BIOX announces third quarter results

TSX symbol: BX

TORONTO, Aug. 12, 2013 /CNW/ - BIOX Corporation (BIOX) (TSX: BX), a renewable energy company that owns and operates Canada's largest biodiesel production facility, today announced its fiscal 2013 third quarter (Q3 2013) financial results for the three-month and nine-month periods ended June 30, 2013.

Highlights

• Production of methyl esters was 14.7 million litres in Q3 2013 compared to 15.4 million litres in the third quarter of fiscal 2012 (Q3 2012)
• Sales were $19,256,000 in Q3 2013 compared to $10,119,000 in Q3 2012
• Operating loss was $1,806,000 in Q3 2013 compared to $2,748,000 in Q3 2012
• Operating income (loss) prior to non-cash items⁽¹⁾ was $463,000 in Q3 2013 compared to $(1,585,000) in Q3 2012
• Operating income (loss) prior to non-cash items of $2,130,000 in Q3 2013 for BIOX's operating segment (BIOX Canada Limited and BIOX USA Limited) compared to $(332,000) in Q3 2012
• Net loss was $2,084,000 in Q3 2013 compared to $3,208,000 in Q3 2012
• Loss per share was $0.05 in Q3 2013 compared to $0.07 in Q3 2012

"The construction of the inter-terminal pipeline between our Hamilton facility and Shell Canada Limited's distribution terminal is ahead of schedule. We expect the project to be completed within the month and sales to commence shortly thereafter," said Kevin Norton, Chief Executive Officer of BIOX. "We believe that this supply agreement could consume a significant portion of our Hamilton production in time. In the broader biodiesel market, biodiesel and RIN values have improved throughout 2013, which is reflected in our sales this quarter. The supply agreement, together with the improvement in market values, has strengthened our underlying fundamentals as a quality supplier and partner within the industry."

Financial Highlights

Sales were $19.3 million and $50.2 million, respectively, for the three-month and nine-month periods ended June 30, 2013, compared with $10.1 million and $52.8 million for the corresponding periods in 2012. The 90% increase in sales for the three-month period ended June 30, 2013, was primarily the result of the 56% increase in litres of biodiesel sold in addition to higher revenue per litre sold. The 5% decrease in sales for the nine-month period ended June 30, 2013, was primarily due to a lower volume of biodiesel produced and sold in 2013 due to the temporary shutdown of the Hamilton facility, from October 25, 2012 through to the beginning of February, 2013, partially offset by higher revenue per litre sold and the recognition of US$7.8 million in refundable tax credits related to the reinstatement of the biodiesel tax incentive and the alternative fuel credit in the U.S. earlier this year.

Direct expenses were $16.9 million and $40.0 million, respectively, for the three-month and nine-month periods ended June 30, 2013, compared with $10.3 million and $45.4 million for the corresponding periods in 2012.  The increase in direct expenses for the three-month period ended June 30, 2013 was primarily due to a higher volume of biodiesel sold during the period. The decrease in direct expenses for the nine-month period was primarily the result of lower production and sales volume due to the temporary shutdown of the Hamilton facility.

General and administrative expenses were $1.3 million and $4.1 million, respectively, for the three-month and nine-month periods ended June 30, 2013, compared with $1.4 million and $4.5 million for the corresponding periods in 2012.

Operating loss was $1.8 million and $0.8 million, respectively, for the three-month and nine-month periods ended June 30, 2013, compared with $2.7 million and $1.3 million for the corresponding periods in 2012. The 2013 operating loss included a $1.0 million provision in Expansion plan and development cost for the estimated net cost to BIOX for unutilized tank storage available for sublease.

Operating income (loss) prior to non-cash items was $0.5 million and $3.8 million, respectively, for the three-month and nine-month periods ended June 30, 2013, compared to $(1.6) million and $2.1 million in the corresponding periods last year. The increase during the third quarter was primarily due to improved margins on the sale of biodiesel due to higher revenue per litre sold partially offset by higher direct cost of sales per litre sold. The increase for the nine-month period was due to the US$7.8 million collected in refundable tax credits, partially offset by losses related to lower production and sales volume due to the temporary shutdown of the Hamilton facility, both of which are mentioned above.

Combined operating income (loss) prior to non-cash items for BIOX's wholly-owned subsidiaries, BIOX Canada Limited and BIOX USA Limited, was $2.1 million and $9.5 million, respectively, for the three-month and nine-month periods ended June 30, 2013, compared with $(0.3) million and $6.8 million for the corresponding periods in 2012.

Net loss was $2.1 million or $0.05 per share and $1.8 million or $0.04 per share, respectively, for the three-month and nine-month periods ended June 30, 2013, compared with $3.2 million or $0.07 per share and $2.5 million or $0.05 per share for the corresponding periods in 2012.

As at June 30, 2013, BIOX's available cash position amounted to $13.8 million, which consisted of cash and cash equivalents and short-term investments, compared with $7.5 million on September 30, 2012. Working capital as of June 30, 2013, was $19.7 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.

As at June 30, 2013, the Company had 45,748,691 common shares outstanding, as well as outstanding stock options to purchase 2,225,000 common shares and share purchase warrants to acquire up to 1,982,143 common shares.

Outlook

The North American biodiesel market has strengthened throughout calendar 2013. Values overall have improved significantly during the last few months from the lows they reached in late 2012. Management believes this improvement is due to the 28 percent increase in the expanded Renewable Fuel Standard (RFS2) minimum use requirement for 2013, with another increase anticipated for 2014, and the implementation of the biodiesel portion of the Canadian Renewable Fuel Content Regulations. 2013 RINs (Renewable Identification Numbers) traded at approximately $0.80 (or $1.20 per U.S. gallon) on August 9, 2013, compared to approximately $0.56 (or $0.84 per U.S. gallon) in early December 2012.

On, March 27, 2013, BIOX announced an agreement to supply biodiesel to Shell Canada Limited (Shell Canada) by an inter-terminal pipeline from our Hamilton plant to Shell Canada.  BIOX's Hamilton plant is located immediately adjacent to the Shell distribution terminal which allows for a pipeline to be installed connecting the two facilities, and provides the most efficient logistics for procuring renewable content.

Both parties are near completion on their respective construction activities connecting the two facilities.  BIOX management anticipates that the project will be completed later this month, ahead of schedule, and that sales under this agreement will commence prior to the end of August 2013.

While BIOX continues to be the largest producer of biodiesel in Canada, it currently sells nearly all of its product into the U.S. market. The implementation of the Canadian regulations and the supply agreement with Shell Canada significantly increases the accessible market for BIOX's product in Ontario.

Management believes that in time, the supply of biodiesel under this agreement has the potential to become a significant portion of BIOX's Hamilton production as the implementation of an Ontario mandate occurs, and as the Canadian Renewable Fuel Content Regulations extend eastward into Quebec and the Atlantic Provinces.

Management remains confident that the definitive regulatory structures now in place in both Canada and the United States are an important step in the evolution of a sustainable biodiesel industry in North America. The Company intends to expand its business through increasing the volume of biodiesel it produces, controls and distributes in strategic locations.

Notice of Conference Call

BIOX will hold a conference call today, August 12, 2013, 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 22321818. 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 depreciation and 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, 2013 and 2012:

(in thousands)		Three months ended June 30		Nine months ended June 30
		2013	2012	2013	2012
		$	$	$	$
Operating income(loss) before non-cash items		463	(1,585)	3,754	2,072
Deduct:	Production facility depreciation and amortization	(1,047)	(900)	(3,002)	(2,638)
	Depreciation and amortization of equipment and intangible assets	(92)	(89)	(282)	(287)
	Share-based compensation	(97)	(174)	(269)	(461)
	Provision for unutilized tank storage	(1,033)	-	(1,033)	-
Operating loss		(1,806)	(2,748)	(832)	(1,314)
Other income and expenses		(278)	(460)	(995)	(1,191)
Net loss		(2,084)	(3,208)	(1,827)	(2,505)

About BIOX Corporation
BIOX is a renewable energy company that owns and operates Canada's largest biodiesel production facility, 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.

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, the impact of the extension of the biodiesel tax incentive in 2013, BIOX's long-term expectations for the biodiesel market in light of current market conditions and anticipated completion of the fuel pipeline and commencement of sales there from. 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 interim statements of comprehensive loss
Three and nine month periods ended June 30, 2013 and 2012
(Unaudited)
(Expressed in thousands of Canadian dollars, except share and per share amounts)
				Three months ended June 30,				Nine months ended June 30,
				2013		2012		2013		2012
				$		$		$		$
Revenue				19,256		10,119		50,209		52,757
Cost of sales
	Direct expenses			16,949		10,253		40,041		45,403
	Production facility depreciation and amortization			1,047		900		3,002		2,638
				17,996		11,153		43,043		48,041
Gross margin				1,260		(1,034)		7,166		4,716
Operating expenses
	General and administrative			1,294		1,446		4,138		4,513
	Depreciation and amortization of equipment and intangible assets			92		89		282		287
	Share-based compensation			97		174		269		461
	Expansion planning and development			1,583		5		3,309		769
				3,066		1,714		7,998		6,030
Operating loss				(1,806)		(2,748)		(832)		(1,314)
Other expenses
	Financing cost			292		294		947		908
	Foreign exchange (gain) loss			(7)		231		93		484
				285		525		1,040		1,392
Net loss before interest income and income taxes				(2,091)		(3,273)		(1,872)		(2,706)
Income tax expense				-		-		(18)		-
Interest income				7		65		63		201
Net loss for the period				(2,084)		(3,208)		(1,827)		(2,505)
Other comprehensive income (loss)
	Foreign currency translation gain (loss)			48		(66)		(90)		(154)
Comprehensive loss				(2,036)		(3,274)		(1,917)		(2,659)
Loss per common share
	Basic			(0.05)		(0.07)		(0.04)		(0.05)
	Diluted			(0.05)		(0.07)		(0.04)		(0.05)
Weighted average number of common shares outstanding
	Basic			45,748,691		45,748,691		45,748,691		45,748,691
	Diluted			45,956,548		45,816,082		45,956,548		45,816,082

 

BIOX Corporation
Condensed consolidated interim statements of changes in equity
Nine month periods ended June 30, 2013 and 2012
(Unaudited)
(Expressed in thousands of Canadian dollars, except share and per share amounts)
				Common share capital
				Shares		Amount		Warrants  reserve		Equity   reserve		Accumulated  other  comprehensive  income (loss)		Deficit		Total   equity
				#		$		$		$		$		$		$
Balance, September 30, 2011				45,748,691		167,787		3,151		1,991		206		(93,891)		79,244
Share-based compensation				-		-		-		461		-		-		461
Net loss				-		-		-		-		-		(2,505)		(2,505)
Foreign currency translation loss				-		-		-		-		(154)		-		(154)
Balance, June 30, 2012				45,748,691		167,787		3,151		2,452		52		(96,396)		77,046
Balance, September 30, 2012				45,748,691		167,787		3,151		2,559		20		(107,972)		65,545
Share-based compensation				-		-		-		269		-		-		269
Net loss				-		-		-		-		-		(1,827)		(1,827)
Foreign currency translation loss				-		-		-		-		(90)		-		(90)
Balance, June 30, 2013				45,748,691		167,787		3,151		2,828		(70)		(109,799)		63,897

 

BIOX Corporation
Condensed consolidated interim statements of financial position
As at June 30, 2013 and September 30, 2012
(Unaudited)
(Expressed in thousands of Canadian dollars)
				June 30,		September 30,
				2013		2012
				$		$
Assets
Current assets
	Cash and cash equivalents			13,768		7,543
	Accounts receivable			3,694		2,472
	Prepaid expenses			774		2,785
	Inventory			9,403		15,317
				27,639		28,117
Restricted cash				2,200		6,942
Property, plant and equipment				46,944		47,678
Intangible assets				946		1,044
Deferred income tax assets				9,551		9,499
				87,280		93,280
Liabilities
Current liabilities
	Accounts payable and other liabilities			6,366		7,970
	Demand loan			-		5,282
	Current portion of long-term debt			1,500		1,500
	Current portion of finance leases			37		69
				7,903		14,821
Finance leases				40		7
Long-term debt				11,223		9,932
Provisions				4,217		2,975
				23,383		27,735
Equity
Common share capital				167,787		167,787
Warrants reserve				3,151		3,151
Equity reserve				2,828		2,559
Accumulated other comprehensive (loss) income				(70)		20
Deficit				(109,799)		(107,972)
				63,897		65,545
				87,280		93,280

 

BIOX Corporation
Condensed consolidated interim statements of cash flows
Nine month periods ended June 30, 2013 and 2012
(Unaudited)
(Expressed in thousands of Canadian dollars, except share and per share amounts)
				Nine months ended  June 30,
				2013		2012
				$		$
Operating activities
	Net loss			(1,827)		(2,505)
	Add (less) items not involving cash
		Production facility depreciation and amortization		3,002		2,638
		Depreciation and amortization of equipment and intangible assets		282		287
		Financing costs		605		550
		Provision for unutilized tank storage		1,033		-
		Income taxes paid		18		-
		Unrealized foreign exchange gain		(458)		(161)
		Share-based compensation		269		461
		Accretion of asset retirement obligation		209		190
				3,133		1,460
	Net change in non-cash working capital balances related to operations			6,560		(6,792)
				9,693		(5,332)
Investing activity
	Purchase of property, plant and equipment			(3,984)		(4,806)
	Decrease in restricted cash			4,742		-
				758		(4,806)
Financing activities
	Payments on finance leases			(33)		(41)
	Proceeds from debt financing			2,415		-
	Repayment of debt financing			(1,125)		(750)
	Repayment of demand loan			(5,282)		(50)
	Financing charges			(2)		-
	Interest paid			(568)		(556)
				(4,595)		(1,397)
Effect of exchange rate changes on cash held in foreign currency				369		7
Net increase (decrease) in cash and cash equivalents during the period				6,225		(11,528)
Cash and cash equivalents, beginning of period				7,543		27,887
Cash and cash equivalents, end of period				13,768		16,359

 

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]