Viridis Energy Inc. ("Viridis" or the "Company") (TSX VENTURE: VRD)
(OTCQX: VRDSF), a "Cleantech" manufacturer and distributor of
alternative energy providing biomass fuel to global residential and
industrial markets, today reported financial results for its second
quarter ended June 30, 2011. During the quarter the Company
strengthened its management team and board of directors and
launched its international strategy, entering into two significant
multi-year, off-take agreements to supply pellets into Asia and
Europe. Subsequent to the end of the second quarter, Viridis
secured financing totaling $7 million and entered into a strategic
alliance with India-based Abellon CleanEnergy ("Abellon").
Viridis generated revenue for the second quarter 2011 of $2.9
million, a 135 percent increase over the second quarter 2010
revenue of $1.2 million, during which the Company completed its
acquisition of the Okanagan Pellet Company Inc, and a 8 percent
increase over the first quarter 2011 revenue of $2.7 million. The
increase in revenues during the second quarter 2011 reflects its
shipments into Europe. Viridis anticipates sequential revenue
growth acceleration during 2011 as it experiences increased
shipment into Europe and as it begins to execute on its procurement
and supply agreement with Abellon.
The Company reported a comprehensive loss of $990,000 or $(0.03)
per basic share for the second quarter of 2011. This compares to
comprehensive income of $1.9 million or $0.13 per basic share for
second quarter of 2010, which included a gain on the acquisition of
business operations of $2.8 million as a result of the discount
purchase of Okanagan Pellet Company. This compares to a
comprehensive net loss of $1.2 million or $(0.04) for the prior
first quarter 2011. Viridis reported a loss from operations of
$813,000 during second quarter 2011 versus a loss of $794,000
during the prior year and a loss of $573,000 for the sequential
prior first quarter 2011. The Company expects to achieve
profitability during 2011, its first full year of operations with
the acquired wood pellet companies, as its revenues continue to
increase and its expenses as a percentage of revenues continue to
fall.
For the three months ended June 30, 2011, Viridis' gross profit
on revenue totaled $365,000, yielding a gross margin of 13 percent.
This gross margin level takes into account freight costs which
totaled $432,000 during the quarter. During the third quarter of
2011 Viridis expects gross margin to increase to 15-18% as the
higher margin domestic home heating season begins.
Operating expenses during second quarter 2011 totaled $1.2
million, an increase of approximately $249,000 from the prior
year's second quarter and an increase of $90,000 from the
sequential first quarter 2011. The quarter-over-quarter increase in
expenses is attributed to an increase in employee costs due to the
acquisition of Okanagan Pellet Company during second quarter 2010,
offset by a continued reduction in selling and marketing expenses.
While Viridis could experience some increase in operating expenses
going forward as its business grows, the Company believes it will
be able to leverage its general and administrative expenses to
deliver increased operating margins as its revenues rise.
Interest expense (inclusive of bank charges) for the second
quarter was approximately $119,000, which compares to interest
expense of approximately $89,000 during second quarter 2010 and
interest expense of $110,000 during the first quarter 2011.
For the six months ended June 30, 2011, Viridis reported
revenues of $5.5 million, a 303 percent increase compared to the
same period in 2010. Net comprehensive loss totaled $(2.5) million
or $ (0.08) per basic share, compared to a net comprehensive income
of $1.4 million or $0.10 per basic share for the same period in
2010, which included the $2.8 million gain on acquisition of
business operations. The Company's year over year operating loss
for the six month period increased $575,000 predominately due to
the increased workforce given the two acquisitions during the first
half of 2010, as well as an increase in material costs.
At June 30, 2011, the Company had accounts receivable of
approximately $800,000, representing a DSO of 25 days, inventory of
$2.3 million and total assets of $15.6 million. At the end of the
second quarter 2011, Viridis total debt stood at $6.3 million of
which $38,000 was long term debt. Subsequent to the second quarter
and concurrent with the Company's recent financings during July and
August of 2011, Viridis has reduced its debt by approximately $1.1
million. Viridis closed on 2 separate funding sources during the
current third quarter which totaled $7 million. The first private
placement for approximately $3.1 million resulted in the issuance
of approximately 12.3 million units. Each unit was issued at $0.25
and consisted of one share of common stock and one half of a
non-transferable share purchase warrant exercisable at $0.40 per
share. The second private placement was a secured 6% per annum
convertible note to an institutional investor totaling
approximately $3.9 million, which received TSX Venture Exchange
approval on August 25, 2011. The note has a conversion rate of one
unit for each $0.25 of indebtedness owing, each unit consisting of
one share of the Company's common stock and one-half transferable
share purchase warrant exercisable at $0.40 per share.
On June 30, 2011, shareholder equity totaled $5.6 million. The
weighted average number of common shares at June 30, 2011 totaled
30.3 million shares, consistent with first quarter 2011 and an
increase of 16.2 million shares over the prior year's second
quarter due largely to a private placement totaling 9.1 million
shares during second quarter 2010 and the acquisition of Cypress
Pacific Marketing, which added 5.6 million shares, and the
completion of $6.0 million in private placements of the Company's
common shares during the year. As of June 30, 2011, Viridis had
approximately 44.3 million fully diluted shares, which if all
options and warrants exercised would generate an additional $9
million of capital into the company.
"During the first half of 2011, we completed our structural
transition to become a clean-tech, biomass company and entered into
the international and industrial markets. We are experiencing a
considerable demand for our products, particularly overseas. Now,
with a streamlined management team, strengthened balance sheet, and
strong, growing global product demand, we are focused on
maintaining operational efficiencies, while planning to achieve
capacity levels that will support our growing customer base,
worldwide," commented Christopher Robertson, Viridis' chief
executive officer. "As demand for clean, inexpensive alternative
fuel continues to be at the forefront of global public policy, we
are receiving bids for long term contracts well beyond our current
capacity. Our strategic production expansion will, therefore, go
hand in hand with future long term contracts commitments."
The Company also reported that on August 23, 2011 the Viridis
Board of Directors accepted the resignation of fellow board member
Isaac Moss. Mr. Moss and the Company had no disagreements. The
resignation was Mr. Moss' personal decision to create opportunity
for industry experts to join the Board. John Campbell, Chairman of
Viridis Board of Directors commented, "We thank Isaac for being an
important contributor to our company and Board during this pivotal
period of our company's first year as a public entity. We wish him
continued success in the future."
About Viridis Energy Inc.
Viridis Energy Inc. (TSX VENTURE: VRD) is a publicly traded,
"Cleantech" alternative energy company specializing in the
agricultural and wood waste biomass. Located in Vancouver, B.C.,
Viridis Energy operates Cypress Pacific Marketing and Okanagan
Pellet Company, two acquisitions in the wood pellet sector, thus
providing the company with vertical integration for distribution
and manufacturing. 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
)interruptions in timely product shipments, particularly into
international markets, (5) inability to finance operations and
growth, (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 security regulators.
VIRIDIS ENERGY INC.
CONSOLIDATED BALANCE SHEETS
June 30, December 31,
2011 2010
---------------------------------
ASSETS (Unaudited)
Current Assets:
Cash and cash equivalents $ - $ -
Accounts receivable 800,285 836,090
Inventory 2,257,873 2,404,622
Other receivable 140,523 171,299
Prepaid expenses 155,065 142,531
Due from related parties 74,488 58,448
---------------------------------
Total Current Assets 3,428,234 3,612,990
Property, plant and equipment 6,373,768 6,683,983
Intangible assets 3,482,000 3,482,000
Goodwill 2,355,411 2,355,411
---------------------------------
Total Assets $ 15,639,413 $ 16,134,384
---------------------------------
---------------------------------
LIABILITIES & STOCKHOLDERS' EQUITY
Current Liabilities:
Bank overdraft 2,815,294 2,601,464
Accounts payable and accrued liabilities 2,181,101 1,675,752
Short term loan payable 2,242,822 10,700
Due to related parties 839,796 707,771
Current portion of loans payable 1,040,200 2,542,424
---------------------------------
Total Current Liabilities 9,119,213 7,538,111
---------------------------------
Long-term Liabilities:
Loan payables 37,725 556,355
Future tax liability 870,500 870,500
---------------------------------
Total Liabilities 10,027,438 8,964,966
---------------------------------
Stockholders' Equity (deficit)
Share capital 16,668,309 16,233,172
Contributed surplus 1,942,020 1,727,713
Deficit (12,998,354) (10,791,467)
---------------------------------
Total Stockholders' Equity 5,611,975 7,169,418
---------------------------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 15,639,413 $ 16,134,384
---------------------------------
---------------------------------
VIRIDIS ENERGY INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
----------------------------------------------------
2011 2010 2011 2010
----------------------------------------------------
Sales $ 2,870,052 $ 1,220,940 $ 5,539,659 $ 1,374,201
Cost of Sales 2,504,557 1,085,181 5,152,729 1,250,083
----------------------------------------------------
Gross profit 365,495 135,759 386,930 124,118
----------------------------------------------------
Operating expenses:
Selling and marketing 52,048 67,199 137,654 78,566
General and
administrative 1,126,848 862,972 2,130,115 1,350,987
----------------------------------------------------
Total operating expenses 1,178,896 930,171 2,267,769 1,429,553
----------------------------------------------------
Loss before other items (813,401) (794,412) (1,880,839) (1,305,435)
Other items:
Foreign exchange loss 4,355 (2,349) (27,500) (2,349)
Disposal of plant, property
and equipment (29,028) - (29,028) -
Gain on acquisition of
business operations - 2,774,394 - 2,774,394
Interest and bank charges (12,879) (88,656) (17,270) (94,142)
Imputed interest on
convertible note (33,041) - (40,751) -
Interest expense (105,791) - (211,499) -
----------------------------------------------------
(176,384) 2,685,099 (326,048) 2,677,903
----------------------------------------------------
Comprehensive income
(loss) $ (989,785) $ 1,890,687 $ (2,206,887) $1,372,468
----------------------------------------------------
----------------------------------------------------
Net income (loss)
per share
basic and diluted $ (0.03) $ 0.13 $ (0.07) $ 0.10
----------------------------------------------------
----------------------------------------------------
Shares outstanding
basic and diluted 30,279,398 14,110,105 30,279,398 14,110,105
----------------------------------------------------
----------------------------------------------------
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.
Contacts: Grannus Financial Advisors, Inc. Yvonne L. Zappulla
Managing Director 212-681-4108 Yvonne@GrannusFinancial.com Viridis
Energy Inc. Michele Rebiere Chief Financial Officer 905-847-5226
investorinfo@viridisenergy.ca www.viridisenergy.ca
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