Calgary, Alberta, May 26, 2022 (Newsfile Corp via COMTEX) -- Calgary, Alberta--(Newsfile Corp. - May 26, 2022) - Cleantek Industries Inc. /zigman2/quotes/200499473/delayed CA:CTEK -3.57% (" Cleantek " or the " Company ") (formerly Raise Production Inc. ("Raise")) is pleased to announce that it has released its financial results for the three months ended March 31, 2022 and 2021. Selected financial and operation information is outlined below and should be read in conjunction with Cleantek's unaudited condensed consolidated interim financial statements and management's discussion and analysis for the three months ended March 31, 2022 and 2021, which are available on SEDAR at www.sedar.com .
Cleantek is an innovative provider of patented, clean technology solutions focused on reducing both cost and carbon intensity in the wastewater management and industrial lighting sectors across North America. Cleantek is a publicly traded company listed on the TSX Venture Exchange (the "TSXV") under the trading symbol "CTEK".
Highlights for the First Quarter 2022
Cleantek generated revenue of $3.1 million for Q1 2022, an increase of $0.7 million or 28%, from Q1 2021 and an increase of $0.8 million or 33% from Q4 2021. The increased revenue in Q1 2022 is due to the continued ramp up in rental activity in both sustainable lighting solutions and ZeroE dehydration;
Cleantek's gross profit of $1.8 million or 58% of revenue was inline with target despite higher than anticipated labor costs, including overtime and third party subcontracting as a result of increased activity and a lean labor force. Repair and maintenance costs related to the set up and install of the rental fleet were also higher than expected in the current quarter, but the Company expects these associated costs to decrease or normalize over the remainder of the year;
mobile ZeroE deployment has increased to 15 units, with over half of deployed systems in the US, and the Company continues to forecast full utilization on the fleet of 35 units before the end of 2022;
Cleantek is currently deploying its first ever mobile ZeroE technology into the Permian basin, with two units contracted with one of the major oil and gas companies;
in Q1 2022 the Company fabricated and deployed an additional six new HALO lighting systems into the US and continues to forecast the deployment of 14 additional HALO lighting systems over the balance of 2022 for a total of 20 new units fabricated and deployed in 2022; and,
as at March 31, 2022 the Company had over $3.0 million of liquidity, including cash on hand and access to a revolving line of credit for up to $2.5 million, that to date remains undrawn.
Cleantek continues to grow its business and improve its financial performance through the execution of its strategy, including maximizing revenue and profits through its existing and expanding fleet of sustainable lighting solutions and wastewater treatment assets. This, combined with the expansion of our ZeroE System portfolio of waste energy powered, wastewater treatment and vaporization infrastructure projects throughout North America and globally, we expect will lead to an increase in revenue and corresponding profitability.
The Company's near-term strategy will continue to focus on:
taking advantage of increased oil and gas drilling and production activity in North America to maximize utilization rates of its current fleet of sustainable lighting solutions and mobile ZeroE wastewater treatment assets;
expanding and growing the Company's fleet of sustainable lighting solutions and mobile ZeroE wastewater treatment assets to satisfy increased demand in the oil and gas, midstream, mining, industrial and construction markets;
leveraging Cleantek's technology to capture additional market share through organic growth of the ZeroE wastewater treatment and vaporization services; and,
expanding and diversifying Cleantek's geographic focus and customer base, including exploring opportunities outside of the North American market.
The Company is uniquely positioned with the prospect to capture expansion in both ZeroE wastewater vaporization and the sustainable lighting markets. We expect that wastewater and vaporization opportunities in the oil and gas, municipal grey water, and industrial wastewater industries and a growing awareness regarding the disadvantages of downhole injection will continue to increase the demand for Cleantek's ZeroE products.
Cleantek's first quarter 2022 revenue was $3.1 million and the Company's revenue forecast remains on pace to increase by greater than 40% in 2022 from $8.8 million in 2021.
"Cleantek had a very strong start to the 2022 calendar year and we are on track to meet or exceed our 2022 revenue targets" said Matt Gowanlock, President and CEO. "We are very encouraged by the expansion of our mobile ZeroE technology into the US and particularly excited about the recent deployment of units into the Permian basin for the first time ever."
Second quarter 2022 financial results will be released on August 18, 2022 after the quarterly review and approval by the Board of Directors.
Results of Operations
|(Canadian $000's, except||Three months ended March 31|
|per share amounts and percentages)||2022||2021||Change|
|Gross profit %||58||58||-%|
|Net loss per share - basic and diluted ($)||$(0.03)||$(0.01)||$(0.02)|
|EBITDA [(]  [)]||454||675||(221)|
|Adjusted EBITDA [(]  [)]||602||825||(223)|
|As at:||March 31, 2022||December 31, 2021||Change|
|Working capital surplus [(]  [)]||153||535||(382)|
|Non-current debt [(] [1,2] [)]||7,383||7,875||492|
|Total non-current liabilities||7,440||7,932||492|
(1)Management considers EBITDA and adjusted EBITDA key metrics in analyzing operational performance and the Company's ability to generate cashflow. EBITDA is measured as net income (loss) before interest, tax, depreciation and amortization. Adjusted EBITDA is measured as EBITDA adjusted for share-based compensation, impairment/impairment reversals of non-financial assets, research expense/ recoveries and unusual items not representative of ongoing business performance. Working capital (or also referred to as net current assets/liabilities) for Cleantek is calculated as current assets less current liabilities per the statement of financial position. These items are not defined and have no standardized meaning under IFRS. Presenting these items from period to period provides management and investors with the ability to evaluate earnings trends more readily in comparison with prior periods' results. Please see "Non-IFRS Measurements" for further discussion of these items, and where applicable, reconciliations to measures calculated in accordance with IFRS.
(2)Total non-current debt includes the non-current portions of long-term debt and lease liabilities.