BioteQ Environmental Technologies Inc.
TSX : BQE

BioteQ Environmental Technologies Inc.

November 14, 2011 17:13 ET

BioteQ Reports Q3 2011 Operating and Financial Results

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Nov. 14, 2011) - BioteQ Environmental Technologies Inc. (TSX:BQE), a leader in the treatment of industrial waste water, reports its unaudited financial and operating results for the three and nine months ended September 30, 2011. All figures are in Canadian dollars and are in accordance with International Financial Reporting Standards (IFRS), unless otherwise noted.

Operating and financial results highlights for Q3 2011:

  • BioteQ has active water treatment operations in China and the US and seasonal operations in Canada; these operations generate recurring revenues. Recurring revenues for the quarter were generated by copper recovery at the plants in Dexing China and Bisbee Arizona, and fee-based water treatment operations at the Raglan site in Quebec. The Company is also involved in several engineering, design, construction and piloting projects at various stages of completion; these projects generate one-time revenues. One-time revenues were driven by engineering projects for new plants that are expected to enter into construction in 2012.

  • Total revenues for the period were $2.9 million compared to $2.7 million in 2010. The increase in revenue over the prior year quarter is mainly attributable to higher copper recovery at the Dexing plant in China.

  • Year to date, revenues totaled $5.7 million compared to $7.2 million in 2010. Revenues were higher in 2010 largely because the company recorded a plant sale that generated one-time revenues.

  • Operating income for the quarter was $1.6 million compared to $1.8 million in 2010. Year to date, operating income was $2.4 million compared to $3.4 million in 2010.

  • The net loss for the quarter was $1.1 million, compared to net income of $2 million in 2010. The comprehensive loss for the quarter was $560,000 compared to income of $1.1 million in 2010. This includes one-time CEO transition and recruitment costs of $700,000. Year to date, the comprehensive loss was $2.7 million compared to income of $201,000 in 2010.

  • Cash flow used in operations, before changes in non-cash working capital, was $540,000. Excluding CEO transition and recruiting costs, operating activities generated positive cash flow of $160,000. Year to date, cash flow used in operations was $2.3 million compared to cash flow generated by operations of $1 million in 2010.

  • Year to date revenue and cash flow figures are in line with the Company's 2011 financial guidance of $6.5 to $7.5 million in revenue and $3 to $3.5 million in operating cash use, before changes in non-cash working capital.

  • BioteQ ended the period with $10.5 million in working capital which included $10.3 million in cash and short-term investments. At December 31, 2010, those balances were $13.8 million and $12.6 million respectively. The Company has no debt.

  • During the quarter, the Company announced the appointment of Jonathan Wilkinson as the new Chief Executive Officer and director.

  • During the quarter, BioteQ resumed operations at its Bisbee plant in Arizona, signed an agreement with a European engineering firm for a SART project, signed an agreement with Minera Mexico to review potential water treatment projects, and continued commissioning of a new 800 cubic meter per hour ion exchange plant for recovery of cobalt and nickel from low-grade solution at the Dexing site in China.

  • Subsequent to quarter end, BioteQ announced that it had signed a new contract valued at $1 million, to be executed over the balance of 2011 and the first quarter of 2012.

  • BioteQ is continuing its litigation efforts for the plants in Mexico and Australia to recover value from these assets. The Company presently has no definitive timeline with respect to when these matters will be resolved.

  • BioteQ has an expanding pipeline of sales opportunities that are progressing toward commercial contacts. The projects, which are subject to customer approvals, are expected to contribute one-time projects revenues and recurring fee-based revenues over the next three years.

Jonathan Wilkinson, BioteQ's Chief Executive Officer, stated, "We are pleased with the quarterly operating and financial results for BioteQ. The company has seen good commercial progress during the quarter, and we are confident that we will meet our current financial guidance for the year. We are continuing to aggressively pursue new growth opportunities and believe that the company is well positioned to generate strong results in 2012."

BioteQ's financial statements and the Company's MD&A have been filed on SEDAR, www.sedar.com, and will be available on the BioteQ website at www.bioteq.ca.

A conference call to discuss the financial results is scheduled for Tuesday November 15th at 11:00 am Eastern. Participants can access the call by dialing 416-340-2217, or 1-866-696-5910, reference number 3277435. A playback of the call will be available until November 29th by dialing 905-694-9451, reference number 2127682. A recording will be available on the BioteQ website within two days of the call.

BioteQ Corporate Profile

BioteQ creates custom water treatment solutions to recover dissolved metals and remove sulphate from water impacted by mining, energy and industrial activities. The company's clean technologies convert wastewater into a useful resource while delivering lower life cycle costs for water treatment. BioteQ has designed and commissioned 14 plants at sites in Canada, the US, Mexico, Australia and China, with additional projects in development.

BioteQ's sustainable water treatment solutions have been recognized with national and international awards for innovation and sustainability. BioteQ is headquartered in Vancouver, Canada, and trades on the TSX under the symbol BQE. For additional information, please visit our website at www.bioteq.ca.

BioteQ Environmental Technologies Inc.
Consolidated Statement of Financial Position
Unaudited
Sep 30 2011 Dec 31 2010
$ $
Assets
Current assets
Cash and cash equivalents 5,529,276 4,653,465
Short-term investments 4,778,293 7,957,391
Trade receivables 2,519,036 1,676,963
Receivable from joint venture partners 187,273 180,204
Net insurance proceeds receivable (note 8) 614,963 618,248
Taxes recoverable - 15,469
Inventory (note 9) 126,394 54,723
Prepaid expenses 296,064 241,089
14,051,299 15,397,552
Non-current assets
Property, plant and equipment (note 10) 7,406,854 6,671,046
Intangible asset 77,425 100,654
Total assets 21,535,578 22,169,252
Liabilities
Current liabilities
Accounts payable and accrued liabilities 3,025,310 1,544,901
Deferred revenue 85,592 -
Taxes payable 417,600 -
Deferred lease inducement 26,049 47,362
3,554,551 1,592,263
Non-current liabilities
Long-term liabilities 46,101 46,884
Total liabilities 3,600,652 1,639,147
Shareholders' Equity
Capital stock and warrants (note 11) 55,269,416 55,182,229
Contributed surplus 8,096,058 8,045,826
Accumulated other comprehensive loss (1,042,383 ) (1,482,945 )
Deficit (44,388,165 ) (41,215,005 )
Total shareholders' equity 17,934,926 20,530,105
Total liabilities and shareholders' equity 21,535,578 22,169,252
For a complete set of consolidated financial statements including accompanying notes, go to http://www.bioteq.ca/
BioteQ Environmental Technologies Inc.
Consolidated Statements of Operations and Comprehensive Loss
For the three and nine months ended September 30, 2011 and 2010
Unaudited
3 months ended Sep 30, 9 months ended Sep 30,
2011 2010 2011 2010
$ $ $ $
Revenue 2,948,473 2,749,178 5,678,444 7,236,173
Plant and other operating costs (other than depreciation) 1,350,809 967,024 3,293,908 3,839,788
1,597,664 1,782,154 2,384,536 3,396,385
General and administration 1,783,942 907,725 3,771,534 2,349,340
Marketing and development 305,042 167,715 645,767 736,224
Stock-based compensation 10,133 111,935 80,536 392,063
Depreciation of property, plant and equipment (note 10) 151,994 219,561 452,484 636,041
Amortization of intangible asset 7,743 7,743 23,229 23,229
Income (loss) before the under-noted (661,190 ) 367,475 (2,589,014 ) (740,512 )
Interest income 27,058 12,541 77,836 27,191
Other income (loss) (3,750 ) 27,269 (3,750 ) 99,713
Lease fee income - 255,760 - 741,650
Foreign exchange gain (loss) (145,393 ) 1,390,321 (145,990 ) 893,956
Income (loss) before income taxes (783,275 ) 2,053,366 (2,660,918 ) 1,021,998
Income taxes (note 12) 337,231 59,359 512,242 242,655
Net income (loss) for the period (1,120,506 ) 1,994,007 (3,173,160 ) 779,343
Other comprehensive income (loss)
Cumulative translation adjustment 560,864 (929,781 ) 440,562 (579,042 )
Comprehensive loss for the period (559,642 ) 1,064,226 (2,732,598 ) 200,301
Net income (loss) per share
Basic and diluted (0.02 ) 0.03 (0.05 ) 0.01
Weighted average number of shares outstanding
Basic 69,966,672 69,855,006 69,943,204 69,573,118
Diluted 69,966,672 70,041,562 70,179,044 69,864,708
For a complete set of consolidated financial statements including accompanying notes, go to www.bioteq.ca
BioteQ Environmental Technologies Inc.
Consolidated Statement of Changes in Equity
For the three and nine months ended September 30, 2011 and 2010
Unaudited
Number of
shares
Share capital Warrants Contributed
surplus
Accumulated
other
comprehensive
income (loss)
Deficit Total
$ $ $ $ $ $
Balance - January 1, 2011 69,865,006 55,182,229 - 8,045,826 (1,482,945 ) (41,215,005 ) 20,530,105
Stock-based compensation - - - 80,536 - - 80,536
Exercise of options 101,666 87,187 - (30,304 ) - - 56,883
Net loss for the period - - - - - (3,173,160 ) (3,173,160 )
Other comprehensive income for the period - - - - 440,562 - 440,562
Balance - September 30, 2011 69,966,672 55,269,416 - 8,096,058 (1,042,383 ) (44,388,165 ) 17,934,926
Balance - January 1, 2010 66,190,308 51,148,380 - 7,586,362 - (30,286,323 ) 28,448,419
Issuance of capital stock and warrants (note 11) 3,636,364 2,486,583 1,513,417 - - - 4,000,000
Stock-based compensation - - - 392,063 - - 392,063
Exercise of options 28,334 25,019 - (8,585 ) - - 16,434
Net income for the period - - - - - 779,343 779,343
Other comprehensive loss for the period - - - - (579,042 ) - (579,042 )
Balance - September 30, 2010 69,855,006 53,659,982 1,513,417 7,969,840 (579,042 ) (29,506,980 ) 33,057,217
For a complete set of consolidated financial statements including accompanying notes, go to http://www.bioteq.ca/
BioteQ Environmental Technologies Inc.
Consolidated Statement of Cash Flow
For the three and nine months ended September 30, 2011 and 2010
Unaudited
3 months ended Sep 30, 9 months ended Sep 30,
2011 2010 2011 2010
$ $ $ $
Cash flow provided by (used in)
Operating activities
Net loss for the period (1,120,506 ) 1,994,007 (3,173,160 ) 779,343
Items not affecting cash:
Depreciation of property, plant and equipment 151,994 219,561 452,484 636,041
Amortization of intangible asset 7,743 7,743 23,229 23,229
Amortization of deferred lease inducement (7,104 ) (7,104 ) (21,313 ) (7,104 )
Loss on disposal of equipment 3,750 - 3,750 -
Unrealized foreign exchange (gain) loss 413,546 (1,373,107 ) 297,392 (818,684 )
Stock-based compensation charge (note 11) 10,133 111,935 80,536 392,063
(540,444 ) 953,035 (2,337,082 ) 1,004,888
Change in non-cash working capital items (note 13) 46,476 (1,206,466 ) 983,561 (1,172,083 )
Net cash used in operating activities (493,968 ) (253,431 ) (1,353,521 ) (167,195 )
Investing activities
Purchase of property, plant and equipment (69,898 ) (201,486 ) (938,820 ) (519,072 )
Proceeds on disposal of equipment 12,604 - 12,604 -
Purchase of short-term investments (4,332,301 ) (5,282,183 ) (10,405,181 ) (17,365,652 )
Proceeds from sale of short-term investments 3,244,000 6,038,525 13,624,000 14,930,835
Increase in loan receivable - (27,981 ) - (27,981 )
Increase in interest in loan receivable - (27,269 ) - (99,713 )
Repayment of loan receivable - 3,806,461 - 4,106,461
Net cash provided by (used in) investing activities (1,145,595 ) 4,306,067 2,292,603 1,024,878
Financing activities
Proceeds from exercise of options - - 56,883 16,434
Proceeds from issuance of capital stock and warrants - - - 4,000,000
Increase (decrease) in long-term liabilities (61,386 ) 46,773 783 46,773
Net cash provided by (used in) financing activities (61,386 ) 46,773 57,666 4,063,207
(1,700,949 ) 4,099,409 996,748 4,920,890
Effect of exchange rate changes on cash and cash equivalents (103,457 ) (9,466 ) (120,937 ) (2,778 )
Increase (decrease) in cash and cash equivalents (1,804,406 ) 4,089,943 875,811 4,918,112
Cash and cash equivalents
Beginning of period 7,333,682 3,319,471 4,653,465 2,491,302
End of period 5,529,276 7,409,414 5,529,276 7,409,414
For a complete set of consolidated financial statements including accompanying notes, go to http://www.bioteq.ca/

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION

Except for statements of historical fact relating to the Company, certain information contained herein constitutes "forward-looking statements" within the meaning of Section 21E of the United States Securities Exchange Act of 1934, as amended. Forward-looking statements are frequently characterized by words such as "plan", "expect", "project", "intend", "believe", "anticipate" and other similar words, or statements that certain events or conditions "might" or "will" occur. Forward-looking statements are based on the opinions and estimates of management at the date the statements are made, and are subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those projected in the forward-looking statements. These factors include the inherent risks involved in the development, construction and operation of water treatment plants, variations in water quality, fluctuating metal prices, the possibility of project cost overruns or unanticipated costs and expenses, uncertainties relating to the availability and costs of financing needed in the future and other factors described in the section entitled "Risks" in the Company's Annual Report for the Year Ended December 31, 2010. Circumstances or management's estimates or opinions could change. The reader is cautioned not to place undue reliance on forward-looking statements.

The Toronto Stock Exchange has not reviewed and does not accept responsibility for the adequacy or the accuracy of this release.

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