BIOX announces 2016 second quarter results

TSX symbol: BX

TORONTO, May 9, 2016 /CNW/ - BIOX Corporation (BIOX) (TSX: BX), a renewable energy company that designs, builds, owns and operates biodiesel production facilities, today announced its 2016 second quarter financial results for the three-month (Q2 2016) and six-month (YTD 2016) periods ended March 31, 2016.

"We continue to execute on our strategy to control and distribute product beyond our own production from the Hamilton facility. We have increased the product we control by more than 33 percent in fiscal 2016 by acquiring product from third-parties and using our sales and distribution network to optimize its value in the North American market," said Alan Rickard, Chief Executive Officer of BIOX. "As we move in to the blending season in the Ontario market we expect to market a significant amount of volume locally to support the requirements of the Greener Diesel program.  Combined with a functional Renewable Fuel Standard in the US market we look forward to better commercial conditions than have been present over the past 6 months. We continue to pursue new strategies that allow us to 'touch more gallons' to leverage the capabilities of management and maximize our Sales & Marketing expertise."

Highlights

• Production of methylesthers was 15.6 million litres in Q2 2016 compared to 13.9 million litres in Q2 2015
• Sold 5.3 million litres of third-party production in Q2 2016 compared to nil in Q2 2015
• Sales were $21,426,000 and $47,169,000 in Q2 2016 and YTD 2016, respectively, compared to $16,067,000 and $43,475,000 for the corresponding periods in fiscal 2015
• Operating income (loss) prior to non-cash items¹ was $(2,104,000) and $3,253,000 for Q2 2016 and YTD 2016, respectively, compared to $(1,172,000) and $4,546,000 for the corresponding periods in fiscal 2015
• Net loss was $5,604,000 in Q2 2016 compared to $2,002,000 in Q2 2015
• Net loss per share was $0.12 in Q2 2016, compared to $0.04 in Q2 2015

Financial Highlights
Sales were $21.4 million and $47.2 million for the three-month period (Q1 2016) and the six-month period (YTD 2016) ended March 31, 2016, respectively, compared to $16.1 million and $43.5 million for the corresponding periods in fiscal 2015. Sales in the YTD 2016 period include the recognition of US$6.7 million of refundable tax credits from customers and the IRS, due to the retroactive reinstatement of the U.S. biodiesel tax incentive, compared to US$6.5 million in the same period last year.

BIOX sold 20.4 million and 40.2 million litres in Q2 2016 and YTD 2016, respectively, compared to 13.3 million and 32.7 million litres in the corresponding periods in fiscal 2015. Included in the 2016 sales are 5.3 and 10.8 million litres of third-party production for Q2 2016 and YTD 2016, respectively.

Direct expenses were $22.3 million and $41.2 for Q2 2016 and YTD 2016, respectively, compared to $16.2 million and $36.7 million for the corresponding periods in fiscal 2015. The change is primarily the result of the purchase and subsequent sale of third-party production as part of the Company's strategy to control and distribute more product.

General and administrative expenses were $1.3 million and $2.7 for Q2 2016 and YTD 2016, respectively, compared to $1.0 and $2.2 million for the corresponding periods in fiscal 2015. The change is primarily due to management's growth strategy to control and distribute higher volumes.

Operating income (loss) was $(3.2) million and $1.0 million for Q2 2016 and YTD 2016, respectively, compared to $(2.2) million and $2.5 million for the corresponding periods in fiscal 2016. The change is primarily a result of the higher feedstock prices and a lower average price per litre of biodiesel sold during the quarterly period as well as costs related to management's growth strategy. The lower average price per litre sold in the 2016 periods was partially a result of the expiration of the $0.08 per litre ecoENERGY for Biofuels incentive on March 31, 2015. BIOX recorded incentive payments of $1.1 million and $2.5 million in Q2 2015 and YTD 2015, respectively. 

Operating income (loss) prior to non-cash items¹ was $(2.1) million and $3.3 million for Q2 2016 and YTD 2016, receptively, compared to $(1.2) million and $4.5 million for the corresponding periods in fiscal 2015. The change is primarily a result of the higher feedstock prices and a lower average price per litre of biodiesel sold during the quarterly period, including the expiry of the ecoENERGY incentive mentioned above, as well as costs related to management's growth strategy.

Net income (loss) was $(5.6) million and $(1.4) million for Q2 2016 and YTD 2016, respectively, compared to $(2.0) and $2.3 million in the corresponding periods in fiscal 2015. Earnings (loss) per share was $(0.12) and $(0.03) for Q2 2016 and YTD 2016 compared to $(0.04) and $0.05 for the corresponding periods in fiscal 2015.

As at March 31, 2016, BIOX's available cash position amounted to $8.0 million, which consisted of cash and cash equivalents and short-term investments, compared with $7.7 million on September 30, 2015.

As at March 31, 2016, BIOX had 46,098,043 common shares outstanding, as well as options to purchase up to 1,738,750 common shares of BIOX outstanding.

Outlook
BIOX continues to pursue growth strategies that would expand its business through increasing the volume of biodiesel it produces, controls and distributes in strategic locations throughout North America. During Q2 2016, BIOX sold 5.3 million litres of third-party product as part of its strategy to touch more gallons and deliver greater value for product to participants across the biodiesel value chain.

On November 30, 2015, the EPA announced its final RVO proposal for Biomass-based diesel for 2014 through 2017. The announcement provided clarity for both producers and obligated parties for the required volumes two years in advance for the first time since 2012. This clarity is a critical component of a sustainable biodiesel industry in the U.S. Biomass-based diesel 2016 RINs traded at approximately $0.79 (or $1.19 per U.S. gallon) as of May 6, 2016.

While BIOX has historically sold the majority of its product into the U.S. market, the implementation of the Canadian regulations as described in BIOX's management's discussion and analysis for the three-month period ended March 31, 2016 significantly increase the accessible market for its product in Canada. Furthermore, the implementation of a renewable diesel mandate in Ontario on April 1, 2014, provides BIOX with market certainty in its local region, which supports the significant capital investment that it made in the Hamilton facility. Once fully implemented, the regulation requires the use of an estimated 240 million litres of bio-based diesel per annum on an average GHG adjusted volume basis.

BIOX's inter-terminal pipeline and supply agreement with Shell is an example of how the Company can directly service primary suppliers with a secure supply of biodiesel under the new Canadian and Ontario regulations by the most efficient possible logistics. The supply of biodiesel under this agreement has the potential to become a significant portion of BIOX's Hamilton production given the implementation of the Ontario mandate and as the Canadian Renewable Fuel Content Regulations extend eastward into Québec and the Atlantic provinces.

On December 18, 2015, the U.S. President signed into law tax extenders legislation that included the reinstatement of the biodiesel tax incentive through to December 31, 2016. The passage of the legislation is significant as it provides greater certainty for producers, refiners and importers of biodiesel.

Notice of Conference Call
BIOX will hold a conference call tomorrow, May 10, 2016, at 9:00 a.m. ET hosted by Mr. Alan Rickard, Chief Executive Officer to discuss the Company's financial results and corporate developments. To access the conference call by telephone, dial [phone] or [phone]. To access the telephone replay, dial [phone] or [phone] and enter reservation number 1765449. A live audio webcast of the call will be available at www.bioxcorp.com. The webcast will be archived for 90 days.

Reconciliation of Non-IRFS Measures
The following table presents a reconciliation of operating income prior to non-cash items to net income for the three-month and six month periods ended March 31, 2016 and 2015:

(in thousands)		Three months ended		Six months ended
		March 31		March 31
		2016	2015	2016	2015
		$	$	$	$
Operating (loss) income before non-cash items		(2,105)	(1,172)	3,253	4,546
Deduct:	Production facility depreciation and amortization	(934)	(956)	(1,908)	(1,912)
	Depreciation and amortization of equipment and intangible assets	(56)	(54)	(112)	(114)
	Share-based compensation	(144)	(17)	(256)	(40)
Operating (loss) income		(3,239)	(2,199)	977	2,480
Deferred income tax expense		(1,739)	-	(1,739)	-
Other income and expenses		(626)	197	(649)	(170)
Net (loss) income		(5,604)	(2,002)	(1,411)	2,310

Note: Non-IFRS Measures. Operating income prior to non-cash items is defined as operating income or loss less production facility depreciation and amortization, and less depreciation and amortization of furniture, equipment and intangibles and share-based compensation. Management uses this measurement to monitor the operating cash flow of BIOX's business and believes this information is useful supplemental information to a reader of financial statements. This measurement may not be comparable to similar measures presented by other issuers. Investors are cautioned that operating income (loss) prior to non-cash items should not be construed as an alternative to net (loss) income determined in accordance with IFRS as an indicator of BIOX's performance.

About BIOX Corporation
BIOX is a renewable energy company that owns and operates a 67 million litre per year continuous flow biodiesel production facility in Hamilton, Ontario. BIOX has an innovative, proprietary and patented production process that is capable of producing the highest quality, renewable, clean burning and biodegradable biodiesel fuel utilizing a variety of feedstocks - from pure seed oils to animal fats to recovered vegetable oils with no change to the production process. BIOX's high quality biodiesel fuel meets North American (ASTM D-6751) quality standards.

Forward-looking Statements
Certain statements in this press release constitute "forward-looking" statements that involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance, objectives or achievements of BIOX, or industry results, to be materially different from any future results, performance, objectives or achievements expressed or implied by such forward-looking statements. Such statements relate to, among other things, BIOX's long-term expectations for the biodiesel market in light of current market conditions, and the ability of BIOX to benefit from recent regulatory initiatives in the U.S. and Ontario. These statements reflect BIOX's current views regarding future events and operating performance, are based on information currently available to BIOX, and speak only as of the date of this press release. These forward-looking statements involve a number of risks, uncertainties and assumptions and should not be read as guarantees of future performance or results, and will not necessarily be accurate indications of whether or not such performance or results will be achieved. Those assumptions and risks include, but are not limited to, the fact that BIOX's results of operations and business outlook are highly dependent on a mix of legislation and producer payment programs and tax credits and upon commodity prices, which are subject to significant volatility and uncertainty. Many factors could cause the actual results, performance or achievements of BIOX to be materially different from any future results, performance or achievements that may be expressed or implied by such forward-looking statements, including factors described in this press release and those discussed in BIOX's publicly available disclosure documents, as filed by BIOX on SEDAR (www.sedar.com) except as updated herein. Should one or more of these risks or uncertainties materialize, or should assumptions underlying the forward-looking statements prove incorrect, actual results may vary materially from those described in this press release as intended, planned, anticipated, believed, estimated or expected. Unless required by applicable securities law, BIOX does not intend and does not assume any obligation to update these forward-looking statements. To the extent any forward-looking statements herein constitute financial outlook, they were approved by management as of the date hereof and have been included to provide an understanding with respect to BIOX's financial performance and are subject to the same risks and assumptions referred to herein. There can be no assurance that the plans, intentions or expectations upon which these forward-looking statements are based will occur and readers are cautioned that any financial outlook information contained in this news release should not be used for purposes other than for which it is disclosed herein.

BIOX Corporation
Condensed consolidated interim statements of comprehensive (loss) income
Three and six month periods ended March 31, 2016 and 2015
(Unaudited)
(Expressed in thousands of Canadian dollars, except share and per share amounts)
				Three months ended		Six months ended
					March 31,		March 31,
				2016	2015	2016	2015
				$	$	$	$
Revenue				21,426	16,067	47,169	43,475
Cost of sales
	Direct expenses			22,268	16,210	41,177	36,748
	Production facility depreciation and amortization			934	956	1,908	1,912
				23,202	17,166	43,085	38,660
Gross margin				(1,776)	(1,099)	4,084	4,815
Operating expenses
	General and administrative			1,263	1,029	2,739	2,181
	Depreciation and amortization of equipment
		and intangible assets		56	54	112	114
	Share-based compensation			144	17	256	40
				1,463	1,100	3,107	2,335
Operating (loss) income				(3,239)	(2,199)	977	2,480
Other expenses
	Financing cost			230	315	467	634
	Gain on revaluation of asset retirement obligation			-	-	(329)	-
	Foreign exchange loss (gain)			402	(498)	527	(441)
				632	(183)	665	193
Net (loss) income before interest income and income taxes				(3,871)	(2,016)	312	2,287
Deferred income tax expense				(1,739)	-	(1,739)	-
Interest income				6	14	16	23
Net (loss) income for the period				(5,604)	(2,002)	(1,411)	2,310
Other comprehensive income (loss)
	Foreign currency translation gain (loss)			23	(96)	57	(184)
Comprehensive (loss) income				(5,581)	(2,098)	(1,354)	2,126
(Loss) Income per common share
	Basic			(0.12)	(0.04)	(0.03)	0.05
	Diluted			(0.12)	(0.04)	(0.03)	0.05
Weighted average number of common
	shares outstanding
	Basic			46,055,164	45,710,967	46,055,164	45,710,967
	Diluted			46,055,164	45,710,967	46,055,164	45,809,685

BIOX Corporation
Condensed consolidated interim statements of changes in equity
Six month periods ended March 31, 2016 and 2015
(Unaudited)
(Expressed in thousands of Canadian dollars, except share and per share amounts)
				Common share capital				Warrant reserve						Accumulated
								Share						other
								purchase				Equity		comprehensive				Total
				Shares		Amount		warrants		Amount		reserve		loss		Deficit		equity
				#		$		#		$		$		$		$		$
Balance, September 30, 2014				45,710,967		167,773		1,982,143		3,151		2,965		(252)		(137,313)		36,324
Share-based compensation				-		-		-		-		40		-		-		40
Expiry of share purchase warrants				-		-		(1,982,143)		(3,151)		-		-		3,151		-
Expiry of share purchase options				-		-		-		-		(641)		-		641		-
Net income				-		-		-		-		-		-		2,310		2,310
Foreign currency translation loss				-		-		-		-		-		(184)		-		(184)
Balance, March 31, 2015				45,710,967		167,773		-		-		2,364		(436)		(131,211)		38,490
Balance, September 30, 2015				46,025,124		168,130		-		-		1,968		(659)		(136,474)		32,965
Share-based compensation				-		-		-		-		256		-		-		256
Share purchase				72,919		46		-		-		(20)		-		-		26
Net income				-		-		-		-		-		-		(1,411)		(1,411)
Foreign currency translation loss				-		-		-		-		-		57		-		57
Balance, March 31, 2016				46,098,043		168,176		-		-		2,204		(602)		(137,885)		31,893

BIOX Corporation
Condensed consolidated interim statements of financial position
As at March 31, 2016 and September 30, 2015
(Unaudited)
(Expressed in thousands of Canadian dollars)
		March 31,		September 30,
		2016		2015
		$		$
Assets
Current assets
	Cash and cash equivalents	7,972		7,709
	Accounts receivable	10,079		3,635
	Prepaid expenses	385		617
	Inventory	2,722		3,086
		21,158		15,047
Restricted cash		-		260
Property, plant and equipment		24,180		26,205
Intangible assets		356		409
Deferred income tax assets		11,484		13,223
		57,178		55,144
Liabilities
Current liabilities
	Accounts payable and other liabilities	8,014		4,687
	Demand Loan	2,250		-
	Current portion of long-term debt	1,500		1,500
	Current portion of finance leases	14		22
	Current portion of provisions	1,411		1,450
		13,189		7,659
Finance leases		-		6
Long-term debt		7,857		8,605
Provisions		4,239		5,909
		25,285		22,179
Equity
Common share capital		168,176		168,130
Equity reserve		2,204		1,968
Accumulated other comprehensive loss		(602)		(659)
Deficit		(137,885)		(136,474)
		31,893		32,965
		57,178		55,144

BIOX Corporation
Condensed consolidated interim statements of cash flows
Six month periods ended March 31, 2016 and 2015
(Unaudited)
(Expressed in thousands of Canadian dollars, except share and per share amounts)
					Six months ended
					March 31,
			2016		2015
			$		$
Operating activities
	Net income		(1,411)		2,310
	Add (less) items not involving cash
		Production facility depreciation and amortization	1,908		1,912
		Depreciation and amortization of equipment and intangible assets	112		114
		Financing costs	281		323
		Provision for unutilized tank storage	-		(178)
		Unrealized foreign exchange gain	-		(1,667)
		Share-based compensation	256		40
		Gain on revaluation of provisions	(329)		-
		Accretion of provisions	159		176
		Deferred income tax asset	1,739		-
			2,715		3,030
	Net change in non-cash working capital balances
		related to operations	(2,338)		(1,695)
			377		1,335
Investing activity
	Purchase of property, plant and equipment		(614)		(291)
	Decrease in restricted cash		260		589
			(354)		298
Financing activities
	Payments on tank lease provision		(762)		-
	Payments on finance leases		(17)		(14)
	Repayment of debt financing		(750)		-
	Proceeds from demand loan		2,250		-
	Issuance of common shares		26		-
	Interest paid		(276)		(321)
			471		(335)
Effect of exchange rate changes on:
	Cash held in foreign currency		(231)		1,482
Net increase in cash and cash equivalents during the period			263		2,780
Cash and cash equivalents, beginning of period			7,709		7,709
Cash and cash equivalents, end of period			7,972		10,489

SOURCE BIOX Corporation

Alan Rickard, CEO, BIOX Corporation, 905-521-8205 ext. 253, [email protected]