BioExx Announces Q2 2012 Results
FOR: BIOEXX SPECIALTY PROTEINS LTD.
AUG 14, 2012 - 17:02 ET
Conference Call: Wednesday, August 15, 9:00 a.m. ET
Dial-in Numbers: 416-340-8527 / 877-440-9795 / 800-9559-6853
TORONTO, ONTARIO--(Marketwire - Aug. 14, 2012) - BioExx Specialty Proteins Ltd. (TSX:BXI), announced today its financial results for the three and six months ended June 30, 2012. Complete Financial Statements and Management Discussion & Analysis have been filed for public review at www.sedar.com and will be posted on the Company's website at www.bioexx.com.
"Execution on our strategy continued throughout the second quarter, with notable progress on each of the key mandates of strategic partnering, scale-up engineering, and cost reduction. We will remain focussed on these core tenets through the balance of 2012, as the critical foundation for our next stages of growth", said BioExx CEO, Chris Schnarr. "While this will take time to complete, we are making progress each and every day, and we will continue to press forward through completion."
Financial Results for the Three and Six Months Ended June 30, 2012
During the quarter, the Company generated $136,008 of revenue from canola oil and canola meal sales at its Saskatoon plant, versus revenue of $1,950,987 in Q2 2011 (including a gain on derivative instruments of $69,714; Q1 2012 - $Nil), and $483,024 in Q1 2012. Given the economic challenges in the operation of a very small canola crushing facility, the Company has moved to a program of running its crush operations only as required to support downstream protein operations, resulting in lower processing volumes versus prior periods. Further, as previously discussed, to conserve capital and exercise appropriate fiscal discipline, the Company also scaled back plant operations in March 2012, and this reduced operating intensity is reflected in the Q2 2012 revenues.
Gross Profit (Loss)
Cost of Goods Sold for the quarter was $602,611, compared to $3,262,705 in Q2 2011 and $1,220,370 in Q1 2012. The decrease results primarily from the lower processing volumes and reduced scope of operations discussed above. As a result of the foregoing factors, Gross Loss for the quarter was $466,603, compared with $1,311,718 for the comparable prior year period, and $737,346 in Q1 2012. The Gross Loss has been significantly reduced as a result of the Company's operational changes to reduce losses and operating cash consumption, as discussed above.
The Company incurred other expenses during the quarter of $3,390,160, compared to $3,757,935 in Q2 2011 and $6,991,438 in Q1 2012. The primary components of this decrease were:
General and administrative expenses were $980,219 in Q2 2012, versus $915,832 in Q2 2011, and $940,061 in the prior quarter, relatively comparable over the periods.
Plant start-up and commissioning expenses were $1,884,268 in Q2 2012, versus $1,537,215 in Q2 2011, with the higher amount resulting mainly from the inclusion of a full quarter of depreciation of PP&E assets in the more recent period versus only one month in the comparable prior year period during which these assets were not yet in commercial use. The Q2 2012 amount may also be compared to $2,877,741 in Q1 2012. This significant decrease is the result of the Company's cost reduction efforts and reduced scope of plant operations.
Research and development expenses were $38,598 in Q2 2012, down from $231,516 in Q2 2011, and $55,501 in the prior quarter, as a result of the Company's previously noted cost reduction efforts.
Sales and marketing expenses were $66,023 in Q2 2012 versus $152,471 in Q2 2011 and $98,431 in Q1 2012. The lower spending in Q2 2012 is a result of the Company's previously noted cost reduction efforts.
Net Finance Costs in Q2 2012 were $224,131 versus $64,304 in Q2 2011 and $97,252 in Q1 2012. The higher amount versus the comparable prior periods is due primarily to the write-off of unaccreted deferred financing fees associated with the FCC mortgage which was repaid upon the closing of the Romspen debt financing.
The Net Loss for the quarter was $3,856,763, versus $5,069,653 in Q2 2011 and $7,728,784 in Q1 2012. The significant decrease in losses reflects the cumulative impact of the Company's cost reduction efforts and reduced scale of interim operations.
Working Capital and Liquidity
As at June 30, 2012, current assets were $4,673,259, including cash and cash equivalents of $4,171,425. Against current liabilities of $2,448,247, this results in net working capital of $2,225,012. This compares to current assets of $12,393,905 and net working capital of $6,537,704 as at December 31, 2011, and current assets of $5,834,947 and net working capital of $2,466,291 as at March 31, 2012.
BioExx's Net Cash Flow Used In Operating Activities during the quarter was ($1,931,026), compared to ($2,600,897) in Q2 2011 and ($4,107,692) in Q1 2012. The differences primarily reflect the different operating environments and cost reduction efforts in the respective quarters, as discussed above.
BioExx's Net Cash Flow From (Used In) Investing Activities during the quarter was $949,496. The positive balance results from significant reductions in capital spending, at $655,966 in the quarter, which were more than offset by proceeds received from the disposal of certain assets held for sale and Investment Tax Credit refunds received. The capital spending in Q2 2012 is mainly a result of property, plant and equipment expenditures from 2011 and Q1 2012 which were paid during the quarter. This compares to Q2 2011 at ($1,212,628), with capital spending much higher at $4,072,171, offset somewhat by the receipt of $2,337,775 of Investment Tax Credit refunds. Net Cash Flows From (Used In) Investing Activities in Q1 2012, by comparison, was ($2,536,788). The significant change versus comparative periods is primarily the result of interim expenditure reduction initiatives, as discussed above.
BioExx's Net Cash Flow From (Used in) Financing Activities during the quarter was $1,940,359, resulting primarily from the Romspen debt financing, net of the repayment of the Farm Credit Canada mortgage, as previously discussed. This compares to $18,650,921 in Q2 2011, largely due to the completion of a bought deal equity financing for gross proceeds of $20,000,000 in Q2 2011. The comparative amount for Q1 2012 was ($151,548), a period during which no additional debt or equity capital was raised, but during which existing debt was serviced as to interest and principal repayments.
About BioExx Specialty Proteins Ltd.
Headquartered in Toronto, Canada, BioExx is focused on the separation of oil and high-value proteins from oilseeds for global food, beverage, nutrition, and other markets. BioExx employs trade secret, patented and patent-pending technologies to enable the improved separation of proteins from oilseeds. BioExx believes that these processes cumulatively have the potential to make a valuable contribution to global food and protein supply while maintaining an environmentally sustainable footprint.
To find out more about BioExx Specialty Proteins Ltd. (TSX:BXI), please visit www.bioexx.com.
The statements made in this press release include forward-looking statements that involve a number of risks and uncertainties. These statements relate to future events or future performance and reflect management's current expectations and assumptions. A number of factors could cause actual events, performance or results to differ materially from the events, performance and results discussed in the forward-looking statements, such as the economy, generally, competition in its target markets, the demand for BioExx's products, the availability of funding, the efficacy of its technology, and the anticipated costs of BioExx's plant construction and operation. These forward-looking statements are made as of the date hereof and BioExx does not assume any obligation to update or revise them to reflect new events or circumstances. Actual events or results could differ materially from BioExx's expectations and projections.
FOR FURTHER INFORMATION PLEASE CONTACT:
BioExx Specialty Proteins Ltd.
Chief Executive Officer
(416) 588-4442 x111
Brisco Capital Partners