BIOX Announces Fourth Quarter Results
/EINPresswire.com/ -- TORONTO, ONTARIO -- (Marketwired) -- 12/10/15 -- BIOX Corporation (BIOX) (TSX: BX), a renewable energy company, today announced its fiscal 2015 fourth quarter (Q4 2015) financial results for the three-month and twelve-month periods ended September 30, 2015.
Highlights
-- Sales were $18,368,000 and $75,352,000 in Q4 and YTD 2015, respectively,
compared to $17,724,000 and $67,547,000 in Q4 and YTD 2014
-- Operating loss was $2,843,000 and $777,000 in Q4 and YTD 2015,
respectively compared to $2,245,000 and $14,664,000 in Q4 and YTD 2014
-- Operating loss prior to non-cash items(1) was $1,767,000 in Q4 2015
compared to operating income of $1,132,000 in Q4 2014. Operating income
prior to non-cash items(1) was $1,221,000 in YTD 2015 compared to
operating loss prior to non-cash items(1) of $4,979,000 in YTD 2014.
-- Net loss was $4,345,000 in Q4 2015 compared to net income of $1,433,000
in Q4 2014. Net loss was $3,041,000 in YTD 2015 compared to $26,692,000
in YTD 2014.
-- Loss per share was $0.09 in Q4 2015 compared to net income per share of
$0.04 in Q4 2014. Loss per share was $0.07 in YTD 2015 compared to $0.58
in YTD 2014.
-- EPA proposes increased Biomass-based diesel Renewable Volume Obligation
through 2017
-- Revenue and net income upside related to the potential retroactive
reinstatement of the biodiesel tax incentive is approximately US
$4,800,000 at September 30, 2015
Commenting on operating results for the fourth quarter, CEO Alan Rickard said: "Our Q4 2015 results were under pressure due to a margin compression between feedstock values and finished products. Biodiesel prices were depressed through the quarter due to weak energy commodity values and policy uncertainty surrounding the status of the Blender Tax Credit ("BTC") and the mandate levels from the Renewable Fuels Standard ("RFS2") in the US. Despite challenging operating conditions, BIOX maintained a strong cash balance and we anticipate the passage of the BTC at some point in the current quarter. Further, the recent announcement on November 30, 2015 from the EPA setting the mandate levels for bio-mass based diesel for 2014-2017 in the U.S. gives us a positive outlook for 2016."
Financial Highlights
Sales were $18.4 million and $75.4 million for the three-month and twelve-month periods ended September 30, 2015, respectively, compared with $17.7 million and $67.5 million for the corresponding periods last year. The increase in sales for the three-month period ended September 30, 2015 was primarily due to a 22% increase in biodiesel litres sold, offset by a 7% decrease in biodiesel revenue per litre compared with the corresponding period in 2014. The increase in sales for the twelve-month period was primarily due to the recognition of approximately US$6.5 million of revenue related to the retroactive reinstatement of the biodiesel tax incentive on December 19, 2014.
Direct expenses were $19.1 million and $69.5 million for the three-month and twelve-month periods ended September 30, 2015, respectively, compared with $17.8 million and $67.4 million for the corresponding periods last year. The increase in direct expenses for the three-month period was primarily due to a 22% increase in litres of biodiesel sold.
General and administrative expenses were $1.1 million and $4.6 million, respectively, including $0.1 million in charges related to management restructuring, for the three-month and twelve-month periods ended September 30, 2015, compared with $1.1 million and $5.1 million in the corresponding periods last year. The decrease in general and administrative expenses in 2015 compared to 2014 is due to cost cutting initiatives implemented throughout 2014.
Operating loss was $2.8 million and $0.8 million for the three-month and twelve-month periods ended September 30, 2015, compared with $2.2 million and $14.7 million for the corresponding periods in Q4 2014. The increased operating loss for the three-month period ended September 30, 2015 compared with Q4 2014 was primarily due to the lower gross margins achieved in 2015 compared with the corresponding period in 2014. The decreased operating loss for the twelve-month period ended September 30, 2015 compared with the corresponding period in 2014 was primarily due to the $2.2 million decrease to the tank lease provision and the recognition of approximately US$6.5 million of revenue during the three-month period ended December 31, 2014 related to the retroactive reinstatement of the biodiesel tax incentive on December 19, 2014.
Operating loss prior to non-cash items was $1.8 million for the three-month period ended September 30, 2015, compared to $1.1 million in Q4 2014. Operating income prior to non-cash items was $1.2 million for the twelve-month period ended September 30, 2015 compared with an operating loss prior to non-cash items of $5.0 million for the corresponding period in 2014. The increased operating income prior to non-cash items for the twelve-month period ended September 30, 2015 compared with the corresponding period in 2014 was primarily due to the $2.2 million decrease to the tank lease provision and the recognition of approximately US$6.5 million of revenue during the three-month period ended December 31, 2014 related to the retroactive reinstatement of the biodiesel tax incentive on December 19, 2014.
Net loss was $4.3 million or ($0.09) per share for the three-month period ended September 30, 2015 compared with net income of $1.4 million or $0.04 per share in Q4 2014. Net loss for the twelve-month period ended September 30, 2015 was $3.0 million or ($0.07) per share compared with a net loss of $26.7 million or ($0.58) per share in for the corresponding period in 2014. The improvement in net income for the three-month and twelve-month periods ended September 30, 2015 compared with the corresponding periods in 2014 are due to the factors discussed above under operating loss and operating loss prior to non-cash items, as well as the recognition of a $15.2 million asset impairment charge during the twelve-month period ended September 30, 2014.
As at September 30, 2015, BIOX's available cash position amounted to $7.7 million, which consisted of cash and cash equivalents and short-term investments, compared with $7.2 million at September 30, 2014. Working capital as of September 30, 2015 was $7.4 million compared with $8.4 million at September 30, 2014. The Company believes that its future cash flow from operations combined with its current financial resources should be sufficient to enable BIOX to meet its ongoing requirements for capital expenditures and working capital requirements.
As at September 30, 2015 and December 9, 2015, the Company had 46,025,124 common shares outstanding, as well as outstanding stock options to purchase up to 962,919 common shares.
Outlook
On November 30, 2015, the EPA announced its final RVO proposal for Biomass-based diesel for 2014 through 2017. This final announcement of the RVO levels is an important signal for the sustainability of the biodiesel industry in the U.S. Biomass-based diesel 2015 RINs traded at approximately $0.80 (or $1.20 per U.S. gallon) as of December 8th, 2015.
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 twelve-month period ended September 30, 2015 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 Quebec and the Atlantic provinces.
On December 3, 2014, the U.S. House of Representatives voted overwhelmingly to pass a package of tax incentives retroactively for 2014, including the $1.00 per U.S. gallon biodiesel tax incentive which was subsequently passed by the U.S. Senate on December 16, 2014 and signed into law by the President of the United States on December 19, 2014. The reinstatement of the biodiesel tax incentive allowed us to collect approximately US$6.5 million in refundable tax credits from our customers and the U.S. Internal Revenue Service related to sales to our customers during calendar 2014. The U.S. biodiesel tax incentive expired for the fourth time on December 31, 2014 and the industry is awaiting clarity on the incentive for 2015. Uncertainty surrounding the renewal of the biodiesel tax incentive could cause continued short term confusion in the market and pricing volatility. As in prior years, retroactive reinstatement of the U.S. biodiesel tax incentive would allow us to recognize additional revenue and profitability related to sales to our customers during calendar 2015. At September 30, 2015, the value that could be recognized upon retroactive reinstatement of the U.S. tax incentive for 2015 was approximately US$4.8 million, although there are no assurances that the incentive will be renewed retroactively for 2015 in a manner consistent with prior years or at all.
BIOX continues to pursue growth strategies that would expand its business through increasing the volume of biodiesel it produces, controls and distributes in strategic locations throughout North America.
(1) Note: Non-IFRS Measures. Operating (loss) income prior to non-cash items is defined as operating income or loss less production facility depreciation and amortization, and less depreciation and amortization of furniture, equipment and intangibles and share-based compensation. Management uses this measurement to monitor the operating cash flow of BIOX's business and believes this information is useful supplemental information to a reader of financial statements. This measurement may not be comparable to similar measures presented by other issuers. Investors are cautioned that operating income (loss) prior to non-cash items should not be construed as an alternative to net (loss) income determined in accordance with IFRS as an indicator of BIOX's performance.
Reconciliation of Non-IRFS Measures
The following table presents a reconciliation of operating (loss) income prior to non-cash items to net (loss) income for the three-months and twelve-months ended September 30, 2015 and 2014:
(in thousands) Three months ended Twelve months ended
September 30 September 30
2015 2014 2015 2014
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$ $ $ $
Operating (loss) income before
non-cash items (1,767) (1,132) 1,221 (4,979)
Deduct:
Production facility depreciation
and amortization (991) (1,040) (3,864) (4,132)
Depreciation and amortization of
equipment and intangible assets (56) (52) (229) (323)
Share-based compensation (29) (21) (89) (231)
Recovery of (provision for)
unutilized tank storage - - 2,184 (4,999)
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Operating loss (2,843) (2,245) (777) (14,664)
Deferred income tax (expense)
recovery (1,359) 4,105 (1,359) 4,105
Impairment of non-current assets - - - 15,197
Financing cost, foreign exchange
(loss) gain, and interest income (143) (427) (905) (936)
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Net (loss) income (4,345) 1,433 (3,041) (26,692)
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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, the potential retroactive reinstatement of the U.S. biodiesel tax incentive for 2015, and the significance of sales under the supply agreement with Shell. 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
Consolidated statements of comprehensive (loss) income
years ended September 30
(Expressed in thousands of Canadian dollars, except share and per share
amounts)
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Three months ended Twelve months ended
September 30, September 30,
--------------------------------------------
2015 2014 2015 2014
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$ $ $ $
Revenue 18,368 17,724 75,352 67,547
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Cost of sales
Direct expenses 19,076 17,791 69,543 67,426
Production facility
depreciation and amortization 991 1,040 3,864 4,132
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20,067 18,831 73,407 71,558
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Gross (loss) margin (1,699) (1,107) 1,945 (4,011)
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Operating expenses
General and administrative 1,059 1,065 4,588 5,100
Depreciation and amortization
of equipment and intangible
assets 56 52 229 323
Share-based compensation 29 21 89 231
Expansion planning and
development - - (2,184) 4,999
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1,144 1,138 2,722 10,653
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Operating loss (2,843) (2,245) (777) (14,664)
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Other expenses
Impairment of non-current
assets - - - 15,197
Financing cost 266 317 1,211 1,240
Foreign exchange gain (101) 127 (254) (204)
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165 444 957 16,233
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Net loss before interest income
and income taxes (3,008) (2,689) (1,734) (30,897)
Deferred income tax (expense)
recovery (1,359) 4,105 (1,359) 4,105
Interest income 22 17 52 100
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Net (loss) income for the year (4,345) 1,433 (3,041) (26,692)
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Other comprehensive loss
Foreign currency translation
loss (146) (170) (407) (161)
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Comprehensive (loss) income (4,491) 1,263 (3,448) (26,853)
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(Loss) income per common share
Basic and diluted (0.10) 0.04 (0.07) (0.58)
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Weighted average number of
common shares outstanding
Basic and diluted 45,744,628 45,710,967 45,744,628 45,717,889
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BIOX Corporation
Consolidated statements of changes in equity
years ended September 30
(Expressed in thousands of Canadian dollars)
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Common share capital Warrant reserve
---------------------------------------------------
Share
purchase
Shares Amount warrants Amount
----------------------------------------------------------------------------
# $ # $
Balance, October 1, 2013 45,748,691 167,787 1,982,143 3,151
Share-based compensation - - - -
Forfeiture of options - - - -
Share cancellation (37,724) (14) - -
Net loss - - - -
Foreign currency
translation loss - - - -
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Balance, September 30,
2014 45,710,967 167,773 1,982,143 3,151
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Balance, October 1, 2014 45,710,967 167,773 1,982,143 3,151
Share-based compensation - - - -
Expiry of share purchase
warrants - - (1,982,143) (3,151)
Expiry of share purchase
options - - - -
Forfeiture of options - - - -
Share purchase 314,157 357 - -
Net loss - - - -
Foreign currency
translation loss - - - -
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Balance, September 30,
2015 46,025,124 168,130 - -
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Accumulated
other
Equity comprehensive Total
reserve loss Deficit equity
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$ $ $ $
Balance, October 1, 2013 2,926 (91) (110,813) 62,960
Share-based compensation 231 - - 231
Forfeiture of options (192) - 192 -
Share cancellation - - - (14)
Net loss - - (26,692) (26,692)
Foreign currency
translation loss - (161) - (161)
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Balance, September 30,
2014 2,965 (252) (137,313) 36,324
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Balance, October 1, 2014 2,965 (252) (137,313) 36,324
Share-based compensation 89 - - 89
Expiry of share purchase
warrants - - 3,151 -
Expiry of share purchase
options (642) - 642 -
Forfeiture of options (87) - 87 -
Share purchase (357) - - -
Net loss - - (3,041) (3,041)
Foreign currency
translation loss - (407) - (407)
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Balance, September 30,
2015 1,968 (659) (136,474) 32,965
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BIOX Corporation
Consolidated statements of financial position
as at September 30
(Expressed in thousands of Canadian dollars)
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2015 2014
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$ $
Assets
Current assets
Cash and cash equivalents 7,709 7,212
Accounts receivable 3,635 2,621
Prepaid expenses 617 665
Inventory 3,086 7,078
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15,047 17,576
Restricted cash 260 1,309
Property, plant and equipment 26,205 29,458
Intangible assets 409 515
Deferred income tax assets 13,223 14,381
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55,144 63,239
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Liabilities
Current liabilities
Accounts payable and other liabilities 4,687 6,028
Current portion of long-term debt 1,500 1,125
Current portion of finance leases 22 29
Current portion of provisions 1,450 2,010
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7,659 9,192
Finance leases 6 28
Long-term debt 8,605 9,727
Provisions 5,909 7,968
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22,179 26,915
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Equity
Common share capital 168,130 167,773
Warrants reserve - 3,151
Equity reserve 1,968 2,965
Accumulated other comprehensive loss (659) (252)
Deficit (136,474) (137,313)
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32,965 36,324
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55,144 63,239
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BIOX Corporation
Consolidated statements of cash flows
years ended September 30
(Expressed in thousands of Canadian dollars)
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2015 2014
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$ $
Operating activities
Net loss (3,041) (26,692)
Add items not involving cash
Production facility depreciation and amortization 3,864 4,132
Depreciation and amortization of equipment and
intangible assets 229 323
Financing costs 621 722
(Recovery of) provision for unutilized tank
storage (2,023) 3,682
Impairment of non-current assets - 15,197
Unrealized foreign exchange gain - (356)
Share-based compensation 89 231
Accretion of asset retirement obligation 352 322
Deferred income tax asset 1,359 (4,105)
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1,450 (6,544)
Net change in non-cash working capital balances
related to operations 964 1,553
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2,414 (4,991)
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Investing activities
Purchase of property, plant and equipment (637) (2,151)
Decrease in restricted cash 1,049 491
Share repurchase - (14)
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412 (1,674)
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Financing activities
Payments on tank lease provision (1,915) -
Payments on finance leases (29) (34)
Repayment of debt financing (750) (1,500)
Interest paid (618) (693)
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(3,312) (2,227)
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Effect of exchange rate changes on:
Cash held in foreign currency 983 195
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Net increase (decrease) in cash and cash equivalents
during the year 497 (8,697)
Cash and cash equivalents, beginning of year 7,212 15,909
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Cash and cash equivalents, end of year 7,709 7,212
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Contacts:
BIOX Corporation
Alan Rickard
CEO
905-521-8205 ext. 253
arickard@bioxcorp.com
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