Viridis Energy Inc.

Viridis Energy Inc.

May 01, 2012 13:32 ET

Viridis Energy Reports Full Year and Fourth Quarter 2011 Financial Results 78% Revenue Growth

VANCOUVER, BRITISH COLUMBIA--(Marketwire - May 1, 2012) - Viridis Energy Inc. ("Viridis" or the "Company") (TSX VENTURE:VRD)(OTCQX:VRDSF), a "Cleantech" manufacturer and distributor of alternative energy providing wood waste biomass to global residential and industrial markets, today reported financial results for its full year and fourth quarter ended December 31, 2011.

Viridis reported full year 2011 revenues of $12.4 million, an increase of 78 percent over the previous year of $6.9 million. The growth in revenues during 2011 reflects the achievement of production capacity goals at the company's Okanagan Pellet plant and increased demand in Europe. Subsequent to year end, Viridis increased its production capacity through its acquisition of a 110,000 ton capacity plant in Nova Scotia on February 6, 2012. Viridis acquired the assets of Enligna Canada and renamed this facility the Scotia Atlantic Biomass Company, where it expects to resume production during the second quarter of this year.

During 2011, Viridis achieved many significant milestones:

  • Expanded markets served from a single sector - North American home heating to multiple geographic and market sectors including European home heating and industrial
  • Developed a strategic alliance with Abellon Clean Energy, including an equity investment, an off-take agreement for current production and plans for a joint venture project to build a new wood pellet plant
  • Commenced a bulk rail shipment program to the northeast US, reducing freight costs of supplying home heating customers
  • Completed a $7 million financing through the sale of a combination of common stock and convertible securities
  • Increased gross margin from negative ($0.9 million) in 2010 to $1.0 million in 2011, representing a $2.0 million improvement year over year, and
  • Reduced G&A expenses as a percentage of revenue from 37% to 27%, while expanding operations and long term initiatives

Viridis' gross profit on revenue in 2011 totaled $1.0 million or 8.5 percent of revenue (gross margin), which includes depreciation and amortization costs of $0.6 million reflecting the Company's adherence to IFRS for the first full year. Excluding non-cash items, gross margin averaged 13% in 2011, which compares to negative gross margin in 2010. Negative gross margin occurred in 2010 as the Company addressed the inventory volumes associated with the new acquisition. Looking ahead, as the Company's production capacity increases, bulk shipment programs take effect and the Company's new plant in Nova Scotia comes online, gross margin are expected to increase.

The Company reported a loss from operations of $(3.5) million in 2011 compared to a loss from operations of $(4.1) million in the prior year. The Company incurred a comprehensive loss of $4.2 million or $(0.10) per basic share or $(0.12) per weighted average share for the full year 2011. This compares to a comprehensive loss of $1.1 million in 2010.or $(0.09) per basic share for the full year 2010, which includes a gain on acquisition of $2.6 million.

While operating expenses increased to $4.6 million in 2011 from $3.2 million in 2010, as a percent of revenue these costs were down significantly, decreasing from 47% in 2010 to 37% in 2011. Finance charges (inclusive of bank charges and imputed interest on convertible securities) for the year were approximately $0.6 million, which compares to approximately $0.3 million in 2010.

At December 31, 2011, the Company had Cash and Cash Equivalents of approximately $600,000 and Accounts Receivable of approximately $1.2 million, assets totaling $15.5 million and Shareholders' Equity of $6.5 million. Common shares issued and outstanding as of December 31, 2011 were 41,277,911. The Company repaid debt in the amount of approximately $2.0 million during the year and used some of the proceeds of financing for future acquisitions.

Commenting on the 2011 financial results, Christopher Robertson, Viridis' chief executive officer, said, "We spent the greater part of 2011 solidifying the foundation needed to effectively address the growing demand for renewable energy. We successfully completed the transition from relying exclusively on the seasonal, residential heating business in North America to an international industrial and residential heating business. By supplying wood pellets to the UK, Europe, Canada and the US, into two diverse sectors, we have limited the Company's exposure to seasonal pricing fluctuations. The industrial use of wood pellets is expected to grow by 350% by 2020,, as European countries seek to meet the mandated targets of 20% of energy produced must come from Renewable Energy. During the year, we narrowed our search for acquisitions to those that were well suited for exporting to Europe and completed the acquisition of our Nova Scotia plant. Scotia Atlantic Biomass not only adds to our production capacity by 110,000 tons, annually, but also significantly reduces the distance between us and our European customers. We anticipate having the plant in operation second quarter and reaching full capacity during 2012."

Mr. Robertson continued, "While working towards adding production capacity, we made progress on reducing costs. We achieved a reduction in expenses relative to our revenue level and will continue to closely manage costs to maximize gross and operating margins. Starting in Q4 2011, we began the implementation of a web-based, integrated ERP and accounting system. We went live on April 1, 2012 and are confident the new system will provide access to vital information enabling management to maximize opportunities and minimize costs. As we seek additional opportunities to augment production capacity, as well as diversify Viridis' biomass product line, our initial focus will be to replicate an efficient business model that promotes maximum operating margins that improves as we scale the business."

About Viridis Energy Inc.

Viridis Energy Inc. (TSX VENTURE:VRD)(OTCQX:VRDSF) is a publicly traded, "Cleantech" alternative energy company specializing in wood biomass. Headquartered in Vancouver, B.C., Viridis Energy operates Cypress Pacific Marketing, Okanagan Pellet Company and Scotia Atlantic Biomass, thus providing the company with vertical integration for distribution and manufacturing as well as coast to coast national presence. For more information on Viridis Energy Inc. please refer to the company website at

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) inability to finance operations and growth (5) inability to finance the start-up operations in Nova Scotia in a timely manner (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.

Financial Statements Follow

Viridis Energy Inc.
Consolidated Statements of Financial Position
(Expressed in Canadian dollars)
As at December 31, 2011, December 31, 2010 and January 1, 2010
December 31, 2011 December 31, 2010 January 1, 2010
Cash and cash equivalents $ 598,696 $ - $ 213,347
Accounts receivable 1,190,370 836,090 5,141
Inventory (note 6) 597,003 2,404,622 -
Other receivable - 171,299 -
Prepaid expenses 247,972 142,531 -
Due from related parties 190,686 58,448 -
2,824,727 3,612,990 218,488
Property, plant and equipment 6,427,739 6,683,983 -
Option to acquire property 550,000 - -
Intangible assets 3,482,000 3,482,000 -
Goodwill 2,059,990 2,059,990 -
$ 15,344,456 $ 15,838,963 $ 218,488
Bank line of credit $ 3,057,021 $ 2,601,474 $ -
Accounts payable and accrued liabilities 1,399,033 1,675,752 142,263
Deferred income 71,470 - -
Short term loan payable - 10,700 -
Due to related parties - 707,771 -
Current portion of loans payable 547,507 2,542,424 -
5,075,031 7,538,121 142,263
Loans payable 3,747,726 556,355 -
8,822,757 8,094,476 142,263
Shareholders' equity (deficit)
Share capital $ 18,559,325 $ 16,233,172 $ 8,768,172
Contributed surplus 2,425,018 1,727,713 362,351
Deficit (14,419,075 ) (10,216,398 ) (9,054,298 )
6,521,699 7,744,487 76,225
$ 15,344,456 $ 15,838,963 $ 218,488
Viridis Energy Inc.
Consolidated Statements of Operations and Comprehensive Loss
(Expressed in Canadian dollars)
For the year ended December 31, 2011 and 2010
Year ended December 31,
2011 2010
Sales $ 12,354,206 $ 6,934,979
Costs of sales 11,304,970 7,869,557
Gross profit 1,049,236 (934,578 )
Operating expenses
Selling and marketing 355,490 251,492
Freight 885,453 394,193
General and administrative 3,334,478 2,593,837
4,575,421 3,239,522
Loss before other items (3,526,185 ) (4,174,100 )
Other items
Foreign exchange loss (43,331 ) (11,429 )
Disposal of property plant and equipment (29,028 ) -
Gain on acquisition of business operations - 2,604,463
Finance expense (647,712 ) (326,044 )
(720,071 ) 2,266,990
Income (loss) before income taxes recovery (4,246,256 ) (1,907,110 )
Income taxes recovery (expense) 43,569 745,010
Comprehensive income (loss) $ (4,202,687 ) (1,162,100 )
Income (loss) per share
Basic and diluted $ (0.12 ) $ (0.05 )
Weighted average number of common shares outstanding
Basic and diluted 35,452,418 24,292,346

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.

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