Pure Technologies Announces Solid First Quarter 2013 Results

CALGARY, May 13, 2013 /CNW/ - Pure Technologies Ltd. ("Pure" or the "Company") (TSX: PUR) today announced its financial performance for the three-month period ended March 31, 2013.  The first quarter of last year benefited from a large, catch-up equipment shipment. Excluding this, revenues increased 32% over the prior quarter. The Company recorded revenue of $12.4 million, EBITDA of $504,000 and a loss of $1.2 million for the latest quarter.  This compares to revenue of $20.0 million, EBITDA of $7.4 million and profit of $3.3 million in the first quarter of 2012.

"Our Company had a solid first quarter, with the core Americas market performing above expectations." said Jamie Paulson, Chairman. "International operations outside the Americas showed significant progress. Excluding the large, catch-up shipment to Libya in the first quarter of last year, revenues improved significantly over the prior quarter. Pure remains unique in its technology offering to this complex area of critical infrastructure management, and we are gratified by the trust and confidence placed in us by our clients. The company continues to move its product offering forward in all markets, thanks to the tremendous efforts of our people. Backlog remains very strong at over $53 million which does not include yearly recurring revenues of approximately $6 million."

Table of Selected Financial Results:

For further details on the results, please refer to Pure's Management Discussion and Analysis (MD&A) and Consolidated Financial Statements which are available on the Company's website (www.puretechltd.com).
($000's CAD, unless otherwise indicated and per share amounts)		Three months ended March 31, 2013	Three months ended March 31, 2012	$ Change	% Change
Revenue		12,381	20,035	(7,654)	(38)
Cost of sales		3,093	4,861	(1,768)	(36)
Gross profit		9,288	15,174	(5,886)	(39)
Gross margin (%)		75	76
Operating Expenses		10,589	10,187	402	4
EBITDA		504	7,390	(6,886)	(93)
Profit (loss) for the period		(1,159)	3,301	(4,460)	(135)
	Per share - basic	(0.02)	0.07
	Per share - diluted	(0.02)	0.07
Total assets		120,009	123,126	(3,117)	(3)

*refer to definition of EBITDA in Pure's MD&A.

Financial Highlights - Three months ended March 31, 2013

• Total revenues decreased 38% over the prior quarter to $12.4 million from $20.0 million. The prior quarter was positively impacted by a deferred equipment shipment (worth $10.7 million). Removing this impact, total revenues have increased 32% over the prior quarter.
• Equipment sales (12% of total) decreased by 87%; equipment sales have increased 125% without the deferred shipment last year.
• Inspection services (63% of total) increased by 17% due to increased work in the Americas and other international regions.
• Consulting revenue (13% of total) increased by 41% due to new work and customers added by Pure Engineering Services.
• Monitoring and technical support revenue (12% of total) grew by 76%, reflecting an increase in monitored pipeline distances worldwide and from contract renewals.
  
  
• Total operating expenses increased 4% over the prior quarter to $10.6 million from $10.2 million.
• Marketing expenses (22% of total) and engineering and operations expenses (42% of total) increased by 26% and 19%, respectively, due to an increase in business development activities and inspection services.
• General and administrative expenses (30% of total) decreased by 15%, mostly related to foreign exchange fluctuations.
• Research and development expenses (6% of total) have declined 26% related to the capitalization of costs.
  
  
• EBITDA of $0.5 million and a loss of $1.2 million compared to EBITDA of $7.4 million and profit of $3.3 million in the prior quarter. Quarter-over-quarter performance was impacted by the deferred equipment shipment made in the first quarter of last year.
  
  
• Working capital at March 31, 2013 was $68.9 million compared to $70.4 million at December 13, 2012.
• Includes $29.4 million in cash.

Business and Operations Highlights

• Current revenue backlog of more than $53 million.
  
  
• Recurring, yearly revenues from pipeline monitoring and technology licensing approximately $6 million.
  
  
• Pure adds new work in Canada and the U.S.
• Awarded new work by the Louisville Water Company to provide electromagnetic inspection and leak detection services for large-diameter water mains in a multi-year program.
• New work with The Regional Municipality of York to provide condition assessment and project management services for a critical water main providing drinking water to the Region.
• The Company has been selected as a member of a consultant team working towards the delivery of a comprehensive, water master plan for a major U.S. water utility.
  
  
• New international work
• Work in India, New Zealand, Saudi Arabia and the United Arab Emirates, related primarily to water pipelines, utilizing a number of Pure's proprietary technologies and condition assessment services including SmartBall® leak detection technology, PipeDiver® technology and robotic inspection; each project has the potential to grow in size and scope.
  
  
• Monitoring over 927 km of large-diameter prestressed concrete water pipes, a record distance to date, using Pure's acoustic fibre-optic ("AFO") monitoring technology.
• Upgrades to existing systems and installations for new clients in the U.S.
  
  

Outlook

The Americas market (79% of total revenue) delivered a 21% increase in revenue over the prior quarter. New multi-year contracts with North American water utilities were added in the first three months which are expected to drive performance in subsequent quarters. The Company's Assess and Address™ approach has helped secure additional work in these core markets with utilities looking to implement condition assessment and specialised engineering programs.

In the international marketplace (17% of total; not including Africa), revenues improved by 82% over the prior period. Pure believes it is in the early days of realizing the large potential inherent in markets outside of the Americas and is encouraged by the progress seen thus far.

Conference Call

A teleconference will be held to discuss these results on May 14, 2013, at 10:30 am ET. Presentation slides will be made available on the Company's website prior to the call.

Teleconference: The telephone numbers for the conference are toll-free 1-888-231-8191 (within North America) and 647-427-7450 (Local / International). Please provide the operator with the Conference Call ID or Topic when dialing in to the call.

• Conference ID: 58674474
• Topic: Pure Technologies Ltd., 2013 First Quarter Conference Call
• A replay will be available approximately two hours after the call and will be available for one week. Access the replay by calling 1-855-859-2056 (toll-free within North America) or 416-849-0833 (Local / International). Use the following Passcode followed by the number sign: 58674474
  
  

Webcast & Presentation Slides: Investors will be able to listen to the conference over the Internet as well as access presentation slides (in pdf format) to follow along during the call.

• Links to the webcast and presentation slides will be available approximately 30 minutes prior to the call at: http://puretechltd.com/investors/presentations.shtml
• The webcast will be archived for 90 days.
  
  

About Pure Technologies Ltd.

Pure Technologies Ltd. is an international asset management technology and services company which has developed patented technologies for inspection, monitoring and management of critical infrastructure around the world. Pure's business model incorporates four distinct but complementary business streams:

• Sales of proprietary monitoring technologies for pipelines, bridges and structures (SoundPrint®, SoundPrint® AFO);
  
  
• Recurring revenue from data analysis and site maintenance for these technologies, and from technology licensing;
  
  
• Premium technical services including pipeline inspection, leak detection and condition assessment (PureEM™, SmartBall®, Sahara®, PipeDiver®, PureRobotics™, PureMFL™);
  
  
• Specialized engineering services in areas related to asset management, primarily in the area of pipeline condition assessment for water and wastewater infrastructure (Openaka Corp., Price Brothers UK Ltd, and Jason Consultants).

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).

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

 

SOURCE: Pure Technologies Ltd.

To find out more about Pure Technologies Ltd. (TSX: PUR), visit our website at www.puretechltd.com. Or contact James E. Paulson, Chairman, Karen Keebler, Chief Financial Officer or Paul Moon, Investor Relations at [phone] or e-mail to  [email protected].