OTTAWA, Aug. 29 /CNW/ -- OTTAWA, Aug. 29 /CNW Telbec/ - Clearford Industries Inc. ("Clearford", TSX-V: CLI) today announced financial results for the second quarter of 2008, which ended June 30, 2008 (all figures in Canadian dollars and in accordance with Canadian GAAP).
As previously announced, on July 31, 2008, following shareholder and TSX approval, the Company completed the divestiture of the Brooklin Concrete Division ("Brooklin") assets and the assignment of the right to purchase the shares of Boucher Pre-Cast Concrete Limited for $43 million (the "Transaction"). The Company subsequently repaid all bank and debenture debt following the divestiture. As a result of this Transaction, the results of operations of Brooklin for the current quarter have been segregated to discontinued operations on the Statement of Operations, and the net assets of Brooklin have been segregated to Held for Sale on the Balance Sheet.
The Brooklin Division recorded net income from discontinued operations for the second quarter of $920,622 compared to $788,123 for the same period of the prior year. This increase was mainly attributable to the increase in revenue during the current quarter as compared to the same period of the prior year. The Wastewater Division recorded $202,389 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 of $473,405 for the current quarter as compared to a loss from continuing operations of $656,040 for the same period of the prior year. Total net income for the Company for the second quarter was $447,217 or $0.02 per share compared to net income of $132,083 or $0.01 per share for the same period of the prior year and a net loss of $3,303,268 or $0.13 per share for the first quarter of 2008.
The Brooklin Concrete Division recorded a net loss from discontinued operations for the six months ended June 30, 2008 of $1,836,285 compared to a net loss of $1,720,768 for the same period of the prior year. The Wastewater Division recorded $202,389 of revenue for the six months ended June 30, 2008 as compared to $125,000 of revenue for the same period of the prior year and recorded a loss from continuing operations of $1,019,766 for the six months ended June 30, 2008 as compared to a loss from continuing operations of $1,137,665 for the same period of the prior year. Total net loss for the Company for the six months ended June 30, 2008 was $2,856,051 or $0.11 per share compared to a net loss of $2,858,433 or $0.11 per share for the same period of the prior year.
For the second quarter of 2008, cash used in continuing operations was $174,996 compared to cash used in continuing operations of $123,080 for the same period of the prior year and cash provided by Brooklin was $933,899 compared to cash provided of $801,701 for the same period of the prior year. For the six months ended June 30, 2008 cash used in continuing operations was $440,510 compared to cash used in continuing operations of $399,945 for the same period of the prior year and cash used by Brooklin was $1,389,839 compared to cash used of $1,020,013 for the same period of the prior year.
"The sale of the Concrete Division allows Clearford the opportunity to focus on its proprietary technology of the Small Bore Sewer(TM). While facing the same continuing challenges in the Ontario market, the Company is excited by the potential opportunities in the emerging market countries," stated John Kelly, President and CEO of Clearford.
Following the sale of Brooklin on July 31, 2008, SC Stormont Holdings Inc. acquired ownership of 4,000,000 common shares of Clearford Industries Inc. which represents approximately 15.56% of the issued and outstanding Clearford common shares. Stormont currently now owns 4,500,000 Clearford common shares, which represents approximately 17.5% of the issued and outstanding common shares of the Company. Stormont is controlled by the Company's chairman, Roderick M. Bryden. The purchase of the shares was a private transaction between Stormont and certain principals of Clearford.
Forward-Looking Statements
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.
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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.
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