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Press release from CNW Group

BIOX announces 2013 second quarter results

Thursday, May 09, 2013

BIOX announces 2013 second quarter results

07:00 EDT Thursday, May 09, 2013

TSX symbol: BX

TORONTO, May 9, 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 second quarter (Q2 2013) financial results for the three-month and six-month periods ended March 31, 2013.

Highlights

  • Production of methyl esters was 10.6 million litres in Q2 2013, due to the temporary suspension of production that commenced in October 2012 with production subsequently resuming on February 2, 2013, compared to 14.9 million litres in the second quarter of 2012 (Q2 2012)
  • Retroactive reinstatement of the U.S. biodiesel tax incentive and alternative fuel credit results in recognition of US$7.8 million of revenue related to sales to our customers in calendar 2012
  • Sales were $21,478,000 in Q2 2013, compared to $13,706,000 in Q2 2012
  • Operating income was $5,808,000 in Q2 2013 compared to an operating loss of $1,019,000 in Q2 2012
  • Operating income prior to non-cash items(1) was $7,037,000 in Q2 2013 compared to an operating income prior to non-cash items of $153,000 in Q2 2012
  • Operating income prior to non-cash items of $8,575,000 in Q2 2013 for BIOX's operating segment (BIOX Canada Limited and BIOX USA Limited) compared to an operating income prior to non-cash items of $1,966,000 in Q2 2012
  • Net income was $5,402,000 in Q2 2013 compared to net loss of $1,276,000 in Q2 2012
  • Earnings per share was $0.12 in Q2 2013 compared with a loss per share of $0.03 Q2 2012
  • Joint development project established with Shell Canada Limited to construct a supply chain to send biodiesel to Shell Canada by an inter-terminal pipeline from BIOX, assisting Shell Canada in achieving its renewable fuels targets
  • Ontario government announced it will undertake a formal consultation for the creation of a renewable diesel mandate, based on fuel percentage and carbon intensity, for all diesel sold in Ontario

"The rebound in the North American biodiesel market is encouraging as the spread between the value we earn from biodiesel and the cost of feedstock has improved considerably. This improvement is due in part to the 28 percent increase in the minimum volume mandate in the U.S. in tandem with an increase in RIN values, as well as, the reinstatement of the U.S. biodiesel tax credit," said Kevin Norton, Chief Executive Officer of BIOX. "In addition to these improvements in the broader market, we have also made significant progress of our own with the completion of a supply agreement with Shell Canada Limited and the commissioning of the glycerin refinement project."

Financial Highlights

Sales were $21.5 million and $31.0 million for the three-month and six-month periods ended March 31, 2013, respectively, compared with $13.7 million and $42.6 million for the corresponding periods last year. BIOX sold 10.5 million and 15.3 million litres of biodiesel for the three-month and six-month periods ended March 31, 2013, respectively, compared with 13.1 million and 29.9 million litres for the corresponding periods in 2012. Sales increased in Q2 2013 primarily due to the retroactive reinstatement of the U.S. biodiesel tax incentive and alternative fuel credit, which allows us to collect approximately US$7.8 million related to sales to our customers in calendar 2012, despite BIOX operating for only two months during the quarter after resuming production after the temporary suspension from October 25, 2012, though early February 2013.

Direct expenses were $12.6 million and $23.1 million for the three-month and six-month periods ended March 31, 2013, respectively, compared with $11.6 million and $35.1 million for the corresponding periods in 2012. The decrease for the current six month period was primarily the result of lower sales volume due to the temporary suspension of production at the Hamilton facility.

General and administrative (G&A) expenses were $1.3 million and $2.8 million for the three-month and six-month periods ended March 31, 2013, respectively, compared with $1.5 million and $3.1 million for the same periods last year.

Operating income was $5.8 million and $1.0 million for the three-month and six-month periods ended March 31, 2013, respectively, compared with operating loss of $1.0 million and operating income of $1.4 million in the corresponding periods last year.

Operating income prior to non-cash items(1) was $7.0 million and $3.3 million for the three-month and six-month periods ended March 31, 2013, respectively, compared with $0.2 million  and $3.7 million in the corresponding periods last year. The increase for the three-month period ended March 31, 2013, was primarily due to the reinstatement of the U.S. biodiesel tax incentive and alternative fuel credit which allows us to collect approximately US$7.8 million in refundable tax credits from the U.S. Internal Revenue Service related to sales to customers during calendar 2012.

Combined operating income prior to non-cash items(1) for BIOX's wholly-owned operating subsidiaries (BIOX Canada Limited and BIOX USA Limited) was $8.6 million and $7.4 million for the three-month and six-month periods ended March 31, 2013, respectively, compared with $2.0 million and $7.1 million for the corresponding periods last year. The increase is due primarily to the US$7.8 million in refundable tax credits mentioned above.

Net income was $5.4 million or $0.12 per common share and $0.3 million or $0.01 per common share for the three-month and six-month periods ended March 31, 2013, respectively, compared with a net loss of $1.3 million or a loss of $0.03 per common share and net income of $0.7 million or $0.02 per common share for the corresponding periods last year.

As at March 31, 2013, BIOX's cash balance amounted to $3.6 million, compared with $7.5 million on September 30, 2012. BIOX's working capital balance at March 31, 2013, was $19.7 million compared with $13.3 million at September 30, 2012. BIOX believes that its future cash flow from operations combined with its current financial resources are sufficient to enable BIOX to meet its ongoing working capital requirements.

As at March 31, 2013, BIOX had 45,748,691 common shares outstanding, as well as options to purchase up to 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 rebounded during the first four months of calendar 2013 from the lows it reached in late 2012. Management believes this rebound is due to the 28 percent increase in the expanded Renewable Fuel Standard (RFS2) minimum use requirement, the increase in RIN values, the reinstatement of the U.S. biodiesel tax credit and the start of a new compliance period for refiners and importers. 2013 RINs traded at approximately $0.95 (or $1.43 per U.S. gallon) on May 8, 2013, compared to approximately $0.56 (or $0.84 per U.S. gallon) in early December 2012.

The regulatory structure for a growing biodiesel market across North America remains in place. The 28 percent increase, to 1.28 billion U.S. gallons for 2013 from 1.0 billion U.S. gallons in 2012, under RFS2 and the full implementation of the biodiesel portion of the Canadian Renewable Fuel Content Regulations are important steps toward the evolution of a sustainable biodiesel industry in North America.

In Canada, the Canadian Renewable Fuel Content Regulations require 5% renewable content in gasoline and 2% renewable content in diesel. This month, the Ontario Government also announced its intention to repeal the existing biodiesel tax credit and undertake a formal consultation for the creation of a renewable diesel mandate, based on fuel percentage and carbon intensity, for all diesel sold in Ontario as part of its 2013 budget measures.

The minimum volume requirements in Canada, and the proposed minimum volume requirement in Ontario, provide greater market certainty for BIOX in its domestic and local markets and management believes it 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 and the supply agreement with Shell Canada Limited significantly increases the accessible market for BIOX's product in Ontario.

Management continues to believe the weakness the biodiesel sector endured during 2012 was short-term in nature and reflects the maturing of a relatively nascent biodiesel market. 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, May 9, 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 (647) 427-7450 or (888) 231-8191. To access the telephone replay, dial (416) 849-0833 or (855) 859-2056 and enter reservation number 64609574. 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 Measures
The following table presents a reconciliation of operating income prior to non-cash items to net income (loss) for the three-month periods ended March 31, 2013 and 2012:

(in thousands)   Three months
ended March
    Six months
ended March
      2013   2012     2013 2012
    $ $     $ $
             
Operating income before non-cash items 7,037 153     3,291 3,657
             
Deduct: Production facility depreciation and amortization (1,044) (883)     (1,955) (1,738)
               
  Depreciation and amortization of equipment and intangible assets (94) (96)     (190) (198)
  Share-based compensation (91) (193)     (172) (287)
             
Operating income (loss) 5,808 (1,019)     974 1,434
             
Other income and expenses (406) (257)     (717) (731)
             
Net income (loss) 5,402 (1,276)     257 703

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 and BIOX's long-term expectations for the biodiesel market in light of current market conditions. 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.

BIOX Corporation            
Condensed consolidated interim statements of comprehensive income (loss)    
Three and six month periods ended March 31, 2013 and 2012          
(Unaudited)            
(Expressed in thousands of Canadian dollars, except share and per share amounts)          
           Three months ended      Six months ended
               March 31,        March 31,
        2013 2012   2013 2012
         $  $    $  $ 
                 
Revenue 21,478 13,706   30,953 42,638
                       
Cost of sales          
  Direct expenses 12,641 11,550   23,092 35,149
  Production facility depreciation and amortization 1,044 883   1,955 1,738
        13,685 12,433   25,047 36,887
                     
Gross margin 7,793 1,273   5,906 5,751
                       
Operating expenses          
  General and administrative 1,334 1,495   2,845 3,068
  Depreciation and amortization of equipment and intangible assets 94 96   190 198
  Share-based compensation 91 193   172 287
  Expansion planning and development 466 508   1,725 764
        1,985 2,292   4,932 4,317
                     
Operating income (loss) 5,808 (1,019)   974 1,434
                       
Other expenses          
  Financing cost 315 259   655 614
  Foreign exchange loss 99 69   100 253
        414 328   755 867
                     
Net income (loss) before interest income and income taxes 5,394   (1,347)   219 567
Income tax expense - -   (18) -
Interest income 8 71   56 136
Net income (loss) for the period 5,402 (1,276)   257 703
Other comprehensive income (loss)          
  Foreign currency translation gain (loss) 141 -   (138) (88)
Comprehensive income (loss) 5,543 (1,276)   119 615
                     
Earnings (loss) per common share          
  Basic 0.12 (0.03)   0.01 0.02
  Diluted 0.12 (0.03)   0.01 0.02
                     
Weighted average number of common shares outstanding          
  Basic   45,748,691   45,748,691    45,748,691  45,748,691
  Diluted   45,748,691   45,837,153    45,748,691  45,837,153

 

BIOX Corporation                          
Condensed consolidated interim statements of changes in equity                
Six month periods ended March 31, 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 -   -   -   287   -   -   287
Net income -   -   -   -   -   703   703
Foreign currency translation loss -   -   -   -   (88)   -   (88)
Balance, March 31, 2012  45,748,691     167,787   3,151   2,278   118   (93,188)   80,146
                                 
Balance, September 30, 2012  45,748,691     167,787   3,151   2,559   20    (107,972)   65,545
Share-based compensation -   -   -   172   -   -   172
Net income -   -   -   -   -   257   257
Foreign currency translation loss -   -   -   -   (138)   -   (138)
Balance, March 31, 2013  45,748,691     167,787   3,151   2,731   (118)    (107,715)   65,836

 

BIOX Corporation      
Condensed consolidated interim statements of financial position    
As at March 31, 2013 and September 30, 2012      
(Unaudited)      
(Expressed in thousands of Canadian dollars)      
         March 31,    September 30,
        2013   2012
         $    $
             
Assets      
Current assets      
  Cash and cash equivalents 3,595   7,543
  Accounts receivable  13,092   2,472
  Prepaid expenses 367   2,785
  Inventory 10,164   15,317
        27,218   28,117
             
Restricted cash 3,374   6,942
Property, plant and equipment 47,011   47,678
Intangible assets 978   1,044
Deferred income tax assets 9,524   9,499
        88,105   93,280
             
Liabilities      
Current liabilities      
  Accounts payable and other liabilities 6,005   7,970
  Demand loan -   5,282
  Current portion of long-term debt 1,500   1,500
  Current portion of finance leases 53   69
        7,558   14,821
             
Finance leases -   7
Long-term debt 11,597   9,932
Provisions 3,114   2,975
        22,269   27,735
             
Equity      
Common share capital 167,787   167,787
Warrants reserve 3,151   3,151
Equity reserve 2,731   2,559
Accumulated other comprehensive (loss) income (118)   20
Deficit (107,715)   (107,972)
        65,836   65,545
        88,105   93,280
             

 

BIOX Corporation      
Condensed consolidated interim statements of cash flows    
Six month periods ended March 31, 2013 and 2012      
(Unaudited)      
(Expressed in thousands of Canadian dollars, except share and per share amounts)    
           Six months ended 
             March 31, 
        2013   2012
         $    $
             
Operating activities      
  Net income 257   703
  Add (less) items not involving cash      
    Production facility depreciation and amortization 1,955   1,738
    Depreciation and amortization of equipment and intangible assets 190   198
    Financing costs 437   365
    Income taxes paid 18   -
    Unrealized foreign exchange (gain) loss (186)   (78)
    Share-based compensation 172   287
    Accretion of asset retirement obligation 139   127
        2,982   3,340
             
  Net change in non-cash working capital balances      
    related to operations (3,184)   1,465
        (202)   4,805
             
Investing activity      
  Purchase of property, plant and equipment (3,284)   (2,052)
  Decrease in restricted cash 3,568   -
        284   (2,052)
             
Financing activities      
  Payments on finance leases (23)   (30)
  Proceeds from debt financing 2,415   -
  Repayment of debt financing (750)   (375)
  Repayment of demand loan (5,282)   -
  Financing charges (2)   -
  Interest paid (436)   (372)
        (4,078)   (777)
             
Effect of exchange rate changes on cash held in foreign currency 48   (10)
             
Net (decrease) increase in cash and cash equivalents during the period (3,948)   1,966
Cash and cash equivalents, beginning of period 7,543   27,887
Cash and cash equivalents, end of period 3,595   29,853
             

 

SOURCE: BIOX Corporation

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@tmxequicom.com

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