TORONTO, ONTARIO--(Marketwired - Dec. 10, 2015) - 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 Québec 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 September 30 |
Twelve months ended September 30 |
|||||||
2015 | 2014 | 2015 | 2014 | ||||||
$ | $ | $ | $ | ||||||
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 | ) | ||||
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 | ) | |
Net (loss) income | (4,345 | ) | 1,433 | (3,041 | ) | (26,692 | ) |
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) |
Three months ended | Twelve months ended | ||||||||
September 30, | September 30, | ||||||||
2015 | 2014 | 2015 | 2014 | ||||||
$ | $ | $ | $ | ||||||
Revenue | 18,368 | 17,724 | 75,352 | 67,547 | |||||
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 | |||||
20,067 | 18,831 | 73,407 | 71,558 | ||||||
Gross (loss) margin | (1,699 | ) | (1,107 | ) | 1,945 | (4,011 | ) | ||
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 | ||||
1,144 | 1,138 | 2,722 | 10,653 | ||||||
Operating loss | (2,843 | ) | (2,245 | ) | (777 | ) | (14,664 | ) | |
Other expenses | |||||||||
Impairment of non-current assets | - | - | - | 15,197 | |||||
Financing cost | 266 | 317 | 1,211 | 1,240 | |||||
Foreign exchange gain | (101 | ) | 127 | (254 | ) | (204 | ) | ||
165 | 444 | 957 | 16,233 | ||||||
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 | |||||
Net (loss) income for the year | (4,345 | ) | 1,433 | (3,041 | ) | (26,692 | ) | ||
Other comprehensive loss | |||||||||
Foreign currency translation loss | (146 | ) | (170 | ) | (407 | ) | (161 | ) | |
Comprehensive (loss) income | (4,491 | ) | 1,263 | (3,448 | ) | (26,853 | ) | ||
(Loss) income per common share | |||||||||
Basic and diluted | (0.10 | ) | 0.04 | (0.07 | ) | (0.58 | ) | ||
Weighted average number of common shares outstanding | |||||||||
Basic and diluted | 45,744,628 | 45,710,967 | 45,744,628 | 45,717,889 |
BIOX Corporation |
Consolidated statements of changes in equity |
years ended September 30 |
(Expressed in thousands of Canadian dollars) |
Common share capital | Warrant reserve | |||||||||||||||
Shares |
Amount |
Share purchase warrants |
Amount |
Equity reserve |
Accumulated other comprehensive loss |
Deficit |
Total equity |
|||||||||
# | $ | # | $ | $ | $ | $ | $ | |||||||||
Balance, October 1, 2013 | 45,748,691 | 167,787 | 1,982,143 | 3,151 | 2,926 | (91 | ) | (110,813 | ) | 62,960 | ||||||
Share-based compensation | - | - | - | - | 231 | - | - | 231 | ||||||||
Forfeiture of options | - | - | - | - | (192 | ) | - | 192 | - | |||||||
Share cancellation | (37,724 | ) | (14 | ) | - | - | - | - | - | (14 | ) | |||||
Net loss | - | - | - | - | - | - | (26,692 | ) | (26,692 | ) | ||||||
Foreign currency translation loss | - | - | - | - | - | (161 | ) | - | (161 | ) | ||||||
Balance, September 30, 2014 | 45,710,967 | 167,773 | 1,982,143 | 3,151 | 2,965 | (252 | ) | (137,313 | ) | 36,324 | ||||||
Balance, October 1, 2014 | 45,710,967 | 167,773 | 1,982,143 | 3,151 | 2,965 | (252 | ) | (137,313 | ) | 36,324 | ||||||
Share-based compensation | - | - | - | - | 89 | - | - | 89 | ||||||||
Expiry of share purchase warrants | - | - | (1,982,143 | ) | (3,151 | ) | - | - | 3,151 | - | ||||||
Expiry of share purchase options | - | - | - | - | (642 | ) | - | 642 | - | |||||||
Forfeiture of options | - | - | - | - | (87 | ) | - | 87 | - | |||||||
Share purchase | 314,157 | 357 | - | - | (357 | ) | - | - | - | |||||||
Net loss | - | - | - | - | - | - | (3,041 | ) | (3,041 | ) | ||||||
Foreign currency translation loss | - | - | - | - | - | (407 | ) | - | (407 | ) | ||||||
Balance, September 30, 2015 | 46,025,124 | 168,130 | - | - | 1,968 | (659 | ) | (136,474 | ) | 32,965 |
BIOX Corporation |
Consolidated statements of financial position |
as at September 30 |
(Expressed in thousands of Canadian dollars) |
2015 | 2014 | ||||
$ | $ | ||||
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 | |||
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 | |||
55,144 | 63,239 | ||||
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 | |||
7,659 | 9,192 | ||||
Finance leases | 6 | 28 | |||
Long-term debt | 8,605 | 9,727 | |||
Provisions | 5,909 | 7,968 | |||
22,179 | 26,915 | ||||
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 | ) | |
32,965 | 36,324 | ||||
55,144 | 63,239 |
BIOX Corporation |
Consolidated statements of cash flows |
years ended September 30 |
(Expressed in thousands of Canadian dollars) |
2015 | 2014 | |||||
$ | $ | |||||
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 | ) | |||
1,450 | (6,544 | ) | ||||
Net change in non-cash working capital balances related to operations | 964 | 1,553 | ||||
2,414 | (4,991 | ) | ||||
Investing activities | ||||||
Purchase of property, plant and equipment | (637 | ) | (2,151 | ) | ||
Decrease in restricted cash | 1,049 | 491 | ||||
Share repurchase | - | (14 | ) | |||
412 | (1,674 | ) | ||||
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 | ) | ||
(3,312 | ) | (2,227 | ) | |||
Effect of exchange rate changes on: | ||||||
Cash held in foreign currency | 983 | 195 | ||||
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 | ||||
Cash and cash equivalents, end of year | 7,709 | 7,212 |
Contact Information:
Alan Rickard
CEO
905-521-8205 ext. 253
arickard@bioxcorp.com