- Operating expenses reduced by 75% - CHANTILLY, VA, May 23, 2012
/CNW/ - Catch the Wind Ltd. , 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. Follow us on Twitter 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 1,376,271 1,391,799 liabilities 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
795,200 552,800 deposits 2,325,463 2,119,572 Non-current
liabilities: Obligations under finance leases 5 - 7,620 Provision
for indemnification 6 2,000,000 2,000,000 agreement 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 Three months ended
ended March 31, March 31, 2012 2011 (Expressed in United Note $ $
States dollars) 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
292,632 853,214 administrative Inventory writedown - 3 571 27,000
beta units Amortization of 2,287 338,540 intangible assets
Depreciation of 90,002 159,097 property and equipment Sales and
marketing 2 25,285 148,349 Consulting fees 2 244,953 128,268
Professional fees 4 444,646 271,403 Professional 153,923 288,736
engineering fees Research and 56,394 1,509,198 development Finance
costs 5 4,155 89,624 Interest income (234) (1,434) (Gain) Loss on
fair value of warrant 10 (239,143) 2,660,328 liability Foreign
exchange (825) 6,870 (gain) loss 1,991,836 7,914,409 Net loss and
total (1,791,836) (7,524,409) comprehensive loss Net loss and total
comprehensive loss attributable to: Owners of the Company
(1,791,836) (7,408,979) Non-controlling - (115,430) interest
(1,791,836) (7,524,409) Net loss per share - (0.01) (0.09) basic
and diluted Weighted average number of common shares outstanding
122,513,614 80,491,919 Catch the Wind Ltd.
CONTACT: Catch the Wind Ltd.Claudia JaquesVice President and
General Counsel703-956-6554cjaques@catchthewindinc.com TMX
EquicomPhilip DaleInvestor Relations416-815-0700 ext.
253pdale@equicomgroup.com
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