Gross margin amounted to 26.4%, compared to a gross margin of 22.3% for the corresponding quarter of the previous fiscal year, which represents an 18.4% increase. EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) for the quarter was CAD1,180,650, compared to (CAD315,101) for the same period ended March 31, 2008.
Before the change in operating working capital, operating activities generated CAD654,773 in cash for the period ended March 31, 2009 compared to a CAD189,072 use of cash for the comparable period ended March 31, 2008.
“We are very satisfied with H2O Innovation’s financial results for the third quarter of fiscal 2009. These results continued the trend begun at the start of fiscal 2009 and build on the performance of the first and second quarters. Sales continued at healthy levels, and our appreciable sales backlog—despite the current economic situation—is the result of the healthy diversification of markets, applications, and regions in which the company is active. Additional gains in operational efficiency in the project execution process helped us maintain a gross margin of over 25% for the second consecutive quarter.” stated Frederic Dugre, president and chief executive officer.
For the nine-month period ended March 31, 2009, sales reached CAD23,893,338 compared to CAD7,139,589 for the comparable nine-month period ended March 31, 2008. Gross margin has also noticeably increased to 25.6% for the first nine months of 2009, up from 21.7% for the corresponding nine months of 2008, representing an 18.0% increase. EBITDA for the nine-month period ended March 31, 2008 was CAD2,417,343, compared to a CAD1,797,567 loss before interest, taxes, depreciation and amortization for the same period ended March 31, 2008. The company recorded a net income of CAD1,002,300 (CAD0.021 per share) for the first nine months of 2009, compared to a net loss of CAD2,181,634 (CAD0.060 per share) for the same nine-month period of 2008.
Before the change in operating working capital, operating activities generated CAD1,435,584 in cash for the nine-month period ended March 31, 2009 compared to a CAD1,484,748 use of cash for the comparable period ended March 31, 2008.
Recent Highlights:
Sales of services and consumable products remain strong:
During the quarter, sales of services and consumable products (replacement parts, membranes, cartridges, conditioners, cleaning products and services) continued at a sustained level, making a positive contribution to quarterly results. Sales of services and consumable products, which totaled CAD1,639,774 in the third quarter, helped lift overall sales of services and consumable products to over CAD4 M in the first nine months of 2009. The company-wide efforts made in the first three quarters of the fiscal year will be sustained to better ensure that sales of services and consumable products represent a growing share of the company’s overall sales.
New contracts signed in municipal and industrial markets:
On March 17, 2009, H2O Innovation announced it has been awarded four new drinking water treatment and wastewater treatment systems contracts in the US and Canada totaling CAD5.1 million. Subsequently to the end of the quarter, the company has also announced, on April 27, 2009, that it had signed several contracts totaling CAD5 million to design, manufacture and deliver reverse osmosis industrial process water treatment systems to companies in the energy, power generation and consumer staples sectors in the US and in Egypt.
“H2O Innovation once again demonstrated its position as a key player in the water treatment industry with its membrane and membrane bioreactor filtration systems—processes with promising growth potential according to a number of independent studies published recently. H2O Innovation is well placed to continue increasing its sales in municipal and industrial markets in Canada, the United States, and elsewhere in order to meet its growth and profitability targets for fiscal 2009 and set the stage for promising future opportunities” concluded Frederic Dugre.
