We are very pleased to have completed important targets in the commissioning of our plant in Bromont, Quebec and generated our first operational revenue, during the third quarter of 2008," said Dave Gagnon, President and Chief Executive Officer of AAER. "We believe this accomplishment represents a significant milestone for AAER as we ramp up commercial production of our wind turbines during the fourth quarter of 2008."
"Subsequent to the end of the third quarter, we signed a reservation agreement for 61 1.65 MW wind turbines to be delivered to Mont Louis Wind L.P, represented by NPI Wind Power GP II and Northland Power Wind GP II Inc. for its 100MW wind farm project in Saint-Maxime-du-Mont-Louis, Quebec," continued Mr. Gagnon. "We are currently in the process of assembling our first two 1.5 MW A-1500 wind turbines that were sold earlier this year to the Town of Portsmouth, Rhode Island and the U.S. Marine Corps Logistics Base in Barstow, California."
Financial Results
For the quarter ended September 30, 2008, net loss totaled $4.04 million or $0.04 per share (basic and diluted), compared to $1.44 million or $0.03 per share (basic and diluted) for the corresponding period ended September 30, 2007. The increased net loss during the third quarter of 2008 is largely attributable to increased operating expenses.
AAER's operating expenses for the third quarter of 2008 stood at $4.43 million, compared to $1.44 for the third 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 rent and occupancy charges for the Bromont facility due to increased square footage utilization; and in marketing expenses for ongoing commercialization efforts.
For the nine-month period ended September 30, 2008, AAER's net loss was $9.36 million or $0.10 per share (basic and diluted) compared to a loss of $2.83 million or $0.06 per share (basic and diluted) for the comparable period the prior year.
As at September 30, 2008, the Company had 102.9 million common shares issued and outstanding, and $786,773 in cash and cash equivalents. As of December 31, 2007, the Company had 82.7 million shares issued and outstanding and cash and cash equivalents totaling $5.93 million. The $5.14 million 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 net proceeds of $6.80 million from the equity financing completed by the Company on May 20, 2008.
Given that the Company continues to devote significant effort to its growth, changes in the level of these expenses do not necessarily indicate trends, demand, important events or uncertainties.
