GLG Life Tech Corporation Reports 2021 First Quarter Financial Results
GLG Life Tech Corporation (GLGLF) announced its Q1 2021 results, reporting revenues of $3.3 million, up 27% from $2.6 million in Q1 2020. The gross profit margin improved to 25% from 12%, driven by better monk fruit margins and reduced idle capacity charges. Although the net loss decreased by 56% to $3.8 million (from $8.7 million), the company remains focused on improving cash flow amid challenges in the stevia market and potential cash shortages. Management is exploring new markets and optimizing operations to enhance financial stability.
- Revenue increased by 27%, reaching $3.3 million compared to $2.6 million in Q1 2020.
- Gross profit margin improved to 25%, a 13 percentage point increase from the previous year.
- Net loss reduced by 56%, down to $3.8 million from $8.7 million in Q1 2020.
- The company reported a net loss per share of $0.10, although improved from $0.23 in Q1 2020.
- Continued cash flow concerns may hinder the ability to fund operations and strategic initiatives.
- Competitive price pressures in the stevia market have led to reduced margins on core products.
VANCOUVER, BC / ACCESSWIRE / May 13, 2021 / GLG Life Tech Corporation (TSX:GLG)(OTC PINK:GLGLF) ("GLG" or the "Company"), a global leader in the agricultural and commercial development of high-quality zero-calorie natural sweeteners, announces financial results for the three ended March 31, 2021. The complete set of financial statements and management discussion and analysis are available on SEDAR and on the Company's website at www.glglifetech.com.
FINANCIAL SUMMARY
The Company reported revenues of
The improvement in gross profit margin was driven by improvements in monk fruit margins as well as a decrease in idle capacity charges in the first quarter of 2021 compared to the first quarter of 2020.
The Company continues to closely manage its SG&A expenses, resulting in a
For the three months ended March 31, 2021, the Company had a net loss attributable to the Company's shareholders of
CORPORATE DEVELOPMENTS
Company Outlook
In recent quarters, one of the most critical items that management has focused on and continues to focus on is the development and implementation of plans to stem the losses that the Company has suffered in recent years and to ameliorate the Company's financial position. As a result of those sustained losses, the Company lacks the cash necessary to fully fund the business operations and its strategic product initiatives. The Company continues to manage its cash flows carefully to mitigate risk of insolvency. As a result of these efforts, management has been successful in improving the Company's cash flows in recent quarters. Nevertheless, without an infusion of cash in the months ahead, the Company may not be able to realize its strategic plans and could eventually cease to be a going concern.
To address that cash need, management negotiated a CAD
Another factor that continues to contribute to the Company's financial situation is the competitive price pressure in the stevia market over the last year that has reduced mainstream "Reb A" products (such as Reb A 80 and Reb A 97) to the lowest price levels in years. While these products have historically formed the core of the Company's product sales, the margins on sales of these products have grown increasingly slim. To address this, the Company has taken a three-pronged approach.
First, the Company has taken decisive steps to reduce its SG&A costs as well as its production costs. Both its North American operations and Chinese operations have significantly reduced SG&A costs. For the last several years, the Company's production capacity has been far greater than its projected order levels as it had sought rapid increases in orders for Reb A products. The Company's aim continues to be to "right-size" its Chinese operations - i.e., to optimize its staffing and production planning to meet the Company's projected production requirements while retaining the ability to accommodate growth in future order volumes - and management has made significant progress in this area and continues striving to optimize staffing and production plans. As a result, this has enabled the Company to sell its goods at more competitive and/or more profitable prices although the competitive price pressures remain strong.
Second, the Company has increased its focus on specialty stevia products, relative to its Reb A products. These specialty products are more differentiated than Reb A products and can bring more revenue opportunities and more meaningful margin contributions to the Company's bottom line.
Third, the Company continues to explore options to enter the CBD/hemp market, where it could leverage its production expertise and equipment towards an investment that would jump start its ability to quickly begin producing high-quality low-cost products.
While the Company continues to face substantial risks and 2021 is another pivotal year for the Company, management remains optimistic about the future opportunities for the Company. With the first idle asset sale now closed, right-sizing efforts progressing well, the optimization of production efficiencies, costs, and planning, and the Company's refocused product strategies, management is proceeding down the best available path to increased financial stability and profitability.
SELECTED FINANCIALS
As noted above, the complete set of financial statements and management discussion and analysis for the three months ended March 31, 2021, are available on SEDAR and on the Company's website at www.glglifetech.com.
Results from Operations
The following results from operations have been derived from and should be read in conjunction with the Company's annual consolidated financial statements for 2020 and the condensed interim consolidated financial statements for the three-month period ended March 31, 2021.
| 3 Months Ended March 31 | % Change | |||||||||||
In thousands Canadian $, except per share amounts | 2021 | 2020 | ||||||||||
Revenue | $ | 3,254 | $ | 2,565 | 27 | % | ||||||
Cost of Sales | $ | (2,426 | ) | $ | (2,254 | ) | 8 | % | ||||
% of Revenue | (75 | %) | (88 | %) | 13 | % | ||||||
Gross Profit | $ | 828 | $ | 311 | 166 | % | ||||||
% of Revenue | 25 | % | 12 | % | 13 | % | ||||||
Expenses | $ | (1,155 | ) | $ | (1,627 | ) | (29 | %) | ||||
% of Revenue | (35 | %) | (63 | %) | 28 | % | ||||||
(Loss) from Operations | $ | (327 | ) | $ | (1,316 | ) | 75 | % | ||||
% of Revenue | (10 | %) | (51 | %) | 41 | % | ||||||
Other Expenses | $ | (3,533 | ) | $ | (8,495 | ) | 58 | % | ||||
% of Revenue | (109 | %) | (331 | %) | 223 | % | ||||||
Net Income (Loss) before Income Taxes | $ | (3,860 | ) | $ | (9,811 | ) | 61 | % | ||||
% of Revenue | (119 | %) | (382 | %) | 264 | % | ||||||
Net Income (Loss) | $ | (3,860 | ) | $ | (9,811 | ) | 61 | % | ||||
% of Revenue | (119 | %) | (382 | %) | 264 | % | ||||||
Net Income (Loss) Attributable to Non-Controlling Interest (NCI) | $ | (29 | ) | $ | (1,133 | ) | 97 | % | ||||
Net Income (Loss) Attributable to GLG | $ | (3,831 | ) | $ | (8,678 | ) | 56 | % | ||||
% of Revenue | (118 | %) | (338 | %) | 221 | % | ||||||
Net Income (Loss) per share (LPS, Basic & Diluted) | $ | (0.10 | ) | $ | (0.23 | ) | 56 | % | ||||
Other Comprehensive Income (Loss) | $ | 997 | $ | (5,399 | ) | 118 | % | |||||
% of Revenue | 31 | % | (210 | %) | 241 | % | ||||||
Comprehensive Net Income (Loss) | $ | (2,863 | ) | $ | (15,210 | ) | 81 | % | ||||
Comprehensive Income (Loss) Attributable to NCI | $ | (20 | ) | $ | (3,022 | ) | 99 | % | ||||
Comprehensive Income (Loss) Attributable to GLG | $ | (2,843 | ) | $ | (12,188 | ) | 77 | % | ||||
% of Revenue | (87 | %) | (475 | %) | 388 | % | ||||||
Revenue
Revenue for the three months ended March 31, 2021, was
Cost of Sales
For the quarter ended March 31, 2021, the cost of sales was
The decrease in cost of sales as a percentage of revenue for the three months ended March 31, 2021, compared to the prior comparable period, is primarily attributable to improvements in monk fruit margins as well as a decrease in idle capacity charges in the first quarter of 2021 compared to the first quarter of 2020.
Capacity charges charged to the cost of sales ordinarily would flow to inventory and are a significant component of the cost of sales. Only two of GLG's manufacturing facilities were operating during the first quarter of 2021, and capacity charges of
Gross Profit (Loss)
Gross profit for the three months ended March 31, 2021, was
Selling, General and Administration Expenses
Selling, General and Administration ("SG&A") expenses include sales, marketing, general and administration costs ("G&A"), stock-based compensation, and depreciation and amortization expenses on G&A fixed assets. A breakdown of SG&A expenses into these components is presented below:
| 3 Months Ended March 31 | % Change | |||||||||||
In thousands Canadian $ | 2021 | 2020 | ||||||||||
G&A Expenses | $ | 845 | $ | 1,275 | (34 | %) | ||||||
Stock Based Compensation Expenses | $ | 45 | $ | 149 | (70 | %) | ||||||
Depreciation Expenses | $ | 265 | $ | 203 | 31 | % | ||||||
Total | $ | 1,155 | $ | 1,627 | (29 | %) | ||||||
G&A expenses for the three months ended March 31, 2021, were
Net Loss Attributable to the Company
| 3 Months Ended March 31 | % Change | |||||||||||
In thousands Canadian $ | 2021 | 2020 | ||||||||||
Net Income (Loss) | $ | (3,860 | ) | $ | (9,811 | ) | 61 | % | ||||
Net Income (Loss) Attributable to NCI | $ | (29 | ) | $ | (1,133 | ) | 97 | % | ||||
% of Revenue | (1 | %) | (44 | %) | 43 | % | ||||||
Net Income (Loss) Attributable to GLG | $ | (3,831 | ) | $ | (8,678 | ) | 56 | % | ||||
% of Revenue | (118 | %) | (338 | %) | 221 | % | ||||||
For the three months ended March 31, 2021, the Company had a net loss attributable to the Company of
Quarterly Basic and Diluted Loss per Share
The basic and diluted net loss loss per share from operations was
Additional Information
Additional information relating to the Company, including our Annual Information Form, is available on SEDAR (www.sedar.com). Additional information relating to the Company is also available on our website (www.glglifetech.com).
For further information, please contact:
Simon Springett, Investor Relations
Phone: +1 (604) 669-2602 ext. 101
Fax: +1 (604) 662-8858
Email: ir@glglifetech.com
About GLG Life Tech Corporation
GLG Life Tech Corporation is a global leader in the supply of high-purity zero calorie natural sweeteners including stevia and monk fruit extracts used in food and beverages. GLG's vertically integrated operations, which incorporate our Fairness to Farmers program and emphasize sustainability throughout, cover each step in the stevia and monk fruit supply chains including non-GMO seed and seedling breeding, natural propagation, growth and harvest, proprietary extraction and refining, marketing and distribution of the finished products. Additionally, to further meet the varied needs of the food and beverage industry, GLG, through its Naturals+ product line, supplies a host of complementary ingredients reliably sourced through its supplier network in China. For further information, please visit www.glglifetech.com.
Forward-looking statements: This press release may contain certain information that may constitute "forward-looking statements" and "forward looking information" (collectively, "forward-looking statements") within the meaning of applicable securities laws. Often, but not always, forward-looking statements can be identified by the use of words such as "plans", "expects" or "does not expect", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate", or "believes" or variations of such words and phrases or words and phrases that state or indicate that certain actions, events or results "may", "could", "would", "might" or "will" be taken, occur or be achieved.
While the Company has based these forward-looking statements on its current expectations about future events, the statements are not guarantees of the Company's future performance and are subject to risks, uncertainties, assumptions and other factors that could cause actual results to differ materially from future results expressed or implied by such forward-looking statements. Such factors include amongst others the effects of general economic conditions, consumer demand for our products and new orders from our customers and distributors, changing foreign exchange rates and actions by government authorities, uncertainties associated with legal proceedings and negotiations, industry supply levels, competitive pricing pressures and misjudgments in the course of preparing forward-looking statements. Specific reference is made to the risks set forth under the heading "Risk Factors" in the Company's Annual Information Form for the financial year ended December 31, 2020. In light of these factors, the forward-looking events discussed in this press release might not occur.
Further, although the Company has attempted to identify factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results not to be as anticipated, estimated or intended. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
As there can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements, readers should not place undue reliance on forward-looking statements.
SOURCE: GLG Life Tech Corporation
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FAQ
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