Pure Technologies Announces Second Quarter 2016 Results

CALGARY, Aug. 8, 2016

Second Quarter and Year-to-Date Highlights:

• Revenue of $29.2 million for the second quarter comparable with $29.4 million in 2015. Year-to-date revenue of $54.3 million, up 23% (14% organically) compared to the same period in 2015.
• Adjusted EBITDA of $4.6 million in the second quarter compared to $4.6 million last year. Year-to-date Adjusted EBITDA of $5.7 million compared to $2.5 million last year, reflecting revenue growth and operating efficiencies.
• Profit for the second quarter of $1.0 million compared to $0.4 million last year. Year-to-date losses improved from $1.9 million to $1.5 million in 2016.
• Inspection and consulting activity grew by $2.2 million (9%) and $13.1 million (39%) for the three and six month periods, respectively, over 2015 offset by lower equipment sales in both periods. Wachs Water Services revenue grew 5% over the first quarter of 2016. Second quarter inspection and consulting growth was driven by the International and PureHM segments.
• $2.5 million of inspection work and equipment sales in the South region planned for the second quarter deferred to the second half of 2016.
• PureHM total revenue grew by $1.4 million (27%) and $4.7 million (71%) to $6.7 and $11.4 million for the three and six month periods, respectively.

"While there is always more work to do, we are making good progress toward achieving our goals," said Jack Elliott, President and CEO of Pure. "On a trailing-twelve-month ("TTM") basis, total revenue was $114.7 million, up 29%, and TTM Adjusted EBITDA was $16.4 million, up 23%, compared to the same period last year. We believe measuring Pure's financial performance on a yearly or TTM basis is more representative of our business cycle due to variables that sometimes create meaningful inter-quarter variability, including client-driven scheduling and inclement weather, against a cost structure that is largely fixed. As is our typical pattern, we expect the second half of 2016 to be more active than the first half. 

"We continue to be excited by the performance of PureHM, our rapidly growing oil and gas pipeline integrity division, representing 23% of total revenue for the quarter compared to 18% of total revenue last year. Revenues in that division grew 27% to $6.7 million in the second quarter and by 71% to $11.4 million compared to the prior six-month period. As activity continues to increase, so must our trained workforce to meet this demand and accordingly, we are placing a heavy emphasis on recruiting and development for this division.

"Inspection and consulting activity in the Americas water business was consistent with the prior quarter. Compared to the first quarter of 2016, second quarter revenue for Wachs Water Services grew by 5% and the recent hiring of three senior business development staff is anticipated to generate improved growth for this division in future quarters.  Outside the Americas, our international inspection and consulting services revenue grew 48% quarter-over-quarter.

"Finally, we continue to make strong headway on our internal processes and systems. Our Enterprise Resource Planning and Customer Relationship Management systems went live in the quarter and we are beginning to see the benefits of better project control and visibility on opportunity pipelines. We continue to believe these new tools and certain other initiatives will move us towards our adjusted EBITDA margin target of 20% or better."

Financial Highlights for the Three and Six Month Periods Ended June 30, 2016
For further details on the results, please refer to Pure's Management Discussion and Analysis (MD&A) and Consolidated Financial Statements which are available on the Company's website (www.puretechltd.com).