PyroGenesis Announces Q2 2016 Results

MONTREAL, QUEBEC--(Marketwired - Aug. 30, 2016) - PyroGenesis Canada Inc. (http://pyrogenesis.com) (TSX VENTURE:PYR)(OTCQB:PYRNF), a TSX Venture 50® clean-tech company (the "Company" or "PyroGenesis") that designs, develops, manufactures and commercializes plasma waste-to-energy systems and plasma torch products, announced today its financial and operational results for the second quarter of fiscal year 2016.

Second Quarter Highlights

In Q2 of Fiscal 2016,

• Revenues decreased 47%; over the same period in 2015;
• Gross margins before amortization of intangible assets decreased to 9%; over the same period in 2015;
• Current backlog at August 30, 2016 of $10.1MM (over 160% of 2015 revenues).

Financial Summary

Operations for the periods under review have been negatively impacted in the short term by the decision to stop working on the previously announced contract to deliver an additional nine (9) Plasma Atomization Systems to an Asian customer for approximately $10MM.

The decision was made when improvements to the system demonstrated that the revenues and profits from selling powders from one system alone, far exceeded, on an annual basis, the one- time profit from selling an additional nine (9) systems, and, as such, the Company announced, on October 26, 2015, the strategy to move into a potentially lucrative market of producing powders for the Additive Manufacturing industry (3D Printing).

As PyroGenesis moved away from its dependency on the cash flow expected from the Asian contract, significant pressure has been placed on revenues and associated margins for the period under review.

Notwithstanding the above, based on current backlog at August 30, 2016 of $10.1MM (over 160% of 2015 revenues), together with the pipeline of prospective new projects, cash flow from operations are expected to become positive in the very near future.

Revenues

PyroGenesis recorded revenue of $818,990 in the second quarter of 2016 ("Q2, 2016"), representing a decrease of 47% compared with $1,533,667 recorded in the second quarter of 2015 ("Q2, 2015"). Revenues for the six first months of fiscal 2016 were $1,835,842, a decrease of 31% over revenues of $2,650,244 reported during the same period in 2015.

Revenues recorded in Q2, 2016 and the six months of fiscal 2016 were generated primarily from (i) the manufacture and further field testing of Tactical PACWADS, the first mobile plasma system for destruction of chemical warfare agents under contract with an international military consortium; (ii) the demonstration of the viability of PyroGenesis' existing plasma chemical warfare agent destruction platform with locally available materials, for the complete eradication of chemical warfare agents without creating hazardous by-products; (iii) the manufacture and supply of PyroGenesis' first DROSRITE™ Furnace System to a North American automobile parts manufacturer; and (iv) the support services related to PAWDS-Marine systems supplied to the US Navy.