- Company takes significant steps to reposition for future success -
CHANTILLY, VA, Nov. 28, 2011 /CNW/ - Catch the Wind Ltd. (TSXV: CTW), providers of laser-based wind sensor products and technology, today reported its financial results for the three-and nine-month periods ended September 30, 2011. All figures are in U.S. dollars unless otherwise stated.
"Over the past several months, we have made a number of key corporate decisions and taken significant steps towards repositioning our Company for a successful future," said Dr. Jo Major, Jr., Chairman and Interim President and Chief Executive Officer. "Most notably, we moved into our new facility, initiated our manufacturing plan for cost-effective volume production, improved product robustness and developed impressive new technological features. We have also detailed our vision for the industry with a product roadmap premised on meeting the technological, economic and data needs of our various customers segments. At the same time, our facility move and decisions to bring all critical engineering functions in-house have dramatically reduced our overall cost structure to both preserve cash and take more of our revenues to the bottom line. We've also added both John Green and Fred Belen to our management team. With a strengthened team and our technical, manufacturing and supply chain assets in place, we are accelerating into the commercial phase of our evolution - shipping product and booking orders for the first quarter of 2012."
Selected Q3 2011 Financial and Operational Highlights
- Leased, with an option to buy, a unit to a leading manufacturer of wind turbines for up to six months, marking the first lease agreement for a Vindicator® unit and creating a new source of cash flow
- Signed a letter of intent to enter into a collaborative agreement with TechnoCentre éolien to install a Vindicator® unit on one of its REpower MM92 2.05 MW turbines located in Québec, which will validate the Vindicator® for use in cold weather and harsh winter conditions, broadening potential markets especially in Québec where over 3,000 MW of wind power is expected to be installed over the next three to four years
- Completed an equity offering for aggregate proceeds of approximately CDN$15.1M
- Moved corporate headquarters to Chantilly, Virginia
- Shipped three units and recognized revenue of $348,000.
- Appointed Dr. Jo Major, Jr. as non-executive Chairman of the Board of Directors
- Appointed Dr. Jo Major, Jr. as interim President and Chief Executive Officer
Highlights Subsequent to Quarter-end
- Updated expectations on shipments for the fourth quarter to between
.9M and $1.1M
- Appointed John Green as Chief Financial Officer
- Appointed Frederick Belen as Vice President of Technology and Product Line Management
- Catch the Wind withdrew its membership in Falcon Fifty LLC effective October 22, 2011
- Catch the Wind terminated the consulting agreements of OADS employees and others effective October 5, 2011
- Demonstrated superb wind assessment accuracy, with excellent correlation to multiple traditional wind measurement tools, in collaboration with AXYS Technologies and Grand Valley State University
Financial Performance
Catch the Wind recognized revenue of $348,000 for the three-month period ended September 30, 2011, compared with $7,500 for the same period in 2010. Catch the Wind generates revenue from the sale and lease of its laser wind sensing products. For the nine-month period ended September 30, 2011, the Company generated revenue of $738,000 compared with $7,500 for the same period in 2010. Catch the Wind operated as a development stage company from its inception until June 15, 2010 and until this point, the Company had not recognized any revenues or commenced its principal commercial operations.
Analysis of the carrying value of inventory, property and equipment and intangible assets resulted in 3 significant charges reflected in the consolidated financial statements. Inventory was written down $1.4 million as the Company made a strategic decision to no longer market the Racer's Edge, Windseeker and Vindicator Beta (Generation 1) products. This decision also led to the write-off of approximately $5.0 million against intangible assets for Vindicator Beta project development costs. The Company also had Property and Equipment impairment loss totaling approximately $2.5 million of which approximately $2.3 million was related to an impairment loss on the Falcon 50 aircraft.
Cost of sales for the three- and nine-month periods ended September 30, 2011 were $527,000 and $1.6 million, respectively compared to nil for the comparable periods in 2010, as there were no product sales in 2010.
Operating expenses after excluding $7.5 million in property and equipment and intangible asset impairment losses for the three-month period ended September 30, 2011 remained constant at $3.8 million compared to the three-month period ended September 30, 2010.
Operating expenses, after excluding $7.5 million in property and equipment and intangible asset impairment losses for the nine-month period ended September 30, 2011 were $13.9 million, up 28.1% from $10.8 million for the same period in 2010. The increase in operating expenses is primarily due to an increase of $2.7 million in research and development costs. It is important to note that expenditures for research and development efforts, while comparable on a period-to-period basis, are reflected differently in the comparative financial statements due to the Company's transition from a development stage company to a commercial enterprise in June 2010. The research and development costs were partially offset by a decrease of $1.8 million in combined consulting, professional, and professional engineering fees and a
.5 million reduction in the non-cash loss related to the change in fair value of the Company's warrant liability.
Net loss for the three-month period ended September 30, 2011 was $10.9 million, or
.10 per share, compared with $3.7 million, or
.07 per share, for the same period in 2010. Net loss for the nine-month period ended September 30, 2011 was $20.7 million, or
.22 per share, compared with $10.8 million, or
.19 per share, for the same period in 2010.
At September 30, 2011, Catch the Wind had a working capital balance of $8.4 million, including cash and cash equivalents of $9.3 million, compared with a working capital balance of $6.9 million, including cash and cash equivalents of $6.7 million, at December 31, 2010.
Catch the Wind has filed its financial statements for the three- and nine-month period ended September 30, 2011 and related Management's Discussion and Analysis (MD&A) with securities regulatory authorities. Catch the Wind's financial statements, MD&A and related documents are available via SEDAR as well as through the Company's website, www.catchthewindinc.com.