Viridis Energy Reports Full Year and Fourth Quarter 2013 Financial
Company Reports 46% Year-Over-Year and 147% Quarter-Over-Quarter
Revenue Growth
VANCOUVER, BRITISH COLUMBIA--(Marketwired - Apr 16, 2014) -
Viridis Energy Inc. ("Viridis" or the "Company")
(OTCQX:VRDSF)(TSX-VENTURE:VRD) a "Cleantech" manufacturer and
distributor of renewable energy providing waste biomass fuel to
global residential and industrial markets, today reported financial
results for its full year and fourth quarter ended December 31,
2013. Viridis reported full year 2013 revenues of $13.9 million, an
increase of $4.4 million or 46% over 2012 of $9.5 million. The
year-over-year improvement reflects strengthened market dynamics,
including improved pricing, increased demand in Europe, and the
achievement of production capacity goals at the Company's Okanagan
Pellet plant, coupled with the addition of production from the
Company's new Scotia Atlantic Biomass facilities.
Viridis anticipates continued momentum in 2014 due to the
significant developments achieved in 2013:
- Commenced wood pellet production at end of third quarter 2013
at its 120,000 ton capacity, facility, which is expected to reach
full production capacity later this year;
- Entered into a worldwide marketing agreement with Ekman &
Co AB., one of the world's oldest trading houses and wholesalers of
forest products, for its entire wood pellet production over a 24
month period, which expires August 2015;
- In its first month of launch (December 2013), arranged its
first transaction of approximately 30,000 tons of wood pellets from
a Southeastern U.S. producer, which are to be delivered over a
12-month period to customers in Europe, generating $8 million in
incremental revenue for Viridis during the delivery period and
subsequent to year end an additional 12,000 tons generating over
$2.5 million was announced;
- Restructured $5.7 million of debt with Cornwall Investments LLC
into two new facilities and, subsequent to year end, refinanced one
of the two facilities with the Royal Bank of Canada at a more
favorable interest rate;
- During the second quarter 2013, secured $5 million in a private
placement of new equity.
"We have delivered four sequential growth quarters during 2013
and the company is well positioned for a breakout year in 2014,"
commented Christopher Robertson, Viridis' CEO. "Our Okanagan plant
achieved full capacity with record margins, and in September 2013
we commenced shipments from our new plant in Nova Scotia, which we
anticipate will reach full operating capacity in the second half of
2014. Additionally, we have established an important avenue for
additional growth, Viridis Merchants, enabling us to accommodate
commercial orders incremental to our own production capacity."
The Company reported 2013 gross profit of $2.0 million or 14.4%
of revenue, which compares to gross profit of $1.1 million or 11.7%
of revenue in 2012. Management expects Scotia's gross margin to
improve as its volume builds towards full capacity.
For the full year ended December 31, 2013, Viridis reported a
comprehensive loss of $(3.3) million or $(0.03) per basic share.
This compares to a comprehensive loss of $(9.5) million or $(0.19)
per basic share in 2012, which included $5.8 million write downs of
impairment of intangible assets and non-refundable deposit. The
Company reported a loss from operations of $(2.7) million in 2013
compared to a loss from operations of $(2.9) million in the prior
year.
Full year 2013 operating expenses increased to $4.7 million from
$4.0 million in 2012; however, as a percent of revenue, these costs
were down significantly, decreasing from 41.9% in 2012 to 33.7% in
2013. The year-over-year increases in operating expenses were
primarily attributed to the costs of resuming production and full
staffing of Scotia's operations.
During the fourth quarter 2013, Viridis generated revenue of
$6.1 million, an increase of 147% compared to $2.5 million in the
fourth quarter 2012 and a 100% improvement over the third quarter
of 2013. The Company expects revenue growth to continue as Scotia
moves closer to production capacity. Viridis reported a
comprehensive loss of $(1.3) million or $(0.01) per basic share for
the fourth quarter 2013, compared to a comprehensive loss of $(6.7)
million or $(0.19) per basic share for the same period in 2012,
which included an impairment of intangible assets of $5.5 million
and a write down of nonrefundable deposit of $250,000. This also
compares to a comprehensive loss of $(712,000) or $(0.01) per basic
and diluted share for third quarter 2013.
The Company reported a gross profit of $615,000 for the fourth
quarter of 2013 compared to $409,000 for the same period in 2012
and $595,000 for third quarter of this year. The fourth quarter
2013 gross margin was negatively impacted by the commencement of
the Scotia facility that has operated below full capacity during
its startup phase, which was offset by strong performance from the
Okanagan plant. Operating loss for 2013 fourth quarter totaled
$(1.2) million versus $(860,000) for the prior year fourth quarter
and $(602,000) for the third quarter 2013.
At December 31, 2013, the Company reported cash and cash
equivalents of $1.6 million, accounts receivable of $1.3 million,
and inventory of $927,000. The Company's current ratio stood was
1.2x at the year-end 2013, a significant increase over the prior
year level of 0.2x. At year-end, Viridis had short-term debt of
$158,000 and long term debt of $6.2 million as a result of the debt
restructuring completed during the first quarter of 2013, extending
the maturity of $5.7 million of formerly short term liabilities.
The Company's shareholder equity totaled $3.5 million on December
31, 2013, an increase of $2.1 million over year-end 2012.
On December 31, 2013, Viridis common stock outstanding totaled
114.3 million shares, compared to 59.8 million at year-end 2012.
The increase in the Company's share count was primarily due to the
$5 million, non-brokered, private placement that was closed during
second quarter 2013 adding 50 million shares of common stock.
Subsequent to year-end, on March 31, 2014, Cornwall Investments LLC
("Cornwall") exercised 25,000,000 of its Viridis common share
purchase warrants at a price of $0.15 per share, generating
proceeds of $3.75 million. Consequently, as of today, Viridis
outstanding shares total 138,451,883 with fully diluted shares of
149,527,369, inclusive of all options (average exercise price of
$0.27) and warrants (average exercise price $0.22). As of December
31, 2013, the Company has tax loss carry forwards of approximately
C$17.5 million, which expire between 2029 and 2033.
"According to industry sources, the annual, global demand for
wood pellets is expected to more than double over the next 7 years
to $9 billion due to a combination of increased use, regulatory
mandates and economics. With current demand exceeding current
supply, we have made a number of important strategic moves over the
past three years to position ourselves to become an important
source of renewable energy. Logistically, we have located our
manufacturing on both North American coasts, providing us with
solid, stable supply of fiber feedstock and optimum port access to
ship into the rapidly growing international markets. We have
diversified our business model to not only supply the high-end,
residential heat market with a premium white pellet, but also to
supply the industrial market, both on a global scale. We have
successfully completed two acquisitions and have a proven track
record for quick, successful turnarounds. Our Scotia Atlantic
acquisition will triple our annual in-house production over the
next year. We also now have the ability to further supplement our
production with cooperative transactions through Viridis
Merchants," commented Robert Aaron, Viridis newly appointed
chairman.
"We have brought together a management team with a long industry
track record, supported by a seasoned board of directors, who have
identified opportunities to increase Viridis' current supply of
wood pellets from an aggregated 220,000 tons to over 1 million tons
by the end of 2015. Having recently fortified our balance sheet, we
are in a strong position to act on opportunities to grow through
expansion of existing facilities, production aggregation via
Viridis Merchants or tuck-in acquisitions."
About Viridis Energy
Inc.
Viridis Energy Inc. (TSX-VENTURE:VRD) is a publicly traded,
"Cleantech" alternative energy company specializing in the
agricultural and wood waste biomass. Located in Vancouver, B.C.,
Viridis Energy Inc. operates Viridis Merchants Inc. and Viridis
Merchants (Canada) Ltd.., Okanagan Pellet Company Inc. and Scotia
Atlantic Biomass Company Limited, thus providing the Company with
vertical integration for distribution and manufacturing as well as
coast to coast national presence. For more information on Viridis
Energy Inc. please refer to the company website at
www.viridisenergy.ca.
Except for "per share" amounts, monetary and share
information contained in this news release is rounded to the
nearest thousandth.
Forward-looking Statements:
Certain of the statements made in this news release may
contain forward-looking statements within the meaning of the United
States Securities Exchange Act of 1934 and forward-looking
information within the meaning of applicable Canadian securities
law. Forward-looking statements and forward-looking information
include, but are not limited to, statements or information with
respect to anticipated future revenue growth and gross margin
increases, the expected timing for achieving profitability,
anticipated future production levels and the projected production
capabilities of the recently acquired manufacturing capacity in
Nova Scotia. Such statements are subject to risks and uncertainties
that may cause actual results, performance or developments to
differ materially from those contained in the statements. No
assurance can be given that any of the events anticipated by the
forward-looking statements will occur or, if they do occur, what
benefits the Company will obtain from them. These forward-looking
statements reflect management's current views and are based on
certain expectations, estimates and assumptions which may prove to
be incorrect. A number of risks and uncertainties could cause our
actual results to differ materially from those expressed or implied
by the forward-looking statements, including: (1) a continued
downturn in general economic conditions in North America and
internationally, (2) a change in the European mandate for renewable
energy, (3) a revision to the UK's DECC renewable obligation, (4) a
sharp increase in ocean freight costs, (5) the inherent
uncertainties associated with the demand for biofuels, (6) the risk
that the Company does not execute its business plan, (7) inability
to finance operations and growth (8) inability to finance the
start-up operations in Nova Scotia in a timely manner (9) inability
to retain key management and employees, (10) an increase in the
number of competitors with larger resources, and (11) other factors
beyond the Company's control. These forward-looking statements are
made as of the date of this news release and the Company does not
intend to update such forward looking information unless required
to do so by applicable laws. Additional information about these and
other assumptions, risks and uncertainties are set out in the
"Risks and Uncertainties" section in the Company's MD&A filed
with Canadian securities regulators.
Neither the 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.
*** Financial
Statements Follow ***
|
VIRIDIS ENERGY INC. |
CONSOLIDATED STATEMENTS OF FINANCIAL
POSITION |
(Expressed in Canadian Dollars) |
|
|
|
December 31, |
December 31, |
|
|
|
2013 |
|
|
|
2012 |
|
ASSETS |
|
|
|
|
|
|
|
|
Current Assets: |
|
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
1,594,246 |
|
|
$ |
413,570 |
|
|
Accounts receivable |
|
|
1,275,959 |
|
|
|
753,208 |
|
|
Inventory |
|
|
926,933 |
|
|
|
594,012 |
|
|
Prepaid expenses |
|
|
546,917 |
|
|
|
225,761 |
|
|
Due from related parties |
|
|
- |
|
|
|
54,000 |
|
|
|
Total Current Assets |
|
|
4,344,055 |
|
|
|
2,040,551 |
|
|
|
|
|
|
|
|
|
|
Property, plant and equipment |
|
|
9,045,376 |
|
|
|
8,264,488 |
|
|
|
Total Assets |
|
$ |
13,389,431 |
|
|
$ |
10,305,039 |
|
|
|
|
|
|
|
|
|
|
LIABILITIES & SHAREHOLDERS' EQUITY |
|
|
|
|
|
|
|
|
Current Liabilities: |
|
|
|
|
|
|
|
|
|
Bank line of credit |
|
$ |
- |
|
|
$ |
2,992,832 |
|
|
Accounts payable and accrued liabilities |
|
|
3,329,868 |
|
|
|
2,924,127 |
|
|
Deferred income |
|
|
196,595 |
|
|
|
157,058 |
|
|
Short term loan payable |
|
|
- |
|
|
|
2,606,875 |
|
|
Due to related parties |
|
|
44,373 |
|
|
|
164,670 |
|
|
Current portion of loans payable |
|
|
113,529 |
|
|
|
19,646 |
|
|
|
Total Current Liabilities |
|
|
3,684,365 |
|
|
|
8,865,208 |
|
|
|
|
|
|
|
|
|
|
Long-term Liabilities: |
|
|
|
|
|
|
|
|
|
Loan payables |
|
|
6,198,921 |
|
|
|
- |
|
|
|
Total Liabilities |
|
|
9,883,286 |
|
|
|
8,865,208 |
|
|
|
|
|
|
|
|
|
|
Shareholders' Equity (deficit) |
|
|
|
|
|
|
|
|
|
Share capital |
|
$ |
27,322,578 |
|
|
$ |
22,537,578 |
|
|
Contributed surplus |
|
|
3,446,376 |
|
|
|
2,861,376 |
|
|
Accumulated deficit |
|
|
(27,262,809 |
) |
|
|
(23,959,123 |
) |
|
|
Total Stockholders' Equity |
|
|
3,506,145 |
|
|
|
1,439,831 |
|
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY |
|
$ |
13,389,431 |
|
|
$ |
10,305,039 |
|
|
|
VIRIDIS ENERGY INC. |
CONSOLIDATED STATEMENTS OF LOSS AND
TOTAL COMPREHENSIVE LOSS |
(Expressed in Canadian Dollars,
except number of shares and per share amounts) |
|
|
|
|
Three Months Ended December 31, |
|
|
Year Ended December 31, |
|
|
|
|
2013 |
|
|
2012 |
|
|
2013 |
|
|
2012 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales |
|
$ |
6,103,087 |
|
$ |
2,479,411 |
|
$ |
13,918,816 |
|
$ |
9,548,177 |
|
Cost of Sales |
|
|
5,488,251 |
|
|
2,070,750 |
|
|
11,907,838 |
|
|
8,435,305 |
|
Gross profit |
|
|
614,836 |
|
|
408,661 |
|
|
2,010,978 |
|
|
1,112,872 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling and marketing |
|
|
99,692 |
|
|
49,904 |
|
|
242,826 |
|
|
167,385 |
|
|
Freight-out |
|
|
393,121 |
|
|
41,466 |
|
|
451,375 |
|
|
167,492 |
|
|
General and administrative |
|
|
741,806 |
|
|
401,717 |
|
|
3,463,857 |
|
|
2,891,816 |
|
|
Maintenance and start-up cost for Scotia facility |
|
|
534,586 |
|
|
775,999 |
|
|
534,586 |
|
|
775,999 |
|
|
|
Total operating expenses |
|
|
1,769,205 |
|
|
1,269,086 |
|
|
4,692,644 |
|
|
4,002,692 |
|
Loss before other items |
|
|
(1,154,369 |
) |
|
(860,425 |
) |
|
(2,681,666 |
) |
|
(2,889,820 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other items: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign exchange loss |
|
|
(944 |
) |
|
(11,318 |
) |
|
(1,742 |
) |
|
(19,712 |
) |
|
Disposal of property, plant and equipment |
|
|
- |
|
|
- |
|
|
2,821 |
|
|
- |
|
|
Impairment of intangible assets and goodwill |
|
|
- |
|
|
(5,541,990 |
) |
|
- |
|
|
(5,541,990 |
) |
|
Write-down of non-refundable deposit |
|
|
- |
|
|
(250,000 |
) |
|
- |
|
|
(250,000 |
) |
|
Finance expense |
|
|
(151,193 |
) |
|
(107,232 |
) |
|
(484,174 |
) |
|
(751,858 |
) |
|
Accretion expense |
|
|
(41,613 |
) |
|
- |
|
|
(138,925 |
) |
|
(86,668 |
) |
|
|
|
(193,750 |
) |
|
(5,910,540 |
) |
|
(622,020 |
) |
|
(6,650,228 |
) |
Loss before income taxes recovered |
|
|
(1,348,119 |
) |
|
(6,770,965 |
) |
|
(3,303.686 |
) |
|
(9,540,048 |
) |
Income taxes recovered |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
Net loss and total comprehensive loss |
|
$ |
(1,348,119 |
) |
$ |
(6,770,965 |
) |
$ |
(3,303.686 |
) |
$ |
(9,540,048 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss per share Basic and diluted |
|
$ |
(0.01 |
) |
$ |
(0.19 |
) |
$ |
(0.03 |
) |
$ |
( 0.19 |
) |
Weighted average number of common shares outstanding
Basic and diluted |
|
|
114,298,883 |
|
|
49,861,479 |
|
|
97,611,212 |
|
|
49,861,479 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investor Contact:Grannus Financial Advisors, Inc.Yvonne L.
ZappullaManaging
Director212-681-4108Yvonne@GrannusFinancial.comCompany
Contact:Viridis Energy Inc.Michele RebiereChief Financial
Officer905-847-5226investorinfo@viridisenergy.ca
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