MONTREAL, May 31, 2012 /CNW Telbec/ - Sofame Technologies Inc. (TSXV: SDW) (OTC: SFMGF) has reported a 10.4% Net Profit in the second quarter of its 2012 fiscal year ended March 31 of $ 53,791 on Revenues of $ 519,547. In the first quarter, the Company reported profit of $ 71,523 (13.5%) on Revenues of $ 529,200. Other highlights of the second quarter were as follows:
- Q2 2012 Net Sales of $ 519,547 compared to $ 368,085 in Q2 2011, an increase of 41%
- Q2 2012 Gross Profit of $ 255,320 (49.1%) compared to ($ 60,222) (-16.4%) in Q2 2011
- Q2 2012 Operating Expenses of $ 149,591 (28.8%) compared to $ 241,455 (65.6%) in Q2 2011
- Q2 2012 Net Earnings of $ 53,791 (10.4%) compared to a loss of ($ 335,069) (-91.0%) in Q2 2011
- EBITDA of $ 166,732 in Q2 2012 versus $ 167,938 in Q1 and ($ 228,107) in Q2 2011
- Sales after six months increased by 8.1% to $ 1,048,747 in 2011 compared to $ 970,361 in 2011
- Gross Profit after six months was $ 480,907 (45.9%) in 2012 versus a loss of ($ 56,527) (-5.8%) in 2011
- Net Profit after six months was $ 125,314 (11.9%) in 2012 versus a loss of ($ 602,614) (-62.1%) in 2011
- EBITDA after six months in 2012 was $ 334,670 compared to ($ 384,957) in the first half of 2011
Note: These are the financial highlights only. Management`s Discussion and Analysis, the consolidated financial statements, cash flows, and notes thereto of Sofame Technologies Inc. are available at www.sedar.com.
Comments on the Second Quarter Ending March 31, 2012
The Company experienced an increase in order activity from August 2011 through the second quarter of fiscal 2012 ending March 31. Six contracts were booked whose total value is $1.94 million. Two of these projects for food processors began shipping in the first quarter, and the engineering for two hospital projects was completed and invoiced in the second quarter. Manufacturing of the equipment for a yeast producer began in the second quarter, and another Percotherm® order for a College in Colorado was received in the second quarter after pre-engineering of the waste heat recovery system was completed.
These results are better than expected considering that over the last three years, Sofame has had to adjust to challenging market conditions including a historically low natural gas price - as low as $ 1.85 per Dekatherm. Gas prices have recently recovered to about $2.40/DT. Another challenge overcome by the Company is low corporate spending budgets for cost-saving plant improvements. Sofame has overcome tight capital conditions by implementing an outsourcing model which has allowed it to cut overhead and incur costs only when contracts are in production. Two-year payback has become the norm for Sofame's industrial water heating solutions.
In other developments, Synergy, a local Chinese rep firm, has begun marketing Sofame's products in China, while discussions about a larger arrangement to support industrial energy efficiency initiatives in China will continue with CGN Energy Service Co. Ltd. in 2012. In North America, Sofame is in discussions with several organizations about funding Sofame's turn-key projects using the "ESCO" or shared savings model. The management team at Sofame is confident that with low overhead costs, contracts in hand, and seasoned leaders experienced in the HVAC industry at the helm of the company, the 2012 fiscal year will continue positively.