Last updated on April 19, 2014 at 8:45 EDT

PyroGenesis Announces 2013-Q3 Results: Revenues Increase 170%, Gross Margins exceed 40%

November 29, 2013

MONTREAL, Nov. 29, 2013 /PRNewswire/ – PyroGenesis Canada Inc. (“PyroGenesis” or the “Company”) (TSXV: PYR), today announced its
financial and operational results for the third quarter of fiscal 2013,
ending September 30, 2013 (“2013-Q3″).

Third Quarter Highlights:

During the third quarter of 2013, PyroGenesis has:

        --  Increased its revenues by 170% to $1,394,255;
        --  Increased gross margin (before amortization of licenses) to
            over 40%;
        --  Total comprehensive loss decreases by 47% to $915,156
        --  EBITDA loss decreases by 65% to $275,859

Results continue to reflect management’s successful restructuring
measures and its focus on increasing the effectives of its business
development strategy. The Company continues to benefit from better
utilization of resources and cost containments, on-time delivery,
meeting key project milestones, and improved reporting with respect to
project progress and issues. The changes recently implemented within
the Company’s business development focus are starting to have effect
and management expects, as a result, further increases in revenues in
the coming quarters.

Financial Summary for the nine months ended September 30, 2013


Revenues for 2013-Q3 were $1,394,255, an increase of 170% over revenues
of $516,595 reported during the same period in fiscal 2012. On a
year-to-date (“YTD”) basis revenues for fiscal 2013 increased 84% to
$3,877,216 (9 months 2012: $2,101,735). This increase in revenue in
2013 reflects the end of the “gap period” the Company has been faced
with while securing its first reorder from its established client base.
In late November 2012, the Company announced that it had secured a $5.5
million reorder from Newport News Shipbuilding for a plasma waste
destruction system to be installed on the CVN-79, the next US Navy
Ford-class air craft carrier, which is to be delivered, and recognized
into income, over the next two years. Revenues in 2013-Q3 were
primarily impacted by the recognition of the revenue on this new major

Cost of Sales

Cost of Sales and Services before amortization of licenses, posted an
increase of 6% over net costs of $772,008 reported for 2012-Q3. On a
YTD basis, cost of sales before amortization of licenses decreased 14%
to $2,246,505 as compared to $2,604,633 for the same period in the
prior year.

Gross margins continued to post impressive year over year improvements
on both a quarter over quarter and year to date basis. The Company
posted gross margin for 2013-Q3 before amortization of licenses of
$575,462 (41.3% of revenues), versus negative $255,413 (negative 49.4%
of revenues) for 2012- Q3. For the nine months ended September 30,
2013, the Company posted a YTD gross margin of $1,630,711 (42.1% of
revenues), versus negative $502,898 (negative 23.9% of revenues) for
the same period in 2012. The improved level of gross margin in 2013 was
achieved through controlled project management, tight control over
technical resources employed on projects, and favorable pricing on
equipment purchases.

Management is pleased with the performance of its technical and project
teams for completing projects under budget and on time. The ability to
execute projects on time and also improve the project margins clearly
demonstrates the success of PyroGenesis’ 2012 restructuring and the
fact that PyroGenesis is now well positioned to manage the
anticipated growth in revenues.

Management is confident that with the increased focus on operations and
project execution, PyroGenesis will continue to see favorable gross
margins on projects. Margins will naturally fluctuate quarter to
quarter depending on the types of projects under execution and the
completion stage of the projects.

Selling, General and Administrative Expenses

Selling, general and administrative (SG&A) expenses, decreased by 3% in
2013-Q3 over the same time frame in 2012 (2013-Q3: $1,013,214; 2012-Q3:
$1,041,685), and decreased 2% for 2013-YTD (2013-YTD: $3,021,782; 2012:
$3,093,902). 2013 SG&A expenses incorporate the expansion of the
Company’s sales force with two seasoned business development
professionals and investments in R&D develop technologies and products.

Net Loss

Loss from operations for 2013-Q3 decreased 47% to $916,604, over a loss
of $1,742,758 reported during the same period in fiscal 2012. On a
year-to-date (“YTD”) basis, loss from operations for fiscal 2013
decreased 43% to $2,847,637 over a loss of $4,979,108 reported during
the same period in fiscal year 2012. During 2012 and 2013, Management
took several key steps to restructure and strengthen the Company’s
management, reduce fixed operating expenses, increase the focus on
increasing revenues and improving the gross margins on projects. The
results from these measures started to be evident towards the end of
2012 and throughout 2013.

Total Comprehensive Loss

The Corporation has achieved a 47% and 43% decrease in comprehensive
loss for 2013- Q3 and 2013-YTD respectively over the 2012 comparatives.
This decrease is due to an increase in revenues of 170% and 84% (net
increase of $877,660 and $1,775,481) for the 2013-Q3 and 2013- YTD over
comparative periods in 2012; and gross margin before amortization of
licenses was $575,462 (41.3% GM) for 2013-Q3 and as compared to a
negative margin of $255,413 (negative 49.4% GM) in 2012-Q3, for a net
margin improvement in Q3-2013 of $830,875 or 90.7% points before
amortization of licenses compared to Q3-2012 as well as for a 2013-YTD,
the gross margin is $1,630,711 (42.1% GM) versus a negative margin of
$502,898 (-23.9% GM) for the comparative period in 2012 (for an
improvement in margin of $2,133,609).


EBITDA (earnings from operations before depreciation and amortization
and special non-cash charges) for 2013-Q3 was negative $275,859, a
decrease of 65% over the negative EBITDA of $782,367 reported during
the same period in fiscal 2012. On a year-to-date (“YTD”) basis, EBITDA
for fiscal 2013 was negative $932,160, a decrease of 63% over the EBITA
of negative $2,529,306 reported during the same period in fiscal year


At September 30, 2013, PyroGenesis had cash on hand of $594,390, no bank
debt, no debt owing to non-related third parties, and a negative
working capital of $3,691,001.

About PyroGenesis Canada Inc.

PyroGenesis Canada is an environmental solutions company that designs,
develops and manufactures plasma waste-to-energy systems and plasma
torch products. PyroGenesis’ proprietary plasma technologies utilize
the intense energy of plasma to gasify and vitrify virtually any type
of waste without producing hazardous by-products. PyroGenesis’ patented
gasification and vitrification technology is different from
incineration because it produces a clean synthetic gas from waste,
which can be used for power generation. PyroGenesis’ technology can
also turn waste into a glassy rock that can be utilized as construction
material. PyroGenesis has marquee defense industry and civilian
customers that are using its technology in marine and land-based
applications. For more information, please visit www.PyroGenesis.com

This press release contains certain forward-looking statements,
including, without limitation, statements containing the words “may”,
“plan”, “will”, “estimate”, “continue”, “anticipate”, “intend”,
“expect”, “in the process” and other similar expressions which
constitute “forward-looking information” within the meaning of
applicable securities laws. Forward-looking statements reflect the
Company’s current expectation and assumptions, and are subject to a
number of risks and uncertainties that could cause actual results to
differ materially from those anticipated. These forward-looking
statements involve risks and uncertainties including, but not limited
to, our expectations regarding the acceptance of our products by the
market, our strategy to develop new products and enhance the
capabilities of existing products, our strategy with respect to
research and development, the impact of competitive products and
pricing, new product development, and uncertainties related to the
regulatory approval process. Such statements reflect the current views
of the Company with respect to future events and are subject to certain
risks and uncertainties and other risks detailed from time-to-time in
the Company’s ongoing filings with the securities regulatory
authorities, which filings can be found at www.sedar.com. Actual results, events, and performance may differ materially. Readers
are cautioned not to place undue reliance on these forward-looking
statements. The Company undertakes no obligation to publicly update or
revise any forward-looking statements either as a result of new
information, future events or otherwise, except as required by
applicable securities laws.

Neither the 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.

SOURCE PyroGenesis Canada Inc.

Source: PR Newswire