STT Enviro Corp. Reports Financial Results for Quarter Ended June 30, 2013
15 August 2013 - 12:16AM
Marketwired Canada
STT Enviro Corp. ("STT" or the "Company") (TSX VENTURE:STT) today reported
financial results for its quarter ended June 30, 2013 of approximately $8.1
million of revenue, $0.9 million of EBITDA and net income after tax of $0.5
million.
Financial Highlights for the Quarter:
Quarter Ended Quarter Ended %
June 30, 2013 June 30, 2012 Change
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Revenue $ 8,122,200 $ 8,324,741 -2%
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EBITDA 880,586 758,326 +16%
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Net income after tax 494,056 380,969 +30%
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Earnings per share ((i)) 0.019 0.014
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EBITDA per issued common
share 0.033 0.029
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Financial Highlights for the Year-to-Date:
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Six Months Six Months
Ended June 30, Ended June 30, %
2013 2012 Change
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Revenue $ 16,980,801 $ 14,515,445 +17%
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EBITDA 1,809,794 631,396 +187%
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Net income after tax 1,029,001 54,983 +1771%
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Earnings per share ((i)) 0.039 0.002
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EBITDA per issued common share 0.068 0.024
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Closing backlog $ 17,733,494 $ 24,333,840 -27%
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Closing working capital 777,025 2,415,529 -68%
(i) Earnings per share as calculated under IFRS does not include the effect
of the exercise of potentially dilutive securities issued by the
Company. See chart below for a summary of these securities.
The Company will hold a conference call to discuss the financial results on
Thursday, August 22, 2013 at 11:00 am Eastern time. The call-in numbers are
(416) 204-9641 or 1(877) 314-1234; participant code 9530930.
"We are pleased with the results for the second quarter," said David Deacon,
STT's CEO. "Although revenue was flat compared to the previous year, gross
margins have improved despite margin pressure on new orders. Our closing backlog
was $17.7 million, consistent with the backlog at March 31, 2013, but down 27%
from the backlog at June 30, 2012. We anticipate the closing of new orders
during Q3 to keep pace with our backlog execution. The strength of these results
should not simply be extrapolated for the rest of the year. We want to caution
that this margin improvement should continue until the end of the third quarter,
when we expect lower overall revenue to begin to impact the gross margin
percentage."
"Our closing working capital was approximately $777,000, with the change from
the previous year reflecting the reclassification of certain loans from
long-term to current liabilities. We expect to close the first tranche of a new
financing by August 31, 2013, the proceeds of which will be used to refinance a
portion of the $2.5 million of convertible debentures maturing early in 2014."
Finally, he said, "We continue to have a cautious outlook on the overall economy
and particularly its impact on commodity pricing, which affects our activities
in the mining sector. We expect oil and gas activity to be modest until there is
clarity on Canadian pipelines and the potential Keystone pipeline in the US.
These factors are causing delays on approval for new capital-intensive projects.
In the meantime, we continue to focus on extending our sales reach
geographically and improved support of aftermarket activities."
Potentially Dilutive Securities:
As at June 30, 2013 and 2012, the following potentially dilutive securities were
excluded from the calculation of earnings per share since their exercise prices
exceeded the average market value of the Company's common shares for the period:
Number of Potential New
Common
Shares Upon Exercise
-----------------------------
Exercise At June 30,
Security Price At June 30, 2013 2012
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Warrants 0.140 1,045,000 1,045,000
Options 0.100 50,000 -
Options 0.130 1,150,000 525,000
Options 0.160 1,205,000 1,425,000
Options 2.220 - 257,500
Convertible debentures 0.140 17,841,729 17,841,729
Warrants which would be issued on
conversion ofconvertible
debentures 0.140 8,920,865 8,920,865
-----------------------------
Total potential dilution 30,212,594 30,015,094
Common shares issued and
outstanding 26,528,944 26,528,944
-----------------------------
Total potential common shares 56,741,538 56,544,038
-----------------------------
-----------------------------
About STT Enviro Corp.
STT Enviro Corp. is an international supplier of environmental solutions and
industrial processes, with specific emphasis on water remediation and emission
control systems.
The Company is of the view that environmental considerations and preventative
technologies are becoming a prerequisite of most modern industrial expansion,
particularly in the mining, oil & gas and power sectors.
The Company's principal focus is the conceptual design, engineering, project
management, and assembly and installation of complete bulk material handling
systems used to clean up water and control air emissions- from the storage
silos, to the conveying systems, to the computerized electronic controls. The
systems are utilized internationally in a broad range of industries.
Caution Regarding Forward-Looking Information and Non-IFRS Measures
Forward-Looking Information
This news release contains certain forward-looking statements. These statements
relate to future events or future performance and reflect management's current
expectations and assumptions regarding the growth, results of operations,
performance, and business prospects and opportunities. Such forward-looking
statements reflect management's current beliefs and expectations and are based
on information currently available to management of the Company. In particular,
statements regarding the future operating results and economic performance are
forward-looking statements. Forward-looking statements involve significant risks
and uncertainties. A number of factors could cause actual events or results to
differ materially from the events and results discussed in the forward-looking
statements, including risks outlined under "Risk Factors" in our Annual
Information Form, which is posted at www.sedar.com. In evaluating these
statements, investors should specifically consider various factors, including
such risks as Investment Risk; Business Valuations; Condition of Capital
Markets; Dependence on Key Personnel; General Economic Factors; Interest Rate
Risk; Competition; and Reliance on Key Suppliers. One or more of these "Risk
Factors" could cause actual events or results to differ materially from any
forward-looking statement. These factors should not be considered exhaustive.
Although the forward-looking statements contained in this press release are
based on what management of the Company considers to be reasonable assumptions
based on information currently available to them, there can be no assurance that
actual events or results will be consistent with these forward-looking
statements, and management's assumptions may prove to be incorrect. These
forward-looking statements are made as of the date of this press release, and
none of STT nor its directors assume any obligation to update or revise them to
reflect new events or circumstances. Undue reliance should not be placed on
forward-looking statements.
Non-IFRS Measures
The term "EBITDA" is a financial measure used in this document which is not a
standard measure under International Financial Reporting Standards ("IFRS"). The
Company's method of calculating EBITDA may differ from the methods used by other
issuers. Therefore, STT's measure of EBITDA, as presented in this press release,
may not be comparable to similar measures presented by other issuers. EBITDA
refers to net earnings determined in accordance with IFRS before depreciation,
amortization of intangible assets, gain or loss on disposal of property and
equipment, interest expense, accretion expense, special charges and recoveries,
stock compensation expense and income tax expense. Management believes that
EBITDA is a useful supplemental measure of cash available for debt service,
working capital, capital expenditures, income taxes, and distribution. Investors
are cautioned that EBITDA, as a non-IFRS measure, is not an alternative to
measures under IFRS and should not, on its own, be construed as an indicator of
performance or cash flows, a measure of liquidity or as a measure of actual
return.
The term "backlog" is a financial measure used in this document which is not a
standard measure under IFRS. The Company's method of calculating backlog may
differ from the methods used by other issuers. Therefore, STT's measure of
backlog, as presented in this press release, may not be comparable to similar
measures presented by other issuers. Backlog is the value of revenue remaining
to be earned from purchase orders received from customers. The projects
represented in backlog are executed according to a schedule agreed with each
customer, which could range in duration from one month to eighteen months.
Revenues are earned on a percentage of completion basis. Management uses this
measure to i) monitor the Company's success in securing new orders, and ii)
gauge the likelihood of meeting revenue objectives in future periods.
Investors are cautioned that backlog, as a non-IFRS measure, is not an
alternative to measures under IFRS and should not, on its own, be construed as
an indicator of performance or cash flows, a measure of liquidity or as a
measure of actual return.
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 of this release.
FOR FURTHER INFORMATION PLEASE CONTACT:
STT Enviro Corp.
David Deacon
CEO
(905) 875-5577
STT Enviro Corp. (TSXV:STT)
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