BlueScout Technologies Reports Third Quarter 2012 Financial Results
- Operating expenses down 77% for the quarter and 66% for the nine-month period -
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
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
- 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 detailed below:
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, wind turbines.
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 management's presentation.
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 optimization.
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
|(Expressed in United States dollars)||Note||
|Cash and cash equivalents||2,107,678||6,018,559|
|Prepaid expenses and other assets||168,484||352,002|
|Property and equipment||149,175||418,896|
|Liabilities and Equity|
|Accounts payable and other liabilities||1,453,548||1,391,799|
|Obligations under finance leases||7||14,461||62,707|
|Due to related party||11||126,197||18,516|
|Deferred revenue and customer deposits||202,000||552,800|
|Obligations under finance leases||7||-||7,620|
|Special warrants liability||13||1,939,060||-|
|Option component of convertible debenture||14||106,489||-|
|Provision for indemnification agreement||8||2,000,000||2,000,000|
|Due to related party||11||74,028||-|
|Commitments and contingencies||9,10|
|Total (deficiency) equity||(2,015,315)||4,496,207|
|Total liabilities and (deficiency) equity||5,471,830||8,872,728|
BlueScout Technologies Ltd. Condensed Consolidated Interim Statements of
||Three months ended||Nine months ended|
(Expressed in United States dollars)
|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|
|Amortization of intangible assets||
|Depreciation of property and equipment||
|Sales and marketing||2||101,037||14,516||255,845||310,529|
|Professional engineering fees||-||102,108||229,333||582,839|
|Research and development||
|Other income, net||
|Impairment of property and equipment||
|Impairment of intangible assets||
|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||
|Gain on fair value deferred related party||
|Loss of asset disposal||
|Loss on foreign exchange||
|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||
|Net loss per share - basic and diluted||
|Weighted average number of common shares outstanding||122,513,614||106,527,100||122,513,614||89,265,679|
SOURCE BlueScout Technologies