Progressive Planet Solutions Inc (TSX-V:PLAN) (PLAN) has announced the financial results of its consolidated group of companies for the fiscal year ending April 30, 2022, which include the revenues and expenses of Absorbent Products Ltd (APL) for seventy-two days after it was acquired on February 18, 2022.
"Progressive Planet underwent a fundamental change in the last quarter of 2022," noted Steve Harpur, PLAN CEO in the results statement. "We purchased a business with mineral assets that we believe are underutilized and that provide core ingredients to make regenerative fertilizers and alternative cements from mineral powders produced as a by-product of APL's business."
He added: "Immediately upon taking over operations, we were faced with legacy customer relationships that were no longer profitable in the inflationary environment we inherited. Tough decisions were made in the short term to position the company for better long-term growth (and we appreciate the support of our customers through this transition)."
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Harpur concluded: "In addition to adjusted pricing initiatives, our focus on operational efficiencies and continued capacity expansion efforts to meet increased demand should lay a strong foundation for PLAN's future."
For the fiscal year ending April 30, 2022, PLAN posted revenue of $3,833,146, which consisted of 72 days of revenue from APL, and had a net loss for the year of $3,278,379.
In the fourth quarter ending April 30, 2022, the PLAN Group of companies incurred certain one-time expenses associated with the acquisition of APL including a non-cash expense of $1.08 million recorded for the issuance of 8.3 million warrants (strike price of $0.36) awarded for personal guarantees on $3 million of bank debt and an increase in the costs of sales of over $300,000 due to the write up of starting inventory at APL at the date of acquisition as required by IFRS accounting standards.
In addition, APL incurred substantially higher freight costs than normal due to the rapid increase in the cost of diesel and labour shortages in the trucking industry along with the inability to pass on these higher costs to many customers until after the year end, and significant price increases were successfully implemented to most customers after year end to address lower margins and higher freight costs.
Further details on how management addressed the inflationary environment and the operations of APL are contained in PLAN's MD&A which can be found at www.sedar.com.
PLAN said financial results for Q1 2023 (ending July 31, 2022) will be released on or before September 29, 2022, and will reflect the first full quarter of consolidated operations after the acquisition of APL.
With the acquisition of APL, Progressive Planet Solutions is now a vertically integrated mineral processor which continues to hold all the properties under development before the acquisition. Progressive Planet Solutions also holds patent pending, intellectual property associated with converting post-consumer glass into a low carbon cement.
Progressive Planet Products Inc - formerly APL - is a wholly-owned subsidiary and is a manufacturer of agricultural, household and industrial products and also possesses a portfolio of intellectual property focused on agricultural products including its top-selling product, ACTIVATED BARN FRESH Poultry Litter Ammonia Control which holds a US patent (US 11089760B2).
In addition to its legacy mineral processing business, PLAN is developing a portfolio of proprietary solutions focused on sequestering CO2 and minimizing the carbon footprint of our customers.
Contact the author at jon.hopkins@proactiveinvestors.com