Vancouver, BC – Viridis Energy Inc. ("Viridis" or the "Company") (TSXV: VRD) a “Cleantech” manufacturer and distributor of alternative energy providing biomass fuel to global residential and industrial markets, today reported financial results for the second quarter ended June 30, 2013. The Company reported revenue for the second quarter 2013 of $2.5 million compared to $2.4 million for the same period in 2012 and $2.3 million for the first quarter 2013.

Gross profit (revenue less cost of sales) increased to $465,000 generating a gross margin of 19%. This compares to $186,000 (gross margin of 8%) during the second quarter of 2012 and $336,000 (gross margin of 14%) for the first quarter 2013. The continued improvement in gross margin reflects increased production utilization and the further effects of cost efficiencies implemented by management in late 2012.  In accordance with IFRS policy, Viridis’ gross profit on revenue includes non-cash depreciation and amortization costs of $141,569 and $156,270 for the second quarters of 2013 and 2012, respectively, and $134,509 for the first quarter 2013.  

On an operating basis, excluding these non-cash charges, gross margin for the second quarters of 2013 and 2012 were approximately 25% and 14%, respectively, and 20% for the first quarter 2013.  

The Company’s loss from operations during the second quarter 2013 decreased to $(365,000) from $(561,000) in the first quarter 2013 and $(730,000) for the second quarter 2012.  The Company’s operating results include general and administrative (“G&A”) and start-up costs associated with Scotia Atlantic Biomass Company Limited (“Scotia”) acquired February 2012 of $250,738 and $204,134 during the second quarter of 2013 and 2012, respectively.

Excluding these Scotia related costs, the Company’s operating loss was $(105,000) during the second quarter and $(318,000) during the first quarter of 2013.  

Operations at the Scotia facility have been restored and production is expected to begin before the end of August. The facility has the capacity to generate 120,000 metric tons of wood pellets per year and recently announced a two year European off-take agreement for its production.  

The Company incurred a comprehensive loss of $(491,000) or $(0.01) per basic share during the second quarter 2013, which includes financing and accretion expenses of $125,000. This compares to a comprehensive loss of $(972,000) or $(0.02) per basic share for the second quarter 2012, which includes $239,000 of financing and accretion costs, and a comprehensive loss of $(753,000) or $(0.01) per basic share during the first quarter of 2013, which includes $190,000 of financing and accretion costs.

Financing and accretion costs incurred during the first six months of 2013 and 2012 were $315,000 and $617,000, respectively.  The Company completed a debt restructuring during the first quarter 2013 under more favorable terms than the prior facility, significantly reducing its finance expense.

Commenting on the improving financial results, Christopher Robertson, chairman and chief executive officer of Viridis Energy Inc., said, “With Scotia back in operation, our bottom line will improve significantly over the next few quarters.  Our consolidated production capacity is now 180,000 tonnes per year, and with efficiencies implemented over the last six months, we are seeing signs that, in addition to increasing plant utilization, we are testing projected production capacity limits.”  Mr. Robertson continued, “We project gross margins on our core residential and commercial wood pellet businesses to continue improving. We also expect our brokerage business to expand in coming months as more power plants convert to biomass fuel sources, especially in Europe where government subsidies and support schemes continue to focus on attracting investment for low carbon generation.”

At June 30, 2013, the Company had Cash and Cash Equivalents of approximately $2.9 million and Accounts Receivable of approximately $729,000, which represent a DSO (days sales outstanding) of less than 30 days.  Inventory increased to $926,000 from $718,000 in the prior quarter of 2013 in preparation for seasonal sale deliveries.  

Viridis’ common shares issued and outstanding as of June 30, 2013 were 114,298,883 and a fully diluted share count of 156,232,465, inclusive of outstanding warrants and options to purchase shares of the Company’s common stock, which, if fully exercised, would generate $10.3 million of additional working capital to the Company, inclusive of 5,848,096 warrants that expired subsequent to June 30, 2013 (representing $201,250 in potential working capital).

Mr. Robertson, concluded, “Viridis has persevered through fairly volatile market parameters over the last 4-5 years.  With the advocacy of our shareholders and the support of our employees and management team, we have emerged a strong competitor in the biomass industry.  With our core business positioned to capitalize on a fast growing market, we are also examining other facets of the biomass industry where we can apply our years of experience to develop additional sources of revenue and cultivate the use of renewable energy sources.”

 

 -------------------------------
 |Company Contact: Michele     |
 |Rebiere Chief Financial      |
 |Officer  Viridis Energy Inc .|
 |905-847-5226                 |
 |investorinfo@viridisenergy.ca|
 -------------------------------

 

About Viridis Energy Inc.

Viridis Energy Inc. (TSXV: VRD) is a publicly traded, "Cleantech" alternative energy company specializing in wood biomass.   Headquartered in Vancouver, B.C., Viridis Energy operates Cypress Pacific Marketing, Okanagan Pellet Company and Scotia Atlantic Biomass, thus providing the company with vertical integration for distribution and manufacturing as well as coast to coast national presence.  For more information on Viridis Energy Inc. please refer to the company website at www.viridisenergy.ca.

 

 Financial Statements Follow 

 

 -----------------------------------------------
 |Viridis Energy Inc.                          |
 |---------------------------------------------|
 |Consolidated statements of financial position|
 |---------------------------------------------|
 |(Expressed in Canadian dollars)              |
 |---------------------------------------------|
 |As at June 30, 2013 and December 31, 2012    |
 -----------------------------------------------

  

 ----------------------------------------------------------------
 |                |            |June, 2013   | |December 31,  | |
 |                |            |(unaudited)  | |2012 (audited)| |
 |--------------------------------------------------------------|
 |                |            |             | |              | |
 |--------------------------------------------------------------|
 |ASSETS          |            |             | |              | |
 |--------------------------------------------------------------|
 |                |            |             | |              | |
 |--------------------------------------------------------------|
 |Current         |            |             | |              | |
 |--------------------------------------------------------------|
 |  Cash and cash |            | $           | | $            | |
 |equivalents     |            |2,910,064    | |              | |
 |                |            |             | | 413,570      | |
 |--------------------------------------------------------------|
 |  Accounts      |            |             | |              | |
 |receivable      |            | 729,448     | | 753,208      | |
 |--------------------------------------------------------------|
 |  Inventory     |            |             | |              | |
 |                |            |   926,171   | |              | |
 |                |            |             | | 594,012      | |
 |--------------------------------------------------------------|
 |  Prepaid       |            |             | |              | |
 |expenses        |            |  436,013    | |    225,761   | |
 |--------------------------------------------------------------|
 |  Due from      |            |             | |              | |
 |related parties |            |  42,242     | |    54,000    | |
 |--------------------------------------------------------------|
 |                |            |             | |              | |
 |                |            |    5,043,938| |              | |
 |                |            |             | |2,040,551     | |
 |--------------------------------------------------------------|
 |                |            |             | |              | |
 |--------------------------------------------------------------|
 |Property, plant |            |             | |              | |
 |and equipment   |            |8,326,743    | |8,264,488     | |
 |--------------------------------------------------------------|
 |                |            |             | |              | |
 |--------------------------------------------------------------|
 |                |            | $           | | $            | |
 |                |            |13,370,681   | |10,305,039    | |
 |--------------------------------------------------------------|
 |                |            |             | |              | |
 |--------------------------------------------------------------|
 |LIABILITIES and SHAREHOLDERS' EQUITY       | |              | |
 |--------------------------------------------------------------|
 |                |            |             | |              | |
 |--------------------------------------------------------------|
 |                |            |             | |              | |
 |--------------------------------------------------------------|
 |  Bank line of  |            | $           | | $            | |
 |credit          |            |             | |  2,992,832   | |
 |                |            | -           | |              | |
 |                |            |             | |              | |
 |--------------------------------------------------------------|
 |  Accounts      |            |             | |              | |
 |payable and     |            |2,044,594    | |  2,294,127   | |
 |accrued         |            |             | |              | |
 |liabilities     |            |             | |              | |
 |--------------------------------------------------------------|
 |  Deferred      |            |             | |              | |
 |income          |            |     -       | |              | |
 |                |            |             | |157,058       | |
 |--------------------------------------------------------------|
 |  Short term    |            |             | |              | |
 |loan payable    |            |             | |              | |
 |                |            |   -         | |              | |
 |                |            |             | | 2,606,875    | |
 |--------------------------------------------------------------|
 |  Due to related|            |             | |              | |
 |parties         |            |             | |              | |
 |                |            |  37,315     | |              | |
 |                |            |             | |164,670       | |
 |--------------------------------------------------------------|
 |  Current       |            |             | |              | |
 |portion of loans|            |   34,202    | |     19,646   | |
 |payable         |            |             | |              | |
 |--------------------------------------------------------------|
 |                |            |             | |              | |
 |--------------------------------------------------------------|
 |                |            |2,116,111    | |8,865,208     | |
 |--------------------------------------------------------------|
 |                |            |             | |              | |
 |--------------------------------------------------------------|
 |  Loans payable |            |             | |              | |
 |                |            |5,688,537    | |  -           | |
 |--------------------------------------------------------------|
 |                |            |             | |              | |
 |--------------------------------------------------------------|
 |                |            |7,804,648    | |8,865,208     | |
 |--------------------------------------------------------------|
 |                |            |             | |              | |
 |--------------------------------------------------------------|
 |                |            |             | |              | |
 |--------------------------------------------------------------|
 |Shareholders'   |            |             | |              | |
 |equity          |            |             | |              | |
 |--------------------------------------------------------------|
 |                |            |             | |              | |
 |--------------------------------------------------------------|
 |  Share capital |            | $           | | $            | |
 |                |            | 27,322,578  | | 22,537,578   | |
 |--------------------------------------------------------------|
 |  Contributed   |            |             | |              | |
 |surplus         |            | 3,446,376   | |  2,861,376   | |
 |--------------------------------------------------------------|
 |  Accumulated   |            |             | |              | |
 |deficit         |            |(25,202,921) | |(23,959,123)  | |
 |--------------------------------------------------------------|
 |                |            |             | |              | |
 |--------------------------------------------------------------|
 |                |            |             | |              | |
 |                |            |5,566,033    | |  1,439,831   | |
 |--------------------------------------------------------------|
 |                |            |             | |              | |
 |--------------------------------------------------------------|
 |                |            | $           | | $            | |
 |                |            | 13,370,681  | | 10,305,039   | |
 ----------------------------------------------------------------

 

Viridis Energy Inc.

Consolidated statements of loss and total comprehensive loss

(Expressed in Canadian dollars, except number of shares and per share amounts)

For the six months ended June 30, 2013 and 2012

(Unaudited)

 ----------------------------------------------------------------------------------------
 |          |              | | |     |                 |            |      |            |
 |--------------------------------------------------------------------------------------|
 |          |              | | |   Three months ended  June  |Six months ended          |
 |          |              | | |30,                          |                          |
 |          |              | | |                             |      June 30,            |
 |--------------------------------------------------------------------------------------|
 |          |              | | |                 |     |            |      |            |
 |          |              | | | 2013            |     |            |      |   2012     |
 |          |              | | |                 |     |            | 2013 |            |
 |          |              | | |                 |2012 |            |      |            |
 |--------------------------------------------------------------------------------------|
 |          |              | | |     |           |           |             |            |
 |--------------------------------------------------------------------------------------|
 |Sales                    | | | $         |     | $         | $           | $          |
 |                         | | |2,473,296  |     |2,405,600  |4,793,148    |4,842,408   |
 |--------------------------------------------------------------------------------------|
 |Costs of sales           | | |           |     |           |             |            |
 |                         | | |2,008,698  |     |2,219,498  |3,992,183    |4,505,641   |
 |--------------------------------------------------------------------------------------|
 |Gross     |              | | |           |     |           |             |            |
 |profit    |              | | |  464,598  |     |  186,102  |  800,965    |            |
 |          |              | | |           |     |           |             | 336,767    |
 |--------------------------------------------------------------------------------------|
 |          |              | | |           |     |           |             |            |
 |--------------------------------------------------------------------------------------|
 |Operating expenses       | | |           |     |           |             |            |
 |--------------------------------------------------------------------------------------|
 |          |Selling and   | | |           |     |           |             |  96,567    |
 |          |marketing     | | |           |     |           |             |            |
 |          |              | | |39,405     |     |47,359     |85,242       |            |
 |--------------------------------------------------------------------------------------|
 |          |Freight-out   | | |           |     |           |             |  122,215   |
 |          |              | | |           |     |           |             |            |
 |          |              | | |4,436      |     |30,666     |12,645       |            |
 |--------------------------------------------------------------------------------------|
 |          |General and   | | |           |     |           |             |  1,666,269 |
 |          |administrative| | |  785,368  |     |  838,392  |             |            |
 |          |              | | |           |     |           |1,628,251    |            |
 |--------------------------------------------------------------------------------------|
 |          |              | | |           |     |           |             |  1,885,051 |
 |          |              | | |  829,209  |     |  916,417  |             |            |
 |          |              | | |           |     |           |1,726,138    |            |
 |--------------------------------------------------------------------------------------|
 |Loss before other        | | |           |     |           |             |            |
 |items                    | | | (364,611) |     | (730,315) | (925,173)   | (1,548,284)|
 |--------------------------------------------------------------------------------------|
 |          |              | | |           |     |           |             |            |
 |--------------------------------------------------------------------------------------|
 |Other items              | | |           |     |           |             |            |
 |--------------------------------------------------------------------------------------|
 |          |Foreign       | | |           |     |           |             |  (6,050)   |
 |          |exchange loss | | |           |     |           |             |            |
 |          |              | | |(4,424)    |     |(2,537)    |(6,688)      |            |
 |--------------------------------------------------------------------------------------|
 |          |Disposal of   | | |2,821      |     |-          |2,821        |  -         |
 |          |property plant| | |           |     |           |             |            |
 |          |    and       | | |           |     |           |             |            |
 |          |equipment     | | |           |     |           |             |            |
 |--------------------------------------------------------------------------------------|
 |          |Finance       | | | (88,531)  |     |           |             |  (530,364) |
 |          |expense       | | |           |     |           |             |            |
 |          |              | | |           |     |(193,152)  |(255,083)    |            |
 |--------------------------------------------------------------------------------------|
 |          |Accretion     | | |(36,473)   |     |(46,107)   |(59,675)     |  (86,668)  |
 |          |expense       | | |           |     |           |             |            |
 |--------------------------------------------------------------------------------------|
 |          |              | | |           |     |           |             |  (623,082) |
 |          |              | | |           |     |           |             |            |
 |          |              | | |(126,607)  |     |(241,796)  |(318,625)    |            |
 |--------------------------------------------------------------------------------------|
 |Loss before income       | | |(491,218)  |     |(972,111)  |(1,243,798)  |(2,171,366) |
 |taxes recovery           | | |           |     |           |             |            |
 |--------------------------------------------------------------------------------------|
 |Income tax recovered     | | |-          |     |-          --            --           |
 |--------------------------------------------------------------------------------------|
 |Net loss and total       | | | $         |     | $         | $           | $          |
 |comprehensive loss       | | |(491,218)  |     |(972,111)  |(1,243,798)  |(2,171,366) |
 |--------------------------------------------------------------------------------------|
 |          |              | | |           |     |           |             |            |
 |--------------------------------------------------------------------------------------|
 |Net loss per share       | | |           |     |           |             |            |
 |--------------------------------------------------------------------------------------|
 |          |Basic and     | | | $         |     | $         | $           |            |
 |          |diluted       | | |           |     |           |             |$           |
 |          |              | | |(0.01)     |     | (0.02)    | (0.02)      |    (0.05)  |
 |--------------------------------------------------------------------------------------|
 |          |              | | |           |     |           |             |            |
 |--------------------------------------------------------------------------------------|
 |Weighted average         | | |           |     |           |             |            |
 |number of common         | | |           |     |           |             |            |
 |shares outstanding       | | |           |     |           |             |            |
 |--------------------------------------------------------------------------------------|
 |          |Basic and     | | |99,683,498 |     |41,343,845 |             |            |
 |          |diluted       | | |           |     |           |80,646,949   |41,310,878  |
 ----------------------------------------------------------------------------------------

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