Positive Cash Flow from Operations Achieved
MISSISSAUGA, February 13, 2020 - Microbix Biosystems Inc. (TSX: MBX, Microbix®), a life sciences innovator making critical ingredients that enable the production of clinical diagnostics and creating medical devices that help ensure test accuracy, reports results for its first quarter of fiscal 2020 (“Q1”) ended December 31, 2019, with positive cash flow from operations (“CFO”) and seasonally weak sales.
Microbix regularly has its weakest quarterly sales in its fiscal first quarters, due to their seasonally being few shipments of its proficiency-testing (“PT”) oriented quality assessment products (“QAPs”™). Q1 was no exception, with sales further reduced year-over-year due to the timing of antigen shipments. However, positive CFO of $237,792, was achieved even in the face of low quarterly sales – for a CFO improvement of $209,067 over the corresponding quarter of fiscal 2019.
For fiscal 2020, further sales growth and continuing improvements to gross and net margins are targeted and expected. Microbix remains committed to improving its operational and financial strength and thereby driving share price appreciation.
First Quarter Financial Results
Total Q1 revenue was $2,046,348, a 17% decrease from 2019 first quarter revenue of $2,460,812. Included were antigen product revenues of $1,972,578 (Q1 2019 - $2,366,790), QAPs revenues of $26,114 (Q1 2019 - $6,044), and revenue from royalties of $73,775 (Q1 2019 - $94,022). Q1 sales were principally to antigen customers in North American and Europe and were across multiple customers and products.
Gross margin for Q1 was 51%, largely flat versus 52% in the first quarter of fiscal 2019. Margin improvements from increasing sales of bioreactor-produced antigen were overshadowed by product mix fluctuations. Seasonally low PT-oriented QAPs sales in the first quarter each year also suppressed margins, although non-PT QAPs led to overall Q1 segment sales growth of 432% year-over-year.
Operating expenses for Q1 increased by $219,154 from 2019, due to further investment in QAPs sales, marketing and business development, and foreign exchange losses incurred in the current quarter. Combined with low Q1 sales, a net loss of $585,265 was reported in Q1, versus a prior year first quarter net loss of $119,296. As stated earlier, CFO improved for Q1 over the prior year, to positive $237,792, and Microbix remains operationally stable. The Company’s financial position was further improved as a result of the proceeds of the non-brokered private placement financing of $2,355,000 that it completed subsequent to Q1, as announced on January 31, 2020.
For fiscal 2020, Microbix will work to continue improving the percentage gross margins from its critical ingredients (antigens) business and achieve strong growth in sales of its lines of innovative, proprietary and branded quality assessment products (QAPs™). If Microbix achieves its budget targets, the company will generate meaningful net earnings for fiscal 2020. Additionally, work continues with regards to securing a partnership agreement to advance Microbix’s Kinlytic® urokinase project.
About Microbix Biosystems
Microbix develops proprietary biological and technology solutions for human health and well-being, with sales usually exceeding $1 million per month and approximately 80 skilled employees. It makes a wide range of critical biological materials for the global diagnostics industry, notably antigens for immunoassays and its laboratory quality assessment products (QAPs™) that support clinical lab proficiency testing, enable assay development and validation, train lab personnel, or help ensure quality control of clinical diagnostic tests. Microbix antigens and QAPs are sold to many customers worldwide, at present primarily to multinational diagnostics companies and laboratory accreditation organizations.
Microbix also applies its biological expertise and infrastructure to develop other proprietary products and technologies, most notably Kinlytic® urokinase, a biologic thrombolytic drug used to treat blood clots.
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 current or future products, 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 firstname.lastname@example.org