Gross Margin Improves to 19%
from 14% in First Quarter and 8% in Prior Year Second
Quarter
Vancouver, BC -
August 27, 2013 - Viridis Energy Inc. ("Viridis" or the
"Company") (TSXV: VRD) a "Cleantech" manufacturer and distributor
of alternative energy providing biomass fuel to global residential
and industrial markets, today reported financial results for the
second quarter ended June 30, 2013. The Company reported revenue
for the second quarter 2013 of $2.5 million compared to $2.4
million for the same period in 2012 and $2.3 million for the first
quarter 2013.
Gross profit (revenue less cost of
sales) increased to $465,000 generating a gross margin of 19%. This
compares to $186,000 (gross margin of 8%) during the second quarter
of 2012 and $336,000 (gross margin of 14%) for the first quarter
2013. The continued improvement in gross margin reflects increased
production utilization and the further effects of cost efficiencies
implemented by management in late 2012. In accordance with IFRS
policy, Viridis' gross profit on revenue includes
non-cash depreciation and
amortization costs of $141,569 and $156,270 for the second quarters
of 2013 and 2012, respectively, and $134,509 for the first quarter
2013.
On an operating basis, excluding these
non-cash charges, gross margin for the second quarters of 2013 and
2012 were approximately 25% and 14%, respectively, and 20% for the
first quarter 2013.
The Company's loss from operations
during the second quarter 2013 decreased to $(365,000) from
$(561,000) in the first quarter 2013 and $(730,000) for the second
quarter 2012. The Company's operating results include general and
administrative ("G&A") and start-up costs associated with
Scotia Atlantic Biomass Company Limited ("Scotia") acquired
February 2012 of $250,738 and $204,134 during the second quarter of
2013 and 2012, respectively.
Excluding these Scotia related costs,
the Company's operating loss was $(105,000) during the second
quarter and $(318,000) during the first quarter of 2013.
Operations at the Scotia facility have
been restored and production is expected to begin before the end of
August. The facility has the capacity to generate 120,000 metric
tons of wood pellets per year and recently announced a two year
European off-take agreement for its production.
The Company incurred a comprehensive
loss of $(491,000) or $(0.01) per basic share during the second
quarter 2013, which includes financing and accretion expenses of
$125,000. This compares to a comprehensive loss of $(972,000) or
$(0.02) per basic share for the second quarter 2012, which includes
$239,000 of financing and accretion costs, and a comprehensive loss
of $(753,000) or $(0.01) per basic share during the first quarter
of 2013, which includes $190,000 of financing and accretion
costs.
Financing and accretion costs incurred
during the first six months of 2013 and 2012 were $315,000 and
$617,000, respectively. The Company completed a debt restructuring
during the first quarter 2013 under more favorable terms than the
prior facility, significantly reducing its finance
expense.
Commenting on the improving financial results,
Christopher Robertson, chairman and chief executive officer of
Viridis Energy Inc., said, "With Scotia back in operation, our
bottom line will improve significantly over the next few quarters.
Our consolidated production capacity is now 180,000 tonnes per
year, and with efficiencies implemented over the last six months,
we are seeing signs that, in addition to increasing plant
utilization, we are testing projected production capacity limits."
Mr. Robertson continued, "We project gross margins on our core
residential and commercial wood pellet businesses to continue
improving. We also expect our brokerage business to expand in
coming months as more power plants convert to biomass fuel sources,
especially in Europe where government subsidies and support schemes
continue to focus on attracting investment for low carbon
generation."
At June 30, 2013, the Company had Cash and Cash
Equivalents of approximately $2.9 million and Accounts Receivable
of approximately $729,000, which represent a DSO (days sales
outstanding) of less than 30 days. Inventory increased to $926,000
from $718,000 in the prior quarter of 2013 in preparation for
seasonal sale deliveries.
Viridis' common shares issued and
outstanding as of June 30, 2013 were 114,298,883 and a fully
diluted share count of 156,232,465, inclusive of outstanding
warrants and options to purchase shares of the Company's common
stock, which, if fully exercised, would generate $10.3 million of
additional working capital to the Company, inclusive of 5,848,096
warrants that expired subsequent to June 30, 2013 (representing
$201,250 in potential working capital).
Mr. Robertson, concluded, "Viridis has persevered
through fairly volatile market parameters over the last 4-5 years.
With the advocacy of our shareholders and the support of our
employees and management team, we have emerged a strong competitor
in the biomass industry. With our core business positioned to
capitalize on a fast growing market, we are also examining other
facets of the biomass industry where we can apply our years of
experience to develop additional sources of revenue and cultivate
the use of renewable energy sources."
-------------------------------
|Company Contact: Michele |
|Rebiere Chief Financial |
|Officer Viridis Energy Inc .|
|905-847-5226 |
|investorinfo@viridisenergy.ca|
-------------------------------
About
Viridis Energy Inc.
Viridis Energy Inc. (TSXV: VRD) is a
publicly traded, "Cleantech" alternative energy company
specializing in wood biomass. Headquartered in Vancouver, B.C.,
Viridis Energy operates Cypress Pacific Marketing, Okanagan Pellet
Company and Scotia Atlantic Biomass, thus providing the company
with vertical integration for distribution and manufacturing as
well as coast to coast national presence. For more information on
Viridis Energy Inc. please refer to the company website at
www.viridisenergy.ca.
Forward-looking Statements
Certain
statements in this release are forward-looking statements, which
reflect the expectations of management regarding the Company's
future operations. Forward-looking statements consist of statements
that are not purely historical, including any statements regarding
beliefs, plans, expectations or intentions regarding the future.
Such statements are subject to risks and uncertainties that may
cause actual results, performance or developments to differ
materially from those contained in the statements. No assurance can
be given that any of the events anticipated by the forward-looking
statements will occur or, if they do occur, what benefits the
Company will obtain from them. These forward-looking statements
reflect management's current views and are based on certain
expectations, estimates and assumptions which may prove to be
incorrect. A number of risks and uncertainties could cause our
actual results to differ materially from those expressed or implied
by the forward-looking statements, including: (1) a continued
downturn in general economic conditions in North America and
internationally, (2) the inherent uncertainties associated with the
demand for biofuels, (3) the risk that the Company does not execute
its business plan, (4) inability to finance operations and growth
(5) inability to finance the start-up operations in Nova Scotia in
a timely manner (6) inability to retain key management and
employees, (7) an increase in the number of competitors with larger
resources, and (8) other factors beyond the Company's control.
These forward-looking statements are made as of the date of this
news release and the Company intends to update such forward looking
information in the Company's MD&A in the event that actual
results differ materially from such forward-looking statements
contained herein. Additional information about these and other
assumptions, risks and uncertainties are set out in the "Risks and
Uncertainties" section in the Company's MD&A filed with
Canadian security regulators.
Neither
the TSX Venture Exchange nor its Regulation Services Provider (as
that term is defined in the policies of the TSX Venture Exchange)
accepts responsibility for the adequacy or accuracy of this
release.
###
??? Financial Statements Follow ???
-----------------------------------------------
|Viridis Energy Inc. |
|---------------------------------------------|
|Consolidated statements of financial position|
|---------------------------------------------|
|(Expressed in Canadian dollars) |
|---------------------------------------------|
|As at June 30, 2013 and December 31, 2012 |
-----------------------------------------------
----------------------------------------------------------------
| | |June, 2013 | |December 31, | |
| | |(unaudited) | |2012 (audited)| |
|--------------------------------------------------------------|
| | | | | | |
|--------------------------------------------------------------|
|ASSETS | | | | | |
|--------------------------------------------------------------|
| | | | | | |
|--------------------------------------------------------------|
|Current | | | | | |
|--------------------------------------------------------------|
| Cash and cash | | $ | | $ | |
|equivalents | |2,910,064 | | | |
| | | | | 413,570 | |
|--------------------------------------------------------------|
| Accounts | | | | | |
|receivable | | 729,448 | | 753,208 | |
|--------------------------------------------------------------|
| Inventory | | | | | |
| | | 926,171 | | | |
| | | | | 594,012 | |
|--------------------------------------------------------------|
| Prepaid | | | | | |
|expenses | | 436,013 | | 225,761 | |
|--------------------------------------------------------------|
| Due from | | | | | |
|related parties | | 42,242 | | 54,000 | |
|--------------------------------------------------------------|
| | | | | | |
| | | 5,043,938| | | |
| | | | |2,040,551 | |
|--------------------------------------------------------------|
| | | | | | |
|--------------------------------------------------------------|
|Property, plant | | | | | |
|and equipment | |8,326,743 | |8,264,488 | |
|--------------------------------------------------------------|
| | | | | | |
|--------------------------------------------------------------|
| | | $ | | $ | |
| | |13,370,681 | |10,305,039 | |
|--------------------------------------------------------------|
| | | | | | |
|--------------------------------------------------------------|
|LIABILITIES and SHAREHOLDERS' EQUITY | | | |
|--------------------------------------------------------------|
| | | | | | |
|--------------------------------------------------------------|
| | | | | | |
|--------------------------------------------------------------|
| Bank line of | | $ | | $ | |
|credit | | | | 2,992,832 | |
| | | - | | | |
| | | | | | |
|--------------------------------------------------------------|
| Accounts | | | | | |
|payable and | |2,044,594 | | 2,294,127 | |
|accrued | | | | | |
|liabilities | | | | | |
|--------------------------------------------------------------|
| Deferred | | | | | |
|income | | - | | | |
| | | | |157,058 | |
|--------------------------------------------------------------|
| Short term | | | | | |
|loan payable | | | | | |
| | | - | | | |
| | | | | 2,606,875 | |
|--------------------------------------------------------------|
| Due to related| | | | | |
|parties | | | | | |
| | | 37,315 | | | |
| | | | |164,670 | |
|--------------------------------------------------------------|
| Current | | | | | |
|portion of loans| | 34,202 | | 19,646 | |
|payable | | | | | |
|--------------------------------------------------------------|
| | | | | | |
|--------------------------------------------------------------|
| | |2,116,111 | |8,865,208 | |
|--------------------------------------------------------------|
| | | | | | |
|--------------------------------------------------------------|
| Loans payable | | | | | |
| | |5,688,537 | | - | |
|--------------------------------------------------------------|
| | | | | | |
|--------------------------------------------------------------|
| | |7,804,648 | |8,865,208 | |
|--------------------------------------------------------------|
| | | | | | |
|--------------------------------------------------------------|
| | | | | | |
|--------------------------------------------------------------|
|Shareholders' | | | | | |
|equity | | | | | |
|--------------------------------------------------------------|
| | | | | | |
|--------------------------------------------------------------|
| Share capital | | $ | | $ | |
| | | 27,322,578 | | 22,537,578 | |
|--------------------------------------------------------------|
| Contributed | | | | | |
|surplus | | 3,446,376 | | 2,861,376 | |
|--------------------------------------------------------------|
| Accumulated | | | | | |
|deficit | |(25,202,921) | |(23,959,123) | |
|--------------------------------------------------------------|
| | | | | | |
|--------------------------------------------------------------|
| | | | | | |
| | |5,566,033 | | 1,439,831 | |
|--------------------------------------------------------------|
| | | | | | |
|--------------------------------------------------------------|
| | | $ | | $ | |
| | | 13,370,681 | | 10,305,039 | |
----------------------------------------------------------------
Viridis Energy Inc.
Consolidated statements
of loss and total comprehensive loss
(Expressed in Canadian
dollars, except number of shares and per share amounts)
For the six months
ended June 30, 2013 and 2012
(Unaudited)
----------------------------------------------------------------------------------------
| | | | | | | | | |
|--------------------------------------------------------------------------------------|
| | | | | Three months ended June |Six months ended |
| | | | |30, | |
| | | | | | June 30, |
|--------------------------------------------------------------------------------------|
| | | | | | | | | |
| | | | | 2013 | | | | 2012 |
| | | | | | | | 2013 | |
| | | | | |2012 | | | |
|--------------------------------------------------------------------------------------|
| | | | | | | | | |
|--------------------------------------------------------------------------------------|
|Sales | | | $ | | $ | $ | $ |
| | | |2,473,296 | |2,405,600 |4,793,148 |4,842,408 |
|--------------------------------------------------------------------------------------|
|Costs of sales | | | | | | | |
| | | |2,008,698 | |2,219,498 |3,992,183 |4,505,641 |
|--------------------------------------------------------------------------------------|
|Gross | | | | | | | | |
|profit | | | | 464,598 | | 186,102 | 800,965 | |
| | | | | | | | | 336,767 |
|--------------------------------------------------------------------------------------|
| | | | | | | | | |
|--------------------------------------------------------------------------------------|
|Operating expenses | | | | | | | |
|--------------------------------------------------------------------------------------|
| |Selling and | | | | | | | 96,567 |
| |marketing | | | | | | | |
| | | | |39,405 | |47,359 |85,242 | |
|--------------------------------------------------------------------------------------|
| |Freight-out | | | | | | | 122,215 |
| | | | | | | | | |
| | | | |4,436 | |30,666 |12,645 | |
|--------------------------------------------------------------------------------------|
| |General and | | | | | | | 1,666,269 |
| |administrative| | | 785,368 | | 838,392 | | |
| | | | | | | |1,628,251 | |
|--------------------------------------------------------------------------------------|
| | | | | | | | | 1,885,051 |
| | | | | 829,209 | | 916,417 | | |
| | | | | | | |1,726,138 | |
|--------------------------------------------------------------------------------------|
|Loss before other | | | | | | | |
|items | | | (364,611) | | (730,315) | (925,173) | (1,548,284)|
|--------------------------------------------------------------------------------------|
| | | | | | | | | |
|--------------------------------------------------------------------------------------|
|Other items | | | | | | | |
|--------------------------------------------------------------------------------------|
| |Foreign | | | | | | | (6,050) |
| |exchange loss | | | | | | | |
| | | | |(4,424) | |(2,537) |(6,688) | |
|--------------------------------------------------------------------------------------|
| |Disposal of | | |2,821 | |- |2,821 | - |
| |property plant| | | | | | | |
| | and | | | | | | | |
| |equipment | | | | | | | |
|--------------------------------------------------------------------------------------|
| |Finance | | | (88,531) | | | | (530,364) |
| |expense | | | | | | | |
| | | | | | |(193,152) |(255,083) | |
|--------------------------------------------------------------------------------------|
| |Accretion | | |(36,473) | |(46,107) |(59,675) | (86,668) |
| |expense | | | | | | | |
|--------------------------------------------------------------------------------------|
| | | | | | | | | (623,082) |
| | | | | | | | | |
| | | | |(126,607) | |(241,796) |(318,625) | |
|--------------------------------------------------------------------------------------|
|Loss before income | | |(491,218) | |(972,111) |(1,243,798) |(2,171,366) |
|taxes recovery | | | | | | | |
|--------------------------------------------------------------------------------------|
|Income tax recovered | | |- | |- -- -- |
|--------------------------------------------------------------------------------------|
|Net loss and total | | | $ | | $ | $ | $ |
|comprehensive loss | | |(491,218) | |(972,111) |(1,243,798) |(2,171,366) |
|--------------------------------------------------------------------------------------|
| | | | | | | | | |
|--------------------------------------------------------------------------------------|
|Net loss per share | | | | | | | |
|--------------------------------------------------------------------------------------|
| |Basic and | | | $ | | $ | $ | |
| |diluted | | | | | | |$ |
| | | | |(0.01) | | (0.02) | (0.02) | (0.05) |
|--------------------------------------------------------------------------------------|
| | | | | | | | | |
|--------------------------------------------------------------------------------------|
|Weighted average | | | | | | | |
|number of common | | | | | | | |
|shares outstanding | | | | | | | |
|--------------------------------------------------------------------------------------|
| |Basic and | | |99,683,498 | |41,343,845 | | |
| |diluted | | | | | |80,646,949 |41,310,878 |
----------------------------------------------------------------------------------------
Grafico Azioni Viridis Energy Inc. (TSXV:VRD)
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