Nordex Explosives Ltd.

Nordex Explosives Ltd.

June 30, 2011 14:49 ET

Nordex Explosives Announces 1st Quarter 2011 Financial Results

KIRKLAND LAKE, ONTARIO--(Marketwire - June 30, 2011) -


LES EXPLOSIFS NORDEX LTEE/NORDEX EXPLOSIVES LTD. ("Nordex") (TSX VENTURE:NXX) announces its financial results for the First Quarter ending March 31, 2011. Nordex achieves its second highest first quarter sales.

Sales for the first quarter ended March 31, 2011 of $2,489,041 show a decrease of 10.9% compared to the 2010 first quarter sales of $2,794,974. Total sales for the trailing twelve months ending March 31, 2011 were $12,089,028 an increase of over 27.8% compared to record sales of $9,459,152 for the trailing twelve months ending March 31, 2010.

Earnings per share decreased to ($0.02) during the first quarter ending March 31, 2011 compared to earnings per share of $0.03 during the same period in 2010.

Nordex recorded a loss before interest, taxes, depreciation, amortization and stock based compensation of ($6,369) compared to net income of $428,164 for the comparative period in 2010. Net loss before tax for the first quarter was ($166,881) compared to a net income $326,727 for the first quarter of 2010. The decrease in net income was primarily a result of the decrease in sales to one major customer and significant legal and settlement costs. The net loss is attributable to a one time settlement with a former employee and reduced margins as a result of increased raw material and fuel costs.

If the first quarter "out of the norm" legal costs of approximately $70,000 plus settlement costs of $168,000 are taken into consideration the first quarter would have shown an operational profit.

The costs for products increased substantially with 10% to 20% rise in raw materials cost and a dramatic increase in fuel and fuel based products.

A complete set of Financial Statements and the Management Discussion and Analysis of the first quarter are filed on SEDAR.


Nordex management and directors are confident and positive about the future of the Corporation.

Nordex has successfully settled several outstanding legal suits. These have been a major distraction to management as well as a significant cost and drain on resources.

Nordex has added several new clients as well as signing a new product distribution agreement.

  • On Feb 7th 2011 Nordex announced an exclusive distribution agreement with Johnex High Tech Explosives Ltd. Johnex has become recognized as Australia's leading innovator in high-tech explosives technology and have developed a unique range of coiled patented explosives which have revolutionized underground production blasting.

  • On April 12, 2011 Nordex announced a 3 year supply agreement with Armistice Resources Corp for their site(s) near Virginiatown. Armistice is moving into a pre‐production mode at the McGarry Mine underground operations with the goal of meeting planned start‐up of gold production in the fourth quarter of 2011. The initial target is a production rate of 25,000 ounces of gold per year. The McGarry project is located immediately adjacent to the former Kerr Addison Mine which produced over 11,000,000 ounces of gold. Armistice is also commencing a $2,500,000 drilling program on the McGarry and Kerr Addison properties.

  • On May 13th 2011 Nordex announced a supply agreement with Trelawney Mining and Exploration Inc. for the supply of explosive products to their Chester #1 site located near Gogama, Ontario, Canada.

  • On June 3rd 2011 Nordex announced a financing of $750,000 with ROYNAT INC.

  • On June 29th 2011 Nordex announced the signing of a 6 year contract with First Nickel Inc. This is the first underground mine for Nordex in the Sudbury region.

In addition, Nordex signed an option agreement with Benton Resources Corp on its Melba Gold property. This agreement was subject to due diligence on Benton's part. The two outstanding issues which are preventing the option agreement from closing are expected to be resolved shortly.


Nordex advises that sales for the second quarter ending June 30th 2011 will surpass first quarter sales by approximately $400,000.

The Company successfully executed a strategy to ensure that Nordex was positioned to respond to the recovery after the economic downturn that began in 2008. As a result, the Corporation was able to win significant long term contracts with major mining companies that previously depended on the large multinational suppliers.

Nordex implemented a plan to increase its manufacturing capabilities. This included the development of a new manufacturing facility and the introduction of an exclusive line of emulsion explosive products. In 2005 only 25% of revenues were from the sale of products manufactured by Nordex compared to 60% now.

Nordex has also developed a strategy for expanding its business beyond its traditional market in the Kirkland Lake Region. Nordex is actively pursuing opportunities with potential clients in both Quebec and Southern Ontario, and is investigating potential satellite operations sites in those areas to enable the company to expand its customer base to a larger geographic area.

ABOUT NORDEX EXPLOSIVES: LES EXPLOSIFS NORDEX LTEE./NORDEX EXPLOSIVES LTD. is a manufacturer and distributor of explosives for the mining, quarry and road construction industries since 1970. Its manufacturing operations and distribution centre is strategically located in one of the world's largest mining regions near Kirkland Lake, Ontario. Nordex trades on the TSX Venture Exchange under the symbol "NXX".


Additional Information relating to the Company is available on SEDAR at

Forward-Looking Statements

Certain information included herein may contain "forward-looking statements" which reflect the current expectations of management of the Company regarding the Company's future growth, results of operations, performance, business prospects and opportunities. Wherever possible, words such as "may", "would", "could", "should", "will", "anticipate", "believe", "plan", "expect", "intend", "estimate", "aim", "endeavor", "seek", "predict", "potential" and similar expressions have been used to identify these forward-looking statements. These statements reflect management's current beliefs with respect to future events and are based on information currently available to management of the Company. Forward-looking statements involve significant risks, uncertainties and assumptions. Many factors could cause the Company's actual results, performance or achievements to be materially different from any future results, performance or achievements that may be expressed or implied by such forward-looking statements, including, without limitation, cancellations of or the failure to renew purchase orders; production and delivery issues; quality, pricing and availability of raw materials; compliance with environmental regulations; exchange rate fluctuations as well as the other risks identified in the "Risk Factors" contained in the Company's Management Discussion and Analysis for the Third Quarter and other public filings (copies of which may be obtained at Should one or more of these risks or uncertainties materialize, or should assumptions underlying the forward-looking statements prove incorrect, actual results, performance or achievements may vary materially from those expressed or implied by this press release. These factors should be considered carefully and the reader should not place undue reliance on the forward-looking statements. Although any forward-looking statements contained in this press release are based upon what management currently believes to be reasonable assumptions, the Company cannot assure readers that actual results, performance or achievements will be consistent with these forward-looking statements, and management's assumptions may prove to be incorrect. These forward-looking statements are made as of the date of this press release, and, other than as required by law, the Company does not intend, and does not assume any obligation, to update or revise these forward-looking statements, whether as a result of new information, future events or otherwise.

Neither 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.

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