BIOX Announces Third Quarter Results

TSX symbol: BX

TORONTO, Aug. 8, 2012 /CNW/ - BIOX Corporation (BIOX) (TSX: BX), a renewable energy company that designs, builds, owns and operates biodiesel production facilities, today announced its fiscal 2012 third quarter (Q3 2012) financial results for the three-month period ended June 30, 2012.

Highlights

• Production of methyl esters was 15.4 million litres in Q3 2012 compared to 15.2 million litres in fiscal 2011 third quarter (Q3 2011)
• Sales were $10,119,000 in Q3 2012 compared to $24,490,000 in Q3 2011
• Operating loss was $2,748,000 in Q3 2012 compared to $2,100,000 in Q3 2011
• Operating loss prior to non-cash items⁽¹⁾ was $1,585,000 in Q3 2012 compared to $954,000 in Q3 2011
• Net loss was $3,274,000 in Q3 2012 compared to $2,381,000 in Q3 2011
• Loss per share was $0.07 in Q3 2012 compared to $0.05 in Q3 2011
• Signed definitive agreements with International-Matex Tank Terminals (IMTT) to secure the site and related infrastructure to construct a 100 million litre per annum nameplate biodiesel production facility within the IMTT terminal in Bayonne, New Jersey

"Our Hamilton facility continues to operate within our target production range and we have entered the detailed planning phase for our new facility under construction in New York Harbor," said Kevin Norton, CEO of BIOX Corporation. "However, the broader biodiesel market in the U.S. remains under considerable pressure due to a decline in the heating oil rack rate, reflecting lower oil prices, and thin trading in the separated RIN market. We continue to believe these issues are short term in nature and that pricing and RIN trading volumes will improve. Within this context, we sold only 8.7 million litres of biodiesel in fiscal Q3, and essentially all that product was sold RIN-less, as we inventory the separated RINs for sale at a later date. We will continue to monitor the market and manage our inventory levels as appropriate. While increased inventories of product and RINs impact our short term results, we believe this strategy places us in a stronger position to earn optimal value once the broader biodiesel market improves."

Financial Highlights

Sales were $10.1 million and $52.8 million, respectively, for the three-month and nine-month periods ended June 30, 2012, compared with $24.5 million and $74.3 million for the corresponding periods in 2011. The 59% decrease in sales for the three-month period ended June 30, 2012 was primarily the result of the 47% decrease in litres of biodiesel sold in addition to lower revenue per litre sold.

Direct expenses were $10.3 million and $45.4 million, respectively, for the three-month and nine-month periods ended June 30, 2012, compared with $22.0 million and $64.8 million for the corresponding periods in 2011.  The change in direct expenses for the three-month and nine-month periods ended June 30, 2012 was primarily the result of lower sales volume and lower cost per litre sold on sales of RINless biodiesel.

General and administrative expenses were $1.4 million and $4.5 million, respectively, for the three-month and nine-month periods ended June 30, 2012, compared with $1.7 million and $5.4 million for the corresponding periods in 2011.

Operating loss was $2.7 million and $1.3 million, respectively, for the three-month and nine-month periods ended June 30, 2012, compared with $2.1 million and $1.0 million for the corresponding periods in 2011.

Operating loss prior to non-cash items was $1.6 million for the three-month period ended June 30, 2012, compared to $1.0 million for the same period last year. Operating income prior to non-cash items was $2.1 million for the nine-month period ended June 30, 2012, compared to $2.2 million in the same period last year.

Combined operating income (loss) prior to non-cash items for BIOX's wholly-owned subsidiaries, BIOX Canada Limited and BIOX USA Limited, was $(0.3) million and $6.8 million, respectively, for the three-month and nine-month periods ended June 30, 2012, compared with $2.3 million and $9.0 million for the corresponding periods in 2011.

Net loss and comprehensive loss was $3.3 million or $0.07 per share and $2.7 million or $0.06 per share, respectively, for the three-month and nine-month periods ended June 30, 2012, compared with $2.4 million or $0.05 per share and $2.3 million or $0.05 per share for the corresponding periods in 2011.

As at June 30, 2012, BIOX's available cash position amounted to $16.4 million, which consisted of cash and cash equivalents and short-term investments, compared with $27.9 million on September 30, 2011. Working capital as of June 30, 2012, was $32.4 million. The Company believes that its future cash flow from operations combined with its current financial resources and debt financing should be sufficient to enable BIOX to meet its ongoing requirements for capital expenditures and working capital requirements, including the construction and commissioning of a 100 million litre per annum production facility in Bayonne, New Jersey at an estimated cost of $60 million (subject to certain assumptions which are detailed in the Company's management's discussion and analysis for the three and nine months ended June 30, 2012).

As at June 30, 2012, the Company had 45,748,691 common shares outstanding, as well as outstanding stock options to purchase 1,700,000 common shares and share purchase warrants to acquire up to 1,982,143 common shares.

Outlook

Expansion Plans

In June, BIOX signed definitive agreements with IMTT to secure the site and related infrastructure for the construction of its second biodiesel production facility. BIOX's second facility will have a 100 million litre capacity per annum, 50 percent larger than its existing facility in Hamilton, Ontario. The new facility will be located within the IMTT terminal in Bayonne, New Jersey, at New York Harbor. The agreements include a long term land lease agreement for the plant as well as long term leases on existing storage tanks at IMTT.

The site, which is located within a major petroleum distribution hub, is consistent with BIOX's strategy to locate its facilities adjacent to large scale petroleum storage and diesel distribution infrastructure and users of petroleum diesel and blenders of biodiesel in order to minimize transportation costs to them.

The estimated cost of the facility is $60 million which includes the core process area, infrastructure, utilities, engineering and indirect cost. IMTT will provide the primary storage assets for feedstock and all finished goods under a long term lease agreement.

Although the biodiesel market weakened during the first half of calendar 2012, management continues to believe that the issues negatively impacting the value of biodiesel reflect a maturing market and it remains confident that these issues will be resolved in the coming months. Supporting this view is the recommendation from the U.S. Environmental Protection Agency (EPA) to increase the minimum volume of biomass-based diesel to 1.28 billion U.S. gallons in 2013. With 2012 RINs trading at approximately $1.10 as of August 7, 2012, BIOX will continue to monitor the fundamentals of the biodiesel market, while proceeding with the detailed planning phase of the project, including commencement of the permitting process. BIOX's current estimate for the date of completion of the facility for commissioning is December 2013.

On June 21, 2012, BIOX Bayonne LLC was incorporated in New Jersey as a subsidiary of BIOX USA Limited. BIOX intends to register BIOX Bayonne with the U.S. EPA as a registered producer of Renewable Fuel and RIN Generator.

BIOX believes that its future cash flow from operations combined with its current financial resources and debt financing should be sufficient to enable it to construct and commission the second BIOX facility. As part of its expansion plans, BIOX is actively pursuing additional potential locations for future facilities, which involves consideration of a number of criteria including availability of infrastructure and service providers, potential strategic partnerships, logistics and other market factors.

Glycerin Refinement Project

All major equipment for the glycerin refinement system is now on site.  Piping and electrical installations activities and system tie-ins to the Hamilton Plant are ongoing. The scheduled date for completion of the glycerin refinement project is August 2012, approximately two months behind the original scheduled completion by end of Q3 2012.  Completion of the project will enable BIOX to increase the quality of the approximately 9.4 million pounds of glycerin that produced annually as a by-product of biodiesel production.  The current glycerin by-product from the Hamilton plant has limited market applications and limited market value. Upon completion of the project the Company will be capable of producing technical grade glycerin at the Hamilton facility. Technical grade glycerin is used in a variety of industrial applications, and currently carries a wholesale market value of approximately $0.30 to $0.40 per pound.

Notice of Conference Call

BIOX will hold a conference call today, August 8, 2012, at 9:00 a.m. ET hosted by Mr. Kevin Norton, Chief Executive Officer, and Mr. Chris Clinning, Executive Vice President and Chief Financial Officer, to discuss BIOX'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 12172620. A live audio webcast of the call will be available at www.bioxcorp.com. The webcast will be archived for 90 days.

¹⁾ 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 amortization of furniture, equipment and intangibles. 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 income (loss) determined in accordance with IFRS as an indicator of BIOX's performance.

Reconciliation of Non-IRFS Measures

The following table presents a reconciliation of operating income (loss) prior to non-cash items to net income (loss) for the three-month and nine-month periods ended June 30, 2012 and 2011:

(in thousands)			Three months ended June				Nine months ended June
			2012		2011		2012		2011
			$		$		$		$
Operating (loss) income before non-cash items			(1,585)		(952)		2,072		2,210
Deduct:	Production facility depreciation and amortization		(900)		(817)		(2,638)		(2,440)
	Depreciation and amortization of furniture, equipment and intangible assets		(89)		(98)		(287)		(296)
	Stock-based compensation		(174)		(233)		(461)		(496)
Operating (loss)income			(2,748)		(2,100)		(1,314)		(1,022)
Other (expenses) and income			(526)		(281)		(1,345)		(1,259)
Net (loss)income			(3,274)		(2,381)		(2,659)		(2,281)

About BIOX Corporation

BIOX is a renewable energy company that designs, builds, owns and operates biodiesel production facilities. BIOX currently owns and operates a biodiesel production facility in Hamilton, Ontario, Canada with a nameplate capacity of 67 million litres per year. 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. BIOX is Canada's largest biodiesel producer and is focused on building, owning and operating a network of commercial scale biodiesel production facilities in jurisdictions where clearly defined renewable fuel standards policies exist.

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. 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.

Financial results included below:

BIOX Corporation Condensed consolidated statements of comprehensive loss Three and nine month periods ended June 30, 2012 and 2011 (Unaudited) (Expressed in thousands of Canadian dollars, except share and per share amounts)
			Three months ended				Nine months ended
			June 30,				June 30,
			2012		2011		2012		2011
			$		$		$		$
Revenue			10,119		24,490		52,757		74,341
Cost of sales
	Direct expenses		10,253		22,003		45,403		64,802
	Production facility depreciation and amortization		900		817		2,638		2,440
			11,153		22,820		48,041		67,242
Gross margin			(1,034)		1,670		4,716		7,099
Operating expenses
	General and administrative		1,446		1,741		4,513		5,425
	Depreciation and amortization of furniture, equipment and intangible assets		89		98		287		296
	Share-based compensation		174		233		461		496
	Expansion planning and development		5		1,698		769		1,904
			1,714		3,770		6,030		8,121
Operating loss			(2,748)		(2,100)		(1,314)		(1,022)
Other expenses
	Financing cost		294		218		908		678
	Loss on foreign exchange		297		120		638		720
			591		338		1,546		1,398
Finance income			65		57		201		139
Net loss and comprehensive loss for the period			(3,274)		(2,381)		(2,659)		(2,281)
Loss per common share
	Basic		(0.07)		(0.05)		(0.06)		(0.05)
	Diluted		(0.07)		(0.05)		(0.06)		(0.05)
Weighted average number of common shares outstanding
	Basic		45,748,691		45,748,691		45,748,691		45,748,691
	Diluted		45,816,082		45,748,691		45,816,082		45,748,691

BIOX Corporation Condensed consolidated statements of changes in equity Nine month periods ended June 30, 2012 and 2011 (Unaudited) (Expressed in thousands of Canadian dollars, except share and per share amounts)
		Attributable to owners of the parent
		Common share capital						Equity				Total
		Shares		Amount		Warrants		reserve		Deficit		equity
		#		$		$		$		$		$
Balance, October 1, 2010		45,748,691		167,787		3,151		1,196		(102,552)		69,582
Vesting of stock options		-		-		-		496		-		496
Net loss for the period		-		-		-		-		(2,281)		(2,281)
Balance, June 30, 2011		45,748,691		167,787		3,151		1,692		(104,833)		67,797
Balance, October 1, 2011		45,748,691		167,787		3,151		1,991		(93,685)		79,244
Vesting of stock options		-		-		-		461		-		461
Net loss for the period		-		-		-		-		(2,659)		(2,659)
Balance, June 30, 2012		45,748,691		167,787		3,151		2,452		(96,344)		77,046

 

BIOX Corporation Condensed consolidated statements of financial position As at June 30, 2012 and September 30, 2011 (Unaudited) (Expressed in thousands of Canadian dollars)
			June 30, 2012		September 30, 2011
			$		$
Assets
Current assets
	Cash and cash equivalents		16,359		27,887
	Accounts receivable		3,916		9,535
	Prepaid expenses		3,362		953
	Inventory		23,097		13,539
			46,734		51,914
Property, plant and equipment, net			47,421		44,129
Intangible assets, net			1,077		1,176
Deferred income tax assets			9,372		9,354
			104,604		106,573
Liabilities
Current liabilities
	Accounts payable and other liabilities		7,845		6,959
	Demand loan		4,907		4,957
	Current portion of long-term debt		1,500		1,125
	Current portion of finance leases		69		63
			14,321		13,104
Finance lease			19		75
Long-term debt			10,306		11,429
Provisions			2,912		2,721
			27,558		27,329
Equity
Common share capital			167,787		167,787
Warrants			3,151		3,151
Equity reserve			2,452		1,991
Deficit			(96,344)		(93,685)
			77,046		79,244
			104,604		106,573

 

 

 

BIOX Corporation Condensed consolidated statements of cash flows Nine month periods ended June 30, 2012 and 2011 (Unaudited) (Expressed in thousands of Canadian dollars, except share and per share amounts)
							Nine months ended June 30,
							2012		2011
							$		$
Operating activities
	Net loss for the period						(2,659)		(2,281)
	Add items not involving cash
		Depreciation and amortization of property, plant and equipment and intangible assets					2,925		2,736
		Net interest expense and  other financing charges					550		516
		Unrealized foreign exchange (gain) loss					(7)		340
		Share-based compensation					461		496
		Accretion of asset retirement obligation					190		154
		Write off of site specific costs					-		1,700
							1,460		3,661
	Net change in non-cash working capital balances related to operations						(6,792)		556
							(5,332)		4,217
Investing activity
	Purchase of property, plant and equipment						(4,806)		(1,366)
Financing activities
	Payments on finance leases						(41)		(47)
	Repayment of debt financing						(750)		(1,035)
	(Repayment of) proceeds from demand loan						(50)		4,180
	Interest paid						(556)		(484)
							(1,397)		2,614
Effect of exchange rate changes on cash held in foreign currency							7		(340)
Net (decrease) increase in cash during the period							(11,528)		5,125
Cash and cash equivalents, beginning of period							27,887		21,470
Cash and cash equivalents, end of period							16,359		26,595
Supplemental cash flow information
	Restricted cash						-		1,173

 

 

SOURCE: BIOX Corporation

BIOX Corporation
Chris Clinning
Executive Vice President & CFO
Phone: [phone]
E-mail: [email protected]

Investor Relations
Ross Marshall
TMX Equicom
Phone: [phone] ext. 238
E-mail: [email protected]