OTTAWA, Nov. 14, 2018 /CNW/ - Clearford Water
Systems Inc. ("Clearford" or the "Company"), (TSXV: CLI),
today released results for its three months and nine months periods
ended September 30, 2018. The unaudited consolidated financial
statements are presented in accordance with IFRS (all figures in
Canadian dollars).
Revenue for the quarter was $1,609,508, up from $910,697 in the same quarter last year. The
operating loss before net financing costs for the quarter was
$1,389,517, compared with
$307,790 for the same quarter last
year. Net financing costs for the quarter were $1,386,517, compared with $806,641 for the same quarter last year. Overall,
the net loss for the quarter was $2,775,934 ($0.03
per share), compared with $1,114,431
($0.01 per share) for the same
quarter last year.
For the nine months ended September 30, 2018, revenue was
$4,910,934 (compared with
$2,720,196 for the same period last
year) and the operating loss was $4,509,663 (compared with $1,470,472 for the same period last year). Net
financing costs were $3,639,520,
compared with $2,372,321 for the same
period last year. The net loss for the nine-month period ended
September 30, 2018 was $8,149,183 ($0.08
per share), compared with $3,842,793
($0.04 per share) for the same period
last year.
UV Pure Technologies Inc. (UV Pure) segmented
revenues for the three- and nine-month periods ended September 30, 2018 were $673,628 and $2,179,551, respectively, compared with
$863,353 and $2,593,364 for the corresponding periods last
year. The decrease relates primarily to the delay in the launch of
its next-generation product, which is expected to be completed in
the fourth quarter of 2018 and to be in full production starting in
the first quarter of 2019.
The cost of revenue for the quarter increased to $1,072,990 compared with $477,931 in the same quarter last year. The
increase was related primarily to the addition of Clearford Koester
Canada Inc. and its subsidiary Clearford Waterworks Inc.
at the end of fiscal 2017. Additionally, the cost of revenue
increased at UV Pure based on supply shortages and supply
chain management as it begins to transition from its
second-generation product to its third-generation product.
Sales and marketing costs increased to $367,491 and $1,074,349 for the three- and nine-month periods
ended September 30, 2018, respectively. During the
corresponding three- and nine-month periods last year, these costs
were $293,925 and $959,230, respectively. This increase reflects
additional resources and travel costs required with the addition of
Clearford Koester Canada Inc.
Costs of engineering, research and development decreased to
$164,824 and $547,570 for the three- and nine-month periods
ended September 30, 2018, respectively. During the
corresponding three-month and nine-month periods last year, these
costs were $206,905 and $618,349, respectively. This decrease relates
primarily to a reduction in R&D and engineering staff at
Clearford and UV Pure, which was partially offset by staff
added at Clearford Koester Canada Inc.
General and administration costs increased to $1,378,827 and $3,859,980 for the three- and nine-month periods
ended September 30, 2018, respectively. During the
corresponding three- and nine-month periods last year, these costs
were $489,080 and $1,648,511 respectively. The increase relates
primarily to the addition of Clearford Koester Canada Inc. and
incremental resources required to continue to execute the Company's
long-term business plan.
Kevin Loiselle, President and CEO
of Clearford, confirmed that the Company continues to focus on
executing its previously announced business plan. While the
integration of acquired companies has taken longer than initially
planned, he noted that it is now nearly complete. Mr. Loiselle
explained: "The strategic business plan is working and there is a
real sense that the Company has turned a corner, with the fourth
quarter of 2018 marking a new beginning for Clearford and
significant revenue growth starting in 2019."
Mr. Loiselle also indicated that Clearford expects a strong
finish to the year. "Revenue in the first three quarters of 2018
was up compared to the same period last year, and we anticipate a
strong fourth quarter with revenue forecast between $2.2 and $2.6 million," he commented. The revised
revenue forecast for the 2018 fiscal year is $7.2 to $7.5 million. This is down from an earlier
2018 revenue forecast of $10 million issued on
November 29, 2017, with the decline largely due to two
projects being fully delayed into 2019.
"We have signed contract backlog of $3.0 million in projects for Clearford
Koester Canada and recurring O&M and utility revenue streams of
$2.2 million for a total backlog of
$5.2 million for fiscal 2019. With
this starting point we expect total revenues for the 2019 fiscal
year to grow by at least 50 to 100 percent over 2018 revenues. This
includes steady growth from the Company's Waterworks and
UV Pure subsidiaries," added Mr. Loiselle. Qualified
water and wastewater infrastructure-related development projects
and utility model projects will continue to have access to the
$100 million Project Finance Facility
from Vancouver-based Sustainable
Water Investments Inc. through Clearford's Pay-for-Performance
(P4P®) delivery model.
Clearford ended the September 30, 2018 quarter with
unrestricted cash of $1,419,201,
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 Inc. is a provider of unified water
management solutions for the design, deployment, financing 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.
For more information, visit www.clearford.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 factors; 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.