VANCOUVER, April 27 /CNW/ - VRB Power Systems Inc. (TSX-V: VRB) today reported its financial results for the year ended December 31, 2006.
The following is a summary of the key points for the period, updated to April 27, 2007 (Note - in 2005 the Company changed its financial year-end from June 30 to December 31. The comparative amounts to December 31, 2005 are therefore for a six-month period. All dollars are Canadian)
- Sales revenue and other income was $467,883 for the year compared
to $213,937 for 2005
- Operating expenses were $11,205,275 for the year compared to
$4,650,235 and other expenses were $15,000 compared to
$283,660 in 2005
- Net loss of $10,752,392 ($0.10 per share) for the year compared to
$4,719,958 ($0.05 per share) for the comparative period
- The Company announced its largest contract to date, the sale of a
2MW (3MW pulse) x 6hr VRB-ESS(TM) to Tapbury Management Limited
("Tapbury") for approximately (euro)7.4 million (US$10.1 million).
This sale is subject to certain conditions, including execution of
final contracts
- The independent study commissioned by Sustainable Energy Ireland
and Tapbury was released in March 2007 and validates the key value
streams of the VRB-ESS and the sizing of the system being
purchased by Tapbury
- Additional sales of five 10kWh systems, one 15kW x 8hr system and
one 5kW x 4hr system were made during the period with an
additional 5kW x 4hr system sale since year end
- Deliveries of six 10kWh systems and one 30kW x 2hr system were
made pursuant to sales orders, and deliveries of three 10kWh
systems were made pursuant to field trial arrangements, during
the period
- All of the systems delivered during 2006 have been commissioned
and are either in laboratory or field testing. Feedback to date
has been in line with expectations with the core technology
performing well
- Commercial 5kW multi hour systems will be available from mid 2007
- Costs of the 5kW multi hour systems have been significantly
reduced from the pre-commercial version, in line with expected
cost reductions
- The Company was granted three additional patents as part of its
strategy of continuing to strengthen its worldwide intellectual
property portfolio
"2006 was a critical year in the development and positioning of the Company", said Tim Hennessy, VRB Power Chairman & CEO. "With continued volatility in global energy markets, a heightened focus on environmental issues and major environmental incentives announced in Canada, the EU and US, macro factors continue to move more and more in our favour with many potential customers in our target markets now accepting the need for energy storage.
The question is no longer if energy storage is necessary but rather what is the best storage solution for specific applications? This maturing in market appreciation has refined our focus on certain sectors, and applications. While this has taken some time to evolve, we have now made good progress in a number of key sectors. As part of this process we have also learned where the "low hanging fruit" is and during 2006 we re-positioned and expanded our sales team and channels to focus on those markets where we can demonstrate a strong value proposition.
The initial success in Ireland is attributable to 18 months spent working with local customers, utilities, grid operators and the Irish government to develop a "blueprint" for VRB - wind applications. The announcement of the conditional (euro) 7.4 million (US$10.1 million) sale of a 2MW x 6hr (3MW pulse) rated VRB-ESS(TM) to Tapbury Management was the culmination of this work.
An emerging area of effort during 2006 has been in coupling our technology to photovoltaic (PV) applications. Like wind generation, PV power is not necessarily coincident with peak demand, and many of the same benefits apply when integrating the VRB technology. Additionally, customers are able to claim the solar tax credit available in the US with respect to the cost of total PV systems.
On the small system side, we finalized the designs of our 5kW cell stacks during 2006 and shipped ten pre-production systems to strategic customers for high profile evaluation. All of these systems have been commissioned and are either in laboratory or field testing in RAPS, solar, telecoms or other back-up applications. Feedback from several customers and trade shows has been extremely encouraging.
To date, performance from these systems has been in line with expectations and experience gained in the field has been incorporated into the design of the commercial version which will be available from mid 2007. These systems will provide a robust, flexible, easy to customize solution at approximately one third the cost of the pre-production systems.
The work done by our engineering and manufacturing teams in refining our designs and reducing costs on our initial commercial systems is another key achievement of 2006. We now have products that we can sell into a variety of markets and generate positive margins. We have also continued to expand our patent portfolio with the award of 3 additional patents and this ongoing process of making our intellectual property ever stronger will continue." concluded Hennessy.
The consolidated financial statements of the Company for the period ended December 31, 2006 and Management's Discussion and Analysis ("MD&A") thereon were prepared in accordance with Canadian generally accepted accounting principles and are presented in Canadian dollars. The Consolidated Statements of Operations and Deficit, Consolidated Balance Sheets, and Consolidated Statements of Cash Flows are set out below. The full financial statements and MD&A will be filed on SEDAR (www.sedar.com) shortly and will also be available on the Company's website (www.vrbpower.com) later today.
About VRB Power
Headquartered in Vancouver, Canada, VRB Power Systems Inc. is an energy storage technology developer which is marketing, selling and manufacturing products utilizing the patented VRB Energy Storage System ("VRB-ESS(TM)"). The VRB-ESS can economically store and supply large amounts of electricity on demand and is focused on stationary applications. It is a long life, cost effective, low maintenance, efficient technology that allows for the scalability of power and storage capacity independently. The VRB-ESS is particularly beneficial to renewable energy providers, utilities and end users through its ability to "inventory" electricity, allowing for the optimal match of supply and demand.
The VRB-ESS is well suited for a variety of applications. Enabling the provision of "firm" capacity from intermittent renewable generation such as wind and solar; more cost effective and efficient generation of electricity in remote areas; capital deferral for utilities; and load levelling (peak shaving) applications. The VRB-ESS is also capable of providing backup power solutions including applications for utility sub-stations and telecommunication sites. The VRB-ESS is characterized by having the lowest ecological impact of all energy storage technologies and is unlike most other conventional energy storage systems that rely on substances such as lead or cadmium.
Caution regarding forward-looking statements: VRB Power's press releases may contain forward-looking statements. These statements are based on management's current expectations and beliefs which are subject to a number of known and unknown risks and uncertainties (including, but not limited to, the risk factors described in VRB Power's Annual Information Form filed with the British Columbia Securities Commission and available at www.sedar.com) that could cause actual results to differ materially from those expressed or implied in our forward-looking statements. The Company does not assume any obligation to update any forward-looking statements contained in this press release.
The TSX Venture Exchange does not accept responsibility for the adequacy
or accuracy of this release.
Simon Clarke
Executive Vice President, Corporate Development
VRB Power Systems Inc.
Consolidated statements of operations and deficit
year ended December 31, 2006, six months ended December 31, 2005 and
year ended June 30, 2005
Six months
Year ended ended Year ended
December 31, December 31, June 30,
2006 2005 2005
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$ $ $
Revenue
Sales 217,660 - -
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Expenses
General and administrative 5,964,740 2,998,778 4,194,172
Research and development 2,889,952 559,293 2,165,987
Amortization of intangible
assets 2,028,978 1,013,368 1,042,503
Amortization of plant
and equipment 321,605 78,796 70,097
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11,205,275 4,650,235 7,472,759
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Operating loss (10,987,615) (4,650,235) (7,472,759)
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Other items
Interest and other income 250,223 113,837 80,100
Bad debts recovered - - 205,000
Gain on shares issued by
Pinnacle VRB Limited - - 88,393
Gain on disposal of subsidiary,
Pinnacle VRB Limited - - 4,467,050
Write-down of plant and
equipment (15,000) (283,660) -
Gain on disposal of investment - 100,100 -
Non-controlling interest - - 311,706
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235,223 (69,723) 5,152,249
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Net loss (10,752,392) (4,719,958) (2,320,510)
Deficit, beginning of period (47,759,452) (43,039,494) (40,343,984)
Cancellation of escrow shares - - (375,000)
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Deficit, end of period (58,511,844) (47,759,452) (43,039,494)
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Loss per share - basic and
diluted (0.10) (0.05) (0.03)
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Weighted average number of
shares outstanding -
basic and diluted 111,651,126 100,227,033 91,378,489
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VRB Power Systems Inc.
Consolidated balance sheets
as at December 31, 2006 and 2005 and June 30, 2005
December 31,
-----------------------------
2006 2005
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$ $
Assets
Current assets
Cash and cash equivalents 6,884,870 7,942,229
Short-term investments 2,501,562 -
Accounts receivable 138,864 -
Deposits and other receivables 249,041 181,271
Inventory 677,451 139,642
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10,451,788 8,263,142
Raw material inventory 788,532 950,175
Plant and equipment 1,693,916 789,876
Intangible assets 6,684,446 8,702,224
Restricted cash 325,231 471,060
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19,943,913 19,176,477
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Liabilities
Current liabilities
Accounts payable and accrued liabilities 900,479 544,913
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Shareholders' equity
Share capital 74,400,898 64,027,192
Contributed surplus 3,154,380 2,363,824
Deficit (58,511,844) (47,759,452)
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19,043,434 18,631,564
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19,943,913 19,176,477
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Approved on behalf of the Board
(Signed) Vincent Sorace (Signed) Timothy Hennessy
------------------------- --------------------------
Vincent Sorace, Director Timothy Hennessy, Director
VRB Power Systems Inc.
Consolidated statements of cash flows
year ended December 31, 2006, six months ended December 31, 2005
and year ended June 30, 2005
Six months
Year ended ended Year ended
December 31, December 31, June 30,
2006 2005 2005
-------------------------------------------------------------------------
$ $ $
Operating activities
Net loss (10,752,392) (4,719,958) (2,320,510)
Items not affecting cash
Amortization 2,350,583 1,092,164 1,112,600
Non-controlling interest - - (311,706)
Gain on shares issued by
Pinnacle VRB Limited - - (88,393)
Gain on sale of subsidiary,
Pinnacle VRB Limited - - (4,467,050)
Stock-based compensation 582,609 577,344 730,152
Write-down of plant and
equipment 15,000 283,660 -
Other - - 106,134
Change in non-cash working
capital
Increase in accounts
receivables (138,864) - -
Increase in deposits and
other receivables (67,770) (108,935) (8,504)
Increase in inventory (376,166) (139,642) -
Increase (decrease) in
accounts payable 355,566 (71,091) 151,552
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(8,031,434) (3,086,458) (5,095,725)
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Investing activities
Purchase of short-term
investments (2,501,562) - -
Acquisition of technology
licence (11,200) - (692,570)
Decrease in cash on disposal
of subsidiary - - (26,516)
Purchase of plant and
equipment (1,240,645) (678,023) (514,120)
Purchase of raw materials
inventory - - (950,175)
Decrease (increase) in
restricted cash 145,829 89,216 (560,276)
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(3,607,578) (588,807) (2,743,657)
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Financing activities
Decrease in loans payable - - (76,542)
Issuance of common shares,
net of issue costs 10,581,653 9,605,473 5,873,319
Shares issued by subsidiary
to non-controlling interest - - 286,475
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10,581,653 9,605,473 6,083,252
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Net cash (outflow) inflow (1,057,359) 5,930,208 (1,756,130)
Cash and cash equivalents,
beginning of period 7,942,229 2,012,021 3,768,151
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Cash and cash equivalents,
end of period 6,884,870 7,942,229 2,012,021
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Cash and cash equivalents
consist of
Cash 250,520 9,029 346,297
Short-term money market
investments 6,634,350 7,933,200 1,665,724
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6,884,870 7,942,229 2,012,021
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