MONTREAL, April 30, 2014 /CNW Telbec/ - PyroGenesis Canada Inc. (http://pyrogenesis.com) (TSXV: PYR), a TSX Venture 50® company, a world leader in the design,
development, manufacturing and commercialization of advanced plasma
processes, today announced its financial and operational results for
the fourth quarter and the fiscal year ended December 31, 2013.
Highlights
2013 was a year during which PyroGenesis:
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Increased revenues by 73% to $5,756,009;
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Increased gross margins (before amortization of intangible assets) to
over 45%;
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Decreased loss from operations by 41%;
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Decreased EBITDA loss by 45% to $2,012,912;
-
At December 31st 2013, backlog exceeded 2013 Revenues by 40%.
PyroGenesis' recent entree into new high-margin market niches is
translating into significant orders for its plasma processes and
engineering services as evidenced by the level of new business
activity. These results validate management's strategic decision to
"de-risk" the Company by introducing its plasma processes into new
high-margin markets. Combined with cost reduction / rationalization
plans undertaken in 2012 management is confident that PyroGenesis is
well positioned for future growth.
Financial Summary
Revenue
Revenue for fiscal 2013 totaled $5,756,009 ($3,323,236: 2012), this 73%
increase in revenues reflects increased business volumes associated
with the execution of a $5.6 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 aircraft carrier, on which
progress is evaluated at 65% complete as December 31, 2013, as well as
other projects in progress.
Revenue for the fourth quarter of fiscal 2013 (hereafter "2013-Q4") was
$1,878,793 ($1,221,501: 2012-Q4).
2014 revenues are projected to increase significantly based on a strong
backlog ($8MM) at the end of 2013 combined with the pipeline of future
projects identified and under discussion.
Cost of Sales and Services
Cost of Sales and Services before amortization of intangible assets for
fiscal 2013 was $3,133,812, ($3,444,560: 2012), a decrease of 9%. Cost
of Sales and Services before amortization for 2013-Q4 was $887,307,
($839,927: 2012), an increase of 6%.
Gross margins continued to post impressive year over year gains on both
a quarter over quarter and annual basis. The Company posted gross
margins for fiscal 2013 before amortization of intangible assets of
$2,622,197 (45.6% of revenue), versus negative $121,324 (negative 3.7%
of revenue) for fiscal 2012. For 2013-Q4, the Company posted gross
margins of $991,486 (52.8% of revenue), versus $381,574 (31.2% of
revenue) for the same period in 2012. The improved level of gross
margins in 2013 was achieved through controlled project management,
tight control over technical resources employed on projects, favorable
pricing on equipment purchases and increased business volumes.
Management is confident that with an increased focus on operations and
project execution, PyroGenesis will continue to post above average
gross margins on its projects notwithstanding the natural fluctuations
that may occur from quarter to quarter.
Selling, General and Administrative Expenses
Selling, general and administrative expenses ("SG&A") for fiscal 2013
were $4,051,354 ($3,832,087: 2012), a 6% increase. SG&A for 2013-Q3
were $1,029,572 (2012: $738,185), a 39% increase.
Included in SG&A is the cost of share-based payments (a non-cash item)
of $606,888 in fiscal 2013 ($952,055 in 2012).
2013 SG&A expenses incorporate the expansion of the Company's sales
force with two seasoned business development professionals, increased
proposal efforts and the strengthening of the management team.
Net Loss
Loss from operations for fiscal 2013 decreased 41% to $3,409,333, over a
loss of $5,819,275 reported during fiscal 2012. For 2013-Q4, loss from
operations decreased 33% to $561,696 over a loss of $840,167 reported
during the same period in fiscal year 2012. During 2012 and 2013,
PyroGenesis took significant steps to restructure and strengthen
management, reduce fixed operating expenses, and increase revenues
while improving overall gross margins on projects. The effects of these
measures started to have an impact on operations towards the end of
2012 and continued throughout 2013.
Total Comprehensive Loss
The Corporation has achieved a 31% decrease in comprehensive loss for
fiscal 2013 over fiscal 2012. The 2013-Q4 Comprehensive loss increased
by 36% over 2012-Q4. In 2013-Q4, the Corporation recognized a
non-recurring impairment loss of $581,638 on the sale of its 50%
ownership interest in a joint operation.
The strong decrease in the fiscal 2013 Comprehensive loss is due to a
73% increase in revenues, and an improvement in gross margins before
amortization of intangible assets to $2,622,197 (45.6% GM) as compared
to a negative margin of $121,324 (negative 3.7% GM) in fiscal 2012, for
a net margin improvement of $2,743,521.
EBITDA
EBITDA (earnings from operations before depreciation and amortization
and special non-cash charges) for 2013 was negative $2,012,912, a
decrease of 45% over the negative EBITDA of $3,684,320 reported during
fiscal 2012. During 2013-Q4, EBITDA was negative $635,344, as
compared to a negative EBITDA of $3,684,320 in 2012-Q4.
Liquidity
At December 31, 2013, PyroGenesis had cash on hand of $1,182,835 and
negative working capital of $1,373,763 (negative $1,436,384 at December
31, 2012).
Of note, the Company has no bank debt, nor any debt owing to unrelated
parties.
On April 22, 2014, the Company announced that it has entered into an
agreement with an agent to undertake a private placement at a price of
$0.60 per unit for gross proceeds of approximately $3,000,000.
New Audit Committee member
Effective April 30, 2014, Mr. Robert Radin has accepted to become a
member of the Audit Committee of the Company. Mr. Radin has been a
Board member since 2012.
Outlook
2013 has been a watershed year for PyroGenesis as the full effect of the
rationalization programs instituted in 2012 were realized as the
largest business development push in the history of the company took
hold. As a result, gross margins of 45% exceeded targeted goals and
sales increased year over year by over 73% to 5.7MM; more to the point,
backlog as of Dec 31, 2013, which is mostly expected to be accounted
for as 2014 revenues, already exceeds 2013 Revenues by more than 40%.
Management fully expects to have at least 100% growth in revenues year
over year for the next three years while maintaining competitive gross
margins.
The Company continues to implement measures to strengthen and focus its
business development department, which includes, amongst other
measures, hiring strategically focused professionals and realigning the
company's business development efforts.
Previously mentioned efforts to refocus the Company's strategic
objectives with the intent of leveraging off Company strengths have
proven highly effective. Under the direction of the board of
directors, this strategy has significantly "de-risked" your Company's
business by becoming less dependent on environmental sales to the US
Military as PyroGenesis has successfully increased sales of its
proprietary plasma processes into the high-margin niche market
segments in the oil and gas as well as the mining and metallurgical
industries; the latter of which includes the recently announced success
within the 3D printing industry wherein PyroGenesis has a proven, and
commercially available, technology platform which can produce the most
spherical Titanium powders highly sought after in 3D printing.
The company has further de-risked its business model by starting to
incorporate recurring revenue features within the sales agreement.
Management has targeted 2016 as the year in which the Company will be
profitable from recurring revenues alone.
In conclusion, management is confident that the strategic plan adopted
by the Board which has given effect to the realignment and de-risking
of the Company's business, has proved a success and management expects
that this success will continue and be improved upon into the
foreseeable future.
About PyroGenesis Canada Inc.
PyroGenesis Canada, a TSX Venture 50® company, is the world leader in
the design, development, manufacturing and commercialization of
advanced plasma processes. We provide engineering and manufacturing
expertise, cutting-edge contract research, as well as turnkey process
equipment packages to the defense, metallurgical, mining, advanced
materials, oil & gas, and environmental industries. With a team of
experienced PyroClassTM engineers, scientists and technicians working
out of our Montreal office and our 3,800 m2 demonstration facility,
PyroGenesis maintains its competitive advantage by remaining at the
forefront of technology development and commercialization. Our core
competencies allow PyroGenesis to lead the way in providing innovative
plasma torches, plasma waste processes, high-temperature metallurgical
processes, and engineering services to the global marketplace. Our
operations are ISO 9001:2008 certified, and have been since 1997.
PyroGenesis is a publicly-traded Canadian company on the TSX Venture
Exchange (Ticker Symbol PYR.V). 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.
