Warnex Inc.

NEX BOARD : WNX
TSX VENTURE : WNX.H


Warnex Inc.

April 24, 2014 17:42 ET

Warnex Reports Year End 2013 Results

LAVAL, QUEBEC--(Marketwired - April 24, 2014) - Warnex Inc. (TSX VENTURE:WNX.H) ("Warnex" or the "Company") announced today financial results for the year ended December 31, 2013.

Warnex sold its Bioanalytical Services division on December 10, 2012, which represented its last operating business unit. On December 2, 2013, the Company terminated its long-term operating lease for its Laval, Quebec facilities and sold one of its subsidiaries. "These transactions have allowed Warnex to eliminate all significant future financial commitments and to aggressively manage its operating expenses," remarked Michael Singer, Chairman of Warnex. "They have also provided the Company with the flexibility required in order to explore more optimally its strategic alternatives. In this regard, discussions with external parties continue to advance and the Company expects to announce the outcome of this process in the near term."

Financial results

Consolidated revenue for the twelve-month period ended December 31, 2013, amounted to $nil compared to $9.0 million in 2012. The Company did not generate any sales, nor related cost of goods sold, in the year ended December 31, 2013, as a result of the sale of all of its operating divisions in 2012.

Net loss for twelve-month period amounted to $2.0 million or $0.07 per share compared to net earnings of $1.0 million or $0.04 per share for the same period in 2012.

Selling expenses amounted to $nil for the twelve-month period ended December 31, 2013, compared to $0.3 million for the twelve-month period ended December 31, 2012.

General and administrative expenses amounted to $1.1 million for the twelve-month period ended December 31, 2013 compared to $4.0 million for the same period in 2012.

Research and development tax credits amounted to $81,267 for the twelve-month period ended December 31, 2013 as a result of the reversal of prior period provisions following assessments by the taxation authorities ($139,998 in the year ended December 31, 2012).

Financial revenues amounted to $3,832 in the twelve-month period ended December 31, 2013 compared to financial expenses of $651,493 in the twelve-month period ended December 31, 2012. This decrease is due to the repayment in full of the Company's debts in 2012.

The Company ended fiscal 2013 with cash, cash equivalents and short-term investments of $2.1 million and working capital of $2.7 million, compared to $2.7 million in cash and a working capital of $4.1 million as at December 31, 2012.

CAUTION REGARDING FORWARD-LOOKING STATEMENTS

Certain statements contained in this news release are forward-looking and are subject to numerous risks and uncertainties, known and unknown. For further information identifying known risks and uncertainties, relating to financial resources, liquidity risk, volatility of share price and other important factors that could cause actual results to differ materially from those anticipated in the forward-looking statements, please refer to the heading Risks and Uncertainties in Warnex's most recent annual Management's Discussion and Analysis, which can be found at www.sedar.com. Consequently, actual results may differ materially from the anticipated results expressed in these forward-looking statements.

Neither NEX nor its Regulation Services Provider (as that term is defined in policies of the NEX) accepts responsibility for the adequacy or accuracy of this release.

Financial statements to follow.

Consolidated Statements of Financial Position

December 31
2013
$
December 31
2012
$
Assets
Current assets
Cash and cash equivalents 218,299 2,742,114
Short-term investments 1,900,000 -
Trade and other receivables 782,073 1,804,421
Prepaid expenses 55,483 70,779
2,955,855 4,617,314
Non-current assets
Amount receivable held in trust - 600,000
2,955,855 5,217,314
Liabilities
Current liabilities
Trade and other payables 169,731 457,317
Provisions 80,000 90,930
249,731 548,247
Shareholders' equity
Capital stock 41,706,049 41,706,049
Other reserves 2,803,559 2,803,559
Deficit (41,803,484 ) (39,840,541 )
2,706,124 4,669,067
2,955,855 5,217,314

Consolidated Statements of Changes in Shareholders' Equity

Other reserves
Capital
stock
$
Equity components of debentures
$
Share-based compensation
$
Other
$
Total other reserves
$
Deficit
$
Total
$
Balance, December 31, 2012 41,706,049 1,734,404 1,028,149 41,006 2,803,559 (39,840,541 ) 4,669,067
Net and comprehensive loss - - - - - (1,962,943 ) (1,962,943 )
Balance, December 31, 2013 41,706,049 1,734,404 1,028,149 41,006 2,803,559 (41,803,484 ) 2,706,124
Balance, December 31, 2011 40,981,049 1,734,404 1,028,149 41,006 2,803,559 (40,863,719 ) 2,920,889
Issuance of common shares 725,000 - - - - - 725,000
Net earnings and comprehensive income - - - - - 1,023,178 1,023,178
Balance, December 31, 2012 41,706,049 1,734,404 1,028,149 41,006 2,803,559 (39,840,541 ) 4,669,067

Consolidated Statements of Operations and Comprehensive Income

For the years ended December 31 2013
$
2012
$
Revenue - 8,964,219
Cost of goods sold - 7,049,073
Gross margin - 1,915,146
Operating expenses
Selling - 266,567
General and administrative 1,123,042 3,986,584
Finance (3,832 ) 651,493
Research and development tax credits (81,267 ) (139,998 )
1,037,943 4,764,646
Loss before under noted items and income taxes (1,037,943 ) (2,849,500 )
Gain on disposal of assets 50,001 4,261,178
Lease termination (975,001 ) -
Impairment of assets - (388,500 )
Earnings (loss) before income taxes (1,962,943 ) 1,023,178
Deferred income taxes - -
Net earnings (loss) and comprehensive income (1,962,943 ) 1,023,178
Basic earnings (loss) per share ($0.07 ) $0.04
Diluted earnings (loss) per share ($0.07 ) $0.04
Weighted average number of shares outstanding 28,323,884 25,958,190
Weighted average number of diluted shares outstanding 28,323,884 27,891,802

Consolidated Statements of Cash Flow

For the years ended December 31 2013
$
2012
$
Operations
Net earnings (loss) (1,962,943 ) 1,023,178
Items not affecting cash:
Depreciation of property, plant and equipment - 707,352
Amortization of intangibles - 32,117
Impairment of assets - 388,500
Gain on disposal of assets - (4,261,178 )
(1,962,943 ) (2,110,031 )
Net change in non-cash working capital items 1,339,128 (773,352 )
Net cash used in operations (623,815 ) (2,883,383 )
Investing activities
Acquisition of property, plant and equipment - (85,181 )
Proceeds of disposal of property, plant and equipment - 6,060,205
Proceeds of disposal of intangibles - 58,477
Acquisition of short-term investments (3,000,000 ) -
Maturity and disposal of short-term investments 1,100,000 -
Net cash provided by (used in) investing activities (1,900,000 ) 6,033,501
Financing activities
Decrease in bank loan - (740,000 )
Repayment of long term debt - (42,840 )
Repayment of debentures - (910,400 )
Net cash used in financing activities - (1,693,240 )
Increase (decrease) in cash and cash equivalents (2,523,815 ) 1,456,878
Cash and cash equivalents, beginning of year 2,742,114 1,285,236
Cash and cash equivalents, end of year 218,299 2,742,114

Contact Information

  • Michael Singer
    Chairman of the Board of Directors
    Warnex Inc.
    (514) 940-3600
    info@warnex.ca