Water Ways Technologies (TSXV:WWT) (“Water Ways” or the “Company”) reports today its financial and business results and is pleased to provide highlights and comments on the results for the year ending December 31, 2018.
2018 Year End Financial Highlights1
- Record operating revenues of CAD $15.7M (USD $12.1M), including CAD $8.3M (USD $6.4M) in Project Services and CAD $7.4M (USD $5.7M) in Product Sales, for the year ending December 31, 2018, up 14% from CAD $13.7M (US$10.6M) for the year ending December 31, 2017.
• Increase due to deployment of ten irrigation service projects in Guatemala, Ecuador, Peru, Nigeria, Cameroon, Ethiopia and Israel in the year ending December 31, 2018 compared with deployment of six irrigation service projects in Ethiopia, Cameroon and the Philippines in the year ending December 31, 2017.
- Record gross profit of CAD $2.39M (USD $1.84M) for the year ending December 31, 2018.
• Increase by CAD $140K (USD $110K) from CAD $2.25 (USD $1.73M) for the year ending December 31, 2017.
• Gross profit margin of 15.2%, in line with the Company’s historical operations.
- Total comprehensive income was CAD $540K (USD $417K) for the year ending December 31, 2018 compared to CAD $871K (USD $671K) for the year ending December 31, 2017, primarily due to the costs of the qualifying transaction of approximately CAD $250K.
- Increase in total assets of CAD $8.36M (USD $6.14M) as of December 31, 2018, by CAD $937K (USD $210K) from CAD $7.44M (USD $5.93M) as of December 31, 2017; while decrease in total liabilities of CAD $4.85M (US$3.56M) as of December 31, 2018, by CAD $1.81M (USD $1.75M) from CAD $6.66M (USD $5.31M) as of December 31, 2017.
1 US Dollars is Irri-Al-Tal’s functional and reporting currencies. CAD equivalent figures hereto are presented using the Bank of Canada USD:CAD annual exchange rate of 2018 of 1.2959 and of 2017 of 1.2976 for income statement items, where applicable; and the December 31, 2018 USD:CAD exchange rate of 1.3621 and December 31, 2017 USD:CAD exchange rate of 1.2540 for balance sheet items, where applicable.
Irri-Al-Tal Financial Results Summary
The table below presents the financial results of Irri-Al-Tal Ltd. (“Irri-Al-Tal”), a wholly owned subsidiary of the Company, since the reverse-takeover transaction between Irri-Al-Tal and the Company has occurred after the completion of the year end.
|(CAD in thousands)||FY 2018||FY 2017||Change %|
|Cost of Sales||13,281||11,481|
|Gross Profit Margin %||15.2%||16.4%|
|Other Income (Loss)||(86)||(197)|
|Taxes on Income||168||261|
|Total Comprehensive Income (Loss)||540||871|
|Basic and Diluted Profit per Share||$ 0.014||$ 0.024|
|Balance Sheet Items:|
|Cash and Cash Equivalents||317||218|
|Total Current Assets||7,802||6,967|
|Total Current Liabilities||4,469||6,178|
|Total Non-Current Liabilities||376||478|
|(USD in thousands)||FY 2018||FY 2017||Change %|
|Cost of Sales||10,248||8,848|
|Gross Profit Margin %||15.2%||16.4%|
|Other Income (Loss)||(66)||(152)|
|Taxes on Income||130||201|
|Total Comprehensive Income (Loss)||417||671|
|Basic and Diluted Profit per Share||$ 0.011||$ 0.024|
|Balance Sheet Items:|
|Cash and Cash Equivalents||233||174|
|Total Current Assets||5,728||5.556|
|Total Current Liabilities||3,281||4,927|
|Total Non-Current Liabilities||276||381|
Revenue change by geographic segments:
|Geographic Segments :|
|South and Central America||56.5%||40.7%|
Business Highlights: 2018 Year End and Subsequent
- In 2018, the Company announced its planned development of the “Precise Irrigation System” (“Data Ways”).
- Uzbekistan: In Q4 2018, the Company added a sales executive, focused on CIS countries, to its sales force; as a result, Water Ways signed its first irrigation project in Central Asian in Uzbekistan in January 2019, which has an initial value of approximately C$0.5M and is expected to be delivered in Q2 2019.
- Canada: In March 2019, the Company signed an LOI to acquire certain assets of a Canadian distributor of irrigation and agriculture components located near London, Ontario. The distributor was established in 2004 and finished the year ended October 2018 with sales of approximately C$3.74M.
- Qualifying Transaction: In 2018, the Company announced a qualifying transaction (“QT”) with Irri-Al-Tal Ltd., a company incorporated under the laws of Israel, and in early 2019, the Company closed the QT and commenced trading on the TSX-V under the symbol “WWT”.
- Equity Financings: In May 2018, the Company closed a private placement of C$1.75M at a price of C$0.175 per unit; in March 2019, the Company raised aggregate gross proceeds totally C$3.11M at a price of C$0.25 per unit.
- Cannabis Sectors: In 2018, Irri-Al-Tal successfully launched the implementation of one cannabis project in Israel, including delivery of the irrigation, fertigation and Internet of Things control system to an Israeli subsidiary of the Cronos Group (TSX: CRON). The Company is currently in the process of submitting bids for similar projects to a number of future licensed producers in the Israeli market.
Ohad Haber, President, CEO and Chairman of the Board of Water Ways, commented as follows: “2018 continued to set records for Water Ways’ growth and momentum across the globe. The Company witnessed a transformational year of 2018 as we initiated the capital raising and the listing process in Canada in early 2018 and successfully completed the listing in early 2019. In addition, we embarked on a mission to aggressively expand our business plan in the global legal cannabis sector, which we have advanced from a concept to tangible projects in multiple countries.” Mr. Haber continued: “We are excited about the future of Water Ways as we continue to expand our global footprint and gain a presence in the new markets. As we became a public company and entered this new chapter of Water Ways, we look forward to demonstrating the full potential of Israeli innovation in the global irrigation sector.”
A comprehensive discussion of Water Ways’ financial position and results of operations is provided in the Company’s Management Discussion & Analysis (“MD&A”) for the year ended December 31, 2018 filed on SEDAR and can be found at www.sedar.com.
About Water Ways Technologies
Water Ways is the parent company of Irri-Al-Tal Ltd. (“IAT”) which is an Israeli based agriculture technology company that specializes in providing water irrigation solutions to agricultural producers. IAT competes in the global irrigation water systems market with a focus on developing solutions with commercial applications in the micro and precision irrigation segments of the overall market. At present, IAT’s main revenue streams are derived from the following business units: (i) Projects Business Unit; and (ii) Component and Equipment Sales Unit. IAT was founded in 2003 by Mr. Ohad Haber with a view of capitalizing on the opportunities presented by micro and smart irrigation, while also making a positive mark on society by making these technologies more widely available, especially in developing markets such as Africa and Latin America. IAT’s past projects include vineyards, water reservoirs, fish farms, fresh produce cooling rooms and more, in over 15 countries.
Certain statements contained in this press release constitute “forward-looking information” as such term is defined in applicable Canadian securities legislation. The words “may”, “would”, “could”, “should”, “potential”, “will”, “seek”, “intend”, “plan”, “anticipate”, “believe”, “estimate”, “expect” and similar expressions as they relate to Water Ways, including receipt of the Final Exchange Bulletin and the proposed listing date, are intended to identify forward-looking information. All statements other than statements of historical fact may be forward-looking information. Such statements reflect Water Ways’ current views and intentions with respect to future events, and current information available to Water Ways, and are subject to certain risks, uncertainties and assumptions. Material factors or assumptions were applied in providing forward-looking information, including: expected sales volumes, timing of and approval of the Acquisition by the TSX Venture Exchange; timing of establishing new operations. Many factors could cause the actual results, performance or achievements that may be expressed or implied by such forward-looking information to vary from those described herein should one or more of these risks or uncertainties materialize. Should any factor affect Water Ways in an unexpected manner, or should assumptions underlying the forward-looking information prove incorrect, the actual results or events may differ materially from the results or events predicted. Any such forward-looking information is expressly qualified in its entirety by this cautionary statement. Moreover, Water Ways does not assume responsibility for the accuracy or completeness of such forward-looking information. The forward-looking information included in this press release is made as of the date of this press release and Water Ways undertakes no obligation to publicly update or revise any forward-looking information, other than as required by applicable law. Water Ways’ results and forward-looking information and calculations may be affected by fluctuations in exchange rates. All figures are in Canadian dollars unless otherwise indicated.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.