SEPROTECH SYSTEMS INCORPORATED
Canadian Timely Disclosure Pack – For Release 16th of December, 2011
SEPROTECH ANNOUNCES 2011 FISCAL YEAR END
AND FOURTH QUARTER 2011 RESULTS
Seprotech Systems Incorporated (TSX-V: SET; “Seprotech” or the “Company”) announces the following unaudited results for the fourth quarter of 2011 and audited results for the fiscal year ended August 31, 2011.
|Three Months August 31||Ended||Year Ended August 31|
|Loss per share||(0.00)||(0.01)||(0.03)||(0.01)|
While the fiscal year ended August 31, 2011 was a challenging year for the Company, by the fourth quarter business operations had moved significantly in the direction of break-even, as the various corrective measures implemented and reported on during the year began to have an impact.
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 34% from historical normal levels. In response to the reduction in revenues, management imposed further reviews of operating expenses, however for the first three quarters these were not sufficient to offset the revenue decline and as a result the net loss for the year increased.
Despite reduced revenues in the fourth quarter 2011 the gross margin of 55% was a significant improvement over the 27% in the same period in 2010, and largely reflected better spreads on Parts & Service business which continued to dominate activity through the end of the fiscal year.
Operating expenses incurred in the fourth quarter 2011 decreased by 32% from the equivalent period in 2010. Factors contributing to the quarter over quarter decline in operating expenses included staff reductions, which in turn contributed to lower travel expenses, reduction in commission expenses commensurate with the decline in sales revenues, and significantly lower write down of assets and allowance for doubtful accounts than in the prior period.
Shortly after year end the Company successfully completed a $600,000 raise of equity capital, in addition to exchanging $705,000 of trade debt for a secured debenture, and forgiveness of a further $106,407 of payables during regular course of business. While over the earlier part of the year the revenue contribution from the Company’s core wastewater treatment business unit remained below historical levels, several new orders were booked in the fourth quarter. These orders were incremental to the previously reported new contract for the Canadian military, the latter potentially worth $14.8 million over five years which will begin execution in the first quarter of the 2012 fiscal year.
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 CrystalBlue™ membrane-based water recycling systems.
For Further Information, please contact:
Mr. Matthew Anderson, Investor Relations
Tel: (613) 523-1641
Fax: (613) 731-0851
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.