GLG Life Tech announces FY11 results, 2012 estimates

GLG Life Tech announces FY11 results, 2012 estimates

Interim 2012 reports show revenue decreases for the vertically integrated stevia company.

GLG Life Tech Corp., the vertically integrated leader in the agricultural and commercial development of high quality stevia and all natural and zero calorie food and beverage products, announces financial results for the year ended December 31, 2011, and interim financial results for the periods ending March 31, 2012, and June 30, 2012.

Second quarter 2012 financial results highlights
The following results from operations have been derived from and should be read in conjunction with the Company's interim consolidated financial statements for the six month period ended June 30, 2012. Complete financial statements are available at glglifetech.com and sedar.com.

Revenue for the three months ended June 30, 2012 which was derived from stevia sales and the sale of consumer beverage products was $6.8 million, a decrease of 56 percent compared to $15.2 million in revenue for the same period last year. For the three months ended June 30, 2012, the total sales of $6.8 million are composed of stevia sales of $6.5 million and consumer product sales of $0.26 million.

Revenue for the six months ended June 30, 2012 was $7.7 million a decrease of 66 percent compared to $22.6 million for the same period in 2011. The total revenue was composed of $7.3 million for stevia sales and $0.3 million for consumer products sales.

Gross loss for the three months ended June 30, 2012 was $2.7 million, a decrease of 189 percent over $3.0 million in gross profit for the comparable period in 2011. The gross profit margin for the three months period ended June 30, 2012 for the Company as a whole was a negative 40 percent compared to a positive 20 percent for the three months ended June 30, 2011. On a disaggregated basis stevia products had a gross loss of negative 40 percent and the consumer products had a gross loss of negative 28 percent. The gross loss was significantly impacted by the capacity charges to the cost of goods sold. These charges ordinarily would flow to inventory; however, only two of GLG's manufacturing facilities were operating during the quarter and capacity charges of approximately $1.5 million were incurred.

Gross loss for the six months ended June 30, 2012 was $4.3 million compared to a positive $4.2 million gross profit for the comparable period in 2011. The gross profit margin decreased to negative 56 percent for the six months ended June 30, 2012 from a positive 19 percent for the comparable period in 2011. On a disaggregated basis, stevia products had a gross margin of negative 58 percent and the consumer products had a gross margin of negative 23 percent. The gross loss was significantly impacted by the capacity charges to the cost of goods sold. These charges ordinarily would flow to inventory; however, only two of GLG's manufacturing facilities were operating during the six months and capacity charges of approximately $3.0 million were incurred.

For the three months ended June 30, 2012, the Company had a net loss attributable to the Company of $8.3 million, a decrease of $4.2 million over the comparable period in 2011 ($12.5 million loss). The decrease in net loss was driven by: (1) a decrease in G&A expenses of $10.3 million, (2) a decrease in other income/expenses of $0.4 million, and (3) a decrease of $1.0 in income tax expense. These items were offset by the (4) a decrease in gross profit of $5.7 million, and (5) a decrease in loss attributable to non-controlling interests of $1.8 million.

For the six months ended June 30, 2012, the Company had a net loss attributable to the Company of $14.5 million, a decrease of $3.8 million over the comparable period in 2011 ($18.3 million loss). The decrease in net loss was driven by: (1) a decrease in G&A expenses of $12.4 million, (2) a decrease in other income/expenses of $0.9 million, and (3) a decrease of $0.9 in income tax expense. These items were offset by the (4) a decrease in gross profit of $8.6 million, and (5) a decrease in loss attributable to non-controlling interests of $1.9 million.

NON-GAAP Financial Measures

Segment Information
Stevia business EBITDA for the three months ended June 30, 2012 was a negative $3.4 million or (53 percent) as percentage of revenues compared to $1.1 million and 11 percent as percentage of revenues in the comparable period. This decrease is driven by lower gross margin during the second quarter of 2012 compared to the second quarter of 2011, offset by lower G&A costs in the second quarter of 2012 compared to the comparable period in the prior year. EBITDA as percentage of revenues has improved from (177 percent) to (53 percent) comparing the second quarter of 2012 to the first quarter of 2012. This increase is due to the significantly higher level of stevia sales in the second quarter of 2012 compared to the first quarter of 2012.

EBITDA for the AN0C consumer products was negative $0.4 million for the three months ended June 30, 2012 compared to negative $7.8 million in the comparable period. EBITDA for the AN0C consumer products was negative $0.7 million for the 6 months ended June 30, 2012 compared to negative $8.7 million in the comparable period.

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