Thursday, 11 December 2008

IWG Ends A Foundation Year, Looks Forward

International Water-Guard (TSX-V: IWG)
Basic Shares: 39.3 million
Fully Diluted: 46.5 million

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International Water Guard is debt free and has a strong balance sheet to face whatever headwinds it encounters in the world-wide aviation industry in its new business year.

That was the forward message IWG President and CEO David Fox ended with while reporting IWG's last fiscal year, ending Sept. 30th.

"Our strong debt-free balance sheet gives us much needed flexibility in dealing with problems that may arise," Mr. Fox said, after reporting a relatively small loss in IWG's fiscal 2008 year.

That loss of just over $148 thousand was partially due to an increase in research and development expenses, work that was designed to open new but still-related aeronautical business arenas and to increase sales of its two major aircraft products - non-chemical water treatment units and total aviation water systems.

Total revenues for fiscal 2008 were roughly $4.1 million, a seven per cent decrease from the prior year's revenue of $4.4 million. That decrease came about because of a short term order delay from a major customer in the first half of the year. In addition, a Fundamental Research Corp. analyst attributed some of that first half revenue slide to a strong Canadian dollar. Our dollar has since slipped back to more traditional values in relation to the United States dollar.

On the bright side, the second half of IWG's fiscal year was strong resulting in overall unit shipments increasing by four per cent over the previous year.

"2008 has been a development year for IWG," Mr. Fox said. "As planned, our investment in new products, as part of our strategy for the future, has resulted in a loss for the year," he added.

Going forward, Mr. Fox said sales in IWG's principal market - corporate jets - remains strong. That's because of multi-year order backlogs that airline manufacturers are eating through. That gives the industry a nearly full plate to dine on while others in the general economy are supping on increasingly thin soup.

"Sales in our market remain strong, but we are ready with contingencies should there be any significant downturn," Mr. Fox concluded.

One factor helping IWG to weather the economic storms came with the closing of a $500 thousand private placement during the year. The Pender Growth Fund subscribed to $350 thousand of that private placement. Pender is a Vancouver-based venture capital fund that takes early investments in B.C. technology companies. Pender traditionally studies companies at length before making investment decisions and once invested, it takes a long-term view for future growth. The Insight Limited Partnership II, which is associated with The Howard Group, also invested in the private placement.

To view the full news release please click here.