Canada NewsWire
CALGARY, March 15, 2016
CALGARY, March 15, 2016 /CNW/ - Pure Technologies Ltd. ("Pure" or the "Company") (TSX: PUR) announces its financial performance for the year ended December 31, 2015.
2015 Year Highlights:
"2015 was a landmark year for Pure," said Jack Elliott, President and CEO of Pure. "For the first time in our history, we exceeded $100 million in revenue and we have consolidated our position as the world leader in water pipeline condition assessment. Through the acquisition of WWS on April 1, 2015 and our continuing focus on research and development, we have broadened the range of services and solutions we can provide to the water sector.
"Looking beyond water, our acquisition of the HM business on October 1, 2014 has allowed us to penetrate the large and established market for integrity services to oil and gas pipeline operators. Even in an environment of depressed oil and gas prices, the requirement to maintain integrity of the vast existing base of pipeline infrastructure provides us the opportunity to materially expand our business. We are one of the few companies with exposure to the oil and gas sector that is actually growing.
"The year was not without its challenges as we integrated these two significant acquisitions. The postponement of anticipated large projects, combined with a slowdown in the WWS core business, resulted in revenue that was below our expectations. Having said that, I am confident that the platforms we have built in the water, wastewater and energy pipeline sectors, combined with the cost reductions and improved management processes we have recently implemented, will drive aggressive revenue and margin expansion in 2016 and beyond."
Financial Highlights for the Three and Twelve Month Periods Ended December 31, 2015
For further details on the results, please refer to Pure's Management Discussion and Analysis (MD&A) and Consolidated Financial Statements which are available on the Company's website (www.puretechltd.com).
For the period ended December 31 (000's) |
Three |
Three |
Change |
Twelve |
Twelve |
Change | |||
$ |
% |
% |
$ | ||||||
Revenue |
30,787 |
27,614 |
3,173 |
11 |
104,423 |
77,806 |
26,617 |
34 | |
Cost of sales |
5,958 |
5,841 |
117 |
2 |
25,522 |
17,506 |
8,016 |
46 | |
Gross profit2 |
24,829 |
21,773 |
3,056 |
14 |
78,901 |
60,300 |
18,601 |
31 | |
Gross margin (%)2 |
81 |
79 |
76 |
78 |
|||||
Operating Expenses1 |
21,449 |
14,660 |
6,789 |
46 |
79,672 |
53,833 |
25,839 |
48 | |
Adjusted EBITDA2 |
6,895 |
8,716 |
(1,821) |
(21) |
13,288 |
15,629 |
(2,341) |
(15) | |
Adjusted EBITDA (%)2 |
22 |
32 |
13 |
20 |
|||||
Profit (loss) |
677 |
(4,729) |
5,406 |
(114) |
(134) |
(3,886) |
3,752 |
(97) | |
Per share – basic |
0.01 |
(0.09) |
(0.00) |
(0.07) |
|||||
Per share – diluted |
0.01 |
(0.09) |
(0.00) |
(0.07) |
|||||
Cash Flow from Operations |
5,612 |
8,672 |
(3,060) |
(35) |
11,359 |
14,243 |
(2,884) |
(20) | |
Adjusted profit2 |
1,244 |
5,140 |
(3,896) |
(76) |
(1,394) |
5,767 |
(7,161) |
(124) | |
Total assets |
147,080 |
130,989 |
16,091 |
12 |
147,080 |
130,989 |
16,091 |
12 |
1. |
Excludes Libya accounts receivable, other provisions, and loss or gains on asset disposals |
2. |
See Non-GAAP Measures as discussed in the 2015 year end Management's Discussion and Analysis |
Growth and Cost Optimization Update
As announced in the previous quarter, Pure is undertaking several specific measures to increase sales, enhance workforce flexibility to better align with project timing volatility and drive operational efficiencies without sacrificing quality or its ability to deliver on long term growth expectations. These include, but are not limited to:
Growth in revenue by investing in sales resources:
Focused Reduction in Operating and Administrative Costs:
The Company is focusing on operational and administrative improvements with a target of optimizing the work force and cost of project delivery by mid-2016. This is expected to result in annualized cost efficiencies of between $6 and $8 million.
To date, Pure has completed or commenced the following initiatives which in aggregate have an efficiency impact of $6 million annualized:
The remaining additional operational and administrative improvements being undertaken in 2016 include (balance of $2 million in efficiencies):
Outlook
In 2015, Pure's focus continued to be the development of its core North American water, wastewater and oil and gas markets while remaining opportunistic in its international expansion activities. Over the last 2 years, Pure has grown its revenues by 71% organically and through the acquisitions of PureHM and WWS to $104.4 million in the current year from $60.9 in 2013. As a consequence, the Company spent much of 2015 with a heavy internal focus on the integration of PureHM and WWS and establishing the foundation for future growth. This focus is within the context of the Company's long-term growth strategy of being the leading provider of pipeline condition assessment and network management services in both the water and oil and gas industries.
WWS, acquired in the second quarter of 2015, is a key part of the Americas' growth strategy. It expands Pure's services towards a full network management offering, including valve, hydrant and non-revenue water (NRW) services and broadens Pure's customer base to include more small and medium sized utilities. The combination of Pure and WWS forms the platform for significant growth in 2016 and beyond.
The Company continues to capitalize on its PureHM acquisition, which is Pure's fastest growing business segment with pro forma organic growth in 2015 of 12% over 2014. In the fourth quarter of 2015, organic growth over the same period of 2014 was 57% as product acceptance increased for both the Spectrum XLI and SmartBall technology for the oil and gas sector. The focus of PureHM's growth strategy includes expansion into the U.S. and other western states, resulting in large contracts being awarded in California; increasing services to existing clients; and targeting of other major pipeline companies for new business. A proactive approach to sales in this division is resulting in an increased amount of work being booked into the first quarter of 2016 relative to the same period of 2015.
The Company made significant strides in 2015 in establishing a foundation for growth in 2016 and beyond, more than doubling its workforce through two acquisitions, broadening its service offerings and expanding its customer base in its core water business, the wastewater sector and the oil and gas sector. As integration concludes and sales and execution of the aforementioned initiatives take hold, the Company expects EBITDA margins to return to or exceed its stated target of 20%.
Conference Call and Webcast
A teleconference and webcast will be held tomorrow morning, March 16, 2016, at 10:30 am EDT. Senior Management will speak to the results and provide a financial and business update. Presentation slides will be made available on the Company's website prior to the call.
Teleconference: The telephone numbers for the conference are toll-free 1-800-319-4610 (within Canada & USA) and 416-915-3239 (Local / International).
Webcast & Presentation Slides: Investors will be able to listen to the conference over the Internet as well as access presentation slides (in pdf format) to follow along during the call.
About Pure Technologies Ltd.
Pure Technologies Ltd. is an international asset management, technology and services company which has developed patented technologies for inspection, monitoring and management of critical infrastructure around the world. Pure's business model incorporates four distinct but complementary business streams:
Forward-Looking Statements
This News Release contains forward-looking statements, including, without limitation, statements containing the words "should", "believe", "anticipate", "may", "plan", "will", "continue", "intend", "expect", "estimate" and other similar expressions. These statements constitute "forward-looking information" within the meaning of applicable Canadian securities laws. These statements are based on the Company's current expectations, estimates, forecasts and assumptions. Forward-looking statements are not guarantees of future performance and are subject to risks, uncertainties and other important factors that could cause the Company's actual performance to be materially different from that projected. Examples of these statements would include those relating to the benefits expected to be realized from the Company's Growth and Cost Optimization Plan, integration of recent acquisitions, where the Company forecasts the timing of new and existing projects, the success of the Company's new technologies and entering new markets, the Company's ability to generate future cash flows and the timing and amount of future dividend payments. The assumptions, risks and uncertainties that could cause actual results to differ materially from the forward-looking information, include, but are not limited to, the Company's ability to successfully implement its Growth and Cost Optimization Plan, integrate the Wachs Water business into its existing operations, market changes, the Company's ability to deliver services in a timely and cost effective manner, technological change, changes in general economic conditions and other risks detailed from time to time in our ongoing filings with the Canadian securities regulatory authorities, including those in the Company's Annual Information Form, which filings can be found at www.sedar.com. Given these assumptions, risks and uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements. Unless otherwise required by applicable securities laws, the Company undertakes no obligation to publicly update or revise any forward-looking statements either as a result of new information, future events or otherwise.
® Registered Trademarks, property of Pure Technologies Ltd.
"The TSX has not reviewed and does not accept responsibility for the adequacy or accuracy of this release"
SOURCE Pure Technologies Ltd.
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