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Filtration Industry Analyst August 1998

NSAI OPENS NEW MARKETS, CUTS YEAR-END LOSS

NSA International Inc has added master distributor- ships in Chile, Costa Rica, Austra l ia , New Zea land , Denmark and Sweden dur- ing the 1998 fiscal year which ended 30 April 1998.

Against its expanding mar- ketplace, the company reduced net losses for the year by US$5.6 million. On revenues of US$23.0 million in 1998, NSAI recorded a net loss of US$4.2 mill ion, compared with 1997 revenues of US$36.1 million and a loss of US$9.8 million.

Company officials noted that net profitability suffered from the after effects of selling its direct sales operations in Europe, and from the impact of the Asian economic crisis. NSAI plans to build on its sol- id sales in the US by continu- ing to add new overseas mar- kets and new products during the 1999 fiscal year.

NSAI primarily markets a line of concentrated nutritional supplements, and air and water filtration systems through independent distributors and third party distr ibution arrangements in Europe, Canada, Central and South America, Australia, New Zealand, and the Far East. The company markets its products in the USA through NSA, a separate, private company founded in 1971.

CONTRACT REVENUES

DRAG DOWN SEPROTECH

Seprotech Systems , the Canadian crossflow mem- brane technology specialist, has reported sales of C$2.6 bi l l ion for the first nine months of f iscal 1997/98, C$360 000 down on the pre- vious year.

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While laboratory revenues were 10 per cent ahead and parts and service revenues were 45 per cent ahead, these increases were more than off- set by a decrease in contract revenues. Gross profit at C$737 000 was C$504 000 up on the previous year.

Operating expenses were C$889 000, down C$309 000 from last year reflecting prior management decisions. The cash position improved over the third quarter through increased efforts to bring oper- ating working capital in line with business expectations. The company continues to focus on reducing costs by introducing improved purchas- ing agreements and cost reduc- tion initiatives.

Contract sales slowed dur- ing the third quarter, but Seprotech reports a significant increase in quality sales leads for projects during the period. Two new distributors have been added and there is increased activity coming from South America.

New Product al l iance agreements will increase the product offering and should have a positive impact during the latter part of 1998. Discussions continue with a number of companies which will help Seprotech to grow the various businesses, either through new technology or outsourcing for some opera- tional activities outside of the core competences.

PURE H20 BIO- TECHNOLOGIES PLANS EQUITY

UNDERWRITING Pure H 2 0 Bio-Technoiogies Inc (PHBT) has entered into a letter of in tent with an investment banking firm to effect a firm commitment public equity offering in the aggregate amount of at least US$5 million.

The equity underwriting in combination with PHBT's pro-

posed US$9.85 mil l ion Industrial Revenue Bonds are intended to provide PHBT with the necessary manufactur- ing capacity and working capi- tal for the manufacture, sale and marketing of its products.

PHBT is a water technolo- gy company engaged in the development, design and man- ufacture of water disinfection, f i l trat ion and purif icat ion products for commercial and residential use which use an iodine dispensing system designed to offer protection to consumers from waterborne diseases.

ITEQ REPORTS RECORD

QUARTERLY PERFORMANCE

Iteq Inc's revenues for the second quarter of 1998 were US$91.2 million, a 17 per cent increase on second quarter 1997 revenues of US$78.2 million.

Houston-based Iteq pro- vides manufactured equip- ment, engineered systems and services used in the processing, treatment, storage and move- ment of gases and liquids. Operating income, excluding merger and acquisition costs, was US$8.3 million for the three months ended 30 June 1998, an increase of 41 per cent on the US$5.9 million in operating profit reported for the corresponding quarter a year ago.

Net earnings from continu- ing operations, excluding merger and acquisition costs, increased 61 per cent to US$4.5 million for the second quarter of 1998, compared with net earnings of US$2.8 million for the second quarter last year.

In a statement, Larry McAfee, Iteq's chief financial officer, said that strong perfor- mance by the company's Process and Storage operations

offset weakness in the Filtration group.

I teq 's backlog of new orders continued to increase during the period and as of the end of June exceeded US$120 million.

In June 1998, lteq announced that it would not continue with the acquisition of McConnell Dowell Corporation, an Australian publicly traded international engineering and contracting firm. Merger and acquisition costs for the recent quarter include all MDC related legal, accounting, investment bank- ing, travel and other items, which were expensed.

MK WINS US$101 MILLION

EGYPTIAN WATER TREATMENT CONTRACT

A Morrison Knudsen Corp- oration-led joint venture has been awarded a US$101 rnil. l ion project by Egypt 's National Organisation for Potable Water and Sanitary Drainage to construct two wastewater treatment plants and related facilities serving three c i t ies in southern Egypt.

Funding will be provided by the United States Agency for International Development. The project will include approximately 125 km of sew- er-collection and force-main pipelines, the construction of six pump stations, 8400 house connections and the renovation of two existing potable water treatment plants.

Facilit ies constructed under the new contract will serve the cities of Kom Ombo, Darawo and Nasr City, all located on or near the Nile river, downstream from the Aswan High Dam. Construction is scheduled to begin in September this year and will take three years to complete.