OTTAWA, June 3, 2019 /CNW/ - Clearford Water Systems
Inc. ("Clearford" or the "Company"), (TSXV: CLI), today released
results for its three months ended March 31,
2019. The unaudited consolidated financial statements are
presented in accordance with IFRS (all figures in Canadian
dollars).
Kevin Loiselle, President and CEO
of Clearford, expressed enthusiasm for the future of Clearford:
"With the completion of the acquisition of ASI Group Limited Water
Division through our new subsidiary Clearford ASI Inc., we expect
revenue to continue to grow. The acquisition is expected to bring
synergies to the Company that will allow us to begin to focus on
the earnings line. Clearford continues to execute on its new
business model transitioning into a full-service utility that will
benefit from the full value of our product offerings. Along with
our existing operations and management services group, the
acquisition now provides us with a significant revenue source from
long-term contracts and puts us in strong position to service
existing and future customers in Ontario extending from Eastern Ontario and down the 401 corridor to
Southern
Ontario".
Additionally, the Company announced that it has arranged
$1 million in short-term financing
from multiple private arm's length lenders effective May 31, 2019. The Loans were provided by Ace
Mortgage Corporation ("ACE") in the amount of C$500,000 and Morebath Limited in the amount of
US$375,000 (C$500,000). Both loans bear interest of 10% and
with an initial due date of December 15,
2019 and are expected to be replaced by new long-term
financing in December 2019. The ACE
loan has the option to be extended until May
31, 2019. A 10% setup fee is payable on each loan at
maturity. Mr. Rod Bryden, a
significant shareholder and deemed insider of the Company has
provided a personal guarantee of both loans. Clearford's President
and CEO has also provided a personal guarantee for the ACE loan.
Clearford Koester Canada Inc., a wholly owned subsidiary of the
Company provided a corporate guarantee of the ACE loan. The
Company's significant lenders have provided a subordination
agreement to one lender and the Company has provided a general
security agreement as well as the assignment of a long-term
receivable as collateral for that loan. The funds will be used for
working capital purposes including interest repayments to existing
unrelated lenders.
Revenue for the quarter was $2,011,437 compared with $1,668,881 for the prior year's quarter. The
operating loss before net financing costs was $1,127,096 for the quarter compared with
$1,776,946 for the prior year's
quarter and included a $152,807
foreign exchange gain on the Company's US dollar denominated debt.
Net financing costs for the quarter were $1,277,389 compared with $937,546 for the prior year's quarter, with net
loss for the quarter of $2,404,485 or
$0.02 per share compared with
$2,714,492 or $0.03 per share for the prior year's quarter.
Costs of sales increased to $1,405,125 during the quarter from $922,602 in the prior year's quarter primarily
due to the increase in revenues.
Sales and marketing costs decreased to $282,635 from $375,790 in the prior year's quarter reflecting a
reduction in rebranding costs and less travel as the Company
focused primarily on the Ontario
market.
Costs of engineering and research and development decreased
slightly to $192,744 from
$212,829 in the prior year's quarter.
The drop related primarily to UV Pure as it had substantially
completed the Generation 3 product development stage and began to
move the new generation products into certification and
pre-production stage.
General and administration costs increased to $1,420,622 from $1,201,314 in the prior year's quarter primarily
reflecting the additional resources to support the growth of the
business.
Clearford ended the March 31, 2019
quarter with unrestricted cash of $466,835 compared with $228,468 on December 31,
2018. 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. (a Clearford
subsidiary)
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. (a Clearford
subsidiary)
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. (a Clearford
subsidiary)
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.
www.clearford.com
SOURCE Clearford Water Systems Inc.
