Lignol hopes to start selling biofuel next year
2011-07-21 10:04 ET - News Release
Mr. Ross MacLachlan reports
LIGNOL REPORTS FISCAL 2011 FINANCIAL RESULTS
Lignol Energy Corp. has released its financial results for the fourth quarter and fiscal year ended April 30, 2011.
Fiscal 2011 Highlights:
-Reached agreement with the U.S. Department of Energy's Biomass Program (DOE) to phase out work on the funding award for a demonstration project -Completed integrated production campaigns and met operability targets for the production of cellulosic ethanol and High Performance Lignin, HP-LTM lignin, at Lignol's pilot-scale biorefinery in Burnaby, British Columbia -Advanced several HP-L™ product development projects and commenced sales of tonnage quantities to development partners for industrial production trials -HP-L™ used successfully in resin adhesive to make Oriented Strand Board (OSB) which meets Canadian and U.S. industry quality standards -Successfully completed the first phase of a joint development program with Novozymes, producing cellulosic ethanol at Lignol's biorefinery -Announced AlcellPlusTM, a breakthrough inorganosolv pre-treatment performance, which provides the potential for lower capital and operating costs and greater flexibility in processing a wider range of cellulosic feedstocks -Completed an engineering design package for a commercial-scale biorefinery -IP portfolio increased to more than 60 applications and received positive International Preliminary Reports on Patentability relating to four key Patent Cooperation Treaty applications -Colin South appointed Chief Technology Officer and Director of Lignol
"We have made significant progress this past fiscal year in the commercialization of our technology," said Ross MacLachlan, President and Chief Executive Officer. "With our pilot-scale biorefinery now operating on a regular basis, we are well positioned to achieve our corporate goals for fiscal 2012."
In fiscal 2012, Lignol's corporate goals include:
-Establishing sales of and off-take agreements for HP-L™ -Achieving our cost targets for cellulosic ethanol with Novozymes -Engaging strategic partners to develop a commercial project
"Lignol continues to be one of only a handful of companies with an operational, integrated pilot-scale biorefinery producing cellulosic ethanol and renewable chemicals from non-food feedstocks," said MacLachlan. "We have recently reported that we plan to develop a commercial project without assistance from the U.S. Department of Energy, through an award granted in 2008, for a demonstration-scale plant. Continued investment in our pilot-scale biorefinery will eliminate the need for a demonstration-scale plant."
"Last year we reported that we anticipated having sufficient cash to fund Baseline Operations until May 2011. As a result of increased non-dilutive contributions received from government programs and industry, together with effective financial management, we now expect to have sufficient resources available to fund Baseline Operations to January 2012," concluded MacLachlan.
Financial Results
For the year ended April 30, 2011, the Company reported a loss of $1.2 million or $(0.02) per share (basic and fully diluted) compared to a loss of $7.8 million or $(0.16) per share in fiscal 2010. The reduction of $6.6 million in the loss for fiscal 2011 is a reflection of a reduction of $2.5 million in expenses and an increase of $4.1 million in government and corporate contributions. Total gross research and development related costs were $6.0 million for the year ended April 30, 2011 as compared to $10.2 million in fiscal 2010. Of these amounts, less than
.1 million in fiscal 2011 and $2.0 million in fiscal 2010, represented capital additions and $6.0 million and $8.2 million, in fiscal 2011 and 2010 respectively, were expensed. The reduction of $2.0 million in capital expenditures arose following the completion of pilot plant commissioning in fiscal 2010. The decrease in operating expenses occurred as a direct result of a reduction in the number of personnel needed to operate the pilot plant post commissioning and a $1.2 million reduction in third party engineering expenses related to updating plant design and cost estimates.
General and administrative expenses for fiscal 2011 and 2010 were unchanged at $1.9 million.
Government and corporate contributions for fiscal 2011 totaled $8.4 million, compared to $5.8 million for fiscal 2010. Of these amounts,
.3 million and $1.8 million, for fiscal 2011 and fiscal 2010 respectively, were credited against the cost of additions to plant and equipment capitalized on the balance sheet, and $8.1 million and $4.0 million, respectively, were credited against the statement of operations. The increase of $2.6 million is primarily due to funding made available by the DOE under their Biorefinery Assistance Program Award, of which $2.7 million was recognized in fiscal 2011, wherein $1.8 million related to funding received in respect of expenses incurred in 2010.
For the three-month period ended April 30, 2011 ("Q4 FY11") the Company reported a loss of
.8 million, or $(0.02) per share (basic and fully diluted) compared to a loss of $1.4 million, or $(0.03) per share (basic and fully diluted) for the same period in 2010 ("Q4 FY10"). The decrease in loss for Q4 FY11 as compared to Q4 FY10 reflects a reduction in total operating expenses of
.9 million which were partially offset by a reduction in related government and corporate contributions of
.3 million. Total operating expenses declined in the period primarily due to a reduction in headcount and related expenses and a reduction in third party engineering design costs of
.8 million.
As of April 30, 2011, the Company had cash, cash equivalents and short-term investments of $3.6 million in aggregate and a working capital surplus of $3.1 million. These balances represent an increase of
.4 million and
.7 million, respectively, compared to the balances as of April 30, 2010. As of April 30, 2011, the Company was also eligible to receive contracted government and corporate funding of up to $5.1 million, of which $1.0 million has been accrued in the financial statements and $4.1 million, which has not yet been recognized in the financial statements. This funding is subject to the satisfaction of certain conditions specified in the relevant agreements, which include the Company incurring sufficient related expenditures and continuing to meet all of its reporting requirements. Receipt is also conditional, in certain cases, upon having sufficient matching funds and completion of the funding programs and agreements. These funding awards are intended to be applied against future expenses incurred under various development programs, which are expected to be completed at various times before early 2012. This brings the total of current and other eligible resources available to the Company to $7.2 million.
The Company believes that, factoring in the expected timeline of receipt of the funding from the various government agencies, the combination of funding sources noted above should be sufficient to fund its "Baseline Operations" until January 2012. This is an improvement by more than three months over the previous forecast disclosed in the Company's MD&A for the three and nine months ended January 31, 2011. Lignol continues to actively seek funding from additional government and corporate sources which, if obtained, would extend the Company's projected operating runway further.
Lignol's complete financial statements for the year ended April 30, 2011 and the related Management's Discussion & Analysis of Financial Condition and Results of Operations are available at the Company's website,
www.lignol.ca, or at
www.sedar.com under the Company's profile.