Catch the Wind Reports First Quarter Financial Results for 2012

- Operating expenses reduced by 75% -

CHANTILLY, VA, May 23, 2012 /CNW/ - Catch the Wind Ltd. (TSXV: CTW), providers of Vindicator® Optical Control Systems (OCS), reported its financial results for the three-month period ended March 31, 2012.  All figures are in U.S. dollars, unless otherwise stated.

"In the first quarter we completed several milestones," said Jo Major, Interim President and CEO of Catch the Wind, Inc. "All of our shipments for the quarter were manufactured by Sanmina. In addition, improvements in our manufacturing infrastructure allowed us to ship customer product within one week of order receipt, and be fully operational within one month.  These operational improvements, coupled with ongoing reductions in our cost structure, position the Company for rapid revenue growth.  Our engineering team has made a number of technical achievements with the OCS product during the quarter, including reducing production costs by approximately 50%, enhancing the product's turbine control features and dramatically improving the uptime of our product. Our technical engagement with customers has grown steadily, laying a solid engineering foundation for strong follow-on orders."

Select Q1 2012 Financial and Operational Highlights

• Signed the Company's first follow-on order by way of a multi-unit sales agreement with enXco, an EDF Energies Nouvelles Company, for the purchase of five additional OCS units to outfit wind turbines at multiple North American wind farms, installation to occur during the second quarter of 2012.
• Signed a sales agreement with Saturn Power to equip all wind turbines at its Gesner wind farm in Ontario, Canada with the OCS. The installation of the OCS will be in parallel with the construction of the new turbines, without modification of the warranty agreement.
• Completed the transfer of OCS manufacturing to Sanmina-SCI, a tier 1 engineering and manufacturing solutions partner. All Q1 shipments were made by Sanmina-SCI.
• After 45 days of testing, results of the first ever deployment of the OCS in AXYS Technologies Inc.'s WindSentinel™ offshore buoy were an unprecedented success; providing wind profile information from the Great Lakes to wind resource researchers and analysts at Grand Valley State University, University of Michigan, the Weather Service and Michigan State University. Similar data collection success was achieved off the US east coast and a second Great Lakes deployment has begun.
• Decreased operating expenses by 75% from the corresponding period last year.

Highlights Subsequent to Quarter-end

• Continued to expand our patent portfolio, now up to seven issued patents and 14 pending patent applications.
• Signed an agreement for a collaborative project with the TechnoCentre éolien to install an OCS on one of its REpower MM-92 2.05 MW wind turbines in Québec for evaluation and R&D purposes, particularly in extremely cold climates and complex terrains.

Financial Performance
Catch the Wind recognized revenue of $200,000 for the three-month period ended March 31, 2012, compared to recognized revenue of $390,500 for the three-month period ended March 31, 2011.

Operating expenses for Q1 2012 were $2.0 million, down 75% from $7.9 million for the corresponding period last year.  The reduction in operating expenses is highlighted below.

Cost of sales for the three-month period ended March 31, 2012 was $151,000 compared to $783,000 for the same period last year.  The decrease in cost of sales is mainly due to replacement of Optical Air Data Systems LLC ("OADS") labour that was used in the first quarter of last year with growth of the Company's internal engineering capability and the outsourcing of manufacturing of the OCS to Sanmina.  Cost of sales for the first quarter of 2011 included OADS labour charges of $333,000 related to installation and customer support charges, whereas there were no OADS labour charges in the current quarter. The Company utilized its own personnel for installation and customer support in the first quarter of 2012.

General and administrative expense for the three-months ended March 31, 2012 were $293,000, down from $853,000 for the same period last year. The decrease in general and administrative costs, when compared to the same period last year, is primarily due to a reduction in travel and travel related expenses as well as repairs and maintenance costs associated with the Falcon 50 aircraft. Travel and travel related expenses were $33,000 for the current quarter compared to $473,000 for the same quarter last year. Expenses associated with repairs and maintenance of the Falcon 50 aircraft, owned by Falcon Fifty LLC, of which CTW had a 75% membership interest until October 22, 2011 when it withdrew from the LLC, were $0 in the first quarter of 2012 compared to $244,000 for the first quarter of 2011.

Research and development expense was $56,000 for the three-month period ended March 31, 2012, down from $1.5 million (OADS labour) for the three-month period ended March 31, 2011.

Catch the Wind recorded a net loss for Q1 2012 of $1.8 million or $0.01 per share, compared to a net loss $7.5 million or $0.09 per share for Q1 2011.

As of March 31, 2012, Catch the Wind had cash and cash equivalents of $3.0 million, compared to $6.0 million at December 31, 2011.

Catch the Wind has filed its financial statements for the three-months ended March 31, 2012, and related Management's Discussion and Analysis (MD&A) with securities regulatory authorities.  Catch the Wind's financial statements, MD&A and related documents are available via SEDAR as well as through the Company's website, www.catchthewindinc.com.

Conference Call
Catch the Wind will host a conference call to discuss its financial results for the first quarter 2012 year on Thursday, May 24, 2012 at 10:00 a.m. ET.

To access the conference call by telephone, dial 647-427-7450 or 1-888-231-8191.  Please connect approximately 15 minutes prior to the beginning of the call to ensure participation.  A question and answer session for analysts and institutional investors will follow management's presentation.

A live audio webcast of the conference call will be available at www.catchthewindinc.com . Please connect at least 15 minutes prior to the conference call to ensure adequate time for any software download that may be required to join the webcast. The webcast will be archived at the above web site for 30 days.

A taped rebroadcast will be available to listeners until 12 a.m. ET on Thursday, May 31, 2012. To access the rebroadcast, please dial 416-849-0833 or 1-855-859-2056 and enter passcode 78785452, followed by the number sign.

About Catch the Wind Ltd.
Catch the Wind Ltd. is a high-growth technology company headquartered in Chantilly, Virginia. The company was founded in 2008 to develop and manufacture the OCS.

The OCS is a "next generation" wind turbine control system for utility-scale wind turbines. From its position on top of the nacelle, the OCS simultaneously measures wind speed and direction in the free stream inflow ahead of the turbine and uses this information to optimize wind turbine performance, increasing energy output and reducing damaging stress loads.

Catch the Wind is focused upon the optical wind sensor systems, and using the data produced by these sensors to enable highly efficient control systems. The Company is focused on becoming a major contributor in making clean, renewable wind energy more affordable and profitable. For more information, please visit www.catchthewindinc.com.

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Forward-Looking Information
This news release includes certain forward-looking statements within the meaning of Canadian securities laws. Forward-looking statements involve risks, uncertainties and other factors that could cause actual results, performance, prospects and opportunities to differ materially from those expressed in such forward-looking statements. Forward-looking statements in this news release, include, but are not limited to, economic performance and future plans and objectives of Catch the Wind. Any number of important factors could cause actual results to differ materially from these forward-looking statements as well as future results. Although Catch the Wind believes that the assumptions and factors used in making the forward-looking statements are reasonable, undue reliance should not be placed on these statements, which only apply as of the date of this news release, and no assurance can be given that such events will occur in the disclosed timeframes or at all. Catch the Wind disclaims any intention or obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.

Neither 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.

Catch the Wind Ltd.Condensed Consolidated Interim Balance Sheets (Unaudited)
					March 31,		December 31,
					2012		2011
(Expressed in United States dollars)				Note	$		$
Assets
Current assets:
	Cash and cash equivalents				3,033,031		6,018,559
	Accounts receivable				388,951		167,705
	Inventory			3	3,127,212		1,830,350
	Prepaid expenses and other assets				139,029		352,002
					6,688,223		8,368,616
Non-current assets:
	Property and equipment				339,694		418,896
	Intangible assets				879		3,166
	Other assets				78,010		82,050
					418,583		504,112
Total assets					7,106,806		8,872,728
Liabilities and Equity
Current liabilities:
	Accounts payable and other liabilities				1,376,271		1,391,799
	Obligations under finance leases			5	29,666		62,707
	Warranty provision			6	93,750		93,750
	Due to related party			9	30,576		18,516
	Deferred revenue and customer deposits				795,200		552,800
					2,325,463		2,119,572
Non-current liabilities:
	Obligations under finance leases			5	-		7,620
	Provision for indemnification agreement			6	2,000,000		2,000,000
	Warrant liability			10	10,186		249,329
					2,010,186		2,256,949
Total liabilities					4,335,649		4,376,521
Commitments and contingencies
Equity
	Capital stock			11	12,252		12,252
	Contributed surplus				56,588,070		56,521,284
	Deficit				(53,829,165)		(52,037,329)
Total equity					2,771,157		4,496,207
Total liabilities and equity					7,106,806		8,872,728

 

Catch the Wind Ltd.Condensed Consolidated Interim Statements of Loss and Comprehensive Loss (Unaudited)
					Three months ended			Three months ended
					March 31,			March 31,
					2012			2011
(Expressed in United States dollars)				Note	$			$
Revenue					200,000			390,000
Expenses:
	Cost of sales			3,5	150,591			782,907
	Salaries and benefits			4	766,599			652,309
	General and administrative				292,632			853,214
	Inventory writedown - beta units			3	571			27,000
	Amortization of intangible assets				2,287			338,540
	Depreciation of property and equipment				90,002			159,097
	Sales and marketing			2	25,285			148,349
	Consulting fees			2	244,953			128,268
	Professional fees			4	444,646			271,403
	Professional engineering fees				153,923			288,736
	Research and development				56,394			1,509,198
	Finance costs			5	4,155			89,624
	Interest income				(234)			(1,434)
	(Gain) Loss on fair value of warrant liability			10	(239,143)			2,660,328
	Foreign exchange (gain) loss				(825)			6,870
					1,991,836			7,914,409
Net loss and total comprehensive loss					(1,791,836)			(7,524,409)
Net loss and total comprehensive loss attributable to:
Owners of the Company					(1,791,836)			(7,408,979)
Non-controlling interest					-			(115,430)
					(1,791,836)			(7,524,409)
Net loss per share - basic and diluted					(0.01)			(0.09)
Weighted average number of common shares
	outstanding				122,513,614			80,491,919

 

 

 

Catch the Wind Ltd.
Claudia Jaques
Vice President and General Counsel
703-956-6554
[email protected] 

TMX Equicom
Philip Dale
Investor Relations
416-815-0700 ext. 253
[email protected]