HWI Global reports net loss for first half of 2011
Agrees $1m of equity funding with private investor
HWI Global, a US designer and builder of cleanrooms for the life science, health science, nanotechnology, microelectronics and aerospace industries, increased its contract revenue by 43% in the second quarter of 2011 to US$1m, up from $700,000 in the same period in 2010.
Gross profit for the second quarter was $351,559, a two-fold increase over the second quarter gross profit of $173,997 in 2010.
The Pittsburgh-based firm narrowed its net loss in the second quarter of 2011 to $87,108 from $141,204.
Contract revenue for the first six months of 2011 slipped from approximately $2.1m in 2010 to $1.8m owing to a customer delay in one large project.
Gross profit for the first six months of 2011 was $393,759, compared with $702,297 in the prior year period, reflecting the impact of lower margin projects completed during the first quarter of 2011, and increased costs. Operating expenses also increased in the first six months to $909,265 from $590,161 in 2010.
Net income of $106,799 for the first six months of 2010 moved to a net loss of $528,482 for the same period in 2011.
Last month, HWI agreed up to $1m in equity funding with a private investor. Pursuant to this agreement, shares of HWI common stock will be sold to this investor at $0.35 per share in tranches of $250,000 starting today (15 August), and quarterly thereafter, subject to certain conditions.
HWI's primary secured lender recently notified the firm that its credit facility, which matured on 26 March, was in default and demanded payment in full. As of 30 June, the amount due was almost $527,000.
Deric Haddad, HWI’s president and chief executive, said the firm has entered into a forbearance agreement with the lender, which restructures the repayment obligations so that the outstanding amounts will be paid over the rest of this year and into the beginning of 2012.
Haddad said HWI does not currently have sufficient cash to satisfy these repayment obligations, but he believes that cash flow from operations and proceeds from the sale of equity securities expected in the future will be sufficient to make the payments when due.
