SEPROTECH ANNOUNCES SECOND QUARTER FISCAL 2011 RESULTS
May 17 2011 - 2:06PM
PR Newswire (Canada)
OTTAWA, May 17 /CNW/ -- OTTAWA, May 17 /CNW/ - Seprotech Systems
Incorporated (TSX-V: SET; "Seprotech" or the "Company") announces
the following unaudited results for the second quarter of fiscal
2011 with comparative unaudited results for the second quarter of
fiscal 2010; and unaudited results for the six months ended
February 28, 2011, with comparative unaudited results for the six
months ended February 28, 2010. Three Months Ended Six Months Ended
February 28 February 28 2011 2010 2011 2010 $000 $000 $000 $000
Revenue 495 1,439 1,519 2,686 Gross Margin 181 548 424 1,126 Net
Loss (361) (58) (598) (94) Loss per share (0.01) (0.00) (0.01)
(0.00) During the quarter ended February 28, 2011 the Company was
in process of dealing with the customer over-billing problem
previously disclosed, and discussed below. Most of the work
required to correct the above problem was undertaken during the
quarter ended February 28, 2011, including previously announced
board and management changes. The resolution of these problems,
which were a considerable distraction to management, and a concern
of the Company's suppliers and customers, had a negative impact on
Q2 2011 financial results. Revenues for the interim period ended
February 28, 2011 were $495 compared with $1,439, a decline of $943
or 66%. Sales of military, automotive and industrial installations
declined, from $516 in Q2 2010 to $270 (48%) in Q2 2011, and sales
of RBC units decreased from $432 in the second quarter 2010 to $166
(62%) in Q2 2011. Parts and Service revenues decreased from $491 in
Q2 2010 to $59 in Q2 2011 (88%). The decline in military business
was largely a timing issue with respect to completion of contract
activities. RBC sales dropped off with the 2009 recession and
although a recovery is anticipated, it was not apparent in the
quarter. RBC sales are also subject to seasonality, with the
quarter ended February 28 typically being a slow period. Gross
margins for the interim period ended February 28 2011 were $181 or
36% compared with $548 or 38% during the same period in 2009, a 2%
deterioration, which reflected the relative reduction in RBC and
parts and service revenues as a percentage of the overall revenue
mix. Staffing levels had been maintained in anticipation of
additional contracts, and in expectation of the over-billing
problem being resolved more quickly than was the case, so operating
expenses remained at relatively high levels, resulting in a net
loss for the quarter of $361 compared with a net loss of $58 for
the same period in 2010. Comparative 2009 data has been changed to
reflect discontinued operations in 2009. As more fully described,
in the Company's press release dated May 10, 2011 the delay in
completing the unaudited quarterly financial statements resulted
from management's detection during the quarter 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 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"). On May 10, 2011 the Company completed its
required annual regulatory filings (audited financial statements
for fiscal year ended August 31, 2011, related MD&A and officer
certifications) and on May 13, 2011 the Company filed its first
quarter 2011 unaudited financial statements and related filings.
The Company is in the process of applying to the OSC for a full
revocation of the cease trade order. 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. To view this news release in HTML
formatting, please use the following URL:
http://www.newswire.ca/en/releases/archive/May2011/17/c5376.html p
Mr. Matthew Anderson, Investor Relationsbr/ Tel: (613) 523-1641br/
Fax: (613) 731-0851 /p
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