SEPROTECH ANNOUNCES 2010 FISCAL YEAR END RESULTS
May 10 2011 - 4:39PM
PR Newswire (Canada)
OTTAWA, May 10 /CNW/ -- OTTAWA, May 10 /CNW/ - Seprotech Systems
Incorporated (TSXV: SET); ("Seprotech" or the "Company") announces
the following unaudited results for the fourth quarter of 2010 and
audited results for the fiscal year ended August 31, 2010. Three
Months Ended Year Ended August 31 August 31 2010 2009 2010 2009
$000 $000 $000 $000 Revenue 1,440 1,849 5,190 7,399 Gross Margin
396 587 2,056 2,220 Net Loss (552) (2,473) (625) (3,110) Loss per
share (0.01) (0.07) (0.01) (0.07) The fiscal year ended August 31,
2010 was again a very challenging year for the Company, with the
revenue contribution from the Company's core wastewater treatment
business unit remaining depressed. The decision to sell back to the
vendor the Envirosearch Operations Inc. business further added to
the challenges faced by management. Despite these setbacks,
operations benefited from the stability offered by the repair
contract for Department of National Defence reverse osmosis water
purification units, the contract continuing beyond fiscal year end
and ultimately being extended until April 2011. As a result of the
downturn in activities in both the mining sector (remote
operations) and the housing and municipal development sectors,
revenues for the year from sales of rotating biological contactors
("RBCs") fell from $7,399 in fiscal 2009 to $5,190, a 30% decline.
In response to the reduction in revenues, management imposed
further cuts to operating expenses and the resulting net loss for
the year was reduced from $3,110 for the year ended August 31, 2009
(which included a one-time write-down of goodwill by $2,003) to
$625 for the same period in 2010. Comparative data has been changed
to reflect discontinued operations in 2009. The delay in completing
the fiscal 2010 audit resulted from management's detection,
subsequent to year-end, of an overstatement of revenue by a
material amount with respect to its financial statements for the
quarters ended November 30, 2009, February 28, 2010 and May 31,
2010. The overstatement resulted from over-billing a customer over
a period of approximately 12 months from July 2009. The Company
immediately brought the billing discrepancy to the attention of its
customer, and subsequently determined that the over-billing
amounted to $315,584 spread over the fiscal year ended August 31,
2010. As a consequence of the over-billing, interim unaudited
financial statements for the periods ended November 30, 2009,
February 28, 2010 and May 31, 2010 have been amended and restated,
and filed on March 25, 2011. The impact of the over-billing is
fully reflected in the August 31, 2010 financial statements, and
did not impact any subsequent fiscal periods. The amount of the
over-billing has been repaid in full. The delay in completing the
fiscal 2010 audit, and consequent delay in completing both its
annual and first and second quarters' 2011 required regulatory
filings has led to the imposition on the Company of cease trade
orders from the Ontario, British Columbia and Manitoba securities
commissions (respectively, the "OSC", the "BCSC" and the "MSC").
The BCSC's cease trade order will be automatically revoked upon
completion of the required regulatory filings, but the OSC and MSC
cease trade orders will only be revoked upon application by the
Company. Seprotech is targeting to complete its required regulatory
filings (including quarterly interim financial statements and
related MD&A and officer certifications for the first and
second quarters of 2011) on or before May 16, 2011, and at that
time intends to make application to the OSC for a full revocation
of the cease trade order. The Company has also been notified by the
TSX Venture Exchange (the "TSXV") that if it does not complete its
reinstatement to trading on or before May 25, 2011, the Company's
securities will be transferred to NEX at that time. The Company
intends to make application to the TSXV for reinstatement as soon
as it is compliant with respect to its required filings, as
described above. The Company believes that, other than the delayed
filings described above, it otherwise meets the continuous listing
requirements of the TSXV. Seprotech is a provider of pre-engineered
water and wastewater treatment solutions to the municipal/land
development, resource sector and military market place, including
Reverse Osmosis water purification systems, ROTORDISK® biological
sewage treatment package plants and CrystalBlueâ„¢ membrane-based
water recycling systems. Neither 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. The TSX Venture Exchange
has neither approved nor disapproved of the information contained
herein. Some of the statements in this press release, including
those relating to the Company's strategies and other statements
that are predictive in nature, that depend upon or refer to future
events or conditions, or that include words such as "expects",
"anticipates", "intends", "plans", "believes", "estimates" or
similar expressions, are forward-looking statements within the
meaning of securities laws. Forward-looking statements include,
without limitation, the information concerning possible or assumed
future results of operations of the Company. These statements are
not historical facts but instead represent only the Company's
expectations, estimates and projections regarding future events.
The Company does not undertake any obligation to update or release
any revisions to these forward-looking statements to reflect events
or circumstances after the date of this presentation or to reflect
the occurrence of unanticipated events, except as required by law.
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Mr. Matthew Anderson, Investor Relationsbr/ Tel: (613) 523-1641br/
Fax: (613) 731-0851 /p
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