H2O Innovation Inc (OTCMKTS:HEOFF) Stock Pulls From The Peak After The Big Gains

H2O Innovation Inc (OTCMKTS:HEOFF) stock pulled back on Tuesday and the stock has give back almost all its recent gains. Will the stock resume another round of rally?

Market Action

In Tuesday’s trading session, HEOFF closed lower by 10.30% to $1.92. More than 7K shares have exchanged hands, above its average volume of 22k shares. The stock opened at $2.14 and moved in a range of $1.8722 – 2.1400.

H2O Innovation Reports Record Fiscal Year 2021 Revenues and Profitability

Here are the highlights:

Revenues reached $144.3 M for fiscal year 2021, representing a $10.7 M growth, or 8.0 %, compared to $133.6 M for the previous fiscal year; Gross profit margin before depreciation and amortization expenses represented 27.7 % of the Corporation’s total revenues for fiscal year 2021, compared to 26.9 % for the previous fiscal year;

Net earnings of $3.1 M or $0.039 per share for fiscal year 2021, compared to a net loss of ($4.2 M) or ($0.061) per share for the previous fiscal year;

Adjusted net earnings1 reached $6.5 M or $0.081 per share for this fiscal year compared to $5.4 M or $0.078 per share for the previous fiscal year; Adjusted EBITDA1 reached $14.6 M, or 10.1 % of revenues for this fiscal year compared to $12.5 M, or 9.4 % of revenues, for the previous fiscal year;

Strong financial position with a net debt1 of $0.5 M at the end of the year, compared to a net debt of $10.5 M as at June 30, 2020;

Completion of two accretive acquisitions complementing our O&M services in Texas and expanding our specialty products offering and sales network; and

Q4-FY2021 financial results impacted by foreign exchange and freight delays which postponed revenue recognition.

Revenues from the WTS business pillar increased by $1.1 M compared to the previous fiscal year. The increase was primarily due to the growth in service activities. The Corporation’s willingness to grow first the service activities is in line with its 3-year strategic plan and aligned with its vision to maximize customers’ retention, thus recurring revenues. With $4.5 M of new industrial and municipal projects secured at the end of the fourth quarter, revenues from the WTS business pillar are gaining positive momentum. It is in line with the Corporation’s business plan to prioritize WTS’ projects with higher gross profit margins, or projects that can fuel opportunities for other business pillars.