Innovative Composites Reports Q1 FY2012 Financial Results
March 27 2012 - 8:07PM
PR Newswire (Canada)
- Record revenue driven by sales growth of non-housing products -
TORONTO, March 30, 2012 /CNW/ - Innovative Composites International
Inc. ("ICI" or the "Company"), (OTCQX: ICIZF), a producer of
patented protected composite products targeting the multi-billion
dollar prefabricated modular housing and transportation markets,
reported today its financial results for the three-month period
ended December 31, 2011. All figures are in U.S. dollars
unless otherwise stated. Beginning with the first fiscal quarter of
FY2012, ICI reported its financial results in accordance with
International Financial Reporting Standards (IFRS), as required for
public companies in Canada. Previously, the Company reported
its financial results under Canadian Generally Accepted Accounting
Standards (GAAP). Financial results for the corresponding period in
FY2011 have been restated to reflect the adoption of IFRS. "The
first quarter of fiscal 2012 was busy and productive, as we
continued to build on the momentum established in fiscal 2011 in
the form of revenue growth and important sales agreements," said
Terry Ball, President and CEO of ICI. "The significant growth
in revenue was a result of the ramping up of manufacturing at our
Michigan plant which is focused on our non-housing products
segment." Q1 FY2012 Financial and Operational Highlights -- Revenue
of approximately $907,000 for Q1 FY2012, the largest in company
history and nearly double all of the previous year's revenue --
Completed the acquisition of the assets of Eleison Composites LLC,
a manufacturer of fiber reinforced thermoplastic skin material
utilized in ICI's products -- Completed a bought deal public
offering for gross proceeds of CDN$10.1 million -- Signed an
agreement to supply EcoScapeTM modular homes for large housing
projects in Brazil. -- Signed an agreement with Fence-Crete
Holdings to make use of ICI's StructureLiteTM panels in highway
fencing applications in Canada on an exclusive basis. -- Received,
and subsequent to quarter-end, shipped an order from Subway®
restaurant owner/operator Liberty Eagle Holdings, based in Tanzania
-- Successfully completed transition from Canadian GAAP to IFRS
Highlights Subsequent to Quarter-end -- Commenced operations at its
flagship Orangeburg, South Carolina ("SC") facility on time and on
budget -- Strengthened executive team by adding Rubens Roque as COO
and Allan Landosky as Director of Engineering -- Began trading on
the OTCQX under the symbol ICIZF for the purposes of providing
additional liquidity and increased access for US based investors --
Signed an agreement with RedLeaf Homes Ltd. to distribute ICI
prefabricated homes and shelters within northern and rural Canada
-- Introduced new Rapid Tactical Emergency Relief Module called the
"RapTER" to target the emergency response and military agency
markets Financial Performance ICI had approximate revenue of
$907,000, an increase of approximately $876,000, for the
three-month period ended December 31, 2011 compared to
approximately $31,000 for the Q1 FY2011. The record revenue for the
period was a result of the beginning of market acceptance for its
products, primarily in its non-housing segments, and the beginning
transition from a development stage company to a commercially
active company during the fiscal year. The Company expects
fluctuations in its revenue initially as more products are
introduced to the market place and the Company begins to ramp up
its SC facility. Cost of sales for the first quarter of fiscal 2012
was approximately $860,000, up approximately $777,000 compared to
the same period in fiscal 2011. On a percentage basis, cost
of sales was approximately 95% of sales during the three-month
ended December 31, 2011 versus approximately 250% for the
three-months ended December 31, 2011. Without the impact of IFRS
related accounting changes, the cost of sales for the quarter ended
December 31, 2011 was 86.7% of sales compared to 69% for the
quarter ended December 31, 2010. The decrease in gross profit
margin for the three months ended December 31, 2011 as compared to
the three months ended December 31, 2010, is largely attributed to
the higher than normal scrap rates and associated write-downs
typical for the ramp up stage of new product manufacturing. In
addition, pricing of certain products formerly manufactured at
Eleison resulted in gross margins that were lower than gross
margins associated with ICI products. ICI management is taking
steps to increase gross margins on former Eleison products through
implementation of manufacturing efficiencies and selling price
adjustments. ICI expects continued improvements in its gross profit
margin through continued strengthened relationships with suppliers,
vertical integration, and achieving certain economies of scale
through increased sales and capacity utilization. Total expenses
for the three-months ended December 31, 2011 were $2.2 million, an
increase of approximately $1.5 million compared to $0.7 million for
the same period last year. The increase in expenses were the
result of the overall growth and expansion of the Company,
specifically relating to an increase in sales initiatives,
expansion of the manufacturing facility in Michigan, ramping up the
new manufacturing facility in South Carolina, and the acquisition
and integration of the Eleison assets into the Company's
activities. ICI recorded a net loss for the first quarter of fiscal
2012 of $1.7 million or $0.03 per share. These compare to a
net loss of $3.9 million, or $0.08 per share, for the first quarter
of fiscal 2011. Cash flow used in operating activities for Q1
fiscal 2012 were $1.7 million, an increase of $1.2 million compared
to $0.5 million for Q1 fiscal 2011. The increase is primarily due
to increasing expenses as described above. At December 31, 2011,
ICI had working capital of $12.3 million, including cash and cash
equivalents of $11.5 million, compared to $7.2 million and $6.6
million, respectively, as of September 30, 2011. ICI has filed its
financial statements for the three-months ended December 31, 2011
and related Management's Discussion and Analysis (MD&A) with
securities regulatory authorities. ICI' financial statements,
MD&A and related documents are available via SEDAR as well as
through the Company's website, www.innovativecompositesinc.com.
Outlook "Fiscal 2012 has started off strong with important sales
agreements, significant strengthening of our balance sheet through
the completed financing, and the recent announcement that our
flagship SC facility has commenced initial operations on time and
on budget," said Mr. Ball. "We expect to start delivering
homes from the SC facility in the near future and to continue
converting opportunities in our project pipeline into sales
agreements." Conference Call ICI will host a conference call to
discuss its 2012 first quarter financial results on Monday, April
2, 2012 at 10:00 a.m. ET. To access the conference call by
telephone, dial 647-427-7450 or 1-888-231-8191. Please connect
approximately 15 minutes prior to the beginning of the call to
ensure participation. A question and answer session for
analysts and institutional investors will follow management's
presentation. A taped replay of the conference call will also be
available to listeners until 12:00 a.m. Monday, April 9,
2012. To access the rebroadcast, please dial 416-849-0833 or
1-855-859-2056 and enter passcode 65594194, followed by the number
sign. About Innovative Composites International Inc. Headquartered
in Toronto, Canada, Innovative Composite International Inc.
(OTCQX: ICIZF) is a high-tech engineering and manufacturing company
that is successfully commercializing a patent protected line of
state-of-the-art composite products targeted at the multi-billion
dollar transportation and prefabricated modular housing markets.
Led by a team of commercialization experts ICI has adopted a tier
two business model: It designs and manufactures game-changing
products and partners with established companies in its target
markets to utilize their sales channels for faster product
roll-out. This strategy and the superior characteristics of the
products have resulted in rapidly growing sales and opened up
opportunities that could lead to large scale contracts on an
ongoing basis. To find out more about ICI please visit our website
at: www.innovativecompositesinc.com. Follow us on www.waggle.ca
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. "Statements made in this press release include
forward-looking statements that involve a number of risks and
uncertainties. These statements relate to future events or future
performance and reflect management's current expectations and
assumptions. A number of factors could cause actual events,
performance or results to differ materially from the events,
performance and results discussed in the forward-looking
statements, such as the economy, generally, competition in its
target markets, the demand for ICI's products and the availability
of funding. These forward-looking statements are made as of the
date hereof and ICI does not assume any obligation to update or
revise them to reflect new events or circumstances. Actual events
or results could differ materially from ICI's expectations and
projections." Innovative Composites International Inc.
CONTACT: Contact Information:Ilja TroitschanskiChief Financial
Officer(416) 646 0754ilja@innovativecompositesinc.com orPhilip
DaleTMX Equicom(416) 815 0700 ext 253pdale@equicomgroup.com
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