Clearford Reviews 2014 and Outlook for 2015; Announces Fiscal 2014 Financial Results
OTTAWA, April 30, 2015 – Clearford Water Systems Inc. («Clearford» or the «Company»), (TSXV: CLI), today released results for 2014 and provided its outlook for 2015. The Company also issued its audited financial results for the fiscal year ended December 31, 2014. The statements are presented in accordance with IFRS (all figures in Canadian dollars).
During 2014 Clearford achieved key milestones which provide the basis for future revenues and income:
- Clearford One™ completed during Q1 and announced April 29th
- The first Clearford One™ sale contracted and announced in Q2 for delivery 2015
- Acquisition of UV Pure Technologies Inc. («UV Pure») closed December 19th
- $100 million fund to install Clearford One™ agreed in Q4 and announced January10th 2015
Clearford One™ is a decentralized wastewater collection and treatment system. Primary and partial secondary treatment is performed by ClearDigest™ at each source. Liquid effluent from ClearDigest™ is carried by ClearConvey™, a sealed small bore flexible HDPE pipe network, to final treatment by ClearRecover™, a treatment plant selected by Clearford to meet the specific needs of each community. ClearConvey™ allows zero infiltration of groundwater, reducing load on the treatment plant and reducing total treated effluent released by the plant. The result is lower levels of contaminants introduced to the receiving watershed by the population served as compared with conventional collection and treatment systems. Clearford One™ has 40% lower capital cost and 30% lower operating cost than conventional systems.
Fetherston Mobile Home Park («Fetherston»), located near Ottawa, Ontario, is a community of some 40 permanent residences currently served by septic tanks discharging to leaching beds. The Ontario Ministry of Environment ordered these septic systems to cease operation. Fetherston contracted with Clearford to install Clearford One™ to provide sewage collection and treatment and to manage the existing water system, which purifies its water using UV Pure’s Hallett® systems. Clearford maintains satisfactory operation of the existing septic tanks pending installation of Clearford One™ during Q2 and Q3 2015.
UV Pure is a Toronto based company which manufactures the proprietary Hallett® , Upstream®, and Cactus®ultraviolet («UV») Purification systems. The UV Pure products are based on patented Crossfire® technology developed by UV Pure. Crossfire® provides effective UV treatment for water with UV transparency from 99% to less than 30% using patented technologies that permit reflection of UV light to deliver repeated and 360° impact on pathogens. UV Pure serves municipal, industrial and commercial markets and has more than 14,000 successful installations. UV Pure continues to operate as a subsidiary corporation within Clearford under continued leadership ofRichard Vansant, President and CEO. Clearford paid $2.6 million to acquire 90.7% of all outstanding shares of UV Pure, which has no debt and produced operating cash flow of approximately $500,000 on revenue of $2.8 million in 2014.
Signina Capital AG («Signina») has committed a fund of $100 million, subject to Signina acceptance of each agreement, to be applied to pay the capital cost of installation of Clearford One™ under contract with municipalities inOntario. Signina has invested through debt in Clearford a total of $18.25 million since 2012, including the funds required for purchase of UV Pure. Signina has gained understanding of Clearford One™ as it evolved. Signina and Clearford have agreed on a program to deliver Clearford One™ to Ontario municipalities under a Pay for Performance («P4P™») model. Signina will own or control Special Purpose Corporations («SPC») which will own the Clearford One™ system installed in each municipality. All capital will be invested by Signina subject to acceptance by Signina of each municipal contract. Each SPC will contract with the municipality it serves to deliver Clearford One™ and operate the system for up to 30 years. At the end of the term the municipality may choose to continue with the service contract or to take ownership of the system and operate it either directly or with a contract operator. All obligations of the SPC for the capital project and operations and maintenance throughout the term of each contract will be contracted by the SPC to Clearford for delivery.
The P4P™ model allows municipalities to benefit from lower costs and superior environmental impact of Clearford One™ while investing no capital and paying only when and to the extent that the contracted service is delivered.
Discussions are advanced with one municipality in Ontario with agreement expected during the second quarter 2015. Discussions with other Ontario municipalities are at early stages. The Company expects to reach agreement with one or more additional municipalities this year and to commit the available $100 million before the end of 2016. Clearford will earn revenues substantially equal to the total capital invested by Signina and will also earn revenue for system operation and maintenance through the life of each contract.
Kevin Loiselle, President and CEO of Clearford, expressed confidence in the future of Clearford: «Completion of Clearford One™ and ownership of UV Pure, together with the P4P™ delivery model with the $100 million Signina funding, has allowed Clearford to enter 2015 with a high level of confidence in achieving commercial success», he said. «Early response in Ontario has been very positive, leading us to conclude that the initial $100 million will be committed to projects in Ontario during this year and 2016. As this program unfolds we will build on experience inOntario to broaden the P4P™ program both here and in other parts of North America«, Mr. Loiselle said.
«International opportunities look attractive for Clearford, particularly in India where public policy has set priority on sanitation and clean water. These markets will develop more slowly than we expect to see in North America, but the scope is enormous and Clearford One™ and Crossfire® are uniquely suited to many of these requirements. Clearford has been active for more than three years in developing a position in India and is working with large contractors inIndia to partner in delivery of Clearford One™ to that market», Mr. Loiselle concluded.
The Company said that 2014 was a year devoted to completing its product offering and putting delivery capacity in place. UV Pure financial performance for the last eleven days of December is included in financial results for Clearford for 2014.
Revenue for the year was $534,993 compared with $1,308,804 for the prior year. Operating loss before finance costs were $3,793,577 for the year compared with $3,275,775 for the prior year. Financing costs for the year were$1,425,386 compared with $668,566 for the prior year, with net loss for the year of $5,218,963 or $0.08 per share compared with $3,964,343 or $0.06 for the prior year.
Costs of sales and marketing were reduced year over year.
Costs of engineering and research and development increased during the year to $902,558 from $741,569 as the Clearford OneTM System was brought to final design and introduced into the market in during the year.
General and administration costs increased to $2,087,325 from $1,730,097 primarily reflecting the acquisition costs incurred relating to the UV Pure acquisition.
Clearford ended 2014 with cash of $756,299 compared with $829,482 a year earlier. The Company’s 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 Inc. (TSX-V: CLI) is a provider of unified water management and sanitation systems based on Clearford One™. Clearford One™ is a proprietary system comprised of ClearDigest™ smart digester, SBS®ClearConvey™ small bore sewer, and ClearRecover™ final treatment facility. For more information on Clearford Water Systems, please visit www.clearford.com.
About UV Pure Technologies Inc.
UV Pure Technologies manufactures technically advanced UV water purification systems. The Company has won an Artemis Top 50 Clean Tech Company award, two Frost and Sullivan Best Practices awards, a Canadian Drinking Water Association award for innovation, and is a Going Green Global Top 200 company.
There are currently over 14,000 UV Pure systems in residential, commercial, industrial, public and municipal applications, with flow rates up to 1 million gallons per day. An aerospace version of UV Pure’s system is being used by Boeing to purify water on its new 787 Dreamliner.
UV Pure’s patented Crossfire Technology® is dramatically advantaged compared to conventional UV systems. Lamps are mounted in air surrounded by elliptical reflectors providing more effective deactivation of pathogens, facilitating easy lamp changes and visual quartz inspection. They are self-cleaning, smart – with multiple sensors and on-board diagnostics guiding maintenance, engineered to be fail-safe, virtually maintenance free, and are plug-in ready for remote monitoring. For more information on UV Pure Technologies, please 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.
SOURCE Clearford Industries Inc.
For further information: Kevin Loiselle, President & CEO, Clearford Water Systems Inc. , Phone: (613) 599-6474 ext. 303, www.clearford.com; Renmark Financial Communications Inc., Bettina Filippone:email@example.com, Richard Dupuy: firstname.lastname@example.org, Tel.: (416) 644-2020 or (514) 939-3989, www.renmarkfinancial.com