Year-Over-Year Sales Growth of 28% in First-Half
TORONTO, May 14, 2018 - Microbix Biosystems Inc. (TSX: MBX, Microbix®), an innovator of biological products and technologies, reports financial results for its second quarter of fiscal 2018, the three-month period ending March 31, 2018 (“Q2”), with record sales and progress toward its operational goals.
Second Quarter Financial Results
Total Q2 revenue was $3,000,193, an increase of 13% compared to 2017 – on target with management’s goal of double-digit percentage sales growth. Revenues were dominated by antigen sales, but included a significant amount of laboratory proficiency-testing (quality assessment) product sales. Sales growth was driven by increased orders from longstanding customers, with growth across multiple antigen products.
Gross margin for Q2 was 38%, down from 53% in 2017, with the decline due to a recently-emerged yield-control issue with the conventionally-produced viral antigen intended to be replaced with bioreactor product now that upgrades to facilities are complete. While steps are being taken to correct the yield-control issue with the old process, still tighter controls will be implemented as most production of that antigen moves to bioreactors. Therefore the financial benefits of the move to bioreactors and of the reallocation of conventional antigen production capacity remained unrealized for Q2.
Bottom-line results showed a net comprehensive loss of $342,502 for Q2, as compared to an income of $257,649 in 2017. The Q2 loss was due largely to the aforementioned yield-control issue, which cost an estimated $353,000 in margin. A further one-time charge of $128,901 was recorded in Q2 relating to director compensation via warrant re-pricing – while that action reduced dilution, its charge had to be entirely expensed in Q2, versus spread-out over a vesting period as occurs for newly-issued options.
Six Month Financial Results
For the six months ended March 31, 2018 (“H1”), revenues were $5,885,760, up by 28% from 2017. H1 provided a net comprehensive loss of $436,630, compared to $2,958,822 in 2017, of which $2,541,066 was due to effects of a debt restructuring, legal settlement and tax asset revaluation. Net of those items, the loss for the first half of 2017 was $417,757. At the end of H1, Microbix’ current ratio (current assets divided by current liabilities) was 1.5 and its debt to equity ratio (total debt over shareholders’ equity) was 0.47.
We continue to target double-digit sales growth over the balance of fiscal 2018 and through 2019. Microbix maintains a log of open purchase orders that, along with year-to-date results, supports meaningful sales growth. Efforts to improve gross margins and profitability are ongoing, with the goal of achieving successive quarterly improvements. Additionally, work continues with regards to securing partnership agreements to advance Microbix’ Kinlytic® urokinase and LumiSort™ cell-sorting projects.
|as at Mar.31, 2018||as at Mar.31, 2017|
|Total Revenue||$ 3,000,193||$ 2,646,649|
| Net Operating Income (Loss)
(Before Debt Restructuring and Settlement Costs)
|Cash Provided (Used) by Operating Activities||465,068||143,721|
|Total current assets||5,842,983||5,639,137|
|Total current liabilities||3,797,379||5,786,309|
|Total shareholders' equity||18,310,106||15,589,282|
|Debt to equity ratio||0.47||0.66|
About Microbix Biosystems Inc.
Microbix specializes in developing proprietary biological and technology solutions for human health and well-being. It manufactures a wide range of critical biological materials for the global diagnostics industry, notably antigens used in immunoassays or quality assessment products. Microbix’ products are sold to more than 100 customers worldwide, primarily to multinational diagnostics companies and laboratory accreditation organizations.
Microbix also applies its biological expertise and infrastructure to create proprietary new products and technologies. Currently it is commercializing two such products, (1) Kinlytic® urokinase, a biologic thrombolytic drug (used to dissolve blood clots) and (2) LumiSort™ cell-sorting, a technology platform for ultra-rapid and efficient sorting of somatic cells that can be used to enrich cell populations of interest (such as sexing semen for the livestock industry). Established in 1988, Microbix is a publicly traded company, listed on the Toronto Stock Exchange and headquartered in Mississauga, Ontario, Canada.
This news release includes “forward-looking information,” as such term is defined in applicable securities laws. Forward-looking information includes, without limitation, discussion of financial results or the outlook for the business, risks associated with its financial results and stability, its biologicals business, development projects such as those referenced herein, sales to foreign jurisdictions, engineering and construction, production (including control over costs, quality, quantity and timeliness of delivery), foreign currency and exchange rates, maintaining adequate working capital and raising further 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.
Please visit www.microbix.com or www.sedar.com for recent Microbix filings.
For further information, please contact:
Cameron Groome, CEO
Jim Currie, CFO
Deborah Honig, Investor Relations
Adelaide Capital Markets
(647) 203-8793 email@example.com
Copyright © 2018 Microbix Biosystems Inc. Microbix®, Kinlytic® and LumiSort™ are trademarks of the Company