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Press release from CNW Group

BIOX Announces 2012 First Quarter Results

Thursday, February 16, 2012

BIOX Announces 2012 First Quarter Results07:00 EST Thursday, February 16, 2012- Fifth Consecutive Quarter of Strong Performance -TSX symbol: BX TORONTO, Feb. 16, 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 first quarter (Q1 2012) financial results for the three-month period ended December 31, 2011, its first reporting period that has been prepared in accordance with the International Financial Reporting Standards (IFRS).HighlightsProduction of methyl esters was 13.4 million litres in Q1 2012 compared to 14.7 million litres in the first quarter of 2011 (Q1 2011)Sales were $28,932,000 in Q1 2012, compared to $26,989,000 in Q1 2011Operating income was $2,453,000 in Q1 2012 compared to $2,327,000 in Q1 2011Operating income prior to non-cash items(1) was $3,503,000 in Q1 2012 compared to $3,335,000 in Q1 2011Operating income prior to non-cash items of $5,106,000 in Q1 2012 for BIOX's operating segment (BIOX Canada Limited and BIOX USA Limited) compared to $4,899,000 in Q1 2011Net income was $1,891,000 in Q1 2012 compared to $1,940,000 in Q1 2011Earnings per share were $0.04 in Q1 2012 and Q1 2011The U.S. Environmental Protection Agency (EPA) confirmed an increase to the minimum volume requirement of biomass-based diesel from 0.8 billion U.S. gallons in 2011 to 1.0 billion U.S. gallons in 2012"Q1 was our fifth consecutive quarter of strong results. With the U.S. biodiesel market mandated to grow by 25 percent in 2012 and the spread remaining strong between the value we receive for our biodiesel and the cost of feedstock, we are delivering consistent performance from our first plant," said Kevin Norton, CEO of BIOX Corporation. "We are proceeding with the planning of our second facility which will be larger than our existing Hamilton plant and will be located within a major transportation fuel hub in the U.S. market. We are now working to finalize commercial terms with the owner of the site for the land lease, tank rentals and terminal services."Financial HighlightsSales were $28.9 million for the three-month period ended December 31, 2011, compared with $27.0 million for the corresponding period last year.  BIOX sold 16.8 million litres of biodiesel during the period compared with 20.9 million litres for the corresponding period in 2010. The increase in sales was primarily due to higher revenue per litre of biodiesel sold, partially offset by $3.5 million in sales that were recognized during the three-month period ended December 31, 2010, but related to fiscal 2010 due to the retroactive reinstatement of the U.S. biodiesel tax incentive.Direct expenses were $23.6 million for the three-month period ended December 31, 2011, compared with $21.8 million for the corresponding period in 2010. The increase in direct expenses was primarily the result of higher cost per litre sold for the three-month period ended December 31, 2011, compared with the same period last year.        General and administrative expenses were $1.6 million for the three-month period ended December 31, 2011, compared with $1.7 million for the same period last year.Operating income was $2.5 million for the three-month period ended December 31, 2011, compared with operating income of $2.3 million for the same period last year.  The increase in operating income was primarily due to higher revenue per litre sold, partially offset by $3.5 million in sales recognized for the three-month period ended December 31, 2010, as discussed above.Operating income prior to non-cash items(1) was $3.5 million for the three-month period ended December 31, 2011, compared with $3.3 million for the same period last year.  The increase in operating income prior to non-cash items was primarily due to higher operating income resulting from higher revenue per litre sold.Combined operating income prior to non-cash items(1) for BIOX's operating segment (BIOX Canada Limited and BIOX USA Limited) was $5.1 million for the three-month period ended December 31, 2011, compared with $4.9 million for the corresponding period last year. The increase was primarily due to higher operating income due to higher revenue per litre sold, as discussed above.Net income and comprehensive income was $1.9 million or $0.04 per common share for both the three-month period ended December 31, 2011, and December 31, 2010.As at December 31, 2011, BIOX's cash balance amounted to $33.3 million, compared with $27.9 million on September 30, 2011. BIOX's working capital balance at December 31, 2011, was $40.1 million compared with $38.8 million at September 30, 2011. BIOX 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, including the construction and commissioning of a second production facility, which will be located in the U.S. and will be larger than its existing Hamilton facility, as detailed in the "Outlook" Expansion Plans section below (subject to certain assumptions which are detailed in BIOX's management's discussion and analysis for the three months ended December 31, 2011).As at December 31, 2011, BIOX had 45,748,691 common shares outstanding, as well as options to purchase up to 1,700,000 common shares, and share purchase warrants to acquire up to 1,982,143 common shares.OutlookU.S. Renewable Fuels Standard Effective July 1, 2010, the expanded RFS2 specifically provides for a renewable component in U.S. diesel fuel. RFS2 requires the use of 1 billion gallons of biomass-based diesel in 2012, an increase of 25% from 0.8 billion U.S. gallons in 2011. From 2012 through 2022, a minimum of 1 billion U.S. gallons must be used domestically each year, and the Administrator of the U.S. Environmental Protection Agency (EPA) has the authority to increase the minimum volume requirement. The EPA has recommended that the minimum volume of biomass-based diesel increase to 1.28 billion U.S. gallons in 2013.BIOX's wholly-owned subsidiaries are registered with the EPA as a Foreign Renewable Fuel Producer (BIOX Canada Limited), and as a Renewable Fuel Importer and RIN Generator (BIOX USA Limited). Registration under RFS2 provides BIOX with access to the U.S. renewable fuels market, including the ability to generate Renewable Identification Numbers (RINs) which are required for obligated parties in the U.S., which includes all refiners and importers of transportation fuel, to show compliance with RFS2. 1.5 RINs are issued per U.S. gallon of biomass-based diesel sold in the U.S.Expansion Plans The increased demand for biodiesel as a result of RFS2 in the U.S. has had a positive impact on pricing. This impact is reflected by the rise in value of RINs, the RFS2 compliance mechanism, 2012 RINs traded at approximately $1.46 as of February 15, 2012. The mandated biomass-based derived diesel minimum volume requirement in the U.S., including the increase to that minimum volume requirement, is an important step in the evolution of a sustainable biodiesel industry.As such, BIOX is proceeding with its planned expansion for a second BIOX facility, which will be located in the U.S. and will be larger than BIOX's existing Hamilton facility. The Company is in the process of finalizing definitive agreements with the owner of the site for the land lease, long term tank rentals and terminal services. This site, which is located within a transportation hub, is consistent with BIOX's strategy of locating 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. BIOX is proceeding with the detailed planning phase of the project, including commencement of the permitting process.U.S. federal excise tax incentive The U.S. federal excise tax incentive, referred to as the biodiesel tax incentive, expired on December 31, 2011. Management believes that any reinstatement of the biodiesel tax incentive will be delayed until the fall of 2012 and that it is possible the program will not be reinstated at all. In management's view the incentive was critical to the formation of the industry prior to the implementation of the mandate in order to generate sufficient supply to fulfill the minimum volume requirements. Management believes that with the mandate now in place and working, RFS2 establishes clear minimum volume levels that the obligated parties are required to meet. As such, the industry is in a much stronger position than it was in 2010; however uncertainty surrounding the renewal of the biodiesel tax incentive could cause short term pricing volatility. BIOX intends to monitor the situation closely over the coming months as the impact of the expiry of the incentive on the value of RINs and the production utilization in the U.S. becomes clearer.Canadian Renewable Fuel Content Regulations In August 2010, the Canadian federal government enacted regulations that require an average renewable fuel content to be blended into gasoline, diesel fuel and heating oil. The compliance period for the 5% renewable content requirement in gasoline is December 15, 2010 to December 31, 2012. The compliance period for the 2% renewable fuel content requirement in diesel fuel and heating oil is July 1, 2011 to December 31, 2012. BIOX's biodiesel qualifies as renewable content and can therefore be used to comply with the program obligations. These minimum volume requirements bring the Canadian biodiesel blending mandates more closely in line with the U.S. market and its expanded RFS2 regulation, and provide clarity for Canadian diesel refineries and importers that BIOX believes will ultimately drive new demand for biodiesel in Canada. 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 these Canadian regulations significantly increases the accessible market for BIOX's product in Canada, which supports its expansion plans.Employee RelationsAlthough none of BIOX's operations are subject to collective bargaining agreements, on February 1, 2012 the Communications, Energy and Paperworkers Union of Canada was certified as the bargaining agent of employees of BIOX Canada Limited in the City of Hamilton, Ontario. Management does not currently expect this unionization of its workforce to have a material adverse effect on its business and financial results.Notice of Conference CallBIOX will hold a conference call today, February 16, 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 (647) 427-7450 or (888) 231-8191. To access the telephone replay, dial (416) 849-0833 or (855) 859-2056 and enter reservation number 50182386. 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 MeasuresThe following table presents a reconciliation of operating income prior to non-cash items to net loss for the three-month periods ended December 31, 2011 and 2010:(in thousands)  Three months endedDecember       2011   2010           $         $Operating income (loss) before non-cash items  3,503   3,335Deduct: Production facility depreciation and amortization  (855)   (810)  Depreciation and amortization of furniture, equipment and intangible assets  (102)   (99)  Stock-based compensation  (93)   (99)Operating income  2,453   2,327Other income and expenses  (562)   (387)Net income  1,891   1,940About 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 StatementsCertain 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 income       three month periods ended December 31, 2011 and 2010       (Unaudited)         (Expressed in thousands of Canadian dollars, except share and per share amounts)                2011    2010          $     $               Revenue  28,932    26,989              Cost of sales         Direct expenses  23,587    21,841  Production facility depreciation and amortization  855    810       24,442    22,651        Gross margin  4,490    4,338              Operating expenses         General and administrative  1,586    1,679  Depreciation and amortization of furniture, equipment and intangible assets  102    99  Stock-based compensation  93    99  Expansion planning and development  256    134         2,037    2,011              Operating income  2,453    2,327              Other expenses         Financing cost  355    232  Loss on foreign exchange  272    195         627    427              Net income before interest income  1,826    1,900Interest income  65    40Net income and comprehensiveincome for the period  1,891    1,940              Earnings per common share         Basic  0.04    0.04  Diluted  0.04    0.04              Weighted average number of common shares outstanding         Basic    45,748,691      45,748,691  Diluted    45,790,770      45,748,691                       BIOX Corporation                      Condensed consolidated statements of changes in equity                three month periods ended December 31, 2011 and 2010                                  (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)  69,582Vesting of stock options -  -  -  99  -  99Net income for the period -  -  -  -  1,940  1,940Balance, December 31, 2010  45,748,691  167,787  3,151  1,295  (100,612)  71,621                        Balance, October 1, 2011  45,748,691  167,787  3,151  1,991  (93,685)  79,244Vesting of stock options -  -  -  93  -  93Net income for the period -  -  -  -  1,891  1,891Balance, December 31, 2011  45,748,691  167,787   3,151   2,084   (91,794)  81,228                                            BIOX Corporation     Condensed consolidated statements of financial position    as at December 31, 2011, September 30, 2011 and October 1, 2010  (Unaudited)     (Expressed in thousands of Canadian dollars)                  December 31,   September 30,   October 1,        2011  2011 2010        $   $   $             Assets     Current assets       Cash33,263  27,887 21,470  Accounts receivable10,544  9,535 3,475  Prepaid expenses747  953 984  Inventory8,818  13,539 13,752       53,372  51,914 39,681            Restricted cash-  - 1,173Property, plant and equipment, net44,468  44,129 46,750Intangible assets, net1,143  1,176 1,308Deferred income tax assets9,371  9,354 -       108,354  106,573 88,912            Liabilities      Current liabilities       Accounts payable and other liabilities7,805  6,959 6,024  Demand loan3,860  4,957 -  Current portion of long-term debt1,500  1,125 1,380  Current portion of finance leases63 63 63       13,228  13,104 7,467            Finance lease59  75 138Long-term debt11,054  11,429 9,666Provisions2,785  2,721 2,059       27,126  27,329 19,330            Equity     Common share capital167,787  167,787 167,787Warrants3,151  3,151 3,151Equity reserve2,084  1,991 1,196Deficit(91,794) (93,685) (102,552)       81,228 79,244 69,582       108,354  106,573 88,912                 BIOX Corporation       Condensed consolidated statements of cash flows       three month periods ended December 31, 2011 and 2010    (Unaudited)       (Expressed in thousands of Canadian dollars, except share and per share amounts)            2011     2010         $      $               Operating activities         Net income for the period 1,891     1,940  Add items not involving cash           Depreciation and amortization of property,             plant and equipment and intangible assets 957     909    Net interest expense and other financing charges 189     176    Unrealized foreign exchange (gain) loss (144)    7    Stock-based compensation 93     99    Accretion of asset retirement obligation 64     51        3,050     3,182                Net change in non-cash working capital balances            related to operations 4,488     (4,382)        7,538     (1,200)              Investing activity         Purchase of property, plant and equipment (1,005)    (611)              Financing activities         Payments on finance leases (16)    (16)  Repayment of debt financing -     (345)  Interest paid (188)    (166)  Payments on demand loan (1,097)    -        (1,301)    (527)              Effect of exchange rate changes on cash held in foreign currency 144     (7)              Net increase (decrease) in cash during the period 5,376     (2,345)Cash, beginning of period 27,887     21,470Cash, end of period 33,263     19,125              Supplemental cash flow information         Restricted cash -     1,173       For further information: BIOX Corporation Chris Clinning Executive Vice President & CFO Phone: (905) 337-4970 E-mail: cclinning@bioxcorp.com Investor Relations Ross Marshall TMX Equicom Phone: (416) 815-0700 ext. 238 E-mail: rmarshall@equicomgroup.com