Heres the results
TORONTO, ONTARIO--(Marketwire - March 30, 2012) - BioExx Specialty Proteins Ltd. (TSX:BXI), the first company to commercialize a new and complete food-grade protein from a major global crop in 50 years, announced today its financial results for the three and twelve month periods ended December 31, 2011. Complete Financial Statements and Management Discussion & Analysis have been filed for public review at www.sedar.com and will be posted on the Company's website at www.bioexx.com.
"Clearly, 2011 was a transitional, and in some ways a transformational year for BioExx. The company made changes to its management, technology, and strategy, to re-energize value creation for shareholders", said Chris Schnarr, CEO of BioExx. "As the year closed out, and into early 2012, we were and are executing well on our strategy. We improved and stabilized our technology, and then confirmed it as to efficacy, scalability, and economics. Our products are stronger, and our markets remain robust. The key focus has been to drive down risk while holding the line on returns - that creates value. Our mission now is to build on this momentum by continuing the successful execution of our strategy through 2012 and beyond."
Financial Results for the Year Ended December 31, 2011
Revenues
Revenues for the year were $5,348,230, versus $3,268,235 in the prior year (including a gain on derivatives of $63,944; 2010 - loss on derivatives of ($61,902)). Revenue is comprised of canola oil and meal sales from the Company's Saskatoon crush facility. In spite of an extended maintenance and upgrade shutdown in 2011, the Saskatoon plant ran more than it did in 2010, a year characterized by a more significant portion of time offline for initial protein equipment installation and commissioning. Therefore processing volumes and revenues were higher in 2011. Revenues were also improved by generally higher oil and meal sales prices in 2011 versus 2010.
Gross Profit (Loss)
Cost of Goods Sold for the year was $10,101,239 versus $6,568,209 in the prior year. Cost of Goods Sold includes canola seed which is purchased by BioExx for processing, and also includes direct labour, direct utilities, process additives, other plant expenses such as maintenance and QA/QC, as well as depreciation of plant and plant equipment. Processing volumes and average canola seed prices were higher in 2011 versus 2010, driving a higher Cost of Goods Sold. Other plant expenses for the year, which includes items such as maintenance expenses, QA/QC expenses, production supervision, plant supplies, and miscellaneous other plant expenses, was $1,898,042 versus $1,627,541 in 2010, with the increase reflecting higher plant activities overall as part of increased activities around protein operations. Amortization of plant and equipment was $985,969 versus $795,864 in 2010, reflective primarily of asset additions and equipment put into use during 2010 being subject in 2011 to the first full year of amortization, as well as further additions in 2011.
As a result, Gross loss for the year was $4,753,009 versus $3,299,974 in the prior year.
Other Expenses
The Company incurred Operating expenses during the year of $25,358,651, compared to $11,605,384 in the prior year. The primary components of this overall increase on a year-over-year are two-fold.
First, expenses associated with the initial introduction of protein operations are reflected in Plant commissioning and start-up, and are significantly higher than in 2010, at $7,430,881 versus $1,117,624, reflecting a full year of increased activity relating to the protein commercialization process versus 2010.
Second, as discussed in the Company's Q3 2011 financial reports, and as discussed in Note 9 to the Audited Consolidated Financial Statements for the year ended December 31, 2011, the Company identified certain equipment and production assets, with a carrying amount of $8,668,205, which are no longer in use. IFRS 5, Non- current Assets Held For Sale and Discontinued Operations requires that an impairment loss be recognized on specific assets at such time that the assets qualify as held for sale or when the assets have been disposed of. The Company estimates that it will receive proceeds of approximately $355,800 upon the eventual sale of the assets which qualify as held for sale, resulting in an impairment expense of $8,312,405. In addition to the assets held for sale, the Company also identified certain production assets, with a carrying amount of $506,053, which were disposed of during the year as a result of the foregoing adoption of a solvent-free production process resulting in a loss on disposal of $506,053. In preparing the specified assets for disposal and classification as held for sale, the Company incurred $113,978 of expenses. The Company also identified certain engineering fees that were previously included in equipment deposits, and presented as a component of non-current other assets, with a carrying amount of $616,297, which are no longer considered to be a recoverable expenditure and have been written-off. The Company recognized a loss on disposal in the amount of $72,319 relating to three patents that the Company has chosen to abandon due to the evolution of its technologies and the filing of other patents. As a result of the foregoing, the Company recognized in aggregate during the year an Impairment and other expenses charge of $9,620,972.
Also, as discussed in Note 9 to the Audited Consolidated Financial Statements for the year ended December 31, 2011, as a result of the formal adoption of the solvent-free protein production process, coupled with the resulting impairments and disposals as disclosed above, a further impairment test was triggered during the year under the requirements of IFRS 36, Impairment of Assets. The recoverable amount was estimated based on the greater of the Company's value in use and its fair value less costs to sell. The Company determined that fair value less costs to sell would result in a higher estimated value and as required, the Company then engaged a third-party valuator to conclude on the estimated fair value less costs to sell.
In determining the fair value less costs to sell, the third-party valuator developed a discounted cash flow model based on the Company's projected after-tax cash flows. The fair value less costs to sell was estimated to be approximately $76,000,000. Notably, the valuation estimate did not include any incremental value for the Company's intellectual property or its application at any additional facilities beyond Saskatoon.
Net Loss
The Net Loss and Comprehensive Loss for the year was $30,111,660, compared to $14,905,358 for the prior year. This increase in net loss is the cumulative result of the various items discussed above, most notably the impairment expense and the plant start-up and commissioning expense. On a per share basis, the Net Loss is
.15 for the year, versus
.09 in the prior year.
Financial Results for the Three Months Ended December 31, 2011
Revenues
During the fourth quarter of 2011, the Company generated $1,217,403 of revenue from canola oil and canola meal sales at its Saskatoon plant (including a gain on derivatives of $1,646; 2010 - loss on derivatives of ($61,902)), versus revenue of $555,820 in Q4 2010. The Company processed significantly more seed, and therefore sold more oil and meal, in Q4 2011 versus Q4 2010, and commodity sales prices were also higher, thus leading to the substantially higher revenue.
Gross Profit (Loss)
Cost of Goods Sold for the quarter was $2,414,129, compared to $1,532,030 in Q4 of the prior year, with the increase resulting primarily from the higher processing volumes, higher seed input costs, and increased depreciation expense, reflective primarily of asset additions and equipment put into use during 2010 being subject in 2011 to the first full year of amortization, as well as further additions in 2011.
The resulting Gross Loss for the quarter was $1,196,726, compared with a loss of $976,210 for Q4 2010.
Other Expenses
The Company incurred other expenses during the quarter of $14,230,821, compared to $3,410,353 in Q4 2010. The primary components of this increase on a quarter-over-quarter basis were two-fold. First, as discussed earlier, an increase in plant start-up and commissioning expenses from $1,117,624 in Q4 2010 to $2,918,046 in Q4 2011, due to expenses associated with the initial introduction of protein operations. Second, also as discussed earlier, Impairment and other expenses of $9,548,653 were recognized in Q4 2011.
Net Loss
The Net Loss for the quarter was $15,427,547, compared to $4,386,563 for the comparable prior year quarter. This increase in net loss is of course the cumulative result of the various items discussed above. On a per share basis, the Net Loss is
.07 for the quarter, versus
.02 in Q4 2010.
About BioExx Specialty Proteins Ltd .
Headquartered in Toronto, Canada, BioExx is focused on the separation of oil and high-value proteins from oilseeds for global food, beverage, nutrition, and other markets. BioExx employs trade secret, patented and patent-pending technologies that utilize significantly lower temperatures than conventional oilseed processing, in order to enable the improved separation of proteins from oilseeds. BioExx believes that these processes cumulatively have the potential to make a valuable contribution to global food and protein supply while maintaining an environmentally sustainable footprint.
To find out more about BioExx Specialty Proteins Ltd. (TSX:BXI), please visit www.bioexx.com.
The statements made in this press release include forward-looking statements that involve a number of risks and uncertainties. These statements relate to future events or future performance and reflect management's current expectations and assumptions. A number of factors could cause actual events, performance or results to differ materially from the events, performance and results discussed in the forward-looking statements, such as the economy, generally, competition in its target markets, the demand for BioExx's products, the availability of funding, the efficacy of its technology, and the anticipated costs of BioExx's plant construction and operation. These forward-looking statements are made as of the date hereof and BioExx does not assume any obligation to update or revise them to reflect new events or circumstances. Actual events or results could differ materially from BioExx's expectations and projections.
FOR FURTHER INFORMATION PLEASE CONTACT:
Chris SchnarrBioExx Specialty Proteins Ltd.Chief Financial Officer(416) 588-4442 x111cschnarr@bioexx.comwww.bioexx.com