WAVEFRONT ANNOUNCES FISCAL FIRST QUARTER
2013 RESULTS
EDMONTON, Alta., January 29, 2013 Wavefront Technology
Solutions Inc. (Wavefront or the Corporation, TSX-V: WEE; OTCQX:
WFTSF) a developer of leading-edge technology for fluid injection
optimization for improved performance and profitability in the oil
and gas and environmental sectors announces its financial results
for the first quarter ending November 30, 2012.
Wavefront is a technology company with a
reputation among its clients for quality, innovation and
creativity. Focused on global markets, Wavefront utilizes its
patented technology to provide measureable solutions when
exploration and production companies (or “E&P” companies) are
faced with the challenges of optimizing oil production, well
intervention and performance drilling.
Wavefront’s strategic value proposition is
underpinned with 20 granted and 29 patents pending based on
differentiated fluid flow technology. Marketed under the
brand names, “Powerwave” and “Primawave”, the injection
methodologies improve distribution of liquids in the
ground.
Wavefront’s business plan for enhancing
shareholder value includes:
i)
Licensing of its proprietary
technologies and products, underpinned by a high margin recurring
revenue model.
ii)
Leveraging of its proprietary
technologies and products through strategic service company
alliances, both in the energy and environmental sectors.
With the Company’s
new marketing initiative entitled
“From Bit to Last Drop”, our product portfolio now encompasses an
and leverages an E&P clients through their entire life cycle
post exploration operations.
The
financial highlights
for the three months ended November 30, 2012
include:
·
Total
revenues amounted to $1,529,585, a 37.6% increase or
$418,030 over the comparative period that reported total revenues
of $1,111,555.
·
Revenues for Powerwave and Primawave approximated
$1,172,076 or 78.3% of revenues; whereas in the comparative
reporting period, Powerwave and Primawave approximated $833,224 or
79.7%.
·
Revenue attributed only to Powerwave product lines were
$1,119,070, an increase of $352,670 or 46.0% over revenues in the
comparative period of $766,400. The Powerwave product line
revenues can then be broken into short-term projects involving
well stimulations and performance
drilling, and long-term, mature field revitalization
projects using Wavefront’s technology to maximize ultimate oil
recovery in water or CO2 flooding applications.
i.
For the three months ended November 30, 2012, the total
revenues attributed to long-term, mature field revitalization
Powerwave projects totalled $759,736. The Corporation also
anticipates that as it has focused more resources on the more
active international markets that Powerwave applications in mature
field revitalization may grow faster in those regions.
ii.
For the three months ended November 30, 2012, the total
revenues attributed to Powerwave well stimulation totalled
$359,334, an increase of $317,867 or 766.6%, compared to $41,467 in
the comparative period. There was a decrease in United States
Powerwave stimulation revenues that is believed to be tied to
client budgets for stimulation work being exhausted for the fiscal
year; however, there was an offsetting increase of Powerwave
stimulation revenues in Canada. The Company anticipates that the
stimulation revenues in the United States may grow in subsequent
reporting periods as budget restitutions are eased in the new
calendar year.
·
For the three months ended November 30, 2012, the
gross profit
margin for Powerwave was relatively stable
at 83.4% compared to 84.9% for the comparative period. For the three months ended
November 30, 2012, the gross profit margin for Primawave was
also relatively stable at 90.6% compared to 93.5% for the
comparative period. The high gross profit margin is attributable to
the Corporation’s ability to leverage its technology while
diversifying its product portfolio to oil well stimulations.
It is believed that Powerwave performance drilling systems may
achieve similar gross profit margins.
·
The basic and diluted
net loss for the first quarter ended November 30, 2012 was
$1,005,061 ($0.012 per share), compared to $991,160 ($0.012 per
share) in 2011.
·
Total current assets decreased by $1,441,601 to $16,229,066
from the prior year end. Of the net decrease, $1,745,032
relates to decreases in cash, which is comprised of $568,178 in
funds used in operations, $598,656 in changes in working capital
and $578,198 in investments in Powerwave tools and related
intangible assets.
The above
financial highlights should be read in conjunction with the audited
consolidated financial statements and management discussion and
analysis of results for Wavefront for the first quarter ended
November 30, 2012, which were filed on SEDAR on January 29,
2013.
Since the
official November 2012 roll-out of the Corporation’s line of
performance drilling tools Wavefront has continued to pilot test
the tools in Canada and the United States as part of drilling the
horizontal section of wells. With our marketing partners we have
now moved into phase II piloting testing and are scheduled to run
two, “thru-tubing” applications on coil tubing this week in
Pennsylvania. This will be the first such tests of Wavefront’s
performance drilling tools employed to increase the rate of
penetration of the bit (or mill) while drilling out frac plugs and
balls in horizontal well completions.
“We are
pleased to see continued positive results and increased customer
interest in Wavefront’s performance drilling tools and have
increased the number of tools available for use in Canada and the
United States to 20”, said Wavefront President and CEO Brett
Davidson.
“Wavefront remains on track with initiatives to refocus its
marketing strategy and anticipates sales to grow across all focus
areas.”
ON BEHALF OF THE BOARD OF
DIRECTORS
WAVEFRONT
TECHNOLOGY SOLUTIONS INC.
“D. Brad
Paterson” (signed)
D. Brad
Paterson, CFO & Director
About
Wavefront:
“From Bit to Last Drop” Wavefront
endeavors to be recognized as a global leader of fluid injection
technologies that maximize
reservoir recovery, drilling efficiency, and groundwater restoration.
Wavefront publicly trades on the TSX Venture Exchange under the
symbol WEE and on the OTCQX under the symbol WFTSF. The Company's
website is www.onthewavefront.com.
For further
information please contact:
Brett Davidson, President and CEO or
D. Brad Paterson, CFO at 780-486-2222 or write to us at
investor.info@onthewavefront.com
Cautionary Disclaimer – Forward Looking
Statement
Certain statements contained herein
regarding Wavefront and its operations constitute “forward-looking
statements” within the meaning of Canadian securities laws and the
United States Private Securities Litigation Reform Act of 1995. All
statements that are not historical facts, including without
limitation statements regarding future estimates, plans,
objectives, assumptions or expectations or future performance, are
“forward-looking statements”. In some cases, forward-looking
statements can be identified by terminology such as ‘‘may’’,
‘‘will’’, ‘‘should’’, ‘‘expect’’, ‘‘plan’’, ‘‘anticipate’’,
‘‘believe’’, ‘‘estimate’’, ‘‘predict’’, ‘‘potential’’, “believe”,
‘‘continue’’ or the negative of these terms or other comparable
terminology. We caution that such “forward-looking
statements” involve known and unknown risks and uncertainties that
could cause actual results and future events to differ materially
from those anticipated in such statements. Such factors
include fluctuations in the acceptance rates of Wavefront’s
Powerwave and Primawave Processes, demand for products and
services, fluctuations in the market for oil and gas related
products and services, the ability of Wavefront to attract and
maintain key personnel, technology changes, global political and
economic conditions, and other factors that were described in
further detail in Wavefront’s continuous disclosure filings,
available on SEDAR at www.sedar.com. Wavefront expressly
disclaims any obligation to up-date any “forward-looking
statements”, other than as required by law.