VANCOUVER, BRITISH COLUMBIA--(Marketwire - Nov. 12, 2012) - BioteQ Environmental Technologies Inc. (TSX:BQE), a leader in the treatment of industrial wastewater, reports its financial and operating results for the three and nine month periods ended September 30, 2012. All figures are in Canadian dollars and are in accordance with International Reporting Standards (IFRS), unless otherwise noted.
BioteQ's revenues include revenues from engineering fees and plant sales, revenues from plant operations generated by the sale of recovered metals, and revenues from plant operations that generate water treatment fees.
Financial results and highlights for Q3 2012:
- BioteQ's financial performance in the third quarter and the first nine months of 2012 was strong. Year to date revenues are similar to revenues achieved by the Company for the full year in 2011. Cash usage and net income levels improved considerably compared to 2011.
- Total revenues for the quarter were $2.8 million, similar to Q3 2011 revenues of $2.9 million. Total revenues for the first nine months of 2012 were $7.3 million compared to $5.7 million in the first nine months of 2011, an increase of 29%.
- The year to date revenue increase over the prior year was due to a doubling of engineering fees and plant sales from $1.1 million to $2.3 million, a 35% increase in treatment fees from $1.1 million to $1.5 million, and a slight increase in metal recovery revenues from $3.4 million to $3.5 million. The increase in metal recovery revenues was due to a 20% increase in production, which was offset by lower global prices for copper in 2012 compared to 2011.
- Operating margin for the quarter was $1.2 million, compared to $1.6 million in Q3 2011. Year to date, operating margin was $2.7 million compared to $2.4 million for the same period in 2011. Operating margin improved on an absolute basis for the 9 month period, even accounting for the impact of lower copper prices. Had copper prices in 2012 been at 2011 levels for the first 9 months of the year, operating margin would have been $700,000 higher.
- Cash used by operating activities, after changes in working capital, was $200,000 compared to cash use of $412,000 in the same quarter last year. Year to date, cash used in operations including working capital was $774,000, an improvement of $632,000 or 45% compared to cash use of $1.4 million in 2011.
- BioteQ has achieved a significant improvement in net cash used in operating activities while also making strategic investments to drive growth. Earlier in the year, the Company invested in enhanced sales and marketing resources to secure new contracts and enter new markets, as well as engineering and technical resources to support project execution. Cash use has also been impacted by a number of non-recurring costs that affect 2012 results and that will, to a lesser extent, impact 2013 including: legal fees; care and maintenance costs for the Mount Gordon plant; payments and consulting fees owing to BioteQ's former CEO; and severance pay resulting from an internal efficiency review conducted early in the year.
- Net loss for the quarter was $1.3 million ($0.02 per share), compared to a loss of $1.1 million ($0.02 per share) in 2011. Year to date, the net loss was $2.2 million ($0.03 per share) compared to $3.2 million ($0.05 per share) in 2011, a 32% reduction compared to 2011.
- The Comprehensive loss for the third quarter was $1.5 million compared to a loss of $560,000 in Q3 2011. Year to date, the Comprehensive loss was $2.3 million compared to $2.7 million in 2011.
- Working capital at the end of Q3 2012 was $8.1 million which included $8.2 million in cash and short-term investments. BioteQ has future capital commitments of approximately $1.7 million for the completion of new water treatment systems at the Dexing mine.
- BioteQ ended the quarter with total assets of $17.4 million compared to $19.3 million as of December 31, 2011.
Operating results and highlights for Q3 2012:
- BioteQ had active operations in Canada, the US, and China during Q3 2012 that together treated 3.6 million cubic meters of contaminated water and recovered 850,000 pounds of metal contaminants from the environment, bringing total production for the first nine months of 2012 to over 2 million pounds of metal and 8.3 million cubic meters of water. The Company's operations are performing well and are on track to meet expectations for performance in 2012.
- During the quarter, BioteQ made additional progress in executing its strategic plan. The sales and marketing team continues to qualify and to actively pursue new project opportunities in mining markets, resulting in improved pipeline quality, and a growing portfolio of validation contracts that are expected to lead to commercial sales over the next 12 to 18 months.
- BioteQ, together with joint venture partner Jiangxi Copper Company, announced plans in September to build an additional copper recovery plant at the Dexing site. The companies committed $3.2 million, sharing equally in the capital costs of the plant and in the profits generated from operations. The operation is expected to provide incremental recurring revenue of between $2.5 to $3 million, of which half will accrue to BioteQ. Design work on the plant has commenced. Construction is expected to be complete by the end of Q3 2013.
- In August, BioteQ completed its contract for engineering review and technical services for Kinross Gold's Maricunga site in Chile. Subsequent to quarter end, BioteQ secured a second fee-based contract with Kinross for continuing technical services in Chile.
- BioteQ completed fee-based engineering design work for an arsenic removal facility for EcoMetales, a wholly-owned subsidiary of Codelco. The project has moved to the next stage of review, which will include environmental and regulatory approval.
- BioteQ carried out fee-based validation test work for two SART projects during the quarter. Testing was completed on one project, which provided the design criteria to inform the commercial proposal for a full scale plant; the customer is expected to make a decision regarding this proposal within the next six to twelve months. Test work for the second validation contract is in progress and is expected to lead to the provision of a commercial proposal during the fourth quarter.
- BioteQ and Newalta completed construction of a mobile Sulf-IX™ unit that will provide a pilot scale plant for the partners to demonstrate the technology's sulphate reduction capabilities for new customers and new market verticals. The plant is being commissioned at a Newalta site.
- BioteQ continues to advance its Sulf-IX™ technologies toward commercial applications in the mining and energy sectors. The Company is providing ongoing technical services to optimize a demonstration scale Sulf-IX™ plant built by an international mining customer at a mine site in the southern US.
- Subsequent to the end of the quarter, BioteQ successfully concluded its eighth operating season at the Raglan site. For the 2012 operating season, the total volume of water treated was approximately 860,000 m3.
Guidance
BioteQ is on track to meet the financial guidance provided in March, 2012. The company expects revenues in 2012 to increase by at least 30% over the prior year, to approximately $10 million, with cash used in operations (including changes in working capital) to be reduced by at least 40% to less than $1.5 million.
Jonathan Wilkinson, BioteQ's Chief Executive Officer, stated, "We are pleased with BioteQ's continued progress towards its 2012 goals. We have qualified and expanded our sales pipeline, and important project opportunities continue to advance toward contract decisions. Revenues and cash figures have improved significantly compared to 2011. Based on the results for the first nine months of the year, we anticipate that the Company will meet its operational and financial milestones for the year. We believe that by demonstrating consistent progress, we will ultimately provide strong returns to our shareholders."
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 13th at 11:00 am Eastern. Participants can access the call by dialing 416-340-2217 or 1-866-696-5910, reference number 9447043. For assistance during the call, dial *0. A playback of the call will be available until December 1st by dialing 905-694-9451 or 1-800-408-3053, reference number 3591824. A recording of the call will be available on the BioteQ website within two days of the call.
BioteQ Corporate Profile
BioteQ is an innovative clean technology leader in global industrial water treatment, serving the mining and energy markets. The company's proven technologies have been applied at sites around the world to recover dissolved metals and remove sulphate, producing clean water and eliminating residual waste. BioteQ is headquartered in Vancouver, Canada and trades on the TSX under the symbol BQE. Please visit our website at www.bioteq.ca for additional information.
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION
Certain information contained herein may not be based on historical fact and therefore constitutes "forward-looking information" under applicable Canadian securities legislation. This includes without limitation statements containing the words "plan", "expect", "project", "estimate", "intend", "believe", "anticipate", "may", "will" and other similar words or expressions. 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, uncertainties and other factors that may cause actual events or results to differ materially from those expressed or implied by such forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, the Company's dependence on key personnel and contracts, uncertainty with respect to the profitability of the Company's technologies, competition, technology risk, the Company's ability to protect its intellectual property and proprietary information, fluctuations in commodity prices, currency risk, environmental regulation and the Company's ability to manage growth and other factors described in the Company's filings with the Canadian securities regulators at www.sedar.com (including without limitation the factors described in the section entitled "Risks and Uncertainties" in the Company's Annual Report for the year ended December 31, 2011 and the section entitled "Risk Factors" in the Company's Annual Information Form for the year ended December 31, 2011). Given these risks and uncertainties, the reader is cautioned not to place undue reliance on forward-looking statements. All forward-looking information contained herein is based on management's current expectations and the Company undertakes no obligation to revise or update such forward-looking information to reflect subsequent events or circumstances, except as required by law.
| BioteQ Environmental Technologies Inc. | ||||
| Consolidated Statement of Financial Position | ||||
| As at September 30, 2012 and 2011 | ||||
| Unaudited | ||||
| Sep 30 2012 | Dec 31 2011 | |||
| $ | $ | |||
| Assets | ||||
| Current assets | ||||
| Cash | 7,619,161 | 4,774,970 | ||
| Short-term investments | 545,452 | 4,486,097 | ||
| Trade receivables | 2,388,050 | 1,664,326 | ||
| Receivable from joint venture partners | 130,936 | 182,286 | ||
| Net insurance proceeds receivable (note 6) | - | 637,099 | ||
| Taxes recoverable | 1,182 | 153,889 | ||
| Inventory (note 7) | 77,793 | 48,174 | ||
| Work in progress | 388,949 | 432,261 | ||
| Other receivable and prepaid expenses | 408,701 | 222,709 | ||
| 11,560,224 | 12,601,811 | |||
| Non-current assets | ||||
| Property, plant and equipment (note 5, 8 and 19) | 5,744,379 | 6,615,837 | ||
| Intangible asset | 46,453 | 69,682 | ||
| Total assets | 17,351,056 | 19,287,330 | ||
| Liabilities | ||||
| Current liabilities | ||||
| Accounts payable and accrued liabilities | 2,743,417 | 2,659,249 | ||
| Deferred revenue | 474,940 | 340,185 | ||
| Taxes payable | 180,523 | 63,105 | ||
| Deferred lease inducement | 13,176 | 18,945 | ||
| 3,412,056 | 3,081,484 | |||
| Non-current liabilities | ||||
| Deferred income tax liability | 88,713 | 88,713 | ||
| Long-term liabilities (note 9) | 94,181 | 111,146 | ||
| Total liabilities | 3,594,950 | 3,281,343 | ||
| Shareholders' Equity | ||||
| Capital stock and warrants (note 10) | 55,269,416 | 55,269,416 | ||
| Contributed surplus | 8,215,665 | 8,117,400 | ||
| Accumulated other comprehensive loss | (1,253,423 | ) | (1,075,369 | ) |
| Deficit | (48,475,552 | ) | (46,305,460 | ) |
| Total shareholders' equity | 13,756,106 | 16,005,987 | ||
| Total liabilities and shareholders' equity | 17,351,056 | 19,287,330 | ||
| Commitments (note 17) |
| Approved by the Board of Directors | ||
| signed "Jonathan Wilkinson" | signed "G.W. Poling" | |
| Jonathan Wilkinson, Director | G.W. Poling, Director |
For a complete set of consolidated financial statements including accompanying notes, go to www.bioteq.ca
| BioteQ Environmental Technologies Inc. | |||||||||
| Consolidated Statement of Operations and Comprehensive Loss | |||||||||
| For the three and nine months ended September 30, 2012 and 2011 | |||||||||
| Unaudited | |||||||||
| 3 months ended Sep 30, | 9 months ended Sep 30, | ||||||||
| 2012 | 2011 | 2012 | 2011 | ||||||
| $ | $ | $ | $ | ||||||
| Revenue | 2,772,740 | 2,948,473 | 7,334,515 | 5,678,444 | |||||
| Plant and other operating costs (other than depreciation) | 1,571,823 | 1,350,809 | 4,632,595 | 3,293,908 | |||||
| 1,200,917 | 1,597,664 | 2,701,920 | 2,384,536 | ||||||
| General and administration | 1,304,597 | 1,783,942 | 3,580,402 | 3,771,534 | |||||
| Sales, marketing and development | 427,851 | 305,042 | 1,100,234 | 645,767 | |||||
| Stock-based compensation | 39,157 | 10,133 | 98,265 | 80,536 | |||||
| Depreciation of property, plant and equipment (note 8) | 232,575 | 151,994 | 693,548 | 452,484 | |||||
| Amortization of intangible asset | 7,743 | 7,743 | 23,229 | 23,229 | |||||
| Loss before the under-noted | (811,006 | ) | (661,190 | ) | (2,793,758 | ) | (2,589,014 | ) | |
| Interest income | 10,653 | 27,058 | 39,556 | 77,836 | |||||
| Other income (loss) | - | (3,750 | ) | 16,500 | (3,750 | ) | |||
| Foreign exchange gain (loss) | (41,972 | ) | (145,393 | ) | 14,945 | (145,990 | ) | ||
| Reversal of impairment of Lluvia de Oro operations (note 11) | - | - | 1,226,873 | - | |||||
| Impairment of construction materials (note 5) | (347,749 | ) | - | (347,749 | ) | - | |||
| Loss before income taxes | (1,190,074 | ) | (783,275 | ) | (1,843,633 | ) | (2,660,918 | ) | |
| Income taxes (note 13) | 66,602 | 337,231 | 326,459 | 512,242 | |||||
| Net loss for the period | (1,256,676 | ) | (1,120,506 | ) | (2,170,092 | ) | (3,173,160 | ) | |
| Other comprehensive income (loss) | |||||||||
| Cumulative translation adjustment | (196,826 | ) | 560,864 | (178,054 | ) | 440,562 | |||
| Comprehensive loss for the period | (1,453,502 | ) | (559,642 | ) | (2,348,146 | ) | (2,732,598 | ) | |
| Net loss per share | |||||||||
| Basic and diluted | (0.02 | ) | (0.02 | ) | (0.03 | ) | (0.05 | ) | |
| Weighted average number of shares outstanding | |||||||||
| Basic and diluted | 69,966,672 | 69,966,672 | 69,966,672 | 69,943,204 | |||||
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, 2012 and 2011 | |||||||
| Unaudited | |||||||
| Accumulated other comprehensive income (loss) |
|||||||
| Number of shares |
Contributed surplus |
||||||
| Capital stock |
Warrants | Deficit | Total | ||||
| $ | $ | $ | $ | $ | $ | ||
| Balance - January 1, 2011 | 69,865,006 | 53,668,812 | 1,513,417 | 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 loss for the period | - | - | - | - | 440,562 | - | 440,562 |
| Balance - September 30, 2011 | 69,966,672 | 53,755,999 | 1,513,417 | 8,096,058 | (1,042,383) | (44,388,165) | 17,934,926 |
| Balance - January 1, 2012 | 69,966,672 | 53,755,999 | 1,513,417 | 8,117,400 | (1,075,369) | (46,305,460) | 16,005,987 |
| Stock-based compensation | - | - | - | 98,265 | - | - | 98,265 |
| Net loss for the period | - | - | - | - | - | (2,170,092) | (2,170,092) |
| Other comprehensive income for the period | - | - | - | - | (178,054) | - | (178,054) |
| Balance - September 30, 2012 | 69,966,672 | 53,755,999 | 1,513,417 | 8,215,665 | (1,253,423) | (48,475,552) | 13,756,106 |
For a complete set of consolidated financial statements including accompanying notes, go to www.bioteq.ca
| BioteQ Environmental Technologies Inc. | ||||||||||
| Consolidated Statement of Cash Flow | ||||||||||
| For the three and nine months ended September 30, 2012 and 2011 | ||||||||||
| Unaudited | ||||||||||
| 3 months ended Sep 30, | 9 months ended Sep 30, | |||||||||
| 2012 | 2011 | 2012 | 2011 | |||||||
| $ | $ | $ | $ | |||||||
| (note 20 | ) | (note 20 | ) | |||||||
| Cash flow used in | ||||||||||
| Operating activities | ||||||||||
| Net loss for the period | (1,256,676 | ) | (1,120,506 | ) | (2,170,092 | ) | (3,173,160 | ) | ||
| Items not affecting cash: | ||||||||||
| Depreciation of property, plant and equipment | 232,575 | 151,994 | 693,548 | 452,484 | ||||||
| Amortization of intangible asset | 7,743 | 7,743 | 23,229 | 23,229 | ||||||
| Amortization of deferred lease inducement | (4,955 | ) | (7,104 | ) | (19,164 | ) | (21,313 | ) | ||
| Impairment of construction materials (note 5) | 347,749 | - | 347,749 | - | ||||||
| Loss on disposal of equipment | - | 3,750 | - | 3,750 | ||||||
| Unrealized foreign exchange loss | 39,957 | 413,546 | 23,504 | 297,392 | ||||||
| Interest income | (3,867 | ) | (3,090 | ) | (16,010 | ) | (39,721 | ) | ||
| Stock-based compensation charge (note 10) | 39,157 | 10,133 | 98,265 | 80,536 | ||||||
| (598,317 | ) | (543,534 | ) | (1,018,971 | ) | (2,376,803 | ) | |||
| Change in non-cash working capital items (note 14) | 398,055 | 131,892 | 244,964 | 970,776 | ||||||
| Net cash used in operating activities | (200,262 | ) | (411,642 | ) | (774,007 | ) | (1,406,027 | ) | ||
| Investing activities | ||||||||||
| Purchase of property, plant and equipment | (178,438 | ) | (152,224 | ) | (493,135 | ) | (886,314 | ) | ||
| Proceeds on disposal of equipment | - | 12,604 | - | 12,604 | ||||||
| Receipt of government grant | - | - | 277,550 | - | ||||||
| Purchase of short-term investments | (89,571 | ) | (4,332,301 | ) | (2,520,556 | ) | (10,405,181 | ) | ||
| Proceeds from sale of short-term investments | 2,427,211 | 3,244,000 | 6,477,211 | 13,624,000 | ||||||
| Net cash provided by (used in) investing activities | 2,159,202 | (1,227,921 | ) | 3,741,070 | 2,345,109 | |||||
| Financing activities | ||||||||||
| Proceeds from exercise of options | - | - | - | 56,883 | ||||||
| Increase in deferred lease inducement | 13,395 | - | 13,395 | - | ||||||
| Increase (decrease) in long-term liabilities | 14,348 | (61,386 | ) | (16,965 | ) | 783 | ||||
| Net cash provided by (used in) financing activities | 27,743 | (61,386 | ) | (3,570 | ) | 57,666 | ||||
| 1,986,683 | (1,700,949 | ) | 2,963,493 | 996,748 | ||||||
| Effect of exchange rate changes on cash | (128,072 | ) | (103,457 | ) | (119,302 | ) | (120,937 | ) | ||
| Increase (decrease) in cash | 1,858,611 | (1,804,406 | ) | 2,844,191 | 875,811 | |||||
| Cash | ||||||||||
| Beginning of period | 5,760,550 | 7,333,682 | 4,774,970 | 4,653,465 | ||||||
| End of period | 7,619,161 | 5,529,276 | 7,619,161 | 5,529,276 | ||||||
For a complete set of consolidated financial statements including accompanying notes, go to www.bioteq.ca
The Toronto Stock Exchange has not reviewed and does not accept responsibility for the adequacy or the accuracy of this release.
Contact Information:
Tanja McQueen
VP Corporate Development
604-685-1243 or 1-800-537-3073
604-685-7778 (FAX)
investor@bioteq.ca
www.bioteq.ca