July 29, 2005
FSC / Press Release
SEAIR ANNOUNCES RESULTS FOR QUARTER ENDING MAY 31, 2005
Edmonton, Alberta CANADA, July 29, 2005 /FSC/ - Seair Inc. (SDS - TSX Venture),
announces the release of its unaudited interim financial statements for the
three months ending May 31, 2005.
Seair's consolidated sales and financial performance is summarized as follows:
| 3 Months Ending | 9 Months Ending | |||||
| 31-May-05 | 31-May-04 | Change | 31-May-05 | 31-May-04 | Change | |
| Revenue | $ 17,413 | $ 63,831 | -73% | $ 84,845 | $ 304,972 | -72% |
| Gross Profit | 12,619 | 41,748 | -70% | 26,359 | 153,597 | -83% |
| Net Loss | (116,758) | (213,285) | -45% | (396,127) | (571,803) | -31% |
| Basic Loss per share | (0.01) | (0.01) | -51% | (0.02) | (0.04) | -36% |
Harold Kinasewich, Seair President and CEO, comments "while we had hoped sales
in the third quarter would have been higher, we acknowledge that much of our
activity during the quarter consisted of customer specific independent testing and
technology proof. It is now clear to us that these testing regimes are essential
to break into our target markets and we are extremely pleased with the results
we've been achieving. The successful tests are now allowing SEAIR, along with
our distribution partners, to close sales opportunities. We expect to see a significant
increase in sales during the final quarter of this fiscal year."
Year over year revenue for the quarter decreased 73% and for the nine months
ending May 31, 2005 revenue was down 72% from the prior year. Although
revenues for the quarter ending May 31, 2004 were higher than the same quarter
a year later, the loss in the prior year was substantially larger. Seair has concentrated its market development and sales efforts in core industries that are expected to provide Seair with sustainable and profitable operations. This concentration of effort, coupled with Seair's limited financial and human resources, has led the Company to de-emphasize pursuit of opportunities outside of the core target industries. Seair management believes the focused approach to target industries is necessary for the Company to achieve a leadership position in those industries. Also, revenue was unusually high in the quarter ending November 30, 2003 as a result of initial successes in the greenhouse industry. This contributed to the significant year-to-date percentage decline in revenue from the prior year. However, the November 2003 revenues did not prove to be sustainable and, therefore, Seair has re-emphasized the development and implementation of a comprehensive, diverse and sustainable sales structure.
Seair's current primary target markets involve waste water remediation,
sterilization and animal enhancement opportunities. While shifting to these
markets did result in a revenue decline, management believes the impact of
Seair's technology in the current target applications will be significantly
more profound, demonstrable and immediate than was the case with now
de-emphasized greenhouse market. Considerable investment in industry
specific independent testing and results verification is required to gain credibility
and acceptance in the target industries. Seair continues to make those testing
investments in its target markets.
Seair intends to develop each of these target markets by combining reference
customers with a suitable sales and marketing infrastructure for each sector.
In many markets SEAIR has partnered with established distributors to expand
reach. The Company is working with these new distributors to establish
reference customers and obtain testimonials to augment awareness and
credibility in the target industries.
Revenue for the quarter ending November 30, 2004 includes an $11,000 credit
granted to a greenhouse industry customer for equipment returned to Seair.
This credit reduced the revenue that would otherwise have been reported for
the six months ending February 28, 2005.
Seair remains at the initial stages of penetration in the waste water
remediation and sterilization markets with initial reference customers
presently at various points along the sales cycle in these target markets.
Completing the sales cycle with these initial reference companies is Seair's
current priority and will be followed by an assessment of each of the specific
industries in order to appropriately prioritize and assign sales and marketing
resources.
Gross margins were 73% in the quarter ending May 31, 2005 versus 65% in
the quarter ending May 31, 2004. Although these gross margin rates are within
the range that management expects at target sales levels, actual gross margin
rates may fluctuate materially until target sales levels are achieved. Cost of sales
includes a number of unusual items that, at full sales levels, do not materially impact the gross margin percentage. However, at low sales levels the unusual items can significantly impact the gross margin percentage.
Operating expenditures totaled $129,377 for the quarter ending May 31, 2005
versus $255,033 for the quarter ending May 31, 2004. This $125,626 decline
in operating expenditures, a 49% reduction, is attributable to general cost
control measures implemented in recent quarters. Total personnel related
costs in the quarter were $69,574 (versus $105,605 for the quarter ending May 31,
2004). Operating personnel costs decreased by $16,367, or 28% while
management compensation declined by $19,664, or 41%. With customer interest building Seair will ensure its design, production, delivery and installation
capabilities are not compromised. Accordingly, where reductions are in order
they are being applied first and foremost at the management compensation
level.
Seair management is committed to ensuring the maximum possible portion
of the Company's financial resources flow directly to sales generation, product
manufacturing, delivery, installation and customer service.
Product testing and trade show costs stem from Seair's post-research phase
marketing initiatives. While initial testing and trade show strategies were
intended to create general awareness, Seair is now narrowing and customizing
the awareness and acceptance strategies to align with the overall
prioritization of target markets. Testing is now commonly directed at specific
industries and specific customers, with a strong likelihood of near-term sales
should the test results confirm Seair's equipment achieved previously
agreed-upon targets. Seair is now involved or planning a number of such tests
in waste water remediation and sterilization applications. These targeted
demonstrations, trials and tests can be completed at low or virtually no cost
to Seair.
The year over year quarterly loss declined $96,527, or 45%. Reduced losses
are attributable to significant cost reductions realized in recent quarters.
Working capital at May 31, 2005 was $127,036, down from $476,397 at August
31, 2004 and down $61,758 from working capital of $189,064 at February 28,
2005. Further details with respect to SEAIR's third quarter results, including the
complete financial statements, will be available at www.sedar.com.
About SEAIR
SEAIR is a leading developer of proprietary diffusion and sterilization
technologies. These patent-pending technologies allow for the efficient
diffusion of gases into a liquid, thereby facilitating numerous applications in
a wide variety of industries, including waste water treatment, pulp and paper,
food processing, aquaculture, agriculture/horticulture, sterilization, golf
course irrigation and pond treatment, animal enhancement and oil and gas.
SEAIR's primary focus is developing and selling equipment that diffuses gases,
such as oxygen, ozone or carbon dioxide, into a liquid, resulting in a
supersaturate solution. The major difference between SEAIR and other diffusion
technologies is SEAIR's ability to achieve extremely small bubble size, which
in turn allows for the mass transfer of gas to fluid. The result is a stable
condition where gases remain in solution for extended periods of time, leading
to increased productivity and lower operating costs.
Parties interested in obtaining further information or receiving news releases
and corporate documents from SEAIR may e-mail such request to seair@telus.net
visit our SEAIR web site at: www.seair.ca .
FOR FURTHER INFORMATION PLEASE CONTACT:
Harold Kinasewich
SEAIR Inc.
T: 780 477 7188
F: 780 477 6622
E: seair@telus.net
This news release may contain certain forward-looking statements that reflect
the current views and/or expectations of SEAIR INC. with respect to its
performance, business and future events. Such statements are subject to a
number of risks, uncertainties and assumptions. Actual results and events
may vary.
THE TSX VENTURE EXCHANGE HAS NOT REVIEWED AND DOES NOT ACCEPT
RESPONSIBILITY
FOR THE ADEQUACY OR ACCURACY OF THIS RELEASE.
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