Q4 and Full Year Results - investors.puretechltd.com · • Q4 revenue grew 34% and adjusted EBITDA...
Transcript of Q4 and Full Year Results - investors.puretechltd.com · • Q4 revenue grew 34% and adjusted EBITDA...
2016 Q4 and Full Year ResultsSupplemental Information SlidesMarch 10, 2016
Forward-Looking Statements
This presentation, and its commentary, may contain forward-looking statements, including, without limitation, statements containing the words
"should", "believe", "anticipate", "may", "plan", "will", "continue", "intend", "expect", "estimate" and other similar expressions. These
statements constitute “forward-looking information” within the meaning of applicable Canadian securities laws. These statements are based on
the Company’s current expectations, estimates, forecasts and assumptions. Forward-looking statements are not guarantees of future
performance and are subject to risks, uncertainties and other important factors that could cause the Company’s actual performance to be
materially different from that projected. Examples of these statements would include those where the Company forecasts the timing of new and
existing projects and the success of the Company’s new technologies and entering new markets. The assumptions, risks and uncertainties that
could cause actual results to differ materially from the forward-looking information, include, but are not limited to grow the Wachs Water
Services business through addition of senior business development staff, market changes, the Company’s ability to deliver services in a timely
and cost effective manner, technological change, changes in general economic conditions and other risks detailed from time to time in our
ongoing filings with the Canadian securities regulatory authorities, including those in the Company’s Annual Information Form, which filings can
be found at www.sedar.com. Given these assumptions, risks and uncertainties, readers are cautioned not to place undue reliance on such
forward-looking statements. Unless otherwise required by applicable securities laws, the Company undertakes no obligation to publicly update
or revise any forward-looking statements either as a result of new information, future events or otherwise. Unless otherwise stated, all dollar
amounts are expressed as CAD$.
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Financial Performance Overview
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1. Excludes direct costs, Libya accounts receivable recovery and loss or gains on asset disposals, includes depreciation and provisions
2. See Non-GAAP Measures in the Company’s Annual Management Discussion and Analysis
2016:
• Total Revenue up 10%;
Adj. EBITDA up 14%
Q4:
• Total Revenue up 5%;
Adj. EBITDA down 24%
For the period ended
December 31
Three
months
2016
Three
months
2015
Change Twelve
months
2016
Twelve
months
2015
Change
$ % $ %
Revenue 32,311 30,787 1,524 5 115,074 104,423 10,651 10
Direct costs 7,569 5,958 1,611 27 25,392 25,522 (130) (1)
Gross profit 24,742 24,829 (87) (0) 89,682 78,901 10,781 14
Gross margin (%) 77 81 78 76
Operating Expenses1 22,797 21,449 1,348 6 88,322 79,672 8,650 11
Adjusted EBITDA2 5,243 6,895 (1,652) (24) 15,119 13,288 1,831 14
Adjusted EBITDA (%) 16 22 13 13
Profit (loss) for the
period1,917 677 1,240 183 1,321 (134) 1,455 NA
Per share – basic 0.03 0.01 0.02 (0.00)
Per share – diluted 0.03 0.01 0.02 (0.00)
Cash Flow from
Operations Before
Working Capital
Changes2
5,301 5,612 (311) (5) 14,609 11,359 3,250 29
Adjusted Profit (Loss)
for the period21,770 1,244 526 42 1,357 (1,394) 2,751 NA
Revenue by Division
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Water Division:
• 2016 Revenue up 5% to
$93.2 million
• 2016 Adj. EBITDA up 10% to
$20.4 million
• 13% CAGR (2012 - 2016)
Oil & Gas Division:
• 2016 Revenue up 41% to
$21.9 million
• 2016 Adj. EBITDA up 52% to
$7.0 million
• 88% CAGR (2012 - 2016)
Revenue by Product Group
Consulting and
Inspection Revenue:
• up 13% YoY
• increase helped push
gross margin to 78%
from 76% last year
• 31% CAGR (2012 -
2016)
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Water DivisionAmericas Segment
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• Q4 revenue declined 5% and adjusted EBITDA declined
25% largely due to procurement delays in Canada
• New meaningful work awarded in Canada subsequent to Q4
• Full-year revenue grew 4% and adjusted EBITDA grew 2%,
despite 22% decline in lumpy equipment sales
• New investments in BD, sales and training to drive growth
Water DivisionInternational Segment
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• Q4 revenue grew 11% and adjusted EBITDA grew 108%
due to increased activity in Europe, monitoring revenue in
Mexico and lower overall costs
• Full-year revenue declined 17% and adjusted EBITDA grew
203% due to favourable revenue mix and lower costs
Water DivisionWachs Water Services Segment
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• Q4 revenue grew 34% and adjusted EBITDA grew by $0.4
million to $0.4 million (7% of Q4 revenue) following re-
investment in sales personnel and refocusing management
• Full-year revenue grew 29% (includes $4.2M from extra
quarter; WWS acquired April 2015) and adjusted EBITDA
declined 43%
• Investments in sales and marketing should show progress
throughout 2017; bookings are up 31% at the end of 2016
Extra quarter
of WWS
(acquired
Apr. 2015)
Oil and Gas DivisionPureHM Segment
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• Q4 revenue grew 15% and adjusted EBITDA declined 43%
reflecting a $0.3M marketing cost reclassification from
Americas segment, product mix, adverse weather impact on
productivity
• Full-year revenue grew 41% and adjusted EBITDA grew
52% from significant contract awards and increasing market
acceptance
Corporate and Other
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For the period ended
December 31 (000s)
Three
months
2016
Three
months
2015
Twelve
months
2016
Twelve
months
2015
General and administration 2,855 2,664 12,935 11,216
Stock based compensation (142) (186) (1,316) (1,173)
Training costs - (42) (286) (42)
Adjusted general and
administration2,707 2,436 11,333 10,001
General and Administration Expenses
For the period ended
December 31 (000s)
Twelve
months
2016
Twelve
months
2015
Research and development 1,130 388
Stock based compensation (128) (147)
Net research and development 1,002 241
Research and Development (R&D) Expenses
(in millions $CAD except
DSO)
Dec 31
2016
Dec 31
2015
Days sales outstanding 108 133
Working capital 34.3 46.7
Total assets 143.6 147.1
Total liabilities 15.2 17.8
• During the year, the Company capitalized $4.1 million of development
expenditures (2015 - $2.8 million), primarily associated with ongoing
development of Pure’s existing technologies and platforms.
• Pure continues to invest in R&D initiatives that are focused on increasing the
capability and efficiency of its technology platforms in both the water and oil
and gas sectors. Pure anticipates commercialization of several of these
initiatives in 2017 with corresponding positive impacts on revenue and
profitability
Outlook
Water Division – back to growth in 2017
• Investment in sales personnel in the Americas segment expected to positively impact the year ahead
• New U.S. multi-year work awarded in Q4/’16, recent awards in Canada and an overall increase in multi-year RFPs
• Growth in Europe expected from several large projects developed in 2016
• Growing interest from China on solutions and technology
• WWS bookings up 31% at end of 2016, a leading indicator of future growth; Q4 was second consecutive quarter showing improved revenue and profitability
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Oil and Gas Division – strong growth to continue
• Synergies from E-Mac acquisition; experienced management team and engineers
• Large addressable market with growing acceptance of PureHM technologies and solutions
Research & Development
• Continued investments to enhance technology leadership
• Current initiatives
• Monitoring system for oil pipelines passing under rivers
• Enhancements to PipeDiver technology for use in water pipelines – to generate higher resolution condition information
Paul Moon
+1 (403) 537-3244
Director, Investor Relations and Corporate Communications