SOURCE: STT Enviro Corp

STT Enviro Corp

August 22, 2016 07:30 ET

STT Enviro Corp. Reports Financial Results for Quarter Ended June 30th, 2016 and Backlog Increase

TORONTO, ON --(Marketwired - August 22, 2016) - STT Enviro Corp. ("STT" or the "Company") (TSX VENTURE: STT) today reported financial results for the quarter ended June 30th, 2016 of approximately $5.9 million of revenue, EBITDA of ($566,534), and net loss after tax of $378,376. For the six months ended June 30th, 2016, the Company reported approximately $13.1 million of revenue, EBITDA of ($617,454), and net loss after tax of $502,437. New orders of $7,940,898 were received in the second quarter, and the cancellation of a $5,059,720 order meant that the net total of new orders for the quarter was $2,881,178. Subsequent to quarter-end, additional orders were received valued at approximately $6,500,000 carrying as-sold margins at acceptable rates, bringing our pro-forma backlog as of the time of this press release to approximately $17,000,000, which is a 46% increase over the closing backlog at June 30th, 2016.

 
Financial Highlights for the Quarter:
    Quarter ended June 30, 2016    Quarter ended June 30, 2015  % Change
Revenue  $5,908,103   $11,166,560  -47%
EBITDA   (566,534 )  1,155,912   
Net (loss) income before tax   (691,254 )  884,250   
Net (loss) income after tax   (378,376 )  602,243   
             
Earnings per share - basic   (0.008 )  0.013   
Earnings per share - diluted   (0.008 )  0.012   
             
Closing backlog   11,645,470    25,076,216  -55%
Closing working capital   4,382,202    5,562,105  -21%
Closing cash on hand   1,820,676    3,824,268  -52%
Closing notes payable and term debt   28,743    64,762  -56%
 
Financial Highlights for the Year-to-Date: 
    Six months ended June 30, 2016    Six months ended June 30, 2015   % Change 
Revenue  $13,118,652   $19,905,696   -34 %
EBITDA   (617,454 )  1,913,392     
Net (loss) income before tax   (852,621 )  1,306,319     
Net (loss) income after tax   (502,437 )  884,078     
               
Earnings per share - basic   (0.011 )  0.021     
Earnings per share - diluted   (0.011 )  0.020­     
          

David Deacon, Chief Executive Officer, commented, "The margins in our Systems & Solutions group were 34.5% for the quarter, but our overall margins suffered as the Tanks & Industrial group dragged the results down with negative margin for the quarter. We are working to close off the last and largest of the projects which drove the poor margin performance, and this project will be 99% complete this month. We anticipate margin improvement over the balance of the year leading to a substantial improvement in our results during the third quarter, and even more traction in the fourth quarter as we start to execute on new orders. We have also strengthened the leadership of the Tanks & Industrial group and are confident that operational improvements will now start to show in the bottom line."

"I am pleased that we are also able to announce that a series of new orders we had been anticipating have been received in the past several weeks, totalling approximately $6,500,000. Our new order intake for the quarter, net of a $5 million cancellation, was $2,881,178 and with the additional recent orders our pro-forma backlog is approximately $17,000,000. This is important as it is the first uptick in our backlog numbers in two years."

"We are starting to see signs of a more sustained investment in capital spending by our customers and are even seeing signs of a mining recovery, particularly in gold, zinc and copper. In addition, our entry into complementary areas of business that began in 2015, has provided a base for our future revenue growth outside of our traditional markets."

The Company will hold a conference call to discuss the financial results on August 23, 2016 at 11:00 am Eastern time. The call-in numbers are +1 877-407-9205 (toll free) or +1 201-689-8054 (international).

The financial statements and MD&A are available on SEDAR and have also been posted on the company's website at http://www.sttenvirocorp.com/investors/financials.

About STT Enviro Corp.

STT Enviro Corp. (TSX VENTURE: STT) supplies cost-effective, incremental, environmental improvements to traditional industrial products. The Company's two operating groups, STT Enviro Corp Systems & Solutions and STT Enviro Corp Tanks & Industrial, work to reduce their customers' environmental footprint, cost efficiently.

STT Enviro Corp Systems & Solutions engineers and supplies chemical make-down systems to neutralize pollutants (usually acid water) created in the ore or oil recovery process; and aftermarket services including optimization of chemical use for our customers to lower costs and reduce their carbon footprint.

STT Enviro Corp Tanks & Industrial engineers and supplies bolted tanks with a smaller environmental footprint for both dry and liquid storage applications.

Environmental considerations are prerequisites in modern industrial expansion and STT Enviro Corp. is focused on being a leader and innovator on incremental environmental improvements. The Company's 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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