- Breakthrough year driven by sales growth and initial commercialization -
TORONTO, Jan. 18, 2012 /CNW/ - Innovative Composites International Inc. (TSXV: IC) (OTCQX: ICIZF), ("ICI" or the "Company"), a producer of patented protected composite products targeting the multi-billion dollar housing and transportation markets, reported today its financial results for the three and 12-month periods ended September 30, 2011. All figures are in U.S. dollars unless otherwise stated.
"Fiscal 2011 was a watershed year for the Company as we achieved a number of significant milestones and established tremendous momentum to capitalize on numerous commercial opportunities before us," said Terry Ball, CEO of ICI. "Most notably, due to our sales efforts we signed a number of agreements during the fiscal year, validating our products and technology and began the process of adding a second, much larger manufacturing facility in South Carolina."
Selected 2011 Financial and Operational Highlights
- Revenue of approximately $490,000 for fiscal 2011, the largest in company history as fiscal 2011 marked the start of transition from a development stage company to commercialization
- Signed a six year lease agreement for a 126,000 square foot manufacturing facility located in Orangeburg, South Carolina, 60 miles from the Charleston ocean port
- Signed an agreement, through its partner Barclays Gedi Group, to supply EcoScapeTM housing for large scale projects in Haiti and Ghana
- Invited to and participated in an expo as the finalist of the "Building Back Better Communities" Initiative housing competition in Haiti
- Secured a purchase order for an 880 square foot EcoScapeTM modular home to be constructed on the island of Antigua to serve as a show home for a large scale affordable housing program
- Received purchase orders for the supply of StructureLiteTM panels to a leading North American automotive aftermarket company. The program is expected to represent approximately US$5 million in annual revenue over an estimated five to six year lifespan
- Secured orders for its composite mobile storage containers from Canadian customers and a US-based moving and storage company to be placed in its fleet for testing in real life conditions
- Completed a project to supply a maternity ward building for a hospital in Milot, Haiti utilizing the EcoScopeTM building system
- Raised approximately CDN$5 million from the early exercise of the outstanding share purchase warrants expiring over the next three years
- Completed a short form prospectus offering for gross proceeds of CDN$4.8 million
- Strengthened its Board of Directors by adding the Hon. John Reynolds, Robert Pulte and Christopher Kruba as directors
- Named as one of the top 50 companies on the TSX Venture Exchange for 2011
Highlights Subsequent to Year-end
- Signed an agreement with Millenium Brasil Limitada and Green Intelligence Corporation to supply EcoScapeTM modular homes for large housing projects in Brazil. Agreement is anticipated to represent approximately US$160 million in revenue over the next three years
- Completed the acquisition of Eleison Composites LLC, a manufacturer of fiber reinforced thermoplastic skin material utilized in ICI's products
- Received first order from Subway® restaurant owner/operator Liberty Eagle Holdings, based in Tanzania, for a custom designed structure to be used as a Subway® restaurant in Dar-es-Salaam using the EcoScapeTM building system
- 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. Agreement is anticipated to represent approximately CDN$10 million in annual revenue
- Completed a bought deal public offering for gross proceeds of CDN$10.1 million
- Began trading on the OTCQX under the symbol ICIZF for the purposes of providing additional liquidity and increased access for US based investors
ICI had approximate revenue of $487,000, an increase of 246.8% or approximately $346,000, for the 12-month period ended September 30, 2011 compared to approximately $140,000 for the fiscal year 2010. The record revenue for the period was a result of the beginning of market acceptance for its products 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 South Carolina facility.
Cost of sales for fiscal 2011 was approximately $399,000, up 227.6% or approximately $278,000 compared to fiscal 2010. The increase was due to the increase in sales activity throughout the fiscal year. On a percentage basis, cost of sales was 82.1% of sales during the 12-months ended September 30, 2011 versus 86.8% for the 12-months ended September 30, 2010. 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 12-months ended September 30, 2011 were $3.5 million, an increase of 23.0% or approximately $652,000 compared to $2.9 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 several commercialization programs and costs incurred in new product and process development.
ICI recorded a net loss for fiscal 2011 of $5.6 million or $0.10 per share. These compare to a net loss of $4.5 million, or $0.12 per share, for fiscal 2010.
Cash flow used in operating activities for fiscal 2011 were $4.1 million, an increase of approximately $400,000 compared to $3.7 million for fiscal 2010. The increase is primarily due to increasing inventory and prepaid expenses as well as an increase in operating expenses as discussed previously.
At September 30, 2011, ICI had working capital of $7.2 million, including cash and cash equivalents of $6.6 million, compared to $1.4 million and $1.4 million, respectively, for 2010.
Innovative Composites has filed its financial statements for the three-months and year-ended September 30, 2011 and related Management's Discussion and Analysis (MD&A) with securities regulatory authorities. Innovative Composites' financial statements, MD&A and related documents are available via SEDAR as well as through the Company's website, www.innovativecompositesinc.com.
"As evidenced by our strong start to fiscal 2012, the momentum that was established in fiscal 2011 has continued," said Terry Ball. "Since the beginning of the fiscal year we have announced our largest and most significant housing initiative to date, acquired a key raw material supplier, and continued to ramp up our second production facility on budget and on schedule. As revenue and shipments continue to increase, fiscal 2012 is well positioned to become another breakthrough year for ICI."
ICI will host a conference call to discuss its 2011 year-end financial results on Thursday, January 19, 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. Thursday, January 26, 2012. To access the rebroadcast, please dial 416-849-0833 or 1-855-859-2056 and enter passcode 42912816, followed by the number sign.
About Innovative Composites International Inc.
Headquartered in Toronto, Canada, Innovative Composite International Inc. (TSX-V: IC; 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 affordable 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 in both markets 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.
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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."
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