January 31 , 2006
11:20 EST Tuesday, January 31, 2006
FSC / Press Release
SEAIR REPORTS REVENUE GROWTH AND PROFITABILITY FOR QUARTER ENDING NOVEMBER 30, 2005
Edmonton, Alberta CANADA, January 31, 2006 /FSC/ - Seair Inc. (SDS - TSX Venture), announces the release of its unaudited interim financial statements for the 3 months ending November 30, 2005.
Seair's consolidated sales and financial performance is summarized as follows:
| Q1 FY2006 | Q1 FY2005 | Change | |
| Revenue | $ 91,679 | $ 21,347 | 329% |
| Gross Profit | $ 73,272 | $ 3,392 | 2060% |
| Net Income (Loss) | 11,884 | (151,726) | |
| Basic Income/(Loss) per share | 0.00 | (0.01) |
Harold Kinasewich, Seair President and CEO, notes "we are extremely pleased to be able to report both revenue growth and profitability as evidence that our commercialization efforts are beginning to bear fruit.."
Year-over-year revenue increased 329% as Seair recorded sales with a number of customers in a variety of target industries. Seair reports net income of $11,884 for the quarter ending November 30, 2005 compared to a loss of $151,726 for the corresponding quarter in fiscal 2005. This $163,610 bottom line improvement is a direct result of increasing sales while further emphasizing cost containment. Seair is now beginning to see multiple sales within its primary target industries. While considerably more work is required to continue to build sales channels the recent results are indicative of positive progress.
Sales in the quarter ending November 30, 2005 spanned the golf course, animal enhancement and wastewater remediation industries.
Gross margins were 80% in the quarter ending November 30, 2005 versus 16% in the quarter ending November 30, 2004. Management expects gross margins to be in the 50% to 70% range at target sales levels. The 80% margin rate for the quarter ending November 30, 2006 was higher than target levels as a result of Seair's ability to draw upon existing stock to meet certain customer orders.
The 16% gross margin rate in the quarter ending November 30, 2004 is not representative of normal levels as a result of the relatively low sales in the period. Included in cost of sales is $6,237 of other production costs. These costs are relatively fixed in nature and, accordingly, when sales are low the impact of these fixed costs can be dramatic on Seair's gross margin percentage.
Operating expenditures totaled $61,388 for the quarter ending November 30, 2005 versus $155,118 for the quarter ending November 30, 2004. This $93,730 decline in operating expenditures, a 60% reduction, is attributable to Seair's strict emphasis on cost control. All non-essential spending has been eliminated and Seair is running at very lean staffing levels. Personnel related costs of $36,353 (versus $85,772 for the quarter ending November 30, 2004) will likely increase in coming quarters as Seair scales up operations. Included in management compensation for the quarter ending November 30, 2004 is $7,000 representing the estimated fair value of stock options granted in the period. No incentive stock options were granted in the quarter ending November 30, 2005 and, accordingly, there is no stock-based compensation provision.
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. In many cases the potential customer now funds the application specific testing and, therefore, Seair's out-of-pocket product testing costs have declined by 76% from the prior year.
Further details with respect to SEAIR's first 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
SEAIR Inc.
9554 Yellowhead Trail
Edmonton, Alberta
T5G 0W4
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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