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BIOX announces record fourth quarter financial results

TSX symbol: BX

TORONTO, Dec. 7, 2011 /CNW/ - BIOX Corporation (BIOX) (TSX: BX), arenewable energy company that designs, builds, owns and operatesbiodiesel production facilities, today announced its fiscal 2011 fourthquarter (Q4 2011) and year end financial results for the three-monthand twelve-month periods ended September 30, 2011.

Highlights

• Production of methyl esters was 15.9 million litres in Q4 2011 compared to 15.3 million litres in Q4 2010
• Sales were $22,989,000 in Q4 2011 compared to $7,255,000 in Q4 2010
• Operating income was $1,694,000 in Q4 2011 compared to an operating loss of $2,773,000 in Q4 2010
• Operating income prior to non-cash items(1) was $2,829,000 in Q4 2011 compared to an operating loss prior to non-cash items of $1,721,000 in Q4 2010
• Net income was $8,299,000 in Q4 2011 compared to a net loss of $2,961,000 in Q4 2010
• Net income per share was
  .18 in Q4 2011 compared to a net loss per share of
  .07 in Q4 2010
• Finalizing agreements to allow BIOX to construct a second production facility at a site identified in the U.S.
• The U.S. Environmental Protection Agency recommended an increase to the minimum volume of Biomass-based diesel, as part of the expanded U.S. Renewable Fuel Standard 2 (RFS2), from the current level of 0.8 billion U.S. gallons in 2011 to 1 billion U.S. gallons in 2012 and 1.28 billion U.S. gallons in 2013.
• Initiated upgrades and technological advancements to the Hamilton production facility to capture the full value and margin contribution of glycerin, a by-product of biodiesel production, by producing technical grade product

"2011 was a watershed year for BIOX as well as the biodiesel market inNorth America. Demand in the U.S. market for biodiesel is drivingstrong sales at BIOX as U.S. refineries and importers respond to theimplementation of mandated minimum volumes of biodiesel under the RFS2policy," said Kevin Norton, CEO of BIOX. "RFS2 has driven a repricingof biodiesel, from a value based on the cost of petroleum diesel priorto the mandates, to a value based on the actual production costs plus amargin. As a low cost producer of biodiesel, during Q4 we generatedannualized operating income prior to non-cash items at the operatingcompany level of $20 million. While we anticipate fluctuations inpricing and costs in the commodity market in which we operate, we areconfident that as a low cost producer we can compete effectively in amarket that is legislated to grow in 2012 and 2013. As such, we areproceeding forward with our second production facility, which will belocated in the U.S. and will be larger than our existing Hamiltonfacility."

Financial Highlights

Sales were $23.0 million and $97.3 million, respectively, for thethree-month and twelve-month periods ended September 30, 2011, comparedwith $7.3 million and $40.2 million for the corresponding periods in2010. The increase was due to a combined increase in sales volume, as aresult of the produce and store strategy we implemented in 2010, andhigher revenue per litre of biodiesel sold.

Direct expenses were $17.7 million and $82.5 million, respectively, forthe three-month and twelve-month periods ended September 30, 2011,compared with $7.2 million and $39.8 million for the correspondingperiods in 2010. The increase in direct expenses in 2011 was due tohigher sales volumes and higher cost per litre sold as a result ofchanges in commodity prices, primarily the price of feedstock.

General and administrative expenses were $2.5 million and $8.1 million,respectively, for the three-month and twelve-month periods endedSeptember 30, 2011, compared with $1.7 million and $6.2 million for thecorresponding periods in 2010. The change in the twelve-month periodwas due in part to $1.0 million of non-recurring costs related to theCEO transitions, increased bonus accruals, as well as increasedadministrative and professional fees related to a full year relative tothe partial year from the previous period as a result of BIOX becominga public company on March 1, 2010.

Operating income was $1.7 million and $2.3 million, respectively, forthe three-month and twelve-month periods ended September 30, 2011,compared with operating loss of $2.8 million and $10.0 million for thecorresponding periods in 2010. The increase in operating income duringthe three and twelve-month periods in 2011 was primarily due tosignificantly higher gross margins achieved in fiscal 2011 comparedwith 2010.

Operating income prior to non-cash itemswas $2.8 million and $6.7 million, respectively, for the three-month andtwelve-month periods ended September 30, 2011, compared with operatingloss prior to non-cash items of $1.7 million and $5.8 million for thecorresponding periods in 2010.

Combined operating income prior to non-cash items for BIOX'swholly-owned subsidiaries, BIOX Canada Limited and BIOX USA Limited,was $5.0 million and $13.8 million, respectively, for the three-monthand twelve-month periods ended September 30, 2011, compared withoperating loss prior to non-cash items of
.1 million and
.4 millionfor the corresponding periods in 2010.

Net income and comprehensive income was $8.3 million or
.18 per shareand $5.6 million or
.12 per share, respectively, for the three-monthand twelve-month periods ended September 30, 2011, compared with netloss and comprehensive loss of $3.0 million or
.07 per share and$16.0 million or
.45 per share for the corresponding periods in 2010.The increase in the three-month period was primarily due tosignificantly higher gross margins achieved in Q4 2011 compared withthe same period last year and the recognition of $6.6 million of futureincome tax assets in Q4 2011. The increase in the twelve-month periodwas a result of the combined impact of significantly higher grossmargins achieved in fiscal 2011 compared with fiscal 2010, therecognition of $6.6 million of future income tax assets in fiscal 2011as well as $4.5 million in costs incurred in fiscal 2010 related to thewarrant valuation and net costs related to the amalgamation.

As at September 30, 2011, BIOX's available cash position amounted to$27.9 million, compared with $21.5 million on September 30, 2010.Working capital as of September 30, 2011, was $39.6 million. BIOXbelieves that its future cash flow from operations combined with itscurrent financial resources should be sufficient to enable BIOX to meetits ongoing requirements for capital expenditures and working capitalrequirements, including the construction and commissioning of a secondproduction facility, which will be located in the U.S. and will belarger than its existing Hamilton facility, as detailed in the "OutlookExpansion Plans" section below (subject to certain assumptions whichare detailed in BIOX's management's discussion and analysis for thetwelve months ended September 30, 2011).

As at September 30, 2011, the Company had 45,748,691 common sharesoutstanding, as well as outstanding stock options to purchase 1,400,000common shares and share purchase warrants to acquire up to 1,982,143common shares.

Outlook

U.S. Renewable Fuels Standard

Effective July 1, 2010, the expanded RFS2 specifically provides for arenewable component in U.S. diesel fuel. RFS2 requires the use of 0.8billion U.S. gallons of Biomass-based diesel in 2011, increasing to 1billion gallons in 2012. From 2012 through 2022, a minimum of 1 billionU.S. gallons must be used domestically each year, and the Administratorof the U.S. Environmental Protection Agency (EPA) has the authority toincrease the minimum volume requirement. The EPA has recommended thatthe minimum volume of Biomass-based diesel will be 1 billion U.S.gallons in 2012 and increase to 1.28 billion U.S. gallons in 2013.

BIOX's wholly-owned subsidiaries are registered with the EPA as aForeign Renewable Fuel Producer (BIOX Canada Limited), and as aRenewable Fuel Importer and RIN Generator (BIOX USA Limited).Registration under RFS2 provides BIOX with access to the U.S. renewablefuels market, including the ability to generate RenewableIdentification Numbers (RINs) which are required for obligated partiesin the U.S., which includes all refiners and importers oftransportation fuel, to show compliance with RFS2. 1.5 RINs are issuedper 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. hashad a positive impact on pricing. This impact is reflected by the risein value of RINs, the RFS2 compliance mechanism, which traded at $1.30as of December 6, 2011. The mandated Biomass-based derived dieselminimum volume requirement in the U.S., including the recommendedincreases to that minimum volume requirement, is an important step inthe evolution of a sustainable biodiesel industry.

As such, BIOX is proceeding with its planned expansion for a second BIOXfacility, which will be located in the U.S. and will be larger thanBIOX's existing Hamilton facility. The Company is in the process offinalizing definitive agreements with the owner of the site for theland lease, long term tank rentals, terminal services and otherinfrastructure requirements. This site, which is located within atransportation hub, is consistent with BIOX's strategy of locating itsfacilities adjacent to large scale petroleum storage and dieseldistribution infrastructure and users of petroleum diesel and blendersof biodiesel in order to minimize transportation costs to them. BIOX isproceeding with the detailed planning phase of the project, includingcommencement of the permitting process. Its current estimate for dateof completion of the facility for commissioning is December, 2013.

Canadian Renewable Fuel Content Regulations

In August 2010, the Canadian federal government enacted regulations thatrequire 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 toDecember 31, 2012. The compliance period for the 2% renewable fuelcontent requirement in diesel fuel and heating oil is July 1, 2011 toDecember 31, 2012. BIOX's biodiesel qualifies as renewable content andcan therefore be used to comply with the program obligations. Theseminimum volume requirements bring the Canadian biodiesel blendingmandates more closely in line with the U.S. market and its expandedRFS2 regulation, and provide clarity for Canadian diesel refineries andimporters that BIOX believes will ultimately drive new demand forbiodiesel in Canada. While BIOX continues to be the largest producer ofbiodiesel in Canada, it currently sells nearly all of its product intothe U.S. market. The implementation of these Canadian regulationssignificantly increases the accessible market for the BIOX's product inCanada, which supports its expansion plans.

Notice of Conference Call

BIOX will hold a conference call today, December 7, 2011, at 9:00 a.m.EST hosted by Mr. Kevin Norton, Chief Executive Officer, and Mr. ChrisClinning, Executive Vice President and Chief Financial Officer, todiscuss BIOX's financial results and corporate developments. To accessthe conference call by telephone, dial [phone] or [phone]. To access the telephone replay, dial [phone] or [phone] and enter reservation number 33312315. A live audio webcast ofthe call will be available at www.bioxcorp.com. The webcast will be archived for 90 days.

1) Note: Non-GAAP Measures. Operating income (loss) prior to non-cashitems is defined as operating income or loss less production facilitydepreciation and amortization, and less amortization of furniture,equipment and intangibles. Management uses this measurement to monitorthe operating cash flow of BIOX's business and believes thisinformation is useful supplemental information to a reader of financialstatements. This measurement may not be comparable to similar measurespresented by other issuers. Investors are cautioned that operatingincome (loss) prior to non-cash items should not be construed as analternative to net income (loss) determined in accordance with Canadiangenerally accepted accounting principles as an indicator of BIOX'sperformance.

Reconciliation of Non-GAAP Measures

The following table presents a reconciliation of operating income (loss)prior to non-cash items to net income (loss) for the three months andtwelve months ended September 30, 2011 and 2010:

(in thousands)		Three months ended September 30				Year ended September 30
			2011		2010		2011		2010
Operating income (loss) before non-cash items		$	2,831	$	(1,721)	$	6,732	$	(5,759)
Production facility depreciation and amortization		$	(1,055)	$	(968)	$	(4,126)	$	(3,902)
Amortization of furniture, equipment and intangibles		$	(82)	$	(84)	$	(331)	$	(302)
Operating income (loss)		$	1,694	$	(2,773)	$	2,275	$	(9,963)
Future income tax recovery		$	6,552		-	$	6,552		-
Other income (expenses)		$	53	$	(188)	$	(3,205)	$	(6,043)
Net income (loss)		$	8,299	$	(2,961)	$	5,622	$	(16,006)

About BIOX Corporation

BIOX is a renewable energy company that designs, builds, owns andoperates biodiesel production facilities. BIOX currently owns andoperates a biodiesel production facility in Hamilton, Ontario, Canadawith a nameplate capacity of 67 million litres per year. BIOX has aninnovative, proprietary and patented production process that is capableof producing the highest quality, renewable, clean burning andbiodegradable biodiesel fuel utilizing a variety of feedstocks - frompure seed oils to animal fats to recovered vegetable oils with nochange to the production process. BIOX's high quality biodiesel fuelmeets North American (ASTM D-6751) quality standards. BIOX is Canada'slargest biodiesel producer and is focused on building, owning andoperating a network of commercial scale biodiesel production facilitiesin jurisdictions where clearly defined renewable fuel standardspolicies exist.

Forward-looking Statements

Certain statements in this press release constitute "forward-looking"statements that involve known and unknown risks, uncertainties andother factors which may cause the actual results, performance,objectives or achievements of BIOX, or industry results, to bematerially different from any future results, performance, objectivesor achievements expressed or implied by such forward-lookingstatements. These statements reflect BIOX's current views regardingfuture events and operating performance are based on informationcurrently available to BIOX, and speak only as of the date of thispress release. These forward-looking statements involve a number ofrisks, uncertainties and assumptions and should not be read asguarantees of future performance or results, and will not necessarilybe accurate indications of whether or not such performance or resultswill be achieved. Those assumptions and risks include, but are notlimited to, the fact that BIOX's results of operations and businessoutlook are highly dependent on a mix of legislation and producerpayment programs and tax credits and upon commodity prices, which aresubject to significant volatility and uncertainty. Many factors couldcause the actual results, performance or achievements of BIOX to bematerially different from any future results, performance orachievements that may be expressed or implied by such forward-lookingstatements, including factors described in this press release and thosediscussed in BIOX's publicly available disclosure documents, as filedby BIOX on SEDAR (www.sedar.com). Should one or more of these risks or uncertainties materialize, orshould assumptions underlying the forward-looking statements proveincorrect, actual results may vary materially from those described inthis 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 theseforward-looking statements.

BIOX Corporation
Consolidated statements of operations and comprehensive income (loss)
(Unaudited)
(All dollar amounts are expressed in thousands, except share and per share amounts)
				Three months ended			Years ended
				September 30,			September 30,
				2011	2010		2011	2010
				$	$		$	$
Sales				22,989	7,255		97,330	40,245
Cost of sales
	Direct expenses			17,683	7,241		82,484	39,831
	Production facility depreciation and amortization			1,055	968		4,126	3,902
				18,738	8,209		86,610	43,733
Gross margin				4,251	(954)		10,720	(3,488)
Operating expenses
	General and administrative			2,475	1,735		8,114	6,173
	Amortization of furniture, equipment and intangibles			82	84		331	302
				2,557	1,819		8,445	6,475
Operating income (loss)				1,694	(2,773)		2,275	(9,963)
Other expenses
	Stock-based compensation			120	60		380	140
	Interest and fees on loans			181	174		663	681
	Financing			4	10		35	61
	Loss on extinguishment of debt			304	-		304	-
	Disposal of property, plant and equipment			-	(58)		-	87
	Expansion planning and development			63	6		1,967	472
	Costs related to the qualifying transaction			-	-		-	634
	Valuation of warrants			-	-		-	3,861
	(Gain) loss on foreign exchange			(688)	50		32	225
				(16)	242		3,381	6,161
Net income (loss) before interest income				1,710	(3,015)		(1,106)	(16,124)
Future income tax recovery				6,552	-		6,552	-
Interest income				37	54		176	118
Net income (loss) and comprehensive income (loss) for the period				8,299	(2,961)		5,622	(16,006)
Income (loss) per common share
	Basic			0.18	(0.07)		0.12	(0.45)
	Diluted			0.17	(0.07)		0.11	(0.45)
Weighted average number of common shares outstanding
	Basic			45,748,691	45,748,691		45,748,691	35,685,600
	Diluted			49,130,834	45,748,691		49,130,834	35,685,600

BIOX Corporation
Consolidated statements of deficit
(Unaudited)
(All dollar amounts are expressed in thousands)
						Three months ended				Years ended
						September 30,				September 30,
						2011	2010			2011				2010
						$	$			$				$
Deficit, beginning of period						94,020	88,382			91,343				75,337
Net income (loss) for the period						8,299	(2,961)			5,622				(16,006)
Deficit, end of period						85,721	91,343			85,721				91,343

BIOX Corporation
Consolidated balance sheets
(Unaudited)
(All dollar amounts are expressed in thousands)
					At		At
					September 30,		September 30,
					2011		2010
					$		$
Assets
Current assets
	Cash				27,887		21,470
	Accounts receivable				9,535		3,475
	Prepaid expenses and sundry assets				953		984
	Inventory				13,539		13,752
	Current portion of income tax asset				716		-
					52,630		39,681
Restricted cash					-		1,173
Property, plant and equipment, net					54,342		57,758
Intangible assets, net					1,176		1,308
Future income tax asset					5,836		-
					113,984		99,920
Liabilities
Current liabilities
	Accounts payable and accrued liabilities				6,959		6,024
	Demand loan				4,957		-
	Current portion of long-term debt				1,125		1,380
					13,041		7,404
Long-term debt					11,429		9,666
Asset retirement obligation					2,721		2,059
					27,191		19,129
Shareholders' equity
Capital stock					167,787		167,787
Warrants					3,151		3,151
Contributed surplus					1,576		1,196
Deficit					(85,721)		(91,343)
					86,793		80,791
					113,984		99,920

BIOX Corporation
Consolidated statements of cash flows
(Unaudited)
(All dollar amounts are expressed in thousands)
					Three months ended			Years ended
					September 30,			September 30,
					2011	2010		2011	2010
					$	$		$	$
Operating activities
	Net income (loss) for the period				8,299	(2,961)		5,622	(16,006)
	Items not involving cash
		Amortization of property, plant and equipment and intangible assets			1,137	1,052		4,457	4,204
		Amortization of deferred financing charges			4	30		35	61
		Loss on extinguishment of debt			304	-		304	-
		Unrealized foreign exchange
		gain on cash held			(74)	-		(74)	-
		Stock-based compensation			120	60		380	140
		Accretion of asset retirement obligation			51	47		206	187
		Valuation of warrants			-	-		-	3,861
		Write off of site specific costs			1,700	-		1,700	-
		Non-cash disposal of property,
		plant and equipment			-	(58)		-	87
		Future income taxes			(6,552)	-		(6,552)	-
					4,989	(1,830)		6,078	(7,466)
		Net change in non-cash working capital balances related to operations			(5,416)	(5,521)		(4,859)	(9,516)
					(427)	(7,351)		1,219	(16,982)
Investing activity
	Purchase of property, plant and equipment, net				(2,508)	(1,392)		(2,174)	(2,913)
	Decrease in restricted cash				1,173	-		1,173	-
	Investment tax credit refund				-	(74)		-	(74)
					(1,335)	(1,466)		(1,001)	(2,987)
Financing activities
	Proceeds from debt financing				12,585	-		12,585	1,380
	Repayment of debt financing				(10,350)	(345)		(11,385)	(2,760)
	Proceeds from (repayment of) demand loan				777	(980)		4,957	(1,545)
	Financing charges				(32)	(20)		(32)	(20)
	Proceeds from issuance of common shares				-	-		-	46,700
	Share issuance costs				-	-		-	(2,518)
					2,980	(1,345)		6,125	41,237
Effect of exchange rate on cash held in foreign currency					74	-		74	-
Net increase (decrease) in cash during the period					1,292	(10,162)		6,417	21,268
Cash, beginning of period					26,595	31,632		21,470	202
Cash, end of period					27,887	21,470		27,887	21,470