STT Enviro Corp
TSX VENTURE : STT

STT Enviro Corp

November 11, 2013 08:56 ET

STT Enviro Corp Reports Financial Results for Quarter Ended September 30th, 2013

TORONTO, ONTARIO--(Marketwired - Nov. 11, 2013) - STT Enviro Corp. ("STT" or the "Company") (TSX VENTURE:STT) today reported financial results for its quarter ended September 30th, 2013 of approximately $6.3 million of revenue, $0.7 million of EBITDA and net loss after tax of $0.1 million.

Financial Highlights for the Quarter:

Quarter Ended September 30, 2013 Quarter Ended September 30, 2012 % Change
Revenue $ 6,252,752 $ 6,489,747 -4 %
EBITDA 697,660 637,408 +9 %
Net income before tax 486,659 419,233 +16 %
Net (loss) income after tax (74,842) 294,089 -125 %
Earnings per share (*) (0.003) 0.011
EBITDA per issued common share 0.026 0.024

"We are pleased with the operating results for the third quarter," said CEO, David Deacon. "Although revenue was down compared to 2012, strong margins drove solid EBITDA performance, and the small loss for the quarter resulted from additional tax expense relating to a potential reassessment of our 2011 tax return. Our strengthened balance sheet and untapped loan facilities will enable us to deal with loans now classified as current liabilities which mature in early 2014, and the Company is in a much better position to deal with an unfavourable business climate than it was during the last downturn. Our efforts to diversify our income stream have proven successful, and we have significantly offset the decline in systems sales and steadily improved our margins, despite the fact that we have carried stable overheads in order to invest in future growth."

Mr. Deacon continued, "Our activities in the mining sector continue to be negatively impacted by the decline in commodity prices, and our closing backlog of $13.9 million includes the effect of an order cancelled subsequent to quarter-end. The uncertainty plaguing the oil and gas industry has left producers in a "wait and see" mindset. We don't expect to see either of these issues resolved until well into 2014, so in the meantime we continue to focus on extending our sales reach geographically and improved support of aftermarket activities."

Financial Highlights for the Year-to-Date:

Nine Months Ended September 30, 2013 Nine Months Ended September 30, 2012 % Change
Revenue $ 23,233,553 $ 21,005,192 +10 %
EBITDA 2,507,454 1,268,804 +98 %
Net income before tax 1,846,193 442,811 +317 %
Net income after tax 954,159 349,072 +173 %
Earnings per share (*) 0.036 0.013
EBITDA per issued common share 0.095 0.048
Closing backlog $ 13,933,918 $ 20,733,749 -33 %
Closing working capital 1,276,046 2,598,926 -51 %

* 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 November 12, 2013 at 11:30 am Eastern time. The call-in numbers are (416) 204-9641 or 1(877) 314-1234; participant code 9530930.

Potentially Dilutive Securities:

As at September 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 September 30, 2013 At September 30, 2012
Warrants 0.120 1,045,000 1,045,000
Warrants 0.140 1,045,000 -
Options 0.130 1,150,000 525,000
Options 0.160 1,205,000 1,335,000
Options 2.220 - 257,500
Convertible debentures (*) 0.140 17,841,729 17,841,729
Warrants which would be issued on conversion of convertible debentures (*) 0.140 8,920,865 8,920,865
Total 31,207,594 29,925,094
* including potential dilution from $937,520 of convertible debentures held by subsidiary.

About STT Enviro Corp.

Our principal area of expertise is the design, assembly and support of handling systems for the reagents (such as lime, soda ash and magnesium oxide) required for environmental cleanups in mining, oil and gas and other industrial applications. While our clients are most often engineering companies, our goal is to ensure we make a positive impact on the end user customer operations, reducing costs and improving efficiency - on both a daily basis and over the long term. The systems are utilized internationally by major companies in a broad range of industries.

Environmental considerations and preventative technologies are prerequisites in modern industrial expansion and STT Enviro Corp is focused on becoming a leading North American supplier. Our strategy is to grow organically and, longer term, to acquire companies at prices which are strategically and financially accretive.

For more information, please visit our website at www.STTEnviroCorp.com.

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.

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