MONTREAL, Aug. 29, 2013 /CNW Telbec/ - PyroGenesis Canada Inc. ("PyroGenesis" or the "Company") (TSXV: PYR), today announced its
financial and operational results for the second quarter of fiscal
2013, ending June 30, 2013 ("2013-Q2").
Second Quarter Highlights:
Over the first six months of 2013 PyroGenesis has:
-
Increased its revenues by over 57%;
-
Decreased its Cost of Sales and Services by over 23% to $1,395,786; and
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Increased gross margin (before amortization of licenses) to over 43% to
$572,281;
Results continue to reflect management's successful restructuring
measures and its focus on increasing the effectives of its business
development strategy. The Company continues to benefit from better
utilization of resources and cost containments, on-time delivery,
meeting key project milestones, and improved reporting with respect to
project progress and issues. The changes recently implemented within
the Company's business development focus are starting to have effect
and management expects, as a result, further increases in revenues in
the coming quarters.
Financial Summary for the six months ended June 30, 2013
Revenues
Revenues for 2013-Q2 were $1,341,818, an increase of 73% over the
revenue of $777,197 reported during the same period in fiscal 2012. On
a year-to-date ("YTD") basis revenues for fiscal 2013 were $2,482,961,
an increase of 57% over the revenues of $1,585,140 reported during the
same period in fiscal year 2012. This increase in revenue in 2013
reflects the end of the "gap period" the Company has been faced with
while securing its first reorder from its established client base. In
late November 2012, the Company announced that it had secured a $5.5
million reorder from Newport News Shipbuilding for a plasma waste
destruction system to be installed on the CVN-79, the next US Navy
Ford-class air craft carrier, which is to be delivered and recognized
into income over the next two years. Revenues in 2013-Q2 are positively
impacted by the work achieved and recognition of the revenues on this
new major contract, as well as other projects in progress or completed
in the quarter.
Cost of Sales
Cost of Sales before government grants and research and development tax
credits for 2013-Q2 was $787,625, an increase of 18% as compared to net
costs of $668,777 reported for 2012-Q2. On a YTD basis, cost of sales
before government grants was $1,395,786 as compared to $1,832,625 for
the same period in the prior year, for a decrease of 24%.
Building on the improvement in gross margin on projects that started in
2012-Q4, the 2013-Q2 shows an impressive improvement over most of 2012.
Gross margin for 2013-Q2 before amortization of licenses was $554,193
(41.3% on revenues), versus $108,420 (14.0% on revenues) for 2012- Q2.
For the six months ended June 30, 2013, the YTD gross margin was
$1,087,175 (43.8% on revenues), versus negative $247,485 (negative
15.6% on revenues) for the same period in 2012. The improved level of
gross margin in 2013 was achieved through controlled project
management, tight control over technical resources employed on
projects, and favorable pricing on equipment purchases.
Management is pleased with the performance of its technical and project
teams for completing projects under budget and on time. The ability to
execute projects on time and also improve the project margins is a key
demonstration that PyroGenesis is ready to face the challenges ahead as
it volume of projects and revenues grow.
Management is confident that with the increased focus on operations and
project execution, PyroGenesis will continue to see favorable gross
margins on projects. Margins will naturally fluctuate quarter to
quarter depending on the types of projects under execution and the
completion stage of the projects.
Selling, General and Administrative Expenses
Before stock based compensation, Selling, general and administrative
(SG&A) expenses, increased by 17% in 2013-Q2 over the same time frame
in 2012 (2013-Q2: $941,894; 2012-Q2: $804,560), and 12% for 2013-YTD
(2013-YTD: $1,838,691; 2012: $1,635,171). The increase in SG&A expenses
is mainly attributable to the hiring of a senior financial executive,
the expansion of the Company's sales force with two seasoned business
development professionals and investments in R&D develop technologies
and products. Increases in office and general spending are mainly
attributed to further development of the Company's information systems.
Net Loss
Loss from operations for 2013-Q2 before non-cash items (share based
payments: $149,785; amortization of licenses and property and
equipment: $394,729) was $432,380. During 2012, Management took
several key steps to restructure and strengthen the Company's
management, reduce fixed operating expenses, increase the focus on
increasing revenues and improving the gross margins on projects. The
results from these measures started to be evident towards the end of
2012 and in the first half of 2013.
Total Comprehensive Loss
The Corporation has achieved a 28% and 40% decrease in comprehensive
loss in 2013- Q2 and 2013-YTD over the respective 2012 comparatives.
This decrease is due to an increase in revenues by 73% and 57% (net
increase of $564,621 and $879,821) for the 2013-Q2 and 2013- YTD over
comparative periods in 2012; and gross margin before amortization of
licenses was $554,193 (41.3% GM) for 2013-Q2 and as compared to a
margin of $108,420 ( 14.0% GM) in 2012-Q2,for a net margin improvement
in Q2-2013 of $445,773 or 27.3% points before amortization of licenses
compared to Q2-2012 as well as for a 2013-YTD, the gross margin is
$1,087,175 (43.8% GM) versus a negative margin of $247,485 (-15.6% GM)
for the comparative period in 2012 (for an improvement in margin of
$1,334,660). The dramatic improvement in gross margin is a positive
sign that Management's restructuring to allow greater concentration on
operations is bringing positive results.
Liquidity
At June 30, 2013, PyroGenesis had cash on hand of $608,786, no debt
owing to non-related third parties or with nil bank indebtedness
parties and negative working capital of $3,191,487. Subsequent to
quarter end, PyroGenesis collected over $1.4M in receivables that were
booked at June 30, 2013.
About PyroGenesis Canada Inc.
PyroGenesis Canada is an environmental solutions company that designs,
develops and manufactures plasma waste-to-energy systems and plasma
torch products. PyroGenesis' proprietary plasma technologies utilize
the intense energy of plasma to gasify and vitrify virtually any type
of waste without producing hazardous by-products. PyroGenesis' patented
gasification and vitrification technology is different from
incineration because it produces a clean synthetic gas from waste,
which can be used for power generation. PyroGenesis' technology can
also turn waste into a glassy rock that can be utilized as construction
material. PyroGenesis has marquee defense industry and civilian
customers that are using its technology in marine and land-based
applications. For more information, please visit www.PyroGenesis.com
This press release contains certain forward-looking statements,
including, without limitation, statements containing the words "may",
"plan", "will", "estimate", "continue", "anticipate", "intend",
"expect", "in the process" and other similar expressions which
constitute "forward-looking information" within the meaning of
applicable securities laws. Forward-looking statements reflect the
Company's current expectation and assumptions, and are subject to a
number of risks and uncertainties that could cause actual results to
differ materially from those anticipated. These forward-looking
statements involve risks and uncertainties including, but not limited
to, our expectations regarding the acceptance of our products by the
market, our strategy to develop new products and enhance the
capabilities of existing products, our strategy with respect to
research and development, the impact of competitive products and
pricing, new product development, and uncertainties related to the
regulatory approval process. Such statements reflect the current views
of the Company with respect to future events and are subject to certain
risks and uncertainties and other risks detailed from time-to-time in
the Company's ongoing filings with the securities regulatory
authorities, which filings can be found at www.sedar.com. Actual results, events, and performance may differ materially. Readers
are cautioned not to place undue reliance on these forward-looking
statements. The Company undertakes no obligation to publicly update or
revise any forward-looking statements either as a result of new
information, future events or otherwise, except as required by
applicable securities laws.
Neither the 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.
SOURCE: PyroGenesis Canada Inc.
