a net loss of ($1,302,726) and a negative
adjusted EBITDA of ($72,098) for the corresponding period of fiscal year 2012.
For the six-month period ended December 31, 2012, the Company generated
$2,234,375 of cash flows from its operating activities, compared to ($325,470)
used by its operating activities for the corresponding period of fiscal year
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 HOInnovation 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 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 involve a number of
risks and uncertainties, which may result in actual and future results 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 September25, 2012 available on SEDAR (www.sedar.com).
Unless required to do so pursuant to applicable securities legislation,
HOInnovation 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.
HO Innovation designs and provides state-of-the-art, custom-built, and
integrated water treatment solutions based on membrane filtration technology
to municipal, energy & natural resources end-users. HO Innovation also
provides a complete line of specialty chemicals and consumables for membrane
filtration and reverse osmosis systems. 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.
- 30 -
HO Innovation Inc.
This announcement is distributed by Thomson Reuters on behalf of Thomson
The owner of this announcement warrants that:
(i) the releases contained herein are protected by copyright and other
applicable laws; and
(ii) they are solely responsible for the content, accuracy and originality of
information contained therein.
Source: H2O Innovation via Thomson Reuters ONE
Press spacebar to pause and continue. Press esc to stop.