Third Quarter Financial Results
Total Q3 revenue was $2,773,365, an increase of 23% compared to the same quarter of fiscal 2016. Most revenues were derived from sales of antigen products, which are principally used in the manufacture of diagnostic tests for infectious diseases. Growth was driven by increased antigen orders from longstanding customers, with double-digit increases in sales of multiple products. The balance of revenue was derived from royalties on an out-licensed technology, which totaled $67,954.
Gross margin for Q3 was 54%, an increase of 3% over the same quarter of 2016 and an indicator of ongoing work to optimize product pricing. The gross margin contribution for Q3 was $1,497,787, an increase of $340,926 from the same quarter of 2016. Operating expenses increased by $363,948 compared to the third quarter last year, with the increase largely due to ongoing costs related to validation of Microbix’ new bioreactor manufacturing process and to the emerging molecular controls product line.
In total, the Company experienced a net profit for the period of $188,646, representing an increase of 293% from the same quarter of 2016, with the increase largely due to non-cash debt and tax recoveries in 2017. Cash provided by operating activities was also positive at $291,596 for Q3, down from $501,463 in 2016 due to increased operating expenses and deduction of the non-cash financial recoveries.
Nine-Month Financial Results
Revenues for the 9 Mo. were $7,372,516, a 22% increase compared to fiscal 2016. Most revenues were derived from sales of antigen products, with growth driven by increased orders from longstanding customers. The balance of revenue was derived from royalties, which totaled $200,276.
Gross margin for the 9 Mo. was 51%, up by 4% over 2016 and again indicative of ongoing price optimization. 9 Mo. gross margin contribution was $3,727, 310, up by $879,820 from 2016. Operating expenses (excluding debt restructuring and settlement costs) increased by $1,054,158 compared to the same period last year, largely due to ongoing bioreactor validation and molecular controls costs.
Non-cash financial restructuring costs impacted profit for the period, reducing it by $2,379,776 and resulting in a net loss of $2,770,177. Cash provided by operating activities was positive at $744,859 for the 9 Mo., for an increase of 56% from 2016.
Cameron Groome, CEO & President of Microbix remarked, “These record sales demonstrate the excellent prospects for Microbix’ business of supplying vital components to the diagnostics industry. Wider global adoption of public health tests is driving increased product demand by our customers. At the same time we are working to expand our capacity and improve production efficiency by the use of bioreactors. With demand, capacity and margins all positioned to improve, we aim to accelerate sales and profit growth.”
The Company is upgrading its manufacturing and quality processes to support sales growth of its antigen products and the launch of a new line of molecular control products. The Company is also investing to build capacity to support expanding sales to customers, including in the Asia Pacific region in partnership with Meridian Life Sciences.
In April, Microbix consulted with the U.S. Food and Drug Administration (the “FDA”) regarding its plans to return the thrombolytic biologic drug, Kinlytic® urokinase, to market. The Company believes the results of its consultation will accelerate its work to partner this asset, complete a re-launch program and submit an application for re-approval in the U.S. market.
LumiSort™ cell-sorting technology
Ongoing litigation between the major participants in the animal genetics industry has slowed the progress of partnering discussions relating to this asset. Microbix continues to support the development of its intellectual property relating to Lumisort and is also beginning to explore other commercial applications of the technology.
About Microbix Biosystems
Microbix Biosystems Inc. specializes in the development of proprietary biological and technology solutions for human health and well-being. The Company manufactures a wide range of critical biological materials for the global diagnostics industry. The Company also applies its biological expertise and technology platforms to create other innovative products and technologies. Currently it is commercializing two such proprietary 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, the risks associated with its financial results and stability, its biologicals business, development projects such as those referenced herein, operations in foreign jurisdictions, engineering and construction generally, production (including control over costs, quality, quantity and timeliness of delivery of products), 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.
For further information, please contact:
Deborah Honig, Investor Relations – Adelaide Capital Markets
(647) 203-8793 or firstname.lastname@example.org