GLG Life Tech Corporation (TSX: GLG)(NASDAQ: GLGL) -
- Revenues grew 323% to record $41.9 million from $9.9 million
in 2008
- Net income improved by $11.4 million from loss of $10.6
million to profit of $0.8 million
- Earnings per diluted share for 2009 were $0.04 compared to
2008 loss of $0.60 per diluted share
- EBITDA for 2009 climbed $11.5 million to $10.5 million from
($1.0 million) in 2008
GLG Life Tech Corporation ("GLG" or the "Company"), a vertically
integrated leader in the agricultural and industrial development of
stevia extracts, including research and development, stevia plant
growth, high purity extraction, marketing, and distribution,
announces financial results for the fourth quarter and fiscal year
ended December 31, 2009.
Business Highlights
Full Year 2009 Revenues Climb 323%
For the year ended December 31, 2009, revenue increased $32.0
million, or 323%, to $41.9 million from $9.9 million in 2008. Net
income increased $11.4 million to $0.8 million, or $0.04 per
diluted share, from a loss of $10.6 million, or ($0.60) per diluted
share, in 2008.
Revenues were derived entirely from the sale of GLG's high grade
stevia extract products. One of the primary drivers to the increase
in stevia revenues was new production capacity coming on line at
the Company's Mingguang and Dongtai facilities during the first
quarter. Leaf processing increased from 5,000 metric tons ("MT")
per year to 41,000 MT. The Company believes that market demand for
its stevia products continues to grow as food and beverage makers
further develop and launch new products containing the all natural
sweetener.
Fourth Quarter Revenue Up 185%
Revenue for the fourth quarter ended December 31, 2009 was $13.3
million, an increase of 185% from $4.7 million in the 2008 fourth
quarter. Net income increased $7.6 million to $0.5 million, $0.02
per diluted share, from a loss of $7.1 million, or ($0.40) per
diluted share in the year ago period.
EBITDA Continues to Strengthen
For the fourth quarter ended December 31, 2009, EBITDA was $4.6
million, or 35% of sales, versus the negative $0.1 million in
EBITDA for the 2008 fourth quarter. EBITDA for the twelve months
ended December 31, 2009 was $10.5 million, or 25% of sales, a
significant increase from the negative $1.0 million in EBITDA for
2008. Management had previously guided an upper range for EBITDA
margin of 22% of revenues for the full year. The main contributing
factors to the continued improvement in EBITDA were higher fourth
quarter stevia revenues and gross profit, reduction in one-time new
facility related start up costs as well as the impact of the
Company being able to use its Huinong One proprietary leaf strain,
which contains approximately 60% Rebaudioside A.
Product Development and Production
In 2009, GLG continued its focus on product development and
production infrastructure. The Company is currently poised to
capitalize on the increasing demand and mainstream acceptance of
natural stevia plant extracts as an alternative to artificial
sweeteners and high fructose corn syrup and as a complement to
sugar in a blended capacity for the reduction of caloric content in
food and beverages.
New, Fully Operational Leaf Processing Plants: GLG completed
food safety audits to bring its two new stevia leaf processing
plants into operation during the first quarter of 2009, adding
36,000 MT of processing capacity for a total of 41,000 MT, a 720%
increase over 2008 leaf processing capacity.
During the fourth quarter, a new Rebpure™ RA97 refining facility
in Qingdao, China was completed, providing an additional 1,000 MT
of RA97 capacity. The new facility has been constructed following
food grade "Good Manufacturing Practice" (GMP) standards and key
components were constructed following pharmaceutical grade GMP
standards. The plant is currently operational with final
certifications expected to be completed during the first half of
2010. This new facility enables GLG easy access to ship, air, and
rail for product movement, increased capacity for secondary
processing, and positions the Company to further meet current and
anticipated demand.
High Grade Stevia Extract Production Quadrupled as Compared to
2008 Average Production Rates: With two new leaf processing
facilities in operation in the first quarter of 2009, GLG increased
monthly primary processing and extraction from an average of 10 MT
in 2008 to 40 MT. With the addition of the Qingdao plant adding
additional refining capacity, the Company in 2010 is expect to be
able to produce 1,500 MT of RA97 high grade stevia extract.
2010 Harvest: GLG is prepared for and anticipates a successful
2010 harvest and is contracted with more than 200,000 trained
farmers within its exclusive stevia growing areas in China. The
Company continues to receive significant support from local Chinese
government agencies within these areas.
In 2009, GLG successfully completed its stevia seed propagation
program with its proprietary strain demonstrating commercial
viability in the field as a direct seed plant, eliminating the
costly use of greenhouses and seedlings as an intermediary step.
More than 10 years of natural breeding technology has generated the
GLG proprietary seed, resulting in a leaf that has three times the
amount of sweet glucocides of other stevia leaves. This enables the
Company to achieve higher yields, greater processing efficiencies
and greater batch to batch consistency for final production. GLG
anticipates that its seeds could generate up to an estimated 40,000
MT of high quality, proprietary stevia leaf in the 2010 harvest.
This would ensure that 100% of the Company's input needs were
supplied through its own proprietary crop, which will meet capacity
at each of its processing centers.
Business Development
GLG also made progress in its efforts to increase commercial
adoption of its high grade stevia extract. Key business development
highlights include:
Received US$40.5 Million Stevia Extract Order from Cargill for
TRUVIA™: In May 2009, GLG received an initial order from its
premier strategic partner, Cargill, valued at US$40.5 million for
the delivery of high grade stevia extract beginning October 2009.
Further, GLG agreed to make additional product available to Cargill
for a possible increase in the order size.
Cargill recently reported that it achieved an eight percent
share of the US alternate sweetener market since launching its
Truvia™ tabletop product against Splenda, Sweet'N Low and Equal.
Cargill also announced it currently has more than 100
stevia-specific projects underway.
GLG Direct Sales Team Announced: In 2009, GLG hired three
experienced sales and marketing executives from the beverage and
sweetener industries in order to accelerate commercial acceptance
of its high grade stevia extracts. The Company appointed Alan
Martin and Jack Tokarczyk as Vice Presidents of Sales, and James E.
Kempland as Vice President of Marketing. The new additions will
focus on the development of Rebpure™ RA97 high-grade stevia extract
sales for the growing global market.
Corporate Developments
In 2009, the Company took steps to ensure it could invest in
growing its operations to meet increasing global demand for its
natural stevia plant extracts.
Additional Credit Facilities Secured: GLG was granted an
additional credit facility of RMB 250 million with the Agricultural
Bank of China, which at current exchange rates will provide GLG
approximately $42 million in capital. The facility provides
additional financial support, and the Company believes it
underscores the Chinese government's support for the Company's
operations and business developments.
NASDAQ listing: On November 20, 2009, GLG commenced trading on
the NASDAQ Global Market under the symbol "GLGL", increasing the
Company's visibility within and its access to the U.S. equity
markets. GLG's common shares are now dual listed on the Toronto
Stock Exchange and the NASDAQ Global Market.
In conjunction with its NASDAQ listing, the Company completed a
public equity offering of 3,625,000 common shares raising aggregate
gross proceeds of US$27.5 million. The underwriters of the equity
offering had purchased an additional 543,750 common shares of the
Company for gross proceeds US$4.1 million. This brought the total
gross proceeds raised from the public offering to US$31.7
million.
Market Development
The Company believes that growing consumer preference for
all-natural products, together with increasing rates of obesity and
diabetes, is driving demand for an all-natural, zero-calorie
sweetener. Additional consumer, governmental and social pressures
are also fueling the need for U.S. food and beverage companies to
create better-for-you products that help lower caloric intake.
According to an August 2009 report published by Mintel
International Group Ltd., United States retail sales of products
containing stevia reached $100 million in 2009, including tabletop
sweeteners and food and beverage products. The market is expected
to reach $2 billion by the end of 2011. Also, according to Mintel,
more than 115 new food and beverage products containing stevia were
launched in the United States in the first seven months of 2009 by
leading global food and beverage companies.
Stevia natural plant extracts are creating an entirely new
category of sweeteners that offer non-caloric and heat-stable
sweetening systems with superior taste, and without artificial
chemicals. According to research, new product launches and consumer
adoption is occurring rapidly which could enable stevia to quickly
becoming a mainstream tabletop sweetener and food and beverage
ingredient. Additionally, new developments using stevia blended
with sugar enables an all natural sweetening system that reduces
added calories in food and beverages, while maintaining a positive
taste profile and providing consumers a naturally sweetened
product.
The current global market for stevia as an ingredient, according
to Mintel, is estimated at $500 million. The European Union is
expected to approve the use of stevia extracts as a food ingredient
within the first half of 2010. GLG believes that this market could
adopt stevia at a faster rate than others, given European
consumers' overall healthier dietary habits.
Emerging markets, such as India and China, are also growth
opportunities for GLG's stevia extracts, given the high instances
of Type-2 diabetes in both countries. According to a study
published in March 2010 by the New England Journal of Medicine, an
estimated 92.4 million adults in China have Type-2 diabetes. In
India, an estimated 50.8 million people are afflicted with the
disease, according to the International Diabetes Federation.
(Source:
http://www.businessweek.com/news/2010-03-24/china-tops-world-diabetes-ladder-as-economic-boom-spurs-obesity.html).
GLG is currently working on development opportunities in these
markets.
Additional discussion of GLG's market outlook can be found later
in the release under "Revenue Outlook 2010".
Fourth quarter 2009 and Year End Financial Results
Highlights
The following results from operations have been derived from and
should be read in conjunction with the audited consolidated
financial statements of GLG for the period ended December 31, 2009,
and its audited consolidated financial statements for previous
years. Certain prior year's figures have been reclassified to
conform to the current financial information presentation.
--------------------------------------------------------------------------
In thousands
Canadian $, Fourth Fourth Twelve Twelve
except per quarter quarter months months
share amounts 2009 2008 % Change 2009 2008 % Change
--------------------------------------------------------------------------
Revenue $13,264 $4,657 185% $41,884 $9,891 323%
Cost of Sales $8,327 $3,718 124% $29,790 $7,560 294%
% of Revenue 63% 80% (17%) 71% 76% (5%)
Gross Profit $4,938 $939 426% $12,094 $2,331 419%
% of Revenue 37% 20% 17% 29% 24% 5%
General &
Administration
Expenses $3,548 $3,389 5% $11,720 $7,217 62%
% of Revenue 27% 73% (46%) 28% 73% (45%)
Income (loss)
from Operations $1,389 ($2,450) 157% $374 ($4,886) 108%
% of Revenue 10% (53%) 63% 1% (49%) 50%
Other Expenses
(income) ($1,317) ($6,146) (79%) ($3) ($7,216) (100%)
% of Revenue (10%) (132%) 122% 0% (73%) 73%
Net Income (loss)
after Income
Taxes and Non-
Controlling
Interests $488 ($7,115) 107% $758 ($10,607) 107%
Earnings (loss)
per share (Basic) $0.02 ($0.40) 106% $0.04 ($0.60) 106%
Earnings (loss)
per share
(Diluted) $0.02 ($0.40) 106% $0.04 ($0.60) 106%
Depreciation and
Amortization $2,258 1,142 90% $6,385 $2,540 151%
% of Revenue 16% 25% (9%) 15% 26% (10%)
EBITDA (1) $4,586 ($77) 6055% $10,450 ($1,032) 1112%
% of Revenue 35% (2%) 37% 25% (10%) 35%
--------------------------------------------------------------------------
(1) EBITDA is a non-GAAP financial measure. GLG calculates it by adding to
net income before taxes (1) depreciation and amortization expense
reported on the statement of operations, (2) Other Income (Expenses)
and (3) stock based compensation expense. This might not be the same
definition used by other companies. For a reconciliation of EBITDA to
net income (loss) before taxes and after minority interest under
Canadian GAAP, please see "Non-GAAP Financial Information" below.
Revenue
Revenue for the twelve months ended December 31, 2009, derived
entirely from stevia sales, was $41.9 million, a substantial
increase of 323% from $9.9 million for the comparable period in
2008. Revenue for the fourth quarter ended December 31, 2009 was
$13.3 million, an increase of 185% from $4.7 million in revenue for
the fourth quarter in 2008.
One of the primary drivers to the increase in stevia revenues
was the new production capacity coming on line at the Company's
Mingguang and Dongtai facilities during the 2009 first quarter.
This new capacity greatly improved the Company's production
throughput. Leaf processing increased from 5,000 MT per year to
41,000 MT. Also contributing to the revenue growth was higher
demand for the Company's high grade stevia extract products and
greater shipments of higher value stevia extract against existing
purchase orders from a year ago.
The Company's Canadian dollar reported revenues were impacted
negatively by the appreciation of the Canadian dollar against the
US dollar during the twelve months because GLG's purchase contracts
and orders are typically US dollar denominated. During the twelve
months ended December 31, 2009 the Canadian dollar appreciated
12.2% relative to the US dollar.
Cost of Sales
Cost of sales for the twelve months ended December 31, 2009 were
$ 29.8 million, an increase of 294% over $7.6 million in cost of
sales for the comparable period in 2008. The increase in cost of
sales year over year was driven by the overall growth in top-line
revenue as well as higher costs associated at the start-up of the
new facilities. The Company has seen production costs at its new
facilities consistently decline during the third and fourth quarter
relative to the first quarter start-up period, as the Company
improved efficiencies throughout the year.
Gross Profit
- Gross profit for the twelve months period ending December 31,
2009 was $12.1 million, an increase of 419% from $2.3 million in
gross profit for 2008. The absolute increase in gross profit can be
attributed to increased stevia sales. The gross profit margin for
the twelve months period ended December 31, 2009 was 29% compared
to 24% gross profit margin for 2008.
- Gross profit for the three months ended December 31, 2009 was
$4.9 million, an increase of 426% over $0.9 million in gross profit
for the fourth quarter of 2008. The gross profit margin for the
three months ended December 31, 2009 was 37% compared to 20% gross
profit margin for 2008.
General and Administration Expenses
--------------------------------------------------------------------------
Fourth Fourth Twelve Twelve
In thousands quarter quarter months months
Canadian $ 2009 2008 % Change 2009 2008 % Change
--------------------------------------------------------------------------
SG&A Expenses $2,402 $1,940 24% $7,832 $5,120 53%
Stock based
Compensation $754 $1,229 (39%) $2,479 $1,321 88%
G&A Amortization
& Depreciation $392 $220 78% $1,409 $776 82%
--------------------------------------------------------------------------
Total $3,548 $3,389 5% $11,720 $7,217 62%
% of Revenue 27% 73% (46%) 28% 73% (45%)
--------------------------------------------------------------------------
General and administration expenses include sales, general and
administration costs (SG&A), depreciation and amortization
expenses on non-manufacturing fixed assets and stock based
compensation.
Sales, General, and Administration (SG&A) Expenses
For 2009, SG&A expenses were $7.8 million, an increase of
$2.7 million, or 53% from $5.1 million for 2008. The key expense
categories that increased were salaries, consulting fees, office
and travel. GLG's employee count at the end of December 31, 2009
was 1,411, a 74% increase of 808 people from year-end 2008.
Approximately 75% of employees work in the production function of
the Company.
SG&A expenses for the three months ended December 31, 2009
were $2.4 million, an increase of $0.5 million, or 24% from 2008.
SG&A expenses increased $0.7 million comparing the fourth
quarter of 2009 to the third quarter of 2009 and were driven by the
start-up of GLG's new Rebpure™ RA97 production facility at its
Runhao subsidiary, an increase in professional fees related to
audit and legal services and an increase from annual business taxes
in China.
G&A Depreciation and Amortization
G&A related depreciation and amortization expenses for the
three months ended December 31, 2009 was $0.4 million, an increase
of 78% over $0.2 million for the comparable period in 2008. The
main driver for the increase is related to the amortization of
G&A related assets in China at GLG's Runhai and Runyang
subsidiaries, which came into operation in the first quarter of
2009.
Other Expenses
--------------------------------------------------------------------------
Fourth Fourth Twelve Twelve
In thousands quarter quarter months months
Canadian $ 2009 2008 % Change 2009 2008 % Change
--------------------------------------------------------------------------
Other Income
(Expenses) ($1,317) ($6,146) (94%) $(3) ($7,216) 110%
--------------------------------------------------------------------------
% of Revenue (10%) (132%) 122% 0% (73%) 73%
--------------------------------------------------------------------------
Other income for the twelve months ended December 31, 2009 was
$0.03 million, versus other expenses of $7.2 million for 2008.
There were two items that contributed to the majority of the other
expenses for the twelve months ended December 31, 2009. The first
was foreign exchange gains of $2.6 million on US dollar-denominated
liabilities that GLG was holding during the period. The second was
interest expenses of $2.7 million mainly related to a US$20 million
advances from a customer which was fully repaid in November 2009,
and the Company's bank loans in China.
Other expenses for the three months ended December 31, 2009 was
$1.3 million, a decrease of 94% from other expenses of $6.1 million
for the 2008 fourth quarter and was impacted by the same items as
described for the twelve months period.
Net Income (loss)
--------------------------------------------------------------------------
Fourth Fourth Twelve Twelve
In thousands quarter quarter months months
Canadian $ 2009 2008 % Change 2009 2008 % Change
--------------------------------------------------------------------------
Net Income (Loss) $488 ($7,115) 107% $758 ($10,607) 107%
% of Revenue 4% (153%) 157% 2% (107%) 109%
--------------------------------------------------------------------------
For the twelve months ending December 31, 2009, the basic income
per share was $0.04 versus a loss per share of ($0.60) for 2008.
Net income improved by $11.4 million compared to the same period in
2008. This improvement was driven by higher revenues and gross
profit margin from increased production at the Company's new
facilities in Mingguang and Dongtai ($9.8 million). Also, increase
in foreign exchange gains of $5.5 million driven by an appreciation
of the Canadian dollar relative to US dollar during 2009 and a
reduction of $3.1 million in one time provisions that were offset
by an increase in G&A expenses of $4.5 million, a net interest
expenses increase of $1.4 million and a decrease of income tax
recoveries of $1.2 million.
The basic income per share was $0.02 for the three months ending
December 31, 2009 versus a loss per share of ($0.40) for the 2008
comparable period. Net income improved to $0.5 million for the
three months period ending December 31, 2009 in comparison to the
loss of 7.1 million for the fourth quarter 2008. This $7.6 million
improvement was driven by higher gross profit margin from increased
production at GLG's new facilities in Mingguang and Dongtai ($4.0
million), foreign exchange gains of $2.3 million driven by an
appreciation of the Canadian dollar relative to US dollar in the
fourth quarter and a reduction in one time provisions of $3.1
million that were offset by an increase in G&A expenses of $0.2
million, a net interest expenses increase of $0.4 million and a net
reduction in income tax recoveries of $1.0 million.
EBITDA
--------------------------------------------------------------------------
Fourth Fourth Twelve Twelve
In thousands quarter quarter months months
Canadian $ 2009 2008 % Change 2009 2008 % Change
--------------------------------------------------------------------------
EBITDA $4,586 ($77) 6055% $10,450 ($1,032) 1112%
% of Revenue 35% (2%) 37% 25% (10%) 35%
--------------------------------------------------------------------------
For the quarter ended December 31, 2009, EBITDA was $4.6 million
versus the negative $0.1 million in EBITDA for the 2008 fourth
quarter. The main drivers for the increase in EBITDA were higher
stevia revenue and gross profit for the fourth quarter, a reduction
in one-time start up related costs and transfer of production staff
costs from general and administrative costs to production costs
with the start-up of operations at the Company's new facilities in
Mingguang and Dongtai.
EBITDA for the twelve months ended December 31, 2009 was $10.5
million, a significant increase from the negative $1.0 million in
EBITDA for 2008.
For a reconciliation of EBITDA to net income (loss) before taxes
and after minority interest under Canadian GAAP, please see
"Non-GAAP Financial Information" below.
Capital Expenditures (CAPEX)
--------------------------------------------------------------------------
Fourth Fourth Twelve Twelve
In thousands quarter quarter months months
Canadian $ 2009 2008 % Change 2009 2008 % Change
--------------------------------------------------------------------------
Capex $16,653 $25,796 (35%) $40,875 $57,790 (29%)
--------------------------------------------------------------------------
GLG's capital expenditures of $16.7 million for the fourth
quarter of 2009 decreased 35% compared to $25.8 million in the
fourth quarter of 2008. The 2009 fourth quarter capital
expenditures were primarily incurred for the Company's new Rebpure™
RA97 facility in Qingdao that was completed during the quarter. The
Company also constructed two administrative buildings at its Runde
and Bengbu subsidiaries as well commenced construction of
additional water treatment facilities at one of its primary
processing plants.
Capital expenditures for the twelve months ended December 31,
2009 were $41.0 million, which was comprised of $35.0 million of
cash flow used by investing activities, plus an increase of $8.0
million in accounts payable related to the purchase of property,
plant and equipment, and a net decrease of $2.1 million of
equipment in year-end prepaid expenses.
GLG's capital expenditures for the twelve months ended December
31, 2009 decreased 29% to $41.0 million compared to $57.8 million
for 2008. Approximately 23%, or approximately $9 million, of these
capital expenditures were incurred in the first quarter of 2009,
driven by the completion of the leaf processing facilities by the
Runhai (Mingguang) and Runyang (Dongtai) subsidiaries. The majority
of the balance of 2009 capital expenditures of approximately $28.5
million, or 71% of capex total spend, was incurred in the set-up
and construction of the Company's new Rebpure™ RA97 facility in
Qingdao. The majority of the remaining 6% of capex for 2009 was
incurred for the construction of two administrative buildings in
the fourth quarter and the commencement of a new waste water
treatment project at its Runyang facility.
The initial phase of the Runhao project included two lines each
capable of producing 500 MT of RA 97 per annum. This project also
completed the infrastructure necessary to support 3,000 MT of RA 97
production including gas and electric infrastructure, underground
pipe lines and road infrastructure. Warehousing space for 10,000 MT
RA 97 was completed as part of this project in 2009. The buildings
constructed have one million square feet of space and were
constructed on 62 acres of land. An additional 65 acres has been
reserved for future expansion. The new facility was constructed
following food grade "Good Manufacturing Practice" (GMP) standards
and key components are being constructed following pharmaceutical
grade GMP standards. Initial test runs commenced during the month
of December 2009. This facility is near completion of a third party
audit in order achieve GMP certification and other important
certifications, such as ISO9000.
The Runhao project expenditure was approximately $6.5 million
higher than announced during the third quarter outlook. The higher
capex was used to increase the initial warehousing infrastructure
to 10,000 MT capacity and gas and electric infrastructure to 3,000
MT capacity.
The following table presents year end capacity levels for GLG's
facilities as compared to year-end 2008.
--------------------------------------------------------------------------
Production Capacity Year end 2009 Year end 2008
--------------------------------------------------------------------------
Leaf Processing 41,000 5,000
Intermediate Powder (RA 60) 4,000 500
High Grade Stevia (RA 80) 3,000 1,000
Rebpure™ (RA 97) 1,500 500
--------------------------------------------------------------------------
Balance Sheet Financial Highlights
--------------------------------------------------------------------------
In thousands Canadian $ December 31, 2009 December 31, 2008
--------------------------------------------------------------------------
Cash and cash equivalents $16,018 $7,363
Working Capital $6,381 ($2,562)
Total Assets $229,586 $174,361
Total Liabilities $84,743 $57,364
Advances from Customers - $24,492
Bank Loans Payable (Current Portion) $37,317 $10,232
Shareholder Loans $7,243 -
Total Shareholder Equity $144,819 $116,829
--------------------------------------------------------------------------
Non-GAAP Financial Information
The following table provides reconciliation of EBITDA to
Canadian GAAP net income.
--------------------------------------------------------------------------
Fourth Fourth Twelve Twelve
quarter quarter months months
In thousands Canadian $ 2009 2008 2009 2008
--------------------------------------------------------------------------
Income (Loss) Before Income Taxes
and Non-Controlling Interests $72 ($8,596) $371 ($12,103)
Add:
Non-Controlling Interest $22 $53 $144 $68
Depreciation and Amortization $2,258 $1,142 $6,385 $2,540
Net Interest Expense $899 $139 $3,709 $1,188
Foreign Exchange Gains $581 $2,845 ($2,638) $2,843
Non-Cash Share $754 $1,229 $2,479 $1,321
Compensation Expense
YHT Provision - $3,111 - $3,111
--------------------------------------------------------------------------
EBITDA $4,586 ($77) $10,450 ($1,032)
% Revenue 35% (2%) 25% (10%)
--------------------------------------------------------------------------
Market and Operations 2010 Outlook
GLG's key operational objectives for 2010 are:
1. Generate sales growth from GLG's direct sales force in the
United States as well as key international markets
2. Execute marketing and communications plan to establish GLG in
the food and beverage industry
3. Commence operation of new Runhao facilities to increase
production capacity and revenues
4. Harvest enough proprietary leaf in 2010 crop to achieve 100%
coverage of production requirements
5. Organize stevia growers in partnership with local governments
in China to meet expected 2010 stevia demand
6. Continue to develop additional leaf growing areas
7. Continue R&D program for high RA yielding seeds and
seedlings, process innovation and product use formulations
Revenue 2010 Outlook
The market for stevia in key markets such as the U.S. showed
strong growth in 2009. According to Mintel's August 2009 report
entitled Stevia and other Natural Sweeteners, more than 115 new
food and beverage products containing stevia have been launched in
the United States in the first seven months of 2009 by leading
global food and beverage companies such as The Coca Cola Company,
Cargill, PepsiCo and Merisant Company. The Company believes that
this support, coupled with underlying trends and key market drivers
presents favorable conditions for stevia's wider global acceptance
and continued long-term growth trajectory.
According to Mintel's August 2009 report, United States retail
sales of products containing stevia topped $100 million in 2009,
including tabletop sweeteners and food and beverage products, and
could reach US$2 billion by the end of 2011. The Company believes
growing consumer preference for all-natural products, together with
increasing rates of obesity and diabetes, have created significant
demand for stevia as an all-natural, zero-calorie sweetener. In
2009, Coca Cola and PepsiCo launched stevia-sweetened versions of
VitaminWater and SoBe Lifewater (respectively), as well as other
products. Kraft, the largest United States food company, and
Hansen, the beverage company, have also launched Truvia™-sweetened
beverage products. Consumer goods companies have also been
combining stevia with sugar in low-calorie products, such as
PepsiCo's Trop 50 orange juice, Coke's Sprite Green and Kraft's
Nature's Splash powdered drinks.
In 2010, GLG has already seen major new launches of products
sweetened with stevia. Coca Cola has recently launched VitaminWater
Zero™, Kraft has launched Crystal Light Pure Fitness™ sweetened
with Truvia™ and Breyers has launched YoCrunch® 100 calorie yogurt
sweetened with Truvia™.
The Company believes stevia extracts such as its Rebpure™ RA97
are positioned to become leading all natural sweeteners as a result
of their appealing profile:
- zero calories
- 100% natural and thus perceived as healthier than artificial
sweeteners
- stability under heat for formulation and processing
- suitability for diabetics
Recent market reports indicate that Truvia™ (launched by the
Company's strategic alliance partner Cargill) has achieved 8% of
the alternate sweetener market in the United States since launched
against products such as Splenda, Sweet'N Low and Equal. Truvia™
has captured majority market share as the stevia sweetener of
choice for new product launches in the US since late 2008. Cargill
had further announced it currently has more than 100 stevia-related
projects underway with customers.
The Company believes that China presents another key market
opportunity for its high-grade stevia products. China currently
faces a shortfall of sugar production and in 2009 imported over 1.5
million MT of sugar worth approximately US$1.1 billion. This sugar
shortage is expected to grow as the population continues to grow
and per capita sugar consumption increases. GLG believes that this
sugar supply shortfall creates a market opportunity for its
stevia-based sweeteners which the Company is actively pursuing. The
Company believes that it is well-positioned to develop this market
opportunity because of its relationships with Chinese provincial
and central government agencies.
GLG is also actively working on opportunities in other markets
such as Japan, Australia, India and a number of countries in South
America.
EBITDA 2010 Outlook
The Company's expectation for EBITDA margin (percentage of
revenues) for 2010 is 24 to 26% EBITDA margin on full year
revenues.
Capital Expenditures - 2010 Outlook
The Company expects to undertake some key capital projects in
2010, including the completion of its water treatment upgrade
program and a new R&D innovation centre. The R&D innovation
centre has the potential for government funding in China and the
Company is currently pursuing such support. This new centre will
focus on R&D across all aspects of the stevia supply chain,
including agriculture, extract processing, finished product
production and product formulation innovation.
GLG's outlook summary for 2010
--------------------------------------------------------------------------
Actual Outlook
In millions Canadian $ 2009 2010
--------------------------------------------------------------------------
Revenue 41.9 70-80
EBITDA 10.5 17-21
Capital Expenditures 40.8 10-15
--------------------------------------------------------------------------
About GLG Life Tech Corporation
GLG Life Tech Corporation is a global leader in the supply of
high purity stevia extracts, an all natural, zero-calorie sweetener
used in food and beverages. The Company's vertically integrated
operations cover each step in the stevia supply chain including
non-GMO stevia seed breeding, natural propagation, stevia leaf
growth and harvest, proprietary extraction and refining, marketing
and distribution of finished product. GLG's advanced technology,
extraction technique and premier, high quality product offerings
including Rebpure™, Rebsweet™, Anysweet™ and the Company's newest
line Sweet Success(SM), make it the leading producer of high
purity, great tasting stevia extracts.
Forward-looking statements: This press release contains certain
information that may constitute "forward-looking information" and
"forward-looking statements" within the meaning of applicable
Canadian and United States securities laws. All statements relating
to plans, strategies, projections of results of specific activities
or investments, and other statements that are not descriptions of
historical facts may be forward-looking statements. Forward-looking
statements and information are inherently subject to risks and
uncertainties, and actual results could differ materially from
those currently anticipated due to a number of factors, which
include, but are not limited to, operational risks, the effects of
general economic conditions, changing foreign exchange rates and
actions by government authorities, uncertainties associated with
legal proceedings and negotiations, industry supply levels,
competitive pricing pressures and other risks and uncertainties
disclosed in the public documents filed by the Company with
Canadian and United States securities regulatory authorities.
Forward-looking statements and information may be identified by
terms such as "may", "will", "should", "continue", "expect",
"anticipate", "estimate", "believe", "intend", "plan" or "project",
or similar terms or the negatives of these terms. Although we
believe that the expectations reflected in the forward-looking
statements and information are reasonable, we cannot guarantee
future results, levels of activity, performance, or achievements.
The Company's forward-looking statements and information reflect
the beliefs, opinions and projections on the date the statements
are made. The Company assumes no obligation to update
forward-looking information should circumstances or management's
estimates or opinions change, except as required by law.
Contacts: GLG Life Tech Corporation Brian Meadows Chief
Financial Officer +1 (604) 641-1368 +1 (604) 844-2830 (FAX)
ir@glglifetech.com www.glglifetech.com
Grafico Azioni GLG Life Tech (TSX:GLG)
Storico
Da Mag 2024 a Giu 2024
Grafico Azioni GLG Life Tech (TSX:GLG)
Storico
Da Giu 2023 a Giu 2024
