NEWS
Viridis Energy Inc. Reports First Quarter 2011 Financial Results
June 8, 2011Viridis Energy Inc. ("Viridis" or the "Company") (TSXV: VRD) (OTC: VRDSF.PK), a “Cleantech” manufacturer and distributor of alternative energy providing biomass fuel to global residential and industrial markets, today reported financial results for its first quarter ended March 31, 2011. During the quarter the Company unveiled its international strategy and immediately began to execute on securing additional manufacturing; diversifying into additional sources of high quality, dependable feedstock; and strengthening its management team and board of directors. Subsequent to the end of the first quarter, Viridis entered into two significant multi-year, off-take agreements to supply pellets into Asia and Europe.
Viridis generated revenue first quarter 2011 of $2.7 million. This compares with the previous year first quarter revenue of $153,000, during which the Company initiated its transition to create a fully integrated biomass manufacturer. Viridis acquired several businesses in both biomass manufacturing and distribution during 2010, initially supplying domestic residential markets and now, with increased production, expanding into commercial and international markets. Although first quarter 2011 revenues were $300,000 less than the fourth quarter 2010 revenues due to seasonality, Viridis anticipates sequential revenue growth acceleration during 2011 as its manufacturing capacity increases, coupled with an expanded sales efforts resulting from its recently announced international strategic distribution partnership, which diversifies the company’s business to include industrial contracts.
The Company reported a comprehensive net loss of $(714,000) or $(0.02) per basic share for the first quarter 2011 compared to a comprehensive net loss of $(518,000) or $(0.04) per basic share for the comparable 2010 period and a comprehensive net loss of $(2.6) million or $(0.09) per basic share for the prior fourth quarter 2010. The Company expects to achieve profitability during 2011, its first full year of operations with the acquired wood pellet companies, as its revenues continue to increase and its expenses as a percentage of revenues continue to fall.
The Company generated gross profit during first quarter 2011 of $917,000 or 34 percent of total revenue. Excluding $129,000 of depreciation expense booked to Costs of Sales, the gross margin was 39 percent of total revenue. The core business of wood pellets expected to generate gross margin before depreciation charges in the low 40% range. During the latter half of 2011, the Company forecasts to begin generating revenue from its other biomass products such as Palm Kernel Shell. It is expected that distribution of these products will generate significant revenue opportunity for the Company at lower margins.
Operating expenses during first quarter 2011 totaled $1.5 million, an increase of approximately $908,000 from the prior year’s first quarter during which the Company initiated its transition to a biomass manufacturer and distributor. Operating expenses decreased $1.1 million from the prior fourth quarter primarily due to a decrease in freight charges as the company began its shift in distribution from 100 percent domestic to international bulk shipment. While Viridis could experience some increase in operating expenses going forward as its business grows, the Company believes it will be able to leverage its general and administrative expenses to deliver increased operating margins as its revenues rise.
Interest expense (inclusive of bank charges) for the first quarter was approximately $118,000, which compares to interest expense of approximately $5,000 during first quarter 2010 and interest expense of $126,000 during the prior fourth quarter 2010.
At March 31, 2011, the Company had accounts receivable of approximately $948,000, representing a DSO of 32 days, inventory of $1.8 million and total assets of $15.5 million, an increase of approximately $800,000 from year end 2010. At the end of the first quarter 2011, Viridis had long term debt of $548,000, future tax liability of $870,000 and shareholder equity of $6.5 million. The weighted average number of common shares at March 31, 2011 and March 31, 2010 were 30.2 million and 14.1 million, respectively. The year over year increase in the weighted average shares outstanding was largely due to the acquisition of Cypress Pacific Marketing during the first quarter 2010, which added 5.6 million shares, and the completion of $6.0 million in private placements of the Company’s common shares during the year. As of March 31, 2011, Viridis had approximately 44.3 million fully diluted shares, which if all options and warrants exercised would bring an additional $9 million of capital into the company.
Commenting on the first quarter results, Chris Robertson, Viridis’ chief executive officer, said, “First quarter 2011 completed our structural transition to become a clean-tech biomass company. We are now prepared to distribute our pellets domestically and internationally to both retail and commercial markets. In the past, our revenues have predominately come from our traditional domestic heating business, which we believe will continue at its current pace. Our expansion into commercial sales and the international markets has been significantly intensified with the support of our recently announced partnerships with leading international green energy companies. Viridis’ business tenet and principles has attracted the attention of like-minded corporations, worldwide, that recognize our expertise in the wood pellet and biomass industry. These new relationships are providing the catalyst to accelerate our expansion worldwide.” Mr. Robertson continued, “At the start of our second quarter, we began shipment into Europe. We anticipate commencing shipment to Asia, an even larger opportunity for our company, in July. The demand for clean, inexpensive alternative fuel continues to be at the forefront of global public policy. We have begun a number of additional contract discussions, which we hope to add to our 2011 projections of $30 million in revenues and approximately $0.02 EPS.”
Investor Contact: Yvonne L. Zappulla Managing Director Grannus Financial Advisors, Inc. 212-681-4108 [email protected]
Company Contact: Michele Rebiere Chief Financial Officer Viridis Energy Inc 905-847-5226 [email protected]
About Viridis Energy Inc. Viridis Energy Inc. (TSXV: VRD) is a publicly traded, "Cleantech" alternative energy company specializing in the agricultural and wood waste biomass. Located in Vancouver, B.C., Viridis Energy operates Cypress Pacific Marketing and Okanagan Pellet Company, two acquisitions in the wood pellet sector, thus providing the company with vertical integration for distribution and manufacturing. For more information on Viridis Energy Inc. please refer to the company website at www.viridisenergy.ca.
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 retain key management and employees, (6) ; an increase in the number of competitors with larger resources, and (7) 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.
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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