Financial Results for the Six Months Ended June 30, 2013
August 07 2013 - 11:44AM
Marketwired Canada
Kelso Technologies Inc. (the "Company" or "Kelso") (TSX VENTURE:KLS)(OTCQX:KEOSF)
The Company reports that it has released its financial statements covering the
three and six month periods ended June 30, 2013. These reporting periods are
subsequent to the fiscal year end change to December 31. In accordance with year
end transition rules the June 30, 2013 results have been compared to the three
and six month periods ended May 31, 2012 where applicable. All amounts are
expressed in United States dollars.
HIGHLIGHTS OF THE THREE MONTHS ENDED JUNE 30, 2013
-- Reported net income for the three months ended June 30, 2013 was
$160,664 compared to a loss of $313,994 for the three months ended May
31, 2012.
-- Revenue for the three months ended June 30, 2013 reached $2,660,140
compared to the three months ended May 31, 2012 of $519,778.
-- Positive cash flow derived from operations was $179,341 for the three
months ended June 30, 2013.
-- Business expenditures and financial results are in line with
management's budgets and expectations.
HIGHLIGHTS OF THE SIX MONTHS ENDED JUNE 30, 2013
-- Reported net income for the six months ended June 30, 2013 was $240,636
compared to a loss of $604,850 for the six months ended May 31, 2012.
-- Revenue for the six months ended June 30, 2013 reached $4,674,202
compared to the six months ended May 31, 2012 of $760,696.
-- Positive cash flow derived from operations was $282,722 for the six
months ended June 30, 2013.
-- Reported net income of $240,636 included items not involving cash for
amortization of $37,830 and recognition of share based payments (Black
Scholes option pricing model) in the amount of $4,256 which estimates
the dilutive effect of incentive stock options granted during the period
and vesting from the prior year.
-- Business growth; product and market development progress; pre-sales
strategic costs and; financial results are in line with management's
budgets and expectations.
-- Average gross profit on sales was 33% for the six months ended June 30,
2013.
-- Cash on deposit at June 30, 2013 was $1,538,530.
-- Working capital at June 30, 2013 remained healthy at $3,946,648.
-- Company remained free of interest-bearing long-term debt commitments.
-- Net tangible assets grew to $4,478,140 at June 30, 2013 up from
$4,036,440 at December 31, 2012.
LIQUIDITY, CAPITAL RESOURCES AND FINANCIAL RISKS
At June 30, 2013 the Company had cash on deposit in the amount of $1,538,530;
accounts receivable of $1,073,687; HST receivable of $46,371; prepaid expenses
of $116,743 and inventory of $1,496,556 compared to cash on deposit in the
amount of $1,421,053; accounts receivable of $1,016,129; HST receivable of
$39,649; prepaid expenses of $88,506 and inventory of $1,188,467 at December 31,
2012.
The working capital position of the Company at June 30, 2013 was $3,946,648
compared to a working capital position of $3,470,762 which includes $12,247 due
to related parties at December 31, 2012.
OUTLOOK
The tragic accident in Lac Megantic in Quebec in July 2013 has been a clear
reminder that the transport of hazmat is a very dangerous activity and that all
hazmat stakeholders and regulators have an obligation to do so as safely as
possible. That has been the key focus of our business model for the past three
years - to innovate, design and deliver the best available service equipment
possible for tank cars used in hazmat applications.
Our priority is to continue to build the quality of our brand and sales in
railroad applications. Our sales growth will be based on our continuing ability
to create and reliably deliver a wide range of "best available" products that
address the demanding design criteria that our hazmat customers require.
Under our business development plan implemented in 2010 Kelso reached the key
milestone of profitability from operations during the four month period ended
December 31, 2012 and we have sustained this earnings trend for the first six
months ended June 30, 2013. Earnings growth is expected to continue as orders
delivered or to be delivered in 2013 are currently approaching $11,000,000 of
our $12,000,000 target for the year.
We remain unencumbered; carry no long term interest-bearing debt; and with the
exercise of warrants in July we have a working capital position in excess of
$4,400,000. From these financial resources we continue to invest in new product
development; independent lab testing and outside design engineering services;
new patent applications; enhanced Tier 1 regulatory disclosure and listing
strategies in Canada and the United States; more efficient accounting systems
and controls; pre-sales production capability for our KKM and; the preliminary
planning for the construction of a new 40,000 square foot production facility in
Bonham, Texas scheduled to be finished in mid 2014 that will handle the
production of our current and future product lines. Our strategic investments
have been improving our revenue and profitability growth and the overall value
of our Company.
Although we have many challenges ahead we are extremely optimistic about the
prospects of our many business opportunities. Management remains dedicated to
the health, welfare and growth of our business so that Kelso can continue to
grow its profitability; enhance dividend potential; and increase corporate value
on behalf of the shareholders of Kelso.
About Kelso Technologies
Kelso is a railroad equipment supplier that produces and sells proprietary tank
car service equipment used in the safe loading, unloading and containment of
hazardous materials during transport. Products are specifically designed to
provide economic and operational advantages while reducing the potential effects
of human error and environmental harm during the transport of hazardous
materials.
For a more complete business and financial profile of the Company, the
financials statements and management discussion and analysis can be viewed in
their entirety on the Company's website at www.kelsotech.com or www.sedar.com.
On behalf of the Board of Directors,
James R. Bond, CEO and President
Legal Notice Regarding Forward-Looking Statements: This news release contains
"forward-looking statements" within the meaning of applicable Canadian
securities legislation. Forward-looking statements are indicated expectations or
intentions. Forward-looking statements in this news release include that
earnings growth is expected to continue as orders delivered or to be delivered
in 2013 are currently approaching $11,000,000 of our $12,000,000 target for the
year. The Company's products involve detailed proprietary and engineering
knowledge and specific customer adoption criteria, hence factors that could
cause actual results to be materially different include that we may be
unsuccessful in raising any additional capital needs that may arise; we may not
have sufficient capital to develop, produce and deliver new orders; product
development may face unexpected delays; orders that are placed may be cancelled;
delivery of orders may be rescheduled; product may not perform as well as
expected; markets may not develop as quickly as anticipated or at all; and
operations may run into permit, labor or other problems. Further, we are reliant
on certain key employees who may leave the Company and we may be unable to
protect or defend our intellectual property. Investors are cautioned against
placing undue reliance on forward-looking statements. We assume no
responsibility to update these forward looking statements except to the extent
required by law.
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.
FOR FURTHER INFORMATION PLEASE CONTACT:
Kelso Technologies Inc.
James R. Bond
CEO and President
250-764-3618
bond@kelsotech.com
Kelso Technologies Inc.
Richard Lee
Chief Financial Officer
604-590-1525
lee@kelsotech.com
Kelso Technologies Inc.
Corporate Address:
7773 - 118A Street
North Delta, BC, V4C 6V1
www.kelsotech.com
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