December 29 , 2006
SEAIR ANNUAL RESULTS SHOW STRONG REVENUE GROWTH
Edmonton, Alberta, December 29, 2006. SEAIR Inc . (SDS:TSX Venture Exchange) announces the release of its audited annual financial statements for the year ending August 31, 2006.
Seair's consolidated sales and financial performance is summarized as follows:
Quarter Endiing |
Year Ending |
|||||
31 Aug 06 |
31 Aug 05 |
Change |
31 Aug 06 |
31 Aug 05 |
Change |
|
| Revenue | $333,779 |
$ (7,803) |
4378% |
$723,235 |
$77,042 |
839% |
| Gross profit | 329,851 |
5,637 |
5752% |
615,252 |
31,996 |
1823% |
| Net loss | (32,440) |
(216,726) |
-85% |
(71,582) |
(612,853) |
-88% |
| Basic loss per share | (0.00) |
(0.01) |
(0.00) |
(0.04) |
||
Harold Kinasewich, Seair President and CEO, notes "We are delighted to report continued strong improvement to revenue and operating results. After acquiring the remaining Seair Septic shares in October 2006 we anticipate these positive trends to continue, particularly when our expanded fleet of portable waste water treatment units is fully deployed in the coming months."
Fiscal 2006 revenue of $723,235 was 839% higher than fiscal 2005. This increase is directly attributable to waste water treatment growth originating with Seair's March 2006 acquisition of a 51% interest in Septic. As a result of this acquisition Seair is a direct participant in the waste water treatment industry. Revenue is derived primarily from rentals of portable water treatment systems that utilize Seair's proprietary diffusion technology.
Prior to fiscal 2005 Seair was essentially a technology development company. Initial efforts were made to bring Seair's technology to market, but gaining a foothold in target sectors proved to be challenging. The versatility of Seair's technology means it can be applied in a wide variety of end applications, but Seair lacked the resources to build market presence from the ground up. Accordingly, in fiscal 2005 Seair shifted to a partnering model whereby third parties, acting as distributors, partners or similar forms of arrangement, assumed responsibility for end sales and first line customer support. The partnering model exposed Seair's technology to a number of end-use applications and markets. As a result of this exposure it was determined that the waste water treatment industry had particular potential in both the near and long-term. The Septic acquisition gives Seair an immediate presence in this high potential industry.
The partnering model continues to be used in a wide variety industries. However, by shifting responsibility for sales to third parties significantly reduces Seair's ability to influence the pace at which specific opportunities are pursued. Although distributor agreements generally include minimum sales targets that must be achieved to maintain the distributor status, by necessity these targets are spread over relatively long time frames in order to permit the distributor adequate time to develop the market. The Company expects distributor-based sales to increase as Seair's partners complete their initial market development.
Gross margin for the year ending August 31, 2006 was $615,252 compared to $31,996 in the preceding year (an increase of 1823%). Seair retrofitted existing Septic rental units with Seair technology, rather than building complete new units from scratch. By retrofitting Seair was able to minimize the cost of fusing the Seair technology into the Septic assets, which in turn leads to extremely high gross margins on rentals of the current units. The 85% gross margin rate realized in fiscal 2006 is expected to decrease slightly as Seair expands the number of available rental units.
Total operating expenses increased by $91,896 from fiscal 2005 to fiscal 2006. This 14% increase compares to an 839% increase in revenue. Seair continues to focus intently on cost control even though revenue and cash flow have dramatically increased.
Professional fees increased $18,855 (40%) as a direct result of work required to complete the Septic acquisition. Repairs and maintenance and shop yard/maintenance totaled $45,772 versus $0 for fiscal 2005. These activities are directly linked to maintaining Septic's rental assets. Amortization increased by $37,362 to $54,847 (an increase of 214%) as a result of the much larger capital asset base acquired in the Septic transaction. Seair also cleaned up a number of customer accounts, which resulted in a $44,037 increase in bad debts expense.
Increased revenues and gross margins, coupled with continued cost control, served to significantly reduce Seair's operating loss. Net loss improved by 88% on a year-over-year basis (loss decreased by $541,271 to $71,582).
Working capital at August 31, 2006 was $263,158 up from $15,640 at August 31, 2005 and up $359,859 from working capital of negative $96,702 at May 31, 2006. Current liabilities at May 31, 2006 include $82,000 with respect to a convertible debenture due to a former director, whereas at August 31, 2005 this item was included as a non-current liability. This debenture has now been retired.
On October 23, 2006 the Company announced that it had acquired the balance of the outstanding shares of Septic in exchange for 2,750,000 Seair shares. Seair, with 100% ownership of Septic, has accelerated the pace of expanding the portable waste water treatment fleet. Seair expects to soon have approximately 100 units in the waste water treatment rental fleet.
Further details with respect to SEAIR's year-end 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. SEAIR provides diffusion-enhanced portable wastewater treatment plants through its subsidiary, Seair Septic.
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
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.
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