Clearford Water Systems forecasting $90 million Revenue During Next 30 Months: CEO Tells AGM
OTTAWA, June 18, 2015 – Clearford Water Systems Inc. (“Clearford” or the “Company”) (TSXV: CLI) held its Annual General Meeting of Shareholders today in Ottawa. Kevin Loiselle, Clearford CEO, reviewed key events of 2014 and the first half of 2015. “More than a decade of investment culminated in the launch of Clearford One™ in April last year, giving Clearford a proven product that delivers waste water collection and treatment with capital costs 40% below the cost of conventional systems and operating costs 20% lower than those systems. Clearford One™ is environmentally superior to conventional systems, with improved impact of treated waste water from a given population on the receiving watershed,” Mr. Loiselle told shareholders.
“The cost and performance advantages of Clearford One™ allowed the Company to contract with Signina Capital AG of Zurich for $100 million of project funding. The funds will pay 100% of capital costs of Clearford One™ installation in Ontario Municipalities carrying an “A” credit rating. Through Signina, private investment funds project capital costs supported by a contract with the municipality paying for waste water collection and treatment services delivered by Clearford under a Service Contract for at least 20, and as long as 30 years. At the end of the contract, the Clearford One™ system, in as new condition, belongs to the community without further charge.
“This Pay for Performance (P4P™) delivery model has been enthusiastically received. We announced the model in January this year. The first contract now under discussion would result in project implementation revenue to Clearford of about $20 million and annual revenue of about $400,000 per year for operation of the system for 30 years, escalated with inflation. This would commit $20 million of the $100 million capital funding currently available.
“Revenue from this initial P4PTM contract is expected to exceed total revenue for the Company during the past 5 years combined.
“The Company expects the full $100 million project funding facility to be committed by mid 2016 and converted to $90 million in Clearford revenue earned through project delivery by the end of 2017 subject to the Ontario permitting process. We have had interest from investors in providing additional capital utilizing this model to expand the program in Ontario and to make it available in other markets”, Mr. Loiselle said.
The second pivotal event for Clearford during 2014 was acquisition of 90.7% of the shares of UV Pure Technologies Inc. (UV Pure). This acquisition was closed in December last year. UV Pure manufactures and sells ultraviolet (UV) water purification systems based on patented Crossfire® technology. Crossfire® enables use of reflective technologies and real time performance monitoring to increase the effectiveness and reduce the cost of UV purification of potable water and waste water. In calendar 2014 UV Pure recorded revenue of $2.8 million and EBITDA of $518,000. For the first quarter of this year UV Pure increased revenue by 22% and EBITDA by 5x compared with the same period last. UV Pure recently announced a co-branding agreement with Erie Water Treatment, a division of Aquion Inc. under which UV Pure will supply systems to Erie to service the restaurant and hospitality industry worldwide, co-branded as H2OptimaTM with Crossfire® Technology.
The CEO reported to shareholders that Clearford One™ has been selected in India by Infrastructure Leasing & Financial Services Limited (IL&FS) for servicing the small village of Jambudiyapura in Gujarat State. IL&FS, based in Mumbai is one of the leading providers of infrastructure in India. Successful installation of Clearford One in this village has the potential to lead Clearford into significant participation with IL&FS in meeting the sanitation needs of Gujarat and other States of India. The State of Gujarat recently signed an MOU with Clearford for cooperation in bringing sanitation to areas of the State. Delivery of Clearford One™ for Jambudiyapura is expected to be completed this year.
“The opportunities for Clearford One™ and for Crossfire® Technology from UV Pure are truly remarkable” Mr. Loiselle said. “Clearford’s management team recognizes the patience our investors have shown over the years. We believe that the investment and patience will now yield results that were worth the wait ” he concluded.
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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 15,000 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.
About Aquion Inc.
Aquion has been a leader in the water treatment industry since 1953 as a manufacturer and marketer of premium water treatment equipment and water quality solutions. Headquartered in Elk Grove Village, Illinois, Aquion provides solutions for residential water treatment and commercial and light industrial applications through four unique operating divisions: Erie Water Treatment, Clearwater LLC, RainSoft, and ProSystems. For more information, visit www.aquion.com.
About Erie Water Treatment
Erie Manufacturing Company was founded in 1943. Although its first products were emergency oxygen systems for military aircraft, Erie soon became a pioneer and innovator in ‘devices to control flows’ for application in oxygen, HVAC and water treatment systems. In 1947, Erie became the world’s first manufacturer to develop and commercially produce an automatic regeneration control valve for ion exchange water softeners. Today, with manufacturing, sales and service operations in the United States, Europe and Asia, Erie is truly a global leader in the water treatment industry, providing components and complete systems for independent water treatment dealers, plumbing wholesalers, plumbing contractors and foodservice equipment dealers. For full details on H2Optimo technology, visit www.erie-h2optimo.com or call: 1-847-871-4750 in the U.S. or 32-14-28-5171 in Europe.
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 Water Systems Inc.
For further information: Kevin Loiselle, President & CEO, Clearford Water Systems Inc., Phone: (613) 599-6474 ext. 303, www.clearford.com