Vancouver, BC /
ACCESSWIRE / May 28, 2014 / Viridis
Energy Inc. ("Viridis" or the "Company")
(TSXV: VRD) (OTC: VRDSF), today reported financial results for its
first quarter ended March 31, 2014. During the quarter, the Company
was impacted by a six week trucking strike that impacted its
British Columbia plant as well as extreme weather conditions that
caused production challenges at its newly revitalized plant in Nova
Scotia. Despite these short-lived
impediments, Viridis grew revenues 143% year-over-year. First
quarter progress:
Viridis Energy
-
--Early March, entered into a $3.25 million secured loan facilities
agreement with the Royal Bank of Canada ("RBC"). The Loan bears
interest at the annual rate of Royal Bank's prime rate plus 3%
(currently equates to 6%), payable monthly over 48 months. Proceeds
from the loan were used to repay the $3.3 million loan owed by
Viridis' Okanagan Pellet Company ("OPC") subsidiary to Cornwall
Investments LLC that carried interest costs of 9% per year (prime
plus 6%). In addition, RBC will provide Viridis with a $250,000
line of credit at RBC's prime rate plus 3% interest per annum, for
general working capital purposes.
-
--On March 31, 2014,
Cornwall Investments LLC ("Cornwall") exercised 25,000,000 of its
Viridis common share purchase warrants at a price of $0.15 per
share, generating proceeds of $3.75 million to Viridis.
-
--Subsequent to
quarter-end, Viridis' wholly owned subsidiary, Scotia Atlantic
Biomass Company Limited ("Scotia") was awarded a Capital Investment
Incentive ("Incentive") of up to C$517,520 by the Government of
Nova Scotia. Initial proceeds from the Incentive will be used to
purchase new capital equipment to increase production performance
at the Scotia plant.
Scotia Atlantic
Viridis Merchants
-
- Arranged its second transaction, since the Company's wholly owned dealer
subsidiary was launched in November 2013, totaling 12,000 tons of
wood pellets from a S.E. U.S. producer,
which will augment Viridis' product deliveries to customers in the
Northeast United States. This transaction is expected to generate
over $2.5 million in revenues over the 12-month period beginning
April 2014.
"We started this year with two significant revenue developments.
We released the largest wood pellet shipment ever exported from
Nova Scotia from a plant that we re-opened only a few months prior,
and we posted the second transaction for Viridis Merchants. Had it
not been for the abnormally hostile winter and a rare trucking
strike, we would have posted a record quarter as well. The
disruption in shipping alone impacted our quarterly results by
approximately $700,000 in delayed revenues," commented
Christopher Robertson, Viridis' CEO. "As discussed at
year-end, Viridis is well positioned for a breakout year in 2014.
Our OPC plant is operating at full capacity and Scotia
Atlantic Biomass is gaining meaningful progress towards achieving
full operating capacity. Additionally, both Viridis Merchants
transactions have begun contributing to revenues. Consequently, we
anticipate 2014 revenues will fall in a range between $30 million
and $35 million, exiting the year at a profitable run-rate."
Viridis reported revenues for the three months ended March
31, 2014 of approximately $5.6 million compared to $2.3 million for
the same period of the previous year and $6.1 million in the fourth
quarter of 2013. The year-over-year improvement
predominately reflects the continued ramp-up of production from the
Company's plant in Nova Scotia, and revenue from Viridis Merchant
initial transaction. The decline in revenues from the fourth
quarter was attributed to the impact of a strike by third-party
freight operators, which has since been resolved, that prevented
the Company's Okanagan plant from delivering product during a six
week period in the first quarter.
The Company reported a comprehensive net loss of $(1.6) million
or $(0.01) per basic share for the first quarter 2014 compared to a
comprehensive net loss of $(753,000) or $(0.01) per basic share for
the first quarter 2013 period and a comprehensive net loss of
$(1.3) million or $(0.01) per basic share for the fourth quarter
2013. The Company reported a loss from operations of $(1.4) million
for the current year first quarter versus a loss from operations of
$(561,000) for the same period of the prior year and a loss from
operations of $(1.2) million in the fourth quarter 2013.
The Company's gross profit during first quarter 2014 of $332,000
or 6 percent of total revenue, compared to $336,000 or 14.5 percent
during the prior year first quarter and $615,000 or 10 percent
during the fourth quarter of 2013. The decrease on gross margin was
primarily due to two events which impacted the Company's two
facilities. In addition, as anticipated,
the first Viridis Merchant transaction, which generated less
gross margin than the Company's production business due to
the lower working capital profile of its transaction,
commenced shipment during the first
quarter. Gross margins going forward are expected to
increase as the Company achieves higher production levels and
continued operating efficiencies.
Operating expenses for the three months ended March 31, 2014
increased to $1.7 million from $900,000 in the comparable period in
2013. Included in the 2014 operating expenses was almost $570,000
in freight charges, compared to only $8,000 in the comparable
period of 2013. Excluding freight, the year over year operating
expenses increased by 26%.
Finance and accretion expense for the three months ended March
31, 2014 totaled $224,000, compared to $192,000 in the same period
of 2013 and $194,000 in the fourth quarter of 2013. The increase
was the result of full quarter accretion expense of $42,000 during
the three months ended March 31, 2014 compared to $23,000 in the
same period of the prior year.
At March 31, 2014, the Company
reported cash and cash equivalents of $2.9 million, primarily
resulting from the exercise of 25,000,000 stock purchase warrants
at $0.15 per share by the Company's largest shareholder, generating
$3.75 million in additional capital. The Company also reported
accounts receivable of $1.3 million, representing DSO of 20 days,
and inventory of $2.0 million, which increased significantly from
year-end inventory level of $927,000 due to the temporary freight
disruption experienced during the first quarter. The Company's
current ratio 1.4x at the first quarter-end, compared to prior year
as well as year-end 2013 level of 1.2x. On March 31, 2014,
Viridis had short-term debt of $1.0
million and long term debt of $5.9 million. The Company's
shareholder equity totaled $5.7 million on March 31, 2014, an
increase of $2.1 million over year-end 2013.
Viridis common shares
outstanding on March 31, 2014 totaled 139.3 million shares, an
increase of 25 million shares due to the Cornwall Investments LLC ("Cornwall") exercise of its
Viridis common share purchase warrants at a price of $0.15 per
share on the final day of the quarter which generated proceeds of
$3.75 million. The Company's fully diluted share count totals 149.5
million, inclusive of all options (average exercise price of $0.26)
and warrants (average exercise price $0.39). At first
quarter end, the Company has tax loss carry forwards of
approximately C$17.5 million, which expire between
2029 and 2033.
Conference
Call Details:
------------------------------------------------------------------------
|Date/Time: |Wednesday, May 28, 2014– 4:30 p.m. (ET) |
|----------------------------------------------------------------------|
|Telephone Number: |877-870-4263 |
|----------------------------------------------------------------------|
|International |412-317-0790 |
|Dial-In | |
|Number: | |
|----------------------------------------------------------------------|
|Canada Dial-In Number:|855-669-9657 |
|----------------------------------------------------------------------|
| | |
|----------------------------------------------------------------------|
|Internet Access: |http://www.videonewswire.com/event.asp?id=99425|
| |or |
| |www.viridisenergy.ca |
------------------------------------------------------------------------
It is recommended that participants phone-in at least 10
minutes before the call is scheduled to begin. A replay of the
conference call in its entirety will be available approximately one
hour after its completion via the Internet Access link
above.
Annual
Shareholder Meeting Details:
------------------------------------------------------------------
|Date/Time:|Tuesday, June 3, 2014 at 10:00 am (PT)– RSVP REQUIRED|
|----------------------------------------------------------------|
|Place: |700-595 Burrard Street, |
| |Vancouver, British Columbia, |
| |Canada |
------------------------------------------------------------------
--------------------------------------------------------------------------
|Investor Contact: |Company Contact: |
| Yvonne L. Zappulla | Michele Rebiere |
| Managing Director | Chief Financial Officer |
| Grannus Financial Advisors, Inc.| Viridis Energy Inc. |
| 212-681-4108 | 905-847-5226 |
| yvonne@grannusfinancial.com | investorinfo@viridisenergy.ca|
--------------------------------------------------------------------------
About Viridis Energy
Inc.
Viridis Energy Inc. (TSXV:VRD) (OTC:VRDSF) is a publicly
traded, "Cleantech" manufacturer and distributor of
renewable energy providing wood waste biomass fuel to global
residential and industrial markets. Located in Vancouver,
B.C., Viridis Energy operates Viridis Merchants (Canada) Ltd.,
Okanagan Pellet Company, Scotia Atlantic Biomass Company and
Viridis Merchants Inc., 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.
Forward-looking Statements
Certain statements in this release are
forward-looking statements, which reflect the expectations of
management regarding the Company's future operations.
Forward-looking statements consist of statements that are not
purely historical, including any statements regarding beliefs,
plans, expectations or intentions regarding the future. Such
statements are subject to risks and uncertainties that may cause
actual results, performance or developments to differ materially
from those contained in the statements. No assurance can be given
that any of the events anticipated by the forward-looking
statements will occur or, if they do occur, what benefits the
Company will obtain from them. These forward-looking statements
reflect management's current views and are based on certain
expectations, estimates and assumptions which may prove to be
incorrect. A number of risks and uncertainties could cause our
actual results to differ materially from those expressed or implied
by the forward-looking statements, including: (1) a continued
downturn in general economic conditions in North America and
internationally, (2) the inherent uncertainties associated with the
demand for biofuels, (3) the risk that the Company does not execute
its business plan, (4) inability to finance operations and growth
(5) inability to finance the start-up operations in Nova Scotia in
a timely manner (6) inability to retain key management and
employees, (7) an increase in the number of competitors with larger
resources, and (8) other factors beyond the Company's control.
These forward-looking statements are made as of the date of this
news release and the Company intends to update such forward looking
information in the Company's MD&A in the event that actual
results differ materially from such forward-looking statements
contained herein. Additional information about these and other
assumptions, risks and uncertainties are set out in the "Risks and
Uncertainties" section in the Company's MD&A filed with
Canadian securities regulators.
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
-- Financial Statements Follow --
-----------------------------------------------
|Viridis Energy Inc. |
|---------------------------------------------|
|Consolidated statements of financial position|
|---------------------------------------------|
|(Expressed in Canadian dollars) |
|As at March 31, 2014and December 31, |
|2013 |
-----------------------------------------------
------------------------------------------------------------------------
| | |31-Mar-14 | | |31-Dec-13 |
| | | | | | |
|----------------------------------------------------------------------|
| | |(Unaudited) | | | |
|----------------------------------------------------------------------|
| | | | | | |
|----------------------------------------------------------------------|
|ASSETS | | | | | |
|----------------------------------------------------------------------|
| | | | | | |
|----------------------------------------------------------------------|
|Current | | | | | |
|----------------------------------------------------------------------|
| Cash and cash equivalents |$| | |$| |
| | | 2,932,710 | | | 1,594,246 |
|----------------------------------------------------------------------|
| Accounts receivable | | 1,252,351 | | | 1,275,959 |
|----------------------------------------------------------------------|
| Inventory | | 1,992,723 | | | 926,933|
|----------------------------------------------------------------------|
| Prepaid expenses | | 493,849| | | 546,917|
|----------------------------------------------------------------------|
| | | 6,671,633 | | | 4,344,055 |
|----------------------------------------------------------------------|
| | | | | | |
|----------------------------------------------------------------------|
|Property, plant and equipment | | 9,604,611 | | | 9,045,376|
|----------------------------------------------------------------------|
| | | | | | |
|----------------------------------------------------------------------|
| |$| 16,276,244 | |$| 13,389,431 |
|----------------------------------------------------------------------|
| | | | | | |
|----------------------------------------------------------------------|
|LIABILITIES and SHAREHOLDERS' EQUITY| | | | | |
|----------------------------------------------------------------------|
| | | | | | |
|----------------------------------------------------------------------|
| Accounts payable |$| 3,675,821| |$| 3,329,868|
|and accrued | | | | | |
|liabilities | | | | | |
|----------------------------------------------------------------------|
| Deferred income | | - | | | |
| | | | | | 196,595 |
|----------------------------------------------------------------------|
| Due to related parties | | | | | |
| | | 43,527 | | | 44,373 |
|----------------------------------------------------------------------|
| Current portion of loans payable | | 1,017,095| | | |
| | | | | | 113,529 |
|----------------------------------------------------------------------|
| | | 4,736,443| | | 3,684,365|
|----------------------------------------------------------------------|
| Loans payable | | 5,860,650 | | | 6,198,921|
|----------------------------------------------------------------------|
| | | 10,597,093 | | | 9,883,286|
|----------------------------------------------------------------------|
| | | | | | |
|----------------------------------------------------------------------|
|Shareholders' equity (deficit) | | | | | |
|----------------------------------------------------------------------|
| | | | | | |
|----------------------------------------------------------------------|
| Share capital | | 31,647,578 | | | 27,322,578 |
|----------------------------------------------------------------------|
| Contributed surplus | | 2,871,376| | | 3,446,376|
|----------------------------------------------------------------------|
| Accumulated deficit | |(28,839,803) | | |(27,262,809) |
|----------------------------------------------------------------------|
| | | 5,679,751| | | 3,506,145|
|----------------------------------------------------------------------|
| | | | | | |
|----------------------------------------------------------------------|
| |$| 16,276,244 | |$| 13,389,431 |
------------------------------------------------------------------------
Viridis Energy Inc.
Consolidated statement of loss
and total comprehensive loss
(Expressed in Canadian dollars,
except number of shares and per share amounts)
For the three months ended March
31, 2014 and 2013
---------------------------------------------------------------------------------------
| | |Three Months Ended March 31, |
|-------------------------------------------------------------------------------------|
| | |2014 | | |2013 |
|-------------------------------------------------------------------------------------|
| | |(Unaudited) | | | |
|-------------------------------------------------------------------------------------|
| | | | | | |
|-------------------------------------------------------------------------------------|
|Sales |$| 5,641,727| |$ |2,319,852 |
|-------------------------------------------------------------------------------------|
|Cost of sales | | 5,310,035 | | | 1,983,485 |
|-------------------------------------------------------------------------------------|
|Gross profit | | 331,692| | | 336,367 |
|-------------------------------------------------------------------------------------|
| | | | | | |
|-------------------------------------------------------------------------------------|
|Operating expenses: | | | | | |
|-------------------------------------------------------------------------------------|
| Selling and marketing | | 124,510| | | |
| | | | | | 45,837 |
|-------------------------------------------------------------------------------------|
| Freight-out | | 568,572| | | |
| | | | | | 8,209 |
|-------------------------------------------------------------------------------------|
| General and administrative | | 991,759| | | 842,883 |
|-------------------------------------------------------------------------------------|
| Total Operating Expenses | | 1,684,841 | | | 896,929 |
|-------------------------------------------------------------------------------------|
|Loss before other items | | (1,353,149) | | | (560,562) |
|-------------------------------------------------------------------------------------|
| | | | | | |
|-------------------------------------------------------------------------------------|
|Other items: | | | | | |
|-------------------------------------------------------------------------------------|
| Foreign exchange loss | | | | | (2,264)|
| | | (4,867) | | | |
|-------------------------------------------------------------------------------------|
| Finance expense | | (177,295) | | | (166,552) |
|-------------------------------------------------------------------------------------|
| Accretion expense | | (41,683)| | | (23,202) |
|-------------------------------------------------------------------------------------|
|Total other items | | (233,845)| | | (192,018) |
|-------------------------------------------------------------------------------------|
| | | | | | |
|-------------------------------------------------------------------------------------|
|Loss before income taxes recovery | | (1,576,994) | | | (752,580) |
|-------------------------------------------------------------------------------------|
|Income taxes recovered | | | | | |
| | | | | | |
| | | | | | - |
| | |- | | | |
|-------------------------------------------------------------------------------------|
| | | | | | |
|-------------------------------------------------------------------------------------|
|Net loss and total comprehensive loss |$| (1,576,994) | |$ | (752,580) |
|-------------------------------------------------------------------------------------|
| | | | | | |
|-------------------------------------------------------------------------------------|
| | | | | | |
|-------------------------------------------------------------------------------------|
|Net loss per share - basic and diluted| |$ (0.01) | | |$ (0.01) |
|-------------------------------------------------------------------------------------|
| | | | | | |
|-------------------------------------------------------------------------------------|
|Weighted average number of common | | 114,576,661 | | |61,510,840 |
|shares outstanding - basic and | | | | | |
|diluted | | | | | |
---------------------------------------------------------------------------------------
SOURCE: Viridis Energy Inc.
Viridis Energy Inc. (TSXV:VRD)
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