STT Enviro Corp
TSX VENTURE : STT

August 14, 2013 18:16 ET

STT Enviro Corp. Reports Financial Results for Quarter Ended June 30, 2013

TORONTO, ONTARIO--(Marketwired - Aug. 14, 2013) - STT Enviro Corp. ("STT" or the "Company") (TSX VENTURE:STT) today reported financial results for its quarter ended June 30, 2013 of approximately $8.1 million of revenue, $0.9 million of EBITDA and net income after tax of $0.5 million.

Financial Highlights for the Quarter:

Quarter Ended Quarter Ended %
June 30, 2013 June 30, 2012 Change
Revenue $ 8,122,200 $ 8,324,741 -2 %
EBITDA 880,586 758,326 +16 %
Net income after tax 494,056 380,969 +30 %
Earnings per share (*) 0.019 0.014
EBITDA per issued common share 0.033 0.029

Financial Highlights for the Year-to-Date:

Six Months Six Months
Ended June 30, Ended June 30, %
2013 2012 Change
Revenue $ 16,980,801 $ 14,515,445 +17 %
EBITDA 1,809,794 631,396 +187 %
Net income after tax 1,029,001 54,983 +1771 %
Earnings per share (*) 0.039 0.002
EBITDA per issued common share 0.068 0.024
Closing backlog $ 17,733,494 $ 24,333,840 -27 %
Closing working capital 777,025 2,415,529 -68 %
* Earnings per share as calculated under IFRS does not include the effect of the exercise of potentially dilutive securities issued by the Company. See chart below for a summary of these securities.

The Company will hold a conference call to discuss the financial results on Thursday, August 22, 2013 at 11:00 am Eastern time. The call-in numbers are (416) 204-9641 or 1(877) 314-1234; participant code 9530930.

"We are pleased with the results for the second quarter," said David Deacon, STT's CEO. "Although revenue was flat compared to the previous year, gross margins have improved despite margin pressure on new orders. Our closing backlog was $17.7 million, consistent with the backlog at March 31, 2013, but down 27% from the backlog at June 30, 2012. We anticipate the closing of new orders during Q3 to keep pace with our backlog execution. The strength of these results should not simply be extrapolated for the rest of the year. We want to caution that this margin improvement should continue until the end of the third quarter, when we expect lower overall revenue to begin to impact the gross margin percentage."

"Our closing working capital was approximately $777,000, with the change from the previous year reflecting the reclassification of certain loans from long-term to current liabilities. We expect to close the first tranche of a new financing by August 31, 2013, the proceeds of which will be used to refinance a portion of the $2.5 million of convertible debentures maturing early in 2014."

Finally, he said, "We continue to have a cautious outlook on the overall economy and particularly its impact on commodity pricing, which affects our activities in the mining sector. We expect oil and gas activity to be modest until there is clarity on Canadian pipelines and the potential Keystone pipeline in the US. These factors are causing delays on approval for new capital-intensive projects. In the meantime, we continue to focus on extending our sales reach geographically and improved support of aftermarket activities."

Potentially Dilutive Securities:

As at June 30, 2013 and 2012, the following potentially dilutive securities were excluded from the calculation of earnings per share since their exercise prices exceeded the average market value of the Company's common shares for the period:

Number of Potential New Common
Shares Upon Exercise

Security
Exercise Price At June 30, 2013 At June 30, 2012
Warrants 0.140 1,045,000 1,045,000
Options 0.100 50,000 -
Options 0.130 1,150,000 525,000
Options 0.160 1,205,000 1,425,000
Options 2.220 - 257,500
Convertible debentures 0.140 17,841,729 17,841,729
Warrants which would be issued on conversion ofconvertible debentures
0.140

8,920,865

8,920,865
Total potential dilution 30,212,594 30,015,094
Common shares issued and outstanding 26,528,944 26,528,944
Total potential common shares 56,741,538 56,544,038

About STT Enviro Corp.

STT Enviro Corp. is an international supplier of environmental solutions and industrial processes, with specific emphasis on water remediation and emission control systems.

The Company is of the view that environmental considerations and preventative technologies are becoming a prerequisite of most modern industrial expansion, particularly in the mining, oil & gas and power sectors.

The Company's principal focus is the conceptual design, engineering, project management, and assembly and installation of complete bulk material handling systems used to clean up water and control air emissions- from the storage silos, to the conveying systems, to the computerized electronic controls. The systems are utilized internationally in a broad range of industries.

Caution Regarding Forward-Looking Information and Non-IFRS Measures

Forward-Looking Information

This news release contains certain forward-looking statements. These statements relate to future events or future performance and reflect management's current expectations and assumptions regarding the growth, results of operations, performance, and business prospects and opportunities. Such forward-looking statements reflect management's current beliefs and expectations and are based on information currently available to management of the Company. In particular, statements regarding the future operating results and economic performance are forward-looking statements. Forward-looking statements involve significant risks and uncertainties. A number of factors could cause actual events or results to differ materially from the events and results discussed in the forward-looking statements, including risks outlined under "Risk Factors" in our Annual Information Form, which is posted at www.sedar.com. In evaluating these statements, investors should specifically consider various factors, including such risks as Investment Risk; Business Valuations; Condition of Capital Markets; Dependence on Key Personnel; General Economic Factors; Interest Rate Risk; Competition; and Reliance on Key Suppliers. One or more of these "Risk Factors" could cause actual events or results to differ materially from any forward-looking statement. These factors should not be considered exhaustive. Although the forward-looking statements contained in this press release are based on what management of the Company considers to be reasonable assumptions based on information currently available to them, there can be no assurance that actual events or results will be consistent with these forward-looking statements, and management's assumptions may prove to be incorrect. These forward-looking statements are made as of the date of this press release, and none of STT nor its directors assume any obligation to update or revise them to reflect new events or circumstances. Undue reliance should not be placed on forward-looking statements.

Non-IFRS Measures

The term "EBITDA" is a financial measure used in this document which is not a standard measure under International Financial Reporting Standards ("IFRS"). The Company's method of calculating EBITDA may differ from the methods used by other issuers. Therefore, STT's measure of EBITDA, as presented in this press release, may not be comparable to similar measures presented by other issuers. EBITDA refers to net earnings determined in accordance with IFRS before depreciation, amortization of intangible assets, gain or loss on disposal of property and equipment, interest expense, accretion expense, special charges and recoveries, stock compensation expense and income tax expense. Management believes that EBITDA is a useful supplemental measure of cash available for debt service, working capital, capital expenditures, income taxes, and distribution. Investors are cautioned that EBITDA, as a non-IFRS measure, is not an alternative to measures under IFRS and should not, on its own, be construed as an indicator of performance or cash flows, a measure of liquidity or as a measure of actual return.

The term "backlog" is a financial measure used in this document which is not a standard measure under IFRS. The Company's method of calculating backlog may differ from the methods used by other issuers. Therefore, STT's measure of backlog, as presented in this press release, may not be comparable to similar measures presented by other issuers. Backlog is the value of revenue remaining to be earned from purchase orders received from customers. The projects represented in backlog are executed according to a schedule agreed with each customer, which could range in duration from one month to eighteen months. Revenues are earned on a percentage of completion basis. Management uses this measure to i) monitor the Company's success in securing new orders, and ii) gauge the likelihood of meeting revenue objectives in future periods.

Investors are cautioned that backlog, as a non-IFRS measure, is not an alternative to measures under IFRS and should not, on its own, be construed as an indicator of performance or cash flows, a measure of liquidity or as a measure of actual return.

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 of this release.

Contact Information

  • STT Enviro Corp.
    David Deacon
    CEO
    (905) 875-5577