OTTAWA, Nov. 28 /CNW Telbec/ - Clearford Industries Inc. ("Clearford" or the "Company", TSX-V: CLI) today announced financial results for the third quarter of 2008, which ended September 30, 2008 (all figures in Canadian dollars and in accordance with Canadian GAAP).
As a result of the previously announced divestiture of the Brooklin Concrete Division ("Brooklin Division") on July 31, 2008, the results of operations of Brooklin for the current quarter have been segregated to discontinued operations on the Statement of Operations. These results include Brooklin's operating results for the month of July as well as the gain on the Brooklin divestiture of $12,731,163. This gain has been partially offset by expenses relating to the divestiture and the full repayment of bank and convertible debenture debt, which includes $2,369,314 of transaction costs, $1,942,285 of debenture settlement expenses and $768,376 for the write-off of previous financing costs.
The Brooklin Division recorded net income from discontinued operations before tax for the third quarter of $8,350,437 compared to $808,404 for the same period of the prior year. The Wastewater Division recorded $47,910 of revenue for the current quarter compared to no revenue for the same period of the prior year and recorded a loss from continuing operations before tax of $1,122,773 for the current quarter as compared to a loss from continuing operations of $623,145 for the same period of the prior year. The increase in the loss for the Wastewater division was mainly a result of the decrease in value of marketable securities the Company received as partial compensation for the divestiture of the Brooklin Division. An income tax expense of $2,345,000 has been recorded against the net income from the Brooklin Division discontinued operations which has been fully offset by an income tax recovery of $2,345,000 on the Wastewater Division continuing operations. Total net income for the Company for the third quarter was $7,227,664 or $0.28 per share compared to net income of $185,259 or $0.01 per share for the same period of the prior year and a net income of $447,217 or $0.02 per share for the second quarter of 2008.
The Brooklin Division recorded net income from discontinued operations before tax for the nine months ended September 30, 2008 of $6,514,152 compared to a net loss of $912,314 for the same period of the prior year. The Wastewater Division recorded $250,299 of revenue for the nine months ended September 30, 2008 as compared to $125,000 of revenue for the same period of the prior year and recorded a loss from continuing operations before tax of $2,142,539 for the nine months ended September 30, 2008 as compared to a loss from continuing operations of $1,760,810 for the same period of the prior year. Total net income for the Company for the nine months ended September 30, 2008 was $4,371,613 or $0.17 per share compared to a net loss of $2,673,174 or $0.11 per share for the same period of the prior year.
For the third quarter of 2008, cash used in continuing operations was $723,069 compared to cash used in continuing operations of $695,432 for the same period of the prior year and cash provided by Brooklin was $1,379,506 compared to cash provided of $1,682,690 for the same period of the prior year. For the nine months ended September 30, 2008 cash used in continuing operations was $1,826,888 compared to cash used in continuing operations of $1,647,653 for the same period of the prior year and cash provided by Brooklin was $2,343,687 compared to cash provided of $2,059,953 for the same period of the prior year.
Proceeds of the Brooklin disposition have provided value in the form of exchangeable units in Armtec Infrastructure Income Fund ("Armtec Units"). Value of the Armtec Units has been reduced by approximately thirty percent at September 30, 2008 as a result of capital market conditions. Restrictions on timing of sale of these units expose the Company to continuing market risk.
The Company has made significant progress in removing the need for pump-out of its clarifiers and capturing methane, which arises as bio-solids in the clarifiers decompose. These system improvements add to the already established high quality and stability of effluent flow from the Clearford system. John Kelly, President and CEO of Clearford, "Clearford's enhanced waste-water collection and treatment system can be a meaningful contribution to the world requirement for improved management of waste-water and conservation of scarce fresh water."
The Company is assessing strategic alternatives to maximize shareholder value and expects to announce the actions arising from that assessment during the first quarter of 2009.
This news release contains certain statements that constitute forward-looking information within the meaning of applicable securities laws ("forward-looking statements"). All statements other than statements of historical fact contained herein are forward-looking statements, including, without limitation, statements regarding the impact of the transaction on the Clearford financial performance and statements regarding the business strategy, plans and objectives of or involving Clearford or the businesses in which they have invested. Prospective investors can identify many of these statements by looking for words such as "believe", "expects", "will", "intends", "plans", "projects", "anticipates", "estimates", "continues" and similar words or the negative thereof. There can be no assurance that the plans, intentions or expectations upon which these forward-looking statements are based will occur. Although management believes that the expectations represented in such forward-looking statements are reasonable, there can be no assurance that such expectations will prove to be correct.
By their nature, forward-looking statements require assumptions and are subject to inherent risks and uncertainties, including those discussed herein. There is significant risk that forward-looking statements will not prove to be accurate. You are cautioned not to place undue reliance on forward-looking statements made herein because a number of factors could cause actual future results, conditions, actions or events to differ materially from the targets, expectations, estimates or intentions expressed in the forward-looking statements. Except as expressly required by applicable securities law we disclaim any intention and assure no obligation to update or revise any forward looking statements whether as a result of new information, future events or otherwise.
The future outcomes that relate to forward-looking statements may be influenced by many factors, including but not limited to: industry cyclicality; competition; reduction in demand for products; collection from customers; relationships with suppliers; lack of long-term agreements; expiration of rights under license and distribution arrangements; raw material price volatility; product liability; intellectual property; reliance on key personnel; environmental; collective bargaining; interest rates; uninsured and underinsured losses; operating hazards; risks of future legal proceedings; income tax matters; leverage and restrictive covenants; credit facilities; distribution of securities; restrictions on potential growth; effect of market interest rates on price of securities; potential dilution; and various risks relating to the transaction, including risks relating to integration and realization of expected synergies, reliance on key personnel, potential undisclosed liabilities associated with the transaction. You are cautioned that the foregoing list of factors is not exhaustive and that when relying on forward-looking statements to make decisions with respect to Clearford, investors and others should carefully consider these factors, as well as other uncertainties and potential events, and the inherent uncertainty of forward-looking statements.
The TSX Venture Exchange does not accept responsibility for the adequacy
or accuracy of this release. More detailed information of the matters
described herein is included in the public documents Clearford files from
time to time with Canadian securities regulatory authorities.
About Clearford Industries Inc.
Clearford Industries Inc. operating unit, the Wastewater Systems Division, designs and implements the patented Small Bore Sewer(TM) (SBS(TM)), a watertight small diameter wastewater collection system for developers, municipalities and First Nations communities who need to create, expand or upgrade their sewage systems. This solution provides servicing with superior operational and environmental performance at a significantly lower cost when compared to historic gravity sewers. With its first installation in 1989, the SBS(TM) has since had several installations within Canada and the U.S. For more information on Clearford Industries Inc., please visit www.clearford.com.