GLG Life Tech Corporation Announces Third Quarter 2012 Results

GLG Life Tech Corporation (GLG.TO) ("GLG", the "Company", "we" and "our"), a 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 quarter ended September 30, 2012.

Our revenues were $5.8 million for the three months ended September 30, 2012 and were up 232% compared to $1.7 million for the three months ended September 30, 2011 driven by increased stevia product sales. Our revenues were $13.4 million for the nine months ended September 30, 2012 down 45% compared to $24.4 million for the nine months ended September 30, 2011 due to lower consumer product sales of our AN0C brand.

The gross loss during the period was significantly impacted by capacity and other fixed charges that were added to the cost of goods sold (approximately $1.7 million), and material sales of two products below list price (approximately $1.6 million).

General and Administrative Expenses have been significantly reduced by $7.2 million from $10.8 million in the third quarter of 2011 to $3.6 million for the third quarter of 2012.

We had a net loss attributable to the Company of $15.1 million for the three months ended September 30, 2012 or a $9.5 million improvement compared to a net loss of $24.6 million reported for the three months ended September 30, 2011. The loss for the third quarter includes an additional inventory write-down of $5.2 million related to the two products sold in the quarter below list price. We had a net loss attributable to the Company of $29.6 million for the nine months ended September 30, 2012 or a $13.3 million improvement compared to a net loss of $42.9 million for the comparable period in 2011.

EBITDA for the quarter ended September 30, 2012 was negative $3.5 million or a $5.3 million improvement compared to negative $8.8 million for the same period in 2011. EBITDA for the nine months ended September 30, 2012 was negative $9.1 million or a $7.7 million improvement compared to negative $16.8 million for the nine months ended September 30, 2011. The main drivers for the improvement in EBITDA are lower SG&A expenses in both the consumer products (AN0C) segment and stevia segment, which were offset by lower gross margin compared to the same period in 2011. The Company has been focused on reducing its cash burn rate in 2012 as it grows its stevia revenue base from the levels achieved in the second half of 2011.

Cash used by operating activities was $5.2 million in the nine month period ended September 30, 2012 compared to $29.9 million used in the same period of 2011 or a $24.7 million improvement. This decrease in cash used by operating activities can be attributed to an improvement in cash flow used in operations ($10.1 million) and an improvement in cash generated from non-cash working capital ($14.6 million) in the current period compared to the same period in 2011.

The Company has reduced inventories from their peak balance of $96.1 million at September 30, 2011 to $44.8 million as at September 30, 2012 or a reduction of 53% through a combination of sales and write-downs. This reduction is an important achievement in order to work through the legacy inventory cost on its balance sheet as the Company moves to its new lower cost structure that it has achieved with its H3 and H4 proprietary stevia leaf varieties.

The Company has made progress during the 9 months ended September 30, 2012 in reducing its short term banks loans by $5.5 million as well as decreasing its accounts payable of $4.6 million compared to these balances as at December 31, 2011. The Company continues to negotiate with its China Banks for the renewal of its short term loans.