AAER Inc. (TSX-V: AAE), Canada's only original equipment manufacturer of wind turbines of 1 megawatt and more, released today its financial results for the second quarter ended June 30, 2008.
The Company's unaudited interim consolidated financial statements, Management Discussion and Analysis and Annual Information Form are available on the Company's Website at www.aaer.ca and on www.sedar.com .
Q2 2008 Highlights:
- Completed $7.5 million bought deal equity financing to implement production plan for 2008
- Secured global insurance policy with Boiler Inspection and Insurance Company of Canada to provide financial backing for turbine manufacturer warranty program
- Established permanent representation office in the United States to target small- to medium-size wind farms
- Concluded $3 million turbine supply agreement with the town of Portsmouth, Rhode Island for the delivery of AAER's first 1.5 MW wind turbine
- Concluded reservation agreement for the delivery of two 1.5 MW wind turbines to Windland, a small wind farm project developer in California
- Signed agreement for the delivery of one 1.5 MW wind turbine to the U.S. Marine Corps Logistics Base in Barstow, California
"During the second quarter of 2008 we began to execute on our strategy of selling wind turbines to small-to-medium sized wind projects in the one to 50 megawatt range," said Dave Gagnon, President and Chief Executive Officer of AAER. "We believe this niche market is currently underserved by the large OEM's and represents a major growth opportunity for AAER."
"With five turbines sold during the first half of 2008, we have now completed sales on both coasts of the United States as well as in Europe. These agreements will increase our geographic presence and provide us with important visibility in the markets in which we are licensed to operate," continued Mr. Gagnon. "We are currently in the process of commissioning our 300,000 square foot facility in Bromont, Quebec in order to start of production scheduled for the end of September 2008."
Financial Results
The Company is currently concentrating all of its efforts on implementing its development strategy, and has not generated any revenue as of June 30, 2008. The results given below are based on material information, and reflect the results for the three and six-month periods ended June 30, 2008.
For the quarter ended June 30, 2008, net loss totaled $3,372,026 or $0.04 per share (basic and diluted), compared to $815,315 or $0.02 per share (basic and diluted) for the corresponding period ended June 30, 2007. The increased net loss during the second quarter of 2008 is largely attributable operating expenses, which increased by $2,556,711 to $3,372,026 when compared to $815,315 during the second quarter on 2007.
AAER's operating expenses for the second quarter of 2008 stood at $3,372,026 compared to $815,315 for the second quarter of 2007. The increase in these expenses is mainly driven by the increase in salary and benefits resulting from increased personnel in preparation for the beginning of commercial production in the fourth quarter of 2008 ($1,319,933 for Q2-2008 compared to $103,977 for Q2-2007); in rent and occupancy charges for the Bromont facility due to increased square footage utilization ($698,096 for Q2-2008 compared to $152,633 for Q2-2007); and in marketing expenses for ongoing commercialization efforts ($465,240 for Q2-2008 compared to $213,075 for Q2-2007).
For the six-month period ended June 30, 2008, AAER's net loss was $5,324,089 or $0.06 per share (basic and diluted) compared to $1,393,087 or $0.03 per share (basic and diluted) for the comparable period the prior year.
As at June 30, 2008, the Company had 102,937,818 common shares issued and outstanding, and $3,583,029 in cash and cash equivalents. As of December 31, 2007, the Company had 82,667,101 shares issued and outstanding and cash and cash equivalents totaling $5,928,246. The $2,345,217 decrease in cash and cash equivalents is mainly due to inventory purchases, investment in capital assets and support of operating activities in preparation for the start of commercial production. This decrease was partially offset by the proceeds of the $7,500,000 equity financing the Company completed on May 20, 2008. -- www.cnxmarketlink.com
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