Microbix Revenue for First Nine Months Grows 12%
08/14/2015 7:30:00AM | Market Wire
TORONTO, ONTARIO – (Marketwired) – 08/14/15 – Microbix Biosystems Inc. (TSX:MBX), an innovator of biological products and technologies, today reported financial results for its third quarter ending June 30, 2015.
Nine-Month Financial Results
Microbix reported total revenue of $6,759,752 in the first nine months of 2015 compared to $6,040,917 for the same period in 2014, or an increase of 12%. Virology products revenue was $6,579,105 in the first nine months compared to $5,852,548 in the same period last year, or an increase of 12%. Continued strong customer demand accounted for the majority of this increase, in addition to a favourable foreign currency impact. R&D contract revenue was $180,647 in the first nine months compared to $188,369 for the same period in 2014. Operating income in the first nine months was $324,657 compared to $778,587 in the first nine months of 2014. The lower operating income resulted from increased operating expenses to support the VIRUSMAX® litigation, which more than offset the impact of higher revenues in the first nine months of 2015 compared to the same period last year.
Cash generated from operations in the first nine months was $511,008 compared to $191,226 of cash used in operations in the first nine months of 2014. Cash generated from financing activities in the first nine months was $3,261,820, due to the exercise of common share warrants ($1,738,433) and stock options ($901,830), as well as the receipt of net proceeds from equipment loans ($749,032). This compared to $2,550,569 of cash generated from financing activities in the first nine months of last year. Cash used in investing activities was $4,342,510 compared to $2,167,444 in the first nine months of last year. The increase was due to the investment in both the LumiSort prototype instrument development and the new Bioreactor platform implementation in the first nine months of 2015. Net cash flow in the first nine months was $569,041 negative compared to $191,899 positive in the same period last year.
Third Quarter Financial Results
Total revenue was $2,219,019 in the third quarter compared to $2,039,935 in the third quarter last year, or an increase of 9%. Virology products revenue was $2,157,774 in the quarter compared to $2,039,935 in the third quarter last year, and R & D Contract revenue was $61,245 in the third quarter compared to zero for the same period in 2014. The improvement in Virology products revenue was mainly attributable to increased sales of the company’s core antigen products. To a lesser extent, sales were positively impacted by the net effect of foreign currency fluctuations versus the Canadian dollar year-over-year, and the successful launch of the Company’s new molecular diagnostic products. Operating income in the third quarter was $147,769 compared to an operating income of $294,561 in the third quarter of 2014. The lower operating income was the result of increased operating expenses to support the VIRUSMAX litigation during the quarter.
Cash used in operations was $180,333 in the third quarter compared to $212,923 positive in the same period in 2014, primarily due to an increase in inventory in anticipation of higher shipments in the fourth quarter, as well as the trial production batches in the new Bioreactor manufacturing platform which is being commissioned this fall. Cash generated from financing activities was $51,308 in the third quarter compared to $557,159 in 2014 when common share warrants were exercised. Cash used in investing activities was $1,009,559 in the third quarter compared to $1,467,802 in the same period last year, primarily due to development of the new bioreactor platform. As a result, net cash flow was $1,138,584 negative in the third quarter compared to $697,719 negative in the third quarter of last year.
Vaughn Embro-Pantalony, Chief Executive Officer commented, “I am very pleased to report continued strong financial performance for the third quarter and first nine months of our fiscal year. Strong growth in Virology products revenue and careful expense management also contributed to an operating profit for both the quarter and nine-month periods. In fact, for the past eight consecutive quarters we have achieved a cumulative operating profit of $1.4 million, while nine-month sales have grown 33% over this same time period. These results reflect the focused execution of our business plan, and we expect to deliver ongoing growth in revenues and operating profit as we continue to implement our strategy.”
3 months ended June 30 9 months ended June 30 2015 2014 2015 2014 ---------------------------------------------------- Revenue $ 2,219,019 2,039,935 6,759,752 6,040,917 Operating income $ 147.769 294,561 324,657 778,587 Net income $ 131,864 83,994 312,539 257,987 Net income per share $ 0.001 0.003 0.003 .008 Cash Flow $ (1,138,584) (697,719) (569,041) 191,899
The Company reported on its new state-of-the-art Bioreactor manufacturing platform for Virology products. In the past year, Microbix has invested more than $1 million on this project, which is on schedule for commissioning in the next few months. Test results to date are very encouraging, and management is confident that projected improvements in manufacturing efficiency will be achieved, translating into improved operating profit for the Company. The new manufacturing process will be phased in beginning in early 2016 and once the new process is fully operational management expects to achieve additional potential profit contribution of up to $2 million annually. The new process will be fully operational in 2017 as the technology platform is applied to an expanded menu of microbial antigen processes in the product line.
Vaughn Embro-Pantalony commented, “Investing in this state-of-the-art technology is a strategic imperative for our Company, as we strive to strengthen the competitive position of our core Virology products business. This investment will yield significant benefits by removing bottlenecks and redundancy, while expanding production capacity.”
Embro-Pantalony provided an update on the status of the Kinlytic venture. “I am pleased to report that discussions have accelerated in the past month with one of the Kinlytic partner candidates. This group has been evaluating Kinlytic for several months and is now interested in finalizing the specific terms of a potential agreement in the form of a letter of intent. The group includes a commercial team with extensive experience in the U.S. thrombolytic market. They have also identified a possible manufacturing site in the U.S., and they have received expressions of interest from several funding sources, including investors as well as State and Municipal governments. One of the potential investors would acquire marketing rights for a select group of countries excluding the U.S. We are working to complete the letter of intent as soon as possible.”
The Company reported that it has received proposals from several parties interested in a collaborative arrangement that would include completing the development of the LumiSort instrument, conducting field trials and ultimately commercializing this transformative technology. Management is working with the parties to fully evaluate each proposal.
Embro-Pantalony confirmed, “Several organizations have expressed an interest in partnering with us to bring LumiSort to the livestock market in a timely fashion. We have received proposals with structured options to consider and we are completing a full evaluation of each with the respective parties. It is not possible to confirm the likely timing of a deal as management is focused on completing a transaction that provides the most beneficial terms for Microbix shareholders.”
About Microbix Biosystems
Microbix Biosystems Inc. specializes in the research and development of biological solutions, including products for human health applications, namely in the vaccine, therapeutic and diagnostic markets, as well as animal reproductive markets worldwide. The Company manufactures and distributes a wide range of infectious disease antigens to a worldwide customer base. The Company’s pipeline of innovative technologies and products includes LumiSort semen sexing technology for the livestock industries, Kinlytic, a thrombolytic drug with several approved and potential applications including the treatment of life-threatening blood clots, and VIRUSMAX, a proprietary technology for increasing virus yields in the manufacture of influenza vaccine. Established in 1988, Microbix is a publicly traded company, listed on the Toronto Stock Exchange, and headquartered in Mississauga, Ontario.
This news release includes “forward-looking information”, as such term is defined in applicable securities laws. Forward-looking information includes, without limitation, the risks associated with development projects, operations in foreign jurisdictions, risks associated with engineering and construction generally, risks associated with production including control over costs, quality, quantity and timeliness of delivery of products, foreign currency and exchange rate risk, and risks of raising capital on acceptable terms or at all, and other similar statements concerning anticipated future events, conditions or results that are not historical facts. These statements reflect management’s current estimates, beliefs, intentions and expectations; they are not guarantees of future performance. The Company cautions that all forward looking information is inherently uncertain and that actual performance may be affected by a number of material factors, many of which are beyond the Company’s control. Accordingly, actual future events, conditions and results may differ materially from the estimates, beliefs, intentions and expectations expressed or implied in the forward-looking information. All statements are made as of the date of this news release and represent the Company’s judgement as of the date of this new release, and the Company is under no obligation to update or alter any forward-looking information.
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Microbix Biosystems Inc.
Vaughn C. Embro-Pantalony
(905) 361-8910 x 350
Microbix Biosystems Inc.
(905) 361-8910 x 255
Microbix Biosystems Inc.