GLG sales rise 133%

20 Nov 2015

Canadian natural sweeteners company GLG Life Tech has reported that, for the three months ended September 30, 2015, it achieved 133% sales growth in its quarterly revenues over the comparable period last year.

GLG sales rise 133%

Canadian natural sweeteners company GLG Life Tech has announced financial results for the nine months ended September 30, 2015.

For the three months ended September 30, 2015, GLG achieved 133% sales growth in its quarterly revenues over the comparable period last year, recording $8.8 million in revenue for the third quarter, compared to $3.8 million for the same quarter last year.

In 2014, GLG developed a three-pronged sales growth strategy, designed to generate increased revenues from international sales in its three distinct product lines - stevia, monk fruit, and its GLG Naturals+ products. This quarter's 133% year-over-year revenue growth reflects GLG's execution of this growth strategy, as GLG's international sales were up 309% from the comparable period last year, making up 94% of its overall third quarter sales.

On a nine-month basis, ending September 30, 2015, revenue increased 85% to $23.0 million, up from $12.4 million in the comparable period in 2014. International sales year-to-date are at 88% of total sales (compared to 51% over the same period last year), and have increased by 218% from last year's same-period international sales.

The increase in international third quarter sales helped GLG improve its gross profit margin year over year by $2.2 million (loss of $2.1 million in the third quarter 2014 to $0.1 million gross profit for the third quarter 2015). On a nine-month year-over-year basis, gross profit margin year over year improved by $3.6 million (loss of $2.3 million for the nine month period in 2014 compared to $1.3 million for the nine month period in 2015).

For the three months ended September 30, 2015, the company had a net loss attributable to the Company of $5.9 million, a decrease of $0.9 million or a 14% improvement over the comparable period in 2014 ($6.8 million loss).

On September 30, 2015, GLG announced what it describes as a major agricultural breakthrough, one that significantly advances the global food and beverage industry toward utilising naturally-sourced Rebaudioside D ("Reb D") and Rebaudioside M ("Reb M"). Through GLG's development of its Reb D seedling using its non-GMO patented breeding methodology, the GLG agriculture team has developed a new strain containing significantly higher levels of the highly-desired Reb D and Reb M glycosides.

GLG's new Reb D seedling contains 320% more Reb D than conventional leaf strains, at 1.26% of dry leaf weight, and amounting to 9.4% of total steviol glycosides ("TSG"). Moreover, as expected, the increased Reb D levels brought a corresponding increase in the Reb M levels; Reb M levels increased by over 430% relative to the typical percentage in a leaf, at 0.53% of dry leaf weight, and amounting to 4% of TSG. Historically, conventional stevia leaf has had Reb D concentrations of around 0.3% of dry leaf weight, or 2.5% of TSG, and Reb M concentrations less than 0.1% of dry leaf weight, or less than 1% of TSG. The TSG in the Reb D seedling was 13.43% of dry leaf weight, and lab tests of this Reb D seedling also included a substantial amount of Reb A in the leaf (68% of the TSGs were Reb A).

GLG says that this increase in Reb D and Reb M represents a major milestone in developing a commercially viable high-Reb D / high-Reb M seedling and is another significant leap forward in the natural, non-GMO agronomic development of the historically scarcer steviol glycosides. GLG made its first announcement in 2014 with its breakthrough in high Reb C seedlings, clearly demonstrating the promise of its patented non-GMO seedling hybridization technology. GLG expects further improvements in the near future with its Reb D seedling, given its proven patented hybridization process.

This Reb D/Reb M seedling breakthrough is important to the sweetener industry as the flavor profile of Reb D and Reb M has been shown to have a vastly superior profile to Reb A, providing a flavor profile much closer to that of sucrose. A natural stevia leaf source sufficiently high in Reb D and Reb M will bring production costs down significantly, as GLG has experienced with Reb C, enabling GLG to provide Reb D and Reb M extracts at commercially viable price points.

Earlier this year, GLG shipped its first orders of high-purity monk fruit extracts, moving towards satisfaction of the contract it signed last year with Tate & Lyle. As of September 30, 2015, GLG has completed all deliveries of monk fruit extract under that contract. This year's monk fruit harvest is now underway; GLG is presently purchasing fruit in multiple regions in China. GLG is commencing processing and expects to commence deliveries late in the fourth quarter.

Producing monk fruit products is a natural extension of GLG's core stevia product line; these product lines are each naturally sourced sweetener ingredients and monk fruit is often used in tandem with stevia. GLG says it differentiates itself from other monk fruit producers in four ways: (1) its competitive advantage in establishing agriculture systems in China, including the introduction of Good Agriculture Practices (GAP) by its monk fruit farmers, superior monk fruit seedlings and its proven methods to expand the amount of farming in other crops such as stevia; (2) its commitment to its Fairness to Farmers program, whereby it aims to promote a healthy economy via fair, stable income for farmers in the monk fruit growing region; (3) its advanced processing and extraction technology, which will enable GLG to more efficiently and economically produce monk fruit extracts and (4) its large industrial processing capacity, which well positions GLG for anticipated growth in the monk fruit market driven by international food and beverage companies.