Warnex Inc. (TSX VENTURE:WNX.H) ("Warnex") announced today financial results for
the year ended December 31, 2012.
2012 Highlights
-- Eliminated the Company's long term debt and reduced total liabilities by
approximately $6 million in 2012. This was achieved through the sale of
the Company's Analytical Services and Bioanalytical Services Divisions.
-- On December 10, 2012, sold the assets related to its Bioanalytical
Services Division for a total purchase price consideration of $7,100,220
consisting of $5,400,000 paid in cash at closing, $600,000 held in
escrow until March 10, 2014 and an additional payment of $1,100,220
received subsequent to year end that related to the adjusted revenues of
the Bioanalytical Division that exceeded $6,000,000 during the calendar
year ending December 31, 2012.
-- Following the repayment of the Company's debts and the sale of the
Company's operating business units; the Board of Directors ("Board") is
undertaking a strategic review of the company's remaining assets. In
conjunction with this review, the Board has initiated discussions with
investment banking groups and other external parties. The outcome of
this review remains uncertain at this time, and the Board will update
shareholders if and when any progress is made.
-- On April 23, 2012, sold the assets related to its Analytical Services
Division for total consideration of $300,000. The terms of the
transaction also provide Warnex with the right, subject to certain
conditions, to terminate the lease for its Laval, Quebec facilities,
which are owned by an affiliate of NEOPHARM, prior to the current expiry
date of such lease.
-- On December 27, 2012, the Company announced that its common shares began
trading on the NEX on a post one-for-four share consolidation basis
under the symbol WNX.H.
-- Subsequent to year end, the Company announced that Mr. Marc Lebel, Mr.
Louis Lacasse and Mr. Patrice Hugo have agreed to resign as Directors of
Warnex. Furthermore, Mr. Sean Karamchandani has been appointed as
Director and will replace Mr. Lebel as the Company's interim Chief
Executive Officer until further notice.
"On behalf of the Warnex Board, I would like to sincerely thank Marc, Louis and
Patrice for their longstanding commitment to the Company, and for their guidance
and many contributions over the years. We wish them continued success for the
future," remarked Michael Singer, Chairman of Warnex. "Furthermore and
subsequent to the sale of the Bioanalytical Services Division, the Board has
undertaken specific measures aimed at preserving shareholder capital including
the transfer of all administrative employees to the purchaser thereby resulting
in a material reduction in operating expenditures going forward, pending a final
outcome related to the ongoing strategic review."
Financial Results
Consolidated revenue for the twelve-month period ended December 31, 2012,
amounted to $9.0 million compared to $21.3 million in 2011. Subsequent to the
sale of assets related to its Bioanalytical Division on December 10, 2012,
Warnex no longer had any operating business units.
Net earnings for the twelve-month period amounted to $1.0 million or $0.04 per
share in 2012 compared to $0.5 million or $0.03 per share in 2011.
For the twelve-month period ended December 31, 2012, selling expenses were $0.3
million compared to $1.3 million in 2011.
General and administrative expenses amounted to $3.9 million compared to $5.7
million last year.
Financial expenses decreased to $0.7 million in 2012 from $1.2 million in 2011,
mainly due to the repayment and partial conversion of the debentures in April
2012.
Research and development tax credits amounted to $139,998 for the year ended
December 31, 2012, compared to $204,422 in 2011.
The Company ended fiscal 2012 with cash of approximately $2.7 million and net
assets of approximately $4.7 million, compared to $1.3 million in cash and a
working capital deficiency of approximately $0.6 million in 2011. The Company
did not have any long-term debt 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 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.
Financial statements to follow.
Consolidated Statements of Financial Position
December 31 December 31
2012 2011
$ $
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Assets
Current assets
Cash and cash equivalents 2,742,114 1,285,236
Trade and other receivables 1,804,421 3,482,427
Work-in-progress - 510,171
Inventory - 273,564
Prepaid expenses 70,779 276,337
----------------------------------------------------------------------------
4,617,314 5,827,735
Non-current assets
Amount receivable held in trust 600,000 -
Property, plant and equipment - 3,333,740
Intangibles - 166,552
----------------------------------------------------------------------------
5,217,314 9,328,027
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Liabilities
Current liabilities
Bank loan - 740,000
Trade and other payables 457,317 3,335,549
Provisions 90,930 90,278
Deferred revenue - 563,071
Current portion of long-term debt - 42,840
Liability component of debentures - 1,635,400
----------------------------------------------------------------------------
548,247 6,407,138
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Shareholders' equity
Capital stock 41,706,049 40,981,049
Other reserves 2,803,559 2,803,559
Deficit (39,840,541) (40,863,719)
----------------------------------------------------------------------------
4,669,067 2,920,889
----------------------------------------------------------------------------
----------------------------------------------------------------------------
5,217,314 9,328,027
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Consolidated Statements of Changes in Shareholders' Equity
Other reserves
----------------------------------------------
----------------------------------------------
Equity
components
Capital of Share-based Total other
stock debentures compensation Other reserves
$ $ $ $ $
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Balance, December
31, 2011 40,981,049 1,734,404 1,028,149 41,006 2,803,559
Issuance of common
shares 725,000 - - - -
Net earnings and
comprehensive
income - - - - -
----------------------------------------------------------------------------
Balance,December
31, 2012 41,706,049 1,734,404 1,028,149 41,006 2,803,559
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Balance, December
31, 2010 40,981,049 1,734,404 1,028,149 41,006 2,803,559
Net earnings and
comprehensive
income - - - - -
----------------------------------------------------------------------------
Balance, December
31, 2011 40,981,049 1,734,404 1,028,149 41,006 2,803,559
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Deficit Total
$ $
--------------------------------------------------
--------------------------------------------------
Balance, December
31, 2011 (40,863,719) 2,920,889
Issuance of common
shares - 725,000
Net earnings and
comprehensive
income 1,023,178 1,023,178
--------------------------------------------------
Balance,December
31, 2012 (39,840,541) 4,669,067
--------------------------------------------------
--------------------------------------------------
Balance, December
31, 2010 (41,350,965) 2,433,643
Net earnings and
comprehensive
income 487,246 487,246
--------------------------------------------------
Balance, December
31, 2011 (40,863,719) 2,920,889
--------------------------------------------------
--------------------------------------------------
Consolidated Statements of Operations and Comprehensive Income
For the years ended December 31 2012 2011
$ $
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Revenue 8,964,219 21,258,262
Cost of goods sold 7,049,073 15,959,523
----------------------------------------------------------------------------
Gross margin 1,915,146 5,298,739
----------------------------------------------------------------------------
Operating expenses
Selling 266,567 1,261,168
General and administrative 3,986,584 5,720,081
Finance 651,493 1,178,969
Research and development tax credits (139,998) (204,422)
----------------------------------------------------------------------------
4,764,646 7,955,796
----------------------------------------------------------------------------
Loss before under noted items and income
taxes (2,849,500) (2,657,057)
Gain on disposal of assets 4,261,178 5,896,240
Impairment of assets (388,500) (1,825,000)
Gain on extinguishment of debt - 420,727
Unrealized foreign exchange loss on
debentures - (126,664)
----------------------------------------------------------------------------
Earnings before income taxes 1,023,178 1,708,246
Deferred income taxes - 1,221,000
----------------------------------------------------------------------------
Net earnings and comprehensive income 1,023,178 487,246
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Basic earnings per share $0.04 $0.03
Diluted earnings per share $0.04 $0.02
Weighted average number of shares outstanding 25,958,190 16,779,298
Weighted average number of diluted shares
outstanding 27,891,802 26,831,298
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Consolidated Statements of Cash Flow
For the years ended December 31 2012 2011
$ $
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Operations
Net earnings 1,023,178 487,246
Items not affecting cash:
Depreciation of property, plant and equipment 707,352 1,250,562
Amortization of intangibles 32,117 93,591
Impairment of assets 388,500 1,825,000
Gain on disposal of assets (4,261,178) (5,896,240)
Accretion of interest on debentures - 71,114
Capitalized fees and interest on debentures - 578,282
Gain on extinguishment of debt - (420,727)
Unrealized foreign exchange loss on
debentures - 126,664
Deferred income taxes - 1,221,000
Foreign currency fluctuation - (15,408)
----------------------------------------------------------------------------
(2,110,031) (678,916)
Net change in non-cash working capital items (773,352) 92,446
----------------------------------------------------------------------------
Net cash used in operations (2,883,383) (586,470)
----------------------------------------------------------------------------
Investing activities
Acquisition of property, plant and equipment (85,181) (211,486)
Proceeds of disposal of property, plant and
equipment 6,060,205 408,891
Acquisition of intangibles - (17,642)
Proceeds of disposal of intangibles 58,477 127,194
Proceeds of disposal of goodwill - 6,833,935
----------------------------------------------------------------------------
Net cash provided by investing activities 6,033,501 7,140,892
----------------------------------------------------------------------------
Financing activities
Increase (decrease) in bank loan (740,000) 160,000
Proceeds from debentures - 600,000
Repayment of long term debt (42,840) (857,598)
Repayment of debentures (910,400) (5,420,114)
----------------------------------------------------------------------------
Net cash used in financing activities (1,693,240) (5,517,712)
----------------------------------------------------------------------------
Foreign exchange gain on cash held in foreign
currencies - 4,070
----------------------------------------------------------------------------
Increase in cash and cash equivalents 1,456,878 1,040,780
Cash and cash equivalents, beginning of year 1,285,236 244,456
----------------------------------------------------------------------------
Cash and cash equivalents, end of year 2,742,114 1,285,236
----------------------------------------------------------------------------
----------------------------------------------------------------------------
FOR FURTHER INFORMATION PLEASE CONTACT:
Michael Singer
Chairman of the Board of Directors, Warnex Inc.
Tel: (514) 940-3610
msinger@thallion.com
Warnex (TSXV:WNX)
Historical Stock Chart
From Oct 2024 to Nov 2024
Warnex (TSXV:WNX)
Historical Stock Chart
From Nov 2023 to Nov 2024
