BlueScout Technologies Reports Third Quarter 2012 Financial Results
- Operating expenses down 77% for the quarter and 66% for the nine-month
CHANTILLY, VA, Nov. 29, 2012 /CNW/ – BlueScout Technologies TSXV: SCT, providers of the BlueScout OCS-210 for optimized wind energy generation, reported its financial results
for the three- and nine-month periods ended September 30, 2012. All
figures are in U.S. dollars, unless otherwise stated.
-- A new signal processing sub-system design was completed. As opposed to the prior design, which was an evolution of a design targeted at aerospace applications, the all-new design started with a clean slate approach specifically addressing the requirements of the wind turbine industry. The foundation of the design is a fundamentally different signal processing algorithm, sharing no commonality of software, firmware or hardware with the prior design. The work combines a clean set of signal processing protocols, modern chipsets, and active system noise reduction to improve system sensitivity by five hundred percent and eliminate errors due to turbine blade blockage. -- The operational fleet has 34 units installed with another seven on backlog for installation. BlueScout products now have over 300,000 of operational field hours. -- Reduced operating expenses by 77% or $8.6M for the quarter compared to last year and reduced net loss for the quarter by $8.3M or $0.08 per share versus Q3 2011. -- Successfully rebranded under the name BlueScout Technologies, which included a new image, mission, vision, values, domain name, ticker symbol and fresh logo. -- Completed a special warrant offering for gross proceeds of CDN$3.1 million and a convertible debenture offering for CDN$1.2 million, for total gross proceeds of CDN$4.3 million. -- Continued its market expansion by entering into a trial program with EDP Renewables North America (EDPR NA) to demonstrate the performance improvement of two EDPR NA turbines under the operational control of the OCS-210 wind turbine control system.
-- As part of ongoing legal disputes, Optical Air Data Systems LLC (OADS) sent more than twenty subpoenas to key BlueScout customers and suppliers. -- The indemnification suit brought against BlueScout by Phil and Alisa Rogers was dismissed without prejudice by the Fairfax Circuit Court in Virginia in October. Following this dismissal the Rogers subsequently filed a substantially similar indemnification lawsuit in the same court. -- In the IP suit, a few days after a motion by OADS against BlueScout was denied at the magistrate level, subsequently another motion was introduced by OADS asking that the denial be re-evaluated by a district level judge.
BlueScout recognized revenue of $50K for the quarter ended September 30,
2012, compared to $348K for the three-month period ended September 30,
2011. The Company has $742K of deferred revenue and customer deposits
recorded on its consolidated balance sheet at September 30, 2012
related to product shipments that have performance provisions that are
expected to be recognized in future quarters. On a nine-month basis,
BlueScout recognized revenue of $510K for 2012 compared to $738K for
the same period in 2011.
Operating expenses for Q3 2012 were $2.6M, down 77% from $11.2M for the
corresponding period last year. Excluding the non-cash items,
litigation expense, one-time August 24 financing fees and one-time
rebranding fees, operating expenses in Q3 2012 were $2.2M, down 23%,
compared to $2.8M for Q3 2011.
For the nine-month period ended September 30, 2012, operating expenses
were $7.4M, down 66% from $21.4M for FY2011. Excluding the non-cash
items, litigation expense, one-time August 24 financing fees and
one-time rebranding fees, operating expenses were $6.0M, down 49% from
$11.8M for the same period last year. Selected operating expenses are
Cost of sales for the three-month period ended September 30, 2012 was
$598K compared to $527K for the same period last year. On a
nine-month basis, cost of sales was $1.2M compared to $1.6M for the
same period in 2011. Cost of sales include product inventory costs and
all costs associated with the installation on, and integration with,
General and administrative expense for Q3 2012 was $196K, down 70% from
$625K for Q3 2011. The decrease is primarily due to reductions in
travel related expenses and repairs and maintenance costs. On a
nine-month basis, general and administrative expense was $659K compared
to $2.2M for the same period in 2011. The 2011 expenses were
predominantly related to travel and maintenance related to the Falcon
50 aircraft which the Company has not been affiliated with since
October 22, 2011.
Sales and marketing expense for Q3 2012 was $101K compared to $15K for
Q3 2011. Sales and marketing expense includes expenses for trade
shows, advertising, promotion and sales and marketing consulting
costs. The increase is primarily due to $64K of rebranding costs and
$22K of expenses associated with trade shows during the quarter.
Professional fees totaled $1.6M for the three-month period ended
September 30, 2012, up from $331K for the same period last year. The
increase in professional fees for the quarter is due to legal expenses,
primarily related to litigation matters, and costs associated with the
August 24 financing which totaled $572K. Legal expense was $873K for
the third quarter of 2012 versus $131K for the same period last year.
On a nine-month basis professional fees were $2.9M for 2012 ($1.7M
related to litigation) and $1.0M for 2011.
Third quarter 2012 research and development expense was $77K compared to
$384K for the same period last year. On a nine-month basis, research
and development expense was $257K compared to $3.7M for the same period
in 2011. Research and development during 2012 has been centered on the
transition to contract manufacturing and turbine integration.
BlueScout recorded a net loss for Q3 2012 of $2.6M or $0.02 per share,
compared to a net loss of $10.9M or $0.10 per share for Q3 2011. On a
nine-month basis, BlueScout generated a net loss of $6.9M or $0.06 per
share compared to a net loss of $20.7M or $0.22 per share for the same
period of FY2011.
As of September 30, 2012, BlueScout had cash and cash equivalents of
$2.1M and working capital of $3.4M, compared to cash and cash
equivalents of $6.0 million and working capital of $6.2 million at
December 31, 2011.
BlueScout has filed its financial statements for the three and nine
month period ended September 30, 2012 and related Management’s
Discussion and Analysis (MD&A) with securities regulatory authorities.
BlueScout’s financial statements, MD&A and related documents are
available via SEDAR as well as through the Company’s website, www.BlueScout.com.
BlueScout will hold a conference call on November 30, 2012 at 1:00 pm ET
to discuss its third quarter 2012 financial results.
To access the conference call by telephone, dial 647-427-7450 or
1-888-231-8191. Please connect approximately 15 minutes prior to the
beginning of the call to ensure participation. A question and answer
session for analysts and institutional investors will follow
A live audio webcast of the conference call will be available at www.BlueScout.com. Please connect at least 15 minutes prior to the conference call to
ensure adequate time for any software download that may be required to
join the webcast. The webcast will be archived at the above web site
for 30 days.
A taped rebroadcast will be available to listeners until 12 a.m. ET on
Friday, December 7, 2012. To access the rebroadcast, please dial
416-849-0833 or 1-855-859-2056 and enter passcode 72229223, followed by
the number sign.
BlueScout Technologies (TSXV: SCT) increases energy production and decreases operating costs by applying
groundbreaking microgeographical wind flow sensing to turbine control
systems that increases the effectiveness and availability of wind
turbines. BlueScout combines precise, optically based wind forecasting
with advanced predictive control architectures to ready the turbine for
the imminent wind inflow changes – optimizing energy production and
reducing the harmful effects of wind turbulence on the turbine. With
extensive operating data on multiple wind turbine models, BlueScout is
the leading, value-added innovator in wind turbine performance and
The team consists of experienced high-tech, R&D and manufacturing
engineers, innovative entrepreneurs, and proven leaders. The BlueScout
team has unique expertise and shares a firm commitment, as part of the
wind power industry, to continuously improve the reliability of wind
power generation through innovation. For more information, visit www.BlueScout.com.
This news release includes certain forward-looking statements within the
meaning of Canadian securities laws. Forward-looking statements involve
risks, uncertainties and other factors that could cause actual results,
performance, prospects and opportunities to differ materially from
those expressed in such forward-looking statements. Forward-looking
statements in this news release, include, but are not limited to,
economic performance and future plans and objectives of BlueScout
Technologies. Any number of important factors could cause actual
results to differ materially from these forward-looking statements as
well as future results. Although BlueScout believes that the
assumptions and factors used in making the forward-looking statements
are reasonable, undue reliance should not be placed on these
statements, which only apply as of the date of this news release, and
no assurance can be given that such events will occur in the disclosed
timeframes or at all. BlueScout Technologies disclaims any intention or
obligation to update or revise any forward-looking statement, whether
as a result of new information, future events or otherwise.
Neither TSX Venture Exchange nor its Regulation Services Provider (as
that term is defined in the policies of the TSX Venture Exchange)
accepts responsibility for the adequacy or accuracy of this release.
BlueScout Technologies Ltd. Condensed Consolidated Interim Balance Sheets (Unaudited) September 30, December 31, (Expressed in United States 2012 2011 dollars) Note $ $ Assets Current assets: Cash and cash equivalents 2,107,678 6,018,559 Accounts receivable 207,502 167,705 Inventory 5 2,810,965 1,830,350 Prepaid expenses and other assets 168,484 352,002 5,294,629 8,368,616 Non-current assets: Property and equipment 149,175 418,896 Intangible assets - 3,166 Other assets 28,026 82,050 177,201 504,112 Total assets 5,471,830 8,872,728 Liabilities and Equity Current liabilities: Accounts payable and other 1,453,548 1,391,799 liabilities Obligations under finance leases 7 14,461 62,707 Warranty provision 8 137,500 93,750 Due to related party 11 126,197 18,516 Deferred revenue and customer 202,000 552,800 deposits 1,933,706 2,119,572 Non-current liabilities: Obligations under finance leases 7 - 7,620 Special warrants liability 13 1,939,060 - Convertible debenture 14 878,244 - Option component of convertible 14 106,489 - debenture Deferred revenue 540,400 - Provision for indemnification 8 2,000,000 2,000,000 agreement Warrant liability 12 15,218 249,329 Due to related party 11 74,028 - 5,553,439 2,256,949 Total liabilities 7,487,145 4,376,521 Commitments and contingencies 9,10 (Deficiency) Equity Capital stock 15 12,252 12,252 Contributed surplus 56,884,327 56,521,284 Deficit (58,911,894) (52,037,329) Total (deficiency) equity (2,015,315) 4,496,207 Total liabilities and (deficiency) 5,471,830 8,872,728 equity
BlueScout Technologies Ltd. Condensed Consolidated Interim Statements of Loss and Comprehensive Loss (Unaudited) Three months ended Nine months ended September September September September (Expressed in 30, 30, 30, 30, United States 2012 2011 2012 2011 dollars) Note $ $ $ $ Revenue 50,000 348,000 510,000 738,000 Expenses: Cost of sales 5 598,161 526,599 1,238,116 1,583,303 Salaries and benefits 6 656,042 607,827 1,974,704 1,689,854 General and administrative 7 195,607 624,967 659,348 2,209,469 Inventory writedown 5 297,336 1,422,986 297,907 1,430,934 Amortization of intangible assets - 338,417 3,166 1,015,497 Depreciation of property and equipment 94,867 153,107 296,229 471,223 Sales and marketing 2 101,037 14,516 255,845 310,529 Consulting fees 2 339,914 74,081 765,216 361,471 Professional fees 2,6 1,553,905 343,079 2,940,552 1,010,578 Professional engineering fees - 102,108 229,333 582,839 Research and development 76,850 384,243 257,365 3,724,826 Finance costs 7 22,195 84,349 27,730 260,768 Interest income (365) (2,711) (799) (4,824) Other income, net - (19,715) - (37,464) Impairment of property and equipment - 2,486,799 - 2,486,799 Impairment of intangible assets - 4,968,369 - 4,968,369 Gain on fair value of warrant liability 12 (25,880) (965,614) (274,232) (713,728) Gain on fair value special warrants liability 13 (1,152,994) - (1,152,994) - Gain on fair value option component of convertible debenture 14 (72,912) - (72,912) - Gain on fair value deferred related party balance 11 (106,528) - (106,528) - Loss of asset disposal 35,894 - 35,894 Loss on foreign exchange 10,534 72,434 10,622 79,509 2,623,665 11,215,841 7,384,565 21,429,952 Net loss and total comprehensive loss (2,573,665) (10,867,841) (6,874,565) (20,691,952) Net loss and total comprehensive loss attributable to: Owners of the Company (2,573,665) (10,176,903) (6,874,565) (19,771,680) Non-controlling interest - (690,938) - (920,272) (2,573,665) (10,867,841) (6,874,565) (20,691,952) Net loss per share - basic and diluted (0.02) (0.10) (0.06) (0.22) Weighted average number of common shares outstanding 122,513,614 106,527,100 122,513,614 89,265,679
SOURCE BlueScout Technologies