Vancouver, BC - Viridis Energy Inc. ("Viridis" or the "Company") /quotes/zigman/561044 CA:VRD -10.53% a "Cleantech" manufacturer and distributor of alternative energy providing biomass fuel to global residential and industrial markets, today reported financial results for its full year and fourth quarter ended December 31, 2012.
Prior to 2012, Viridis off-take agreements included the cost of freight, which was included in the reported revenue. In 2012, the Company revised its arrangements to require customers to pay delivery costs directly to the transport service providers. Consequently, revenue reported for 2012 excludes these transportation costs and reflects a decrease compared to 2011. Viridis reported revenue for the full year 2012 of $9.5 million. This compares to $12.4 million of revenue reported for the prior, year that included $2.2 million in delivery costs as well as $0.5 million in sales of inventory remaining from the 2010 acquisition.
Gross profit increased from $1.0 million (or 8.5% of revenue) in 2011 to $1.1 million (or 11.7% of revenue) in 2012. The increase in gross profit reflects a 14% increase of the average selling price of pellets during the year. In accordance with IFRS reporting, Viridis gross profit on revenue includes depreciation and amortization costs of $0.5 million and $0.6 million in 2012 and 2011 respectively. Excluding these non-cash charges, gross margin averaged 17% in 2012 compared to 13% in 2011.
The Company reported a loss from operations of $2.9 million in 2012, inclusive of $0.8 million of general and administrative (G&A) costs associated with Scotia Atlantic Biomass ("Scotia") which was acquired in February 2012, and is not projected to contribute to revenue until the second half of 2013. This compares to a loss from operations of $3.5 million in the prior year. Excluding G&A costs of Scotia, the 2012 loss from operations was $2.0 million, a 40% decrease to the comparable loss in 2011.
Commenting on the 2012 financial results, Christopher Robertson, the Company's chief executive officer said, "During the year, the Company's Okanagan Pellets brand continued to gain market share in the US heating market. Although the company does not segment its revenue by product line, we achieved a 22% operating margin on the pellet line. However, the volumes fell short of our forecast and as a result; we determined it was necessary to write-down the Company's goodwill and intangible assets for accounting purposes. While this has a significant non-cash impact on our financial results for 2012, it shortens the path to net profitability."
As a result of the write-down related to goodwill and intangible assets, the Company incurred a comprehensive loss of $(9.5) million or $(0.19) per basic and diluted share for 2012. Excluding the write-down, the comprehensive loss for 2012 was $(4.0) million or $(0.08) per basic and diluted share. This compares to a comprehensive loss of $(4.2) million in 2011 or $(0.12) per basic share for the full year 2011.
Operating expenses decreased from $4.6 million in 2012 to $4.0 million in 2012 and finance charges (inclusive of bank charges and imputed interest on convertible securities) for the year were approximately $0.8 million, which compares to approximately $0.6 million in 2011.
At December 31, 2012, the Company had Cash and Cash Equivalents of approximately $0.4 million and Accounts Receivable of approximately $0.7 million, compared to the same period in 2011, of $0.6 million and $1.2 million respectively. Short-term loan payable in 2012 of $2.6 million reflects the loan associated with the acquisition of Scotia Atlantic Biomass Company. Common shares issued and outstanding as of December 31, 2012 were 59,798,883.
Mr. Robertson, added, "Clearly, a major area of focus this past year was on improving operating margins and we have made great strides in this regard. In 2013, we are scheduling the operational start-up of our Scotia plant to coincide with the demand increases projected from the UK and European Union, which we believe will have a material impact on our financial results over the next few years."
Source: Viridis Energy Inc.
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