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
"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")
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
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
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
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
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
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.
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.
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
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
SOURCE: Innovative Composites International Inc.
For further information:
Chief Financial Officer
(416) 646 0754