FSI Energy Group Inc.

April 30, 2013 21:26 ET

FSI Announce 2012 Fourth Quarter and Year-End Financial Results

CALGARY, ALBERTA--(Marketwired - April 30, 2013) - Richard Ball, Chief Executive Officer of FSI Energy Group Inc. (TSX VENTURE:FSI) ("FSI" or the "Company"), is pleased to announce financial results for the three and twelve months ended December 31, 2012.

Financial Highlights: Twelve months ended December 31: Three months ended December 31:
2012 2011 2012 2011
Cash flow from operations 5,810,506 (181,795 ) 2,682,051 (97,714 )
Cash flow from operations (per share) 0.18 (0.00 ) 0.08 (0.00 )
Revenue 3,014,979 3,051,664 184,112 398,605
Comprehensive income (loss) (733,143 ) (281,634 ) 45,821 (874,024 )
EBITDA1 (1,223,543 ) (53,961 ) (626,723 ) (812,331 )

Fiscal 2012 was marked by significant manufacturing and economic activity pursuant to the substantial completion of construction of two major brine projects during the year. As highlighted below, the construction of these projects in 2012 had a significant effect on the financial results in 2012 and, moreover, should result in recognition of operating income of over $4 million in fiscal 2013.

  • The pending sale of the two brine plants in 2013, resulted in the Company recording an income tax recovery of deferred taxes of $700,000 in the quarter, whereas prior to this a full valuation allowance was taken against any potential recovery
  • With the focus on the construction of the two major brine plants, domestic revenue tapered to $184,122 or 54% lower than the same quarter last year with sales for the year of $3,014,919 being relatively flat in comparison to last year
  • Although revenue was lower for the quarter, comprehensive income of $45,821 for the quarter was $919,845 higher than the loss of $874,024 the same quarter last year mostly the aforementioned recovery of deferred income taxes and lower write-downs of accounts receivable
  • Despite relatively flat revenue for the year and the aforementioned deferred income tax recovery, the comprehensive loss for the year of $733,143 was $451,509 higher than last year, mostly on higher selling, general and administration expenses as the Company geared up for the fabrication of two major brine plant contracts completed in December 2012
  • The economic activity from the brine plants substantially improved the Company's liquidity and cash flow as follows:
    • Cash flow from operations was $2,682,051 and $5,810,506 for the quarter and year, respectively, up $2.8 million and $6.0 million over the same quarters last year mostly on progress payments made by customers on the construction of the brine plants
    • Cash and restricted cash (which will become available on delivery of the brine plants) amounted to $5.5 million which will be more than sufficient to service the Company's short term monetary liabilities of $3 million

Further detail may be found in the Company's Management Discussion and Analysis - which is available on SEDAR.

About FSI

Through its wholly owned subsidiary FSI International Services Ltd., FSI Energy Group Inc. is a Calgary-based manufacturing and service company specializing in customized filtration, filtration-related technologies and Brine Plants for the energy, chemical, and water treatment industries.

Non-GAAP Financial Measures

EBITDA does not have a standard definition prescribed by GAAP and therefore may not be comparable to similar measures disclosed by other companies. The Company utilizes these measures in making operating decisions and assessing the Company's financial performance and as an indicator of its ability to service its liabilities. This non-GAAP measure has not been presented as an alternative to net income (loss) or any other measure of performance or liquidity prescribed by GAAP. EBITDA is calculated as follows:

Financial Highlights: Twelve months ended December 31: Three months ended December 31:
2012 2011 2012 2011
Comprehensive income (loss) (733,143 ) (281,634 ) 45,821 (874,024 )
Addback (subtract):
Deferred income tax recovery (700,000 ) - 700,000 -
Finance costs 94,778 78,680 22,869 20,247
Depreciation included in cost of sales 91,184 131,212 2,468 35,711
Depreciation 23,638 17,781 7,055 5,735
EBITDA1 (1,223,543 ) (53,961 ) (626,723 ) (812,331 )

Forward-looking Information Cautionary Statement

Certain information contained in this press release, including information and statements which may contain words such as "could", "plans", "should", "anticipates", "expect", "believe", "will", and similar expressions and statements relating to matters that are not historical facts are forward-looking information. In particular, this press release contains forward-looking information about the completion of the Brine Plant export contracts and the revenues associated therewith. Forward-looking statements are based on the opinions and estimates of management relying on their experience at the date the statements are made, and are subject to a variety of risks, uncertainties and other factors that could cause actual events or results to differ materially from those anticipated in the forward-looking statements including, but not limited to, the risk factors discussed in FSI's MD&A and other continuous disclosure documents. All of the forward- looking information contained in this press release is qualified by this cautionary statement. There can be no assurance that the actual results or developments anticipated by FSI, as expressed or implied by the forward-looking information, will be realized or, even if substantially realized, that they will have the expected consequences to or effects on FSI or its business operations. FSI disclaims any intention or obligation to update or revise any forward-looking information as a result of new information or future events. Readers should not place undue reliance on forward-looking information.

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.

Contact Information

  • FSI Energy Group Inc.
    Richard Ball
    President and CEO
    (403) 571-4230
    (403) 230-3106 (FAX)