Innovative Composites Reports Second Quarter Fiscal 2012 Financial Results

- Industrial products division drives revenue growth and South Carolina facility initiates production -

TORONTO, May 24, 2012 /CNW/ - Innovative Composites International Inc. ("ICI" or the "Company"), (TSXV: IC) (OTCQX: ICIZF, a producer of proprietary composite products reported today its financial results for the three- and six-month periods ended March 31, 2012.  All figures are in U.S. dollars unless otherwise stated.

Q2 FY2012 Financial and Operational Highlights

• Revenue of $1.0 million in the Q2 fiscal 2012 period.
• Cash and cash equivalents of $8.8 million as of March 31, 2012.
• Commenced operations at flagship Orangeburg, South Carolina facility on time and on budget.
• Signed an agreement with RedLeaf Homes Ltd. to distribute ICI prefabricated homes and shelters within northern and rural Canada.
• Introduced new Rapid Tactical Emergency Relief Module called the RapTER™ to target the emergency response, and military agency markets.
• Began trading on the OTCQX under the symbol ICIZF for the purposes of providing additional liquidity and increased access for U.S. based investors.

Highlights Subsequent to Quarter-end

• Received its first multi-home purchase order to supply EcoScape^TM modular homes for a housing project in Antigua.
• Appointed Sam Greiss as Chief Financial Officer.
• Graduated to Tier 1 status on TSX Venture.

"During the second quarter we continued to focus on developing markets for our EcoScape modular homes," said Terry Ball, President and CEO of ICI.  "In addition to international markets, we began targeting the Canadian and U.S. markets, where we believe there is significant potential.  To compliment the modular homes segment we developed the RapTER module which will target the potential markets in emergency relief, mining, and oil and gas exploration.  Our goal is to create sustainable value and manage risk by diversifying our sources of revenue through existing products and by developing complementary new products that address defined needs in certain market sectors.  We believe that we have sufficient funds to execute our business development strategy and sustain operations for the foreseeable future."

Review of Q2 2012 Financial Performance
ICI recognized revenue of $1,042,704 for the second quarter of fiscal 2012.  On a quarter-over-quarter basis, revenue increased by $135,764 from $906,940 in the first fiscal quarter of 2012. The increase in revenue for the period was a result of the beginning of market acceptance for ICI's non-housing industrial products as the Company transitioned from a development stage company to a commercially operational company during the fiscal year.

Cost of sales for the second quarter of fiscal 2012 was $953,740.  Cost of sales was adversely impacted by the transition to IFRS due to the IFRS requirement to allocate expenses such as amortization and depreciation to cost of sales that were not previously required under Canadian GAAP.  Without the impact of IFRS related accounting changes, gross margin for the quarter-ended March 31, 2012 was 19.4%.

ICI expects continued improvements in its gross profit margin through continued strengthened relationships with suppliers, vertical integration, and achieving certain economies of scale through increased sales and capacity utilization.

Operating expenses for the three-months ended March 31, 2012 were $3.1 million.  Expenses for the quarter increased as the result of the growth of the Company in activities necessary to service the increased number of sales initiatives, expanding the manufacturing facility in Michigan, ramping up a new manufacturing facility in South Carolina, the acquisition of the Eleison assets and integration of the Eleison equipment into the Company's activities, and an increase in on-going fees and expenses associated with being a public entity and being listed on the TSX Venture, as well as, on the OTCQX stock exchanges.

Cash flow used in operating activities for Q2 fiscal 2012 were $1.9 million.

At March 31, 2012, ICI had working capital of $9.7 million, including cash and cash equivalents of $8.8 million.

ICI has filed its financial statements for the three and six -months ended March 31, 2012 and related Management's Discussion and Analysis (MD&A) with securities regulatory authorities.  ICI's financial statements, MD&A and related documents are available via SEDAR as well as through the Company's website, www.innovativecompositesinc.com.

Conference Call
ICI will host a conference call to discuss its second quarter 2012 financial results on Wednesday, May 30, 2012 at 2:00 p.m. ET.  The conference call is being scheduled to accommodate the statutory holiday in the U.S.

To access the conference call by telephone, dial 647-427-7450 or 1-888-231-8191.  Please connect approximately 15 minutes prior to the beginning of the call to ensure participation.  A question and answer session for analysts and institutional investors will follow management's presentation.

A taped replay of the conference call will also be available to listeners until 12:00 a.m. Wednesday, June 6, 2012.  To access the rebroadcast, please dial 416-849-0833 or 1-855-859-2056 and enter passcode 79139753, followed by the number sign.

About Innovative Composites International Inc.
Headquartered in Toronto, Canada,  Innovative Composite International Inc. (TSXV: IC) (OTCQX: ICIZF) is a high-tech engineering and manufacturing company whose goal is to successfully commercialize a proprietary line of composite products targeted at markets that include prefabricated modular housing, shelters, containers, and transportation.

Led by a management team with extensive commercialization experience, ICI has adopted a two-tier business model:  It designs and manufactures products and partners with established companies in its target markets to utilize their sales channels for faster product roll-out.

The superior characteristics of its products provide ICI with opportunities to establish and grow significant, sustainable, and diversified sources of revenue in its target markets.

To find out more about ICI please visit our website at: www.innovativecompositesinc.com.

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Neither 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.

Statements made in this press release include forward-looking statements that involve a number of risks and uncertainties. These statements relate to future events or future performance and reflect management's current expectations and assumptions. A number of factors could cause actual events, performance or results to differ materially from the events, performance and results discussed in the forward-looking statements, such as the economy, generally, competition in its target markets, the demand for ICI's products and the availability of funding. These forward-looking statements are made as of the date hereof and ICI does not assume any obligation to update or revise them to reflect new events or circumstances. Actual events or results could differ materially from ICI's expectations and projections.

 

 

Sam Greiss                                      
Chief Financial Officer                                                        
[phone]                                                                    
[email protected]                                 

or

Philip Dale
TMX Equicom
[phone] ext 253
[email protected]