TORONTO, February 14, 2018 ‐ Microbix Biosystems Inc. (TSX: MBX, Microbix®), an innovator of biological products and technologies, reports financial results for its first quarter of fiscal 2018, the three‐ month period ending December 31, 2017 (“Q1”), with record sales and improving margins and earnings.
First Quarter Financial Results
Total Q1 revenue was $2,885,567, an increase of 48% compared to the first quarter of fiscal 2017. Normalized to remove approximately $600,000 of revenues intended for Q4 that were delayed into Q1, year‐over‐year sales growth was 17%, on target toward management’s goal of sustained double‐digit percentage sales growth. Revenues were dominated by antigen sales, reflective of customarily low Q1 demand for Microbix’ laboratory proficiency‐testing (quality assessment) products. Sales growth was driven by increased orders from longstanding customers, with growth across multiple antigen products.
Gross margins for Q1 improved to 46%, up from 42% in the first quarter of the preceding year. While improved, gross margin is not yet at management’s target level, due largely to the full assumption of bioreactor staff costs into cost‐of‐goods‐sold prior to all planned capacity coming on‐line. Specifically, bioreactor revenue in the quarter was approximately one‐sixth of the capacity that Microbix is in the midst of commissioning. Therefore the financial benefits of the move to bioreactors and of the reallocation of conventional antigen production capacity were not yet realized for Q1.
Bottom‐line results improved in Q1, with a net comprehensive operating loss of ($94,128) as compared to ($525,406) in 2017. No restructuring, settlement or tax entries were incurred in Q1, in contrast to the first quarter of 2017 when such items resulted in further expenses totaling $2.7 million.
Microbix’ balance sheet has also been improved, with Q1 financial ratios better on a year‐over‐year and quarter‐over‐quarter basis. Management has quickly deployed proceeds of the October private placement to optimize working capital utilization and undertake needed upgrades, including the capacity ramp‐up plans announced in November. At present, Microbix’ current ratio (current assets divided by current liabilities) is 1.6 and its debt to equity ratio (total debt over shareholders’ equity) is 0.5.
Management is targeting for double‐digit sales growth to continue over the balance of the 2018 fiscal year and through fiscal 2019. The Company maintains a log of open purchase orders from its customers that, along with year‐to‐date results, currently suggests meaningful sales growth for fiscal 2018. Efforts to improve gross margins and profitability will be ongoing, with the intention to demonstrate successive quarterly improvements. Additionally, work continues with regards to securing partnership agreements to advance Microbix’ Kinlytic® urokinase and LumiSort™ cell‐sorting projects.
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 treat 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 in sexing semen. 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.
Cameron Groome, CEO (905) 361‐8910
Jim Currie, CFO (905) 361‐8910
Deborah Honig, Investor Relations Adelaide Capital Markets
(647) 203‐8793 firstname.lastname@example.org