Press release from Marketwire
Nordex Explosives Ltd.: 2013 Second Quarter Results
Record Revenue Growth and Significant Increase in Assets
Friday, August 30, 2013
Nordex Explosives Ltd.: 2013 Second Quarter Results12:38 EDT Friday, August 30, 2013
KIRKLAND LAKE, ONTARIO--(Marketwired - Aug. 30, 2013) - NORDEX EXPLOSIVES LTD. (TSX VENTURE:NXX) ("Nordex") has released its unaudited financial statements for the second quarter of 2013 and is pleased to announce its highest Q2 sales revenues in the 42 year history of the Company. Record sales revenues are attributed to ongoing diversification and the securing of new business in the construction and quarry markets while maintaining and increasing business with existing customers.
Total revenues for the period were $4,427,802, an increase of $786,706 or 22%, over same period revenues in 2012 of $3,641,096.
The revenues for the first 6 months of 2013 were $7,954,606; an increase of $1,046,908 over same period revenues in 2012 of $6,907,698.
Total revenues for the first 6 months of 2013 have increased by $2,432,627 over same period revenues in 2011; a comparative growth rate of over 44%.
Total assets of $15,880,886 (both current & non-current) increased by $6,165,347 from June 30th 2011 to June 30th 2013 an increase of over 63% in the past 24 months.
Jim Taylor, President & CEO, stated, "We are extremely happy with our revenue growth as we continue to focus on increasing our market share. It is anticipated this ongoing strategy will help us negotiate reductions in raw material costs and allow us to strengthen our position as we continue to grow. We have added new locations, increased our manufacturing capabilities, hired and are training new staff, developed new products and equipment and have successfully entered into the non-mining segment of the explosive industry. The plan in 2013 is to position ourselves as an industry leader so we can continue to grow; and subsequently reduce costs and strengthen our bottom line in 2014."
Nordex implemented a strategy to increase its manufacturing capabilities. The strategy included the introduction of a proprietary line of emulsion explosive products and the manufacture and sale of new specialty products.
The new "Buttbuster" and "Econotrim" manufacturing line is about 80% completed. The loading carousel is built and has been installed in the renovated production facility and the required infrastructure has been completed. Final construction of the plant is expected by mid-September with commissioning and start-up in October. The line will produce several patent protected "perimeter control" products considered to be highly effective and extremely safe. Over the last year Nordex has committed considerable resources to obtain exclusive rights to these products and has developed a fully automated production facility. This is the only manufacturing facility for these products in North America. The demand for these well known products is expected to be high. The staff and plant operators were hired and are being trained in advance of initial production. The products have been market tested in Canada and the initial costs are expected to be offset by new revenues and profits as operations and sales ramp up over the next year.
The Corporation has expanded its business beyond its traditional geographic region by opening up new satellite sites. The first two of these satellite sites (located in the Muskoka and Manitoulin Island areas) started operations in the second quarter of 2013. Considerable capital investment was required in setting up the sites as well as to purchase equipment to support and service potential new business opportunities. The initial capital outlay was required due to the specialized nature of the explosive business and required the Company to commit resources to support such upfront costs. Staff was hired to provide the specialized services to allow for soliciting new clients in these geographic regions. Strict regulatory restrictions exist in the explosives industry and Nordex is now positioned to solicit new clients in new markets areas. Nordex has been successful obtaining initial new business as a result of these commitments to growth but it will take time to ramp up operations fully to offset the initial costs. Further satellite sites may be planned as new strategic areas are identified and business potential warrants.
The Corporation identified and has been pursuing several exciting opportunities in recent months and through these efforts has made several financial commitments to diversify and expand markets as well as to build new equipment and infrastructure. This is part of a strategic plan to complete a "positioning" phase for the Corporation to move forward. Many initial or one-time costs are being incurred in the interest of this positioning for potential future growth.
Sales continue to grow to mining clients. However, margins are under pressure with the recent financial issues facing the mining industry overall. Nordex continues to gain momentum with larger mining operators and expects these relationships will position the Corporation to benefit from sales and profitability once the mining industry stabilizes. Nordex continues to focus efforts on non-mining clients and has committed resources to be able to service these potential accounts. Mining clients once represented 100% of Nordex sales revenues but the Corporation has been successful in reducing the dependency on these clients to about 60%. It is expected that over the next year; sales and profitability will reflect the success of these efforts.
Nordex continues to work with its First Nations partners to promote relationships with businesses operating on traditional territorial lands. These proposed joint ventures with Wabun and Wahgoshig are ongoing and expected to produce benefits to Nordex over the next year that will offset initial costs to develop.
The Corporation announced on July 15th, 2013 it had received all necessary consents and approvals to acquire clear title and sole mineral rights to the Melba Gold Mine property. Nordex is currently assessing its options on how best to convert this asset into value for our shareholders.
Nordex Explosives Ltd. is proud to be the only truly Canadian manufacturer of explosives.
The financial information for the periods indicated as set out in this news release is presented on a basis consistent with the accounting principles used to prepare Nordex' most recently filed financial statements. The contents of this news release should be read in conjunction with the complete unaudited financial statements and the Company's annual financial statements and related management discussion and analysis ("MD&A") for the periods under the Company's profile available at www.SEDAR.com. Readers are advised that the Company faces various risk factors with respect to its business and operations: for further information please see the MD&A of Nordex available at www.SEDAR.com.
ABOUT NORDEX EXPLOSIVES: NORDEX EXPLOSIVES LTD. is a manufacturer and distributor of explosives for the mining, quarry and road construction industries since 1970. Its manufacturing operations and distribution centre is strategically located in one of the world's largest mining regions near Kirkland Lake, Ontario. Nordex is the exclusive supplier of the Econotrim and Ezicharge perimeter control explosive products in Canada. Nordex trades on the TSX Venture Exchange under the symbol "NXX".
Additional Information relating to the Company is available on SEDAR at www.sedar.com.
Certain information included herein may contain "forward-looking statements" which reflect the current expectations of management of the Company regarding the Company's future growth, results of operations, performance, business prospects and opportunities. Wherever possible, words such as "may", "would", "could", "should", "will", "anticipate", "believe", "plan", "expect", "intend", "estimate", "aim", "endeavor", "seek", "predict", "potential" and similar expressions have been used to identify these forward-looking statements. These statements reflect management's current beliefs with respect to future events and are based on information currently available to management of the Company. Forward-looking statements involve significant risks, uncertainties and assumptions. Many factors could cause the Company's actual results, performance or achievements to be materially different from any future results, performance or achievements that may be expressed or implied by such forward-looking statements, including, without limitation, cancellations of or the failure to renew purchase orders; production and delivery issues; quality, pricing and availability of raw materials; compliance with environmental regulations; exchange rate fluctuations as well as the other risks identified in the "Risk Factors" contained in the Company's Management Discussion and Analysis for fiscal 2012 and other public filings (copies of which may be obtained at www.sedar.com). Should one or more of these risks or uncertainties materialize, or should assumptions underlying the forward-looking statements prove incorrect, actual results, performance or achievements may vary materially from those expressed or implied by this press release. These factors should be considered carefully and the reader should not place undue reliance on the forward-looking statements. Although any forward-looking statements contained in this press release are based upon what management currently believes to be reasonable assumptions, the Company cannot assure readers that actual results, performance or achievements will be consistent with these forward-looking statements, and management's assumptions may prove to be incorrect. These forward-looking statements are made as of the date of this press release, and, other than as required by law, the Company does not intend, and does not assume any obligation, to update or revise these forward-looking statements, whether as a result of new information, future events or otherwise.
Neither 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.
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Nordex Explosives Ltd.