H2O Innovation Awarded CAN$8.0 Million in Contracts for Municipal and Industrial Water Treatment Systems in the United States and Canada

H2O Innovation Inc. has announced that it was awarded new contracts totalling $8.0 million shortly before the end of its 2011 fiscal year, on June 30, 2011.

These contracts will see H2O Innovation provide custom-built membrane filtration water treatment systems and equipment to municipal and industrial end-users in the United States and Canada. H2O Innovation secured an all-time high of $17.4 million in new bookings during the fourth quarter of fiscal 2011.

These contracts bring H2O Innovation's sales backlog to a record-high of $36.6 million as at fiscal year-end, June 30, 2011. The Company's sales backlog is comprised entirely of systems and equipment sales and does not include sales of services and consumable products.

"With demand from the North American industrial market remaining high, we are particularly pleased to observe that approximately two-thirds of the total value of the contracts announced today come from the U.S. and Canadian municipal markets. Our backlog stands at $36.6 million - the highest level in the Company's 11-year history - fuelled by the strong growth in systems and equipment sales we have been experiencing in the last three quarters of fiscal 2011. The projects announced today will translate into revenues during fiscal 2012 and beyond, and, combined with our strong base of recurring revenues, put us in a very enviable position as we start this new fiscal year", stated Frederic Dugre, President and CEO of H2O Innovation.

Two contracts will see H2O Innovation deliver nanofiltration membrane systems for the production of drinking water from surface water sources to two Canadian municipalities located in the provinces of New Brunswick and Quebec. The contract awarded to H2O Innovation by the town of Riviere-Verte is the Company's first system sale in New Brunswick, a new regional market for the Company.

For this nanofiltration system and the one to be delivered to the town of Sutton, Quebec, H2O Innovation has optimized permeate recovery rate above 80%, minimizing water loss and maximizing system efficiency.

A third Canadian municipal contract will see H2O Innovation supply a nanofiltration membrane system to the municipality of Saint-Adolphe-d'Howard, Quebec, expanding the drinking water production capabilities of the municipality's existing nanofiltration system, initially designed and manufactured by H2O Innovation.

The Company will also deliver a brine minimization system for the East Cherry Creek Valley Water & Sanitation District's Northern Water Supply Project in Colorado.

This system will enhance permeate recovery from the District's low-pressure reverse-osmosis drinking water production system, presently being assembled by H2O Innovation.

The City of Sterling, Colorado, has also selected H2O Innovation to supply a nanofiltration membrane system that will produce softened water.

As part of another contract, H2O Innovation will design, fabricate, and deliver a reverse osmosis membrane filtration system to a U.S. industrial end-user in the energy and power generation sector.

All projects announced will be manufactured in the Company's two North American plants, in Ham-Nord, Quebec and Minneapolis, Minnesota.