TORONTO,
Jan. 28, 2013 /CNW/ - Innovative
Composites International Inc. ("ICI" or the "Company"), (TSXV: IC)
(OTCQX: ICIZF, a producer of proprietary engineered composite
products, reported today its financial results for the fiscal year
ended September 30, 2012. All figures
are in U.S. dollars unless otherwise stated.
"Fiscal 2012 was a challenging year for the
Company as despite earning record revenue of approximately
$3 million, we underperformed against
expectations, primarily as a result of international housing
contracts that did not materialize," said Terry Ball, CEO of ICI. "The Company has
broadened its offerings and is marketing into four distinct, but
complementary market segments and our priority in fiscal 2013 is
extinguishing the operating burn rate and becoming cash flow
positive by focussing on business segments with shorter sales
cycles, such as industrial applications and shelters and
containers. We are also developing our capabilities in the fire
retardant market segment working with positive test results to-date
in the forestry sector."
Selected 2012 Financial and Operational
Highlights
- Revenue was approximately $3
million for fiscal 2012, compared with $0.5 million for fiscal 2011.
- Commenced production of specifically engineered enclosures for
world leader in heating, air-conditioning and refrigeration
("HVAC") equipment.
- Developed RapTER (Rapid Tactical Emergency Response) shelters
and containers for emergency relief, and oil & gas and mining
sectors.
- Completed the acquisition 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.
- Began trading on the OTCQX under the symbol ICIZF.
Highlights Subsequent to Year End
- Developed and tested new "load floor" design with attractive
cost and weight attributes for the automotive sector utilizing RMor
Skin.
- Increased production volumes of specifically engineered HVAC
enclosures
- Entered final phase of testing with the US Forestry Service of
Evergreen Hero fire retardant for forestry applications
- Hired a new Vice President of Business Development to generate
new business and increase business from existing customers
Financial Performance
ICI had revenue of $3,012,000 for fiscal 2012 compared to
$487,000, for fiscal 2011. The
revenue for the year was generated primarily as a result of the
Eleison acquisition and the Company is working to generate
additional revenue through its initiatives in the housing, shelters
and containers, industrial applications, and fire retardant market
segments.
Cost of Sales for fiscal 2012 (after deducting
the reallocation of amortization and depreciation expenses that
IFRS requires be included in Cost of Sales) was $2,383,000, compared to $399,000 for fiscal 2011. The Gross Margin for
fiscal 2012 (calculated using the adjusted Cost of Sales) was
$629,000 or 21%, compared to
$87,000 or 18% for fiscal 2011.
The Company expects that as revenue increases, it will achieve
certain economies of scale and that the Gross Margin will increase
accordingly.
Total expenses for the 12-months ended
September 30, 2012 were $11.0 million, compared to $5.2 million for the same period last year. The
increase in expenses were the result of the overall expansion of
the Company, specifically relating to the launch of the
manufacturing facility in South
Carolina, an increase in sales initiatives, ramping up
several commercialization programs and costs incurred in new
product and process development.
ICI recorded a net loss for fiscal 2012 of
$9.9 million or $0.12 per share, compared to a net loss of
$9.4 million, or $0.17 per share, for fiscal 2011.
Cash flow used in operating activities for
fiscal 2012 were $6.9 million
compared to $4.1 million for fiscal
2011. The increase is primarily due to the previously referenced
increase in operating expenses.
At September 30,
2012, ICI had cash and cash equivalents of $4.2 million, compared to $6.6 million at the same date in 2011.
ICI has filed its financial statements for the
fiscal year-ended September 30, 2012
and related Management's Discussion and Analysis (MD&A) with
securities regulatory authorities. ICI's financial statements,
MD&A and related documents are available via SEDAR
(www.sedar.com) as well as through the Company's website,
www.innovativecompositesinc.com.
Board Action
The Board has created a Special Committee of
independent Directors to assess the Company's business plan,
prospects, and assets and, based on that assessment, to recommend
the actions necessary to ensure the long term viability of the
Company.
Granting of Options
The Company granted 1,000,000 options to the
independent Directors of the Company, who are currently receiving
no cash compensation for their services. These options are
exercisable at $0.20 per share, which
is a $0.10 premium over the closing
price of ICI shares on the day prior to the grant of the options,
and have a term of 7 years. These options vest on a
straight-line basis over 12 months commencing on October 1st, 2012.
The Company granted 1,450,000 options to certain
officers and employees of the Company, some of whom have taken a
voluntary temporary 25% salary reduction in order to reduce the
operating burn rate of the Company. These options are
exercisable at $0.20 per share, which
is a $0.10 premium over the closing
price of ICI shares on the day prior to the grant of the options,
and have a term of 7 years. These options are subject to the
following vesting provisions: 25% shall vest upon the Company's
South Carolina facility shipping
commercial products having an aggregate value of $5 million; 25% shall vest upon the Company being
cash flow positive for a combined 12-month period, upon the date
that the financial statements of the Company evidence this and are
publicly available; and 50% shall vest in 36 equal amounts with
one-seventy second (1/72) of the options vesting on the first day
of each of the 36 months following the date of grant.
Conference Call
ICI will host a conference call to discuss its
2012 fiscal year-end financial results on Wednesday, January 31, 2013 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.
About Innovative Composites International
Inc.
Headquartered in Toronto, Canada, Innovative Composites
International Inc. (TSXV: IC) (OTCQX: ICIZF) is a high-tech
engineering and manufacturing company whose goal is to utilize its
proprietary "green" composite materials and building systems to
provide innovative, engineered product solutions to markets that
include prefabricated modular housing, shelters and containers, and
industrial applications.
To find out more about ICI please visit our
website at:
www.innovativecompositesinc.com.
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."
SOURCE Innovative Composites International Inc.
