Q3 Sales of $5.0 million, Q3 Net Earnings of $0.6 million
MISSISSAUGA, August 11, 2022 – Microbix Biosystems Inc. (TSX: MBX, OTCQX: MBXBF, Microbix®), a life sciences innovator, manufacturer, and exporter, reports results for its third quarter and year-to-date fiscal 2022 ended June 30, 2022 (“Q3” and “YTD”), with strong sales and continued positive net earnings, plus ongoing progress upon its strategic goal of increasing its capacity for medical devices production to thereby continue growing sales, margins, and earnings.
Q3 revenues were $5.0 million, down 8% from Q3 2021, while YTD top-line increased 14% to $14.7 million. In Q3, antigens provided 46% of sales, rebounding 42% from a pandemic low-point in the prior quarter. Q3 Sales of QAPs™ test quality assessment products and DxTM™ viral transport medium continued to be strong at $1.3 million for each product line. This mix of sales achieved a gross margin of 55% for Q3, in comparison to 63% in Q3 2021 and reflective of a greater proportion of lower margin ingredients (antigens) sales in the quarter but still driving continuing net earnings and strong cash flow. Microbix considers Q3 to be a satisfactory result as it continues to pursue greater sales of its medical devices and thereby expects to achieve material growth in net earnings over coming quarters and longer term.
Three Months Ending June 30, 2022 (“Q3”)
Q3 revenue was $5,011,025, an 8% decrease from Q3 2021 revenues of $5,451,834. Included were antigen revenues of $2,283,621 (2021 – $$2,398,969). QAPs revenues were $1,305,896 (2021 – $1,051,617). Revenue from DxTM was $1,326,410 (2021 – $1,924,300), and royalties were $95,099 (2021 – $76,948). Year-over-year, Q3 sales were most influenced by the timing of deliveries of DxTM, which were higher in Q3 2021.
Q3 gross margin was 55%, down from 63% in Q3 2021, due a lower margin antigen product sales mix and pressure on supply chain costs due to inflation that has not yet been mitigated by Microbix price increases.
Operating expenses in Q3 increased by 10% relative to Q3 2021, due to greater investment in product development for QAPs customers, additional spend on trade shows and marketing to support sales growth, and no offsetting Ontario Together Fund grant money. Those factors outweighed the meaningful reductions in interest costs due to the repayment of debentures and BDC loans. Overall, lower sales and fewer gross margin dollars during the period led to an operating income and net income of $638,502 versus a Q3 2021 operating income and net income of $1,516,178. In turn, cash provided by operating activities (cash flow) was very strong at $2,709,545, compared to cash used of $683,335 in Q3 2021.
Nine Months Ending June 30, 2022 (“YTD”)
YTD revenue was $14,747,189, a 14% increase from YTD 2021 revenues of $12,963,266. Included were antigen revenues of $5,658,007 (2021 – $7,061,161). QAPs revenues were $3,773,429 (2021 – $3,509,127). In turn, revenue from DxTM was $5,004,359 (2021 – $2,179,300), and royalties were $311,394 (2021 – $213,679). YTD sales growth was most influenced by Ontario-driven deliveries of DxTM, followed by continued diagnostics industry uptake of QAPs, and offset by weaker antigen sales.
YTD gross margin was 62%, up from 60% YTD 2021, due to a greater proportion of sales of QAPs, new VTM sales, and the effects of antigen product sales mix.
Operating expenses YTD increased by 28% relative to YTD 2021, due to increased investment in QAPs product development, additional spending in sales and marketing to support sales growth, and no Ontario Together Fund (“OTF”) grant funding this year vs. last year; more than offsetting reduced interest costs due to the repayment of debt.
Overall, greater sales and more available gross margin dollars during the YTD period, offset by increased operating expenses, led to an operating income and net income of $2,252,769 versus a YTD 2021 operating income and net income of $2,454,461. Cash provided by operating activities was $3,318,763, compared to cash provided of $485,115 in YTD 2021, with the majority of the change coming from improvements in non-cash working capital.
At the end of Q3, Microbix’s current ratio (current assets divided by current liabilities) was 7.84 and its debt to equity ratio (total debt over shareholders’ equity) was 0.35.
Microbix will continue to drive sales growth across all of its three revenue-generating business lines, and work to keep improving percentage gross margins and driving bottom-line results. Management currently expects Microbix to generate meaningful net earnings growth across fiscal 2022 and 2023. Additionally, work continues upon securing a partnership to advance its Kinlytic® urokinase project.
Adelaide Capital will host a live webinar with management, on Wednesday, August 17 at 11am ET. Please register here: https://us02web.zoom.us/webinar/register/WN_jo4YJ-2xRUuL66C50GXIqA .
It will also be live-streamed to YouTube at: https://www.youtube.com/channel/UC7Jpt_DWjF1qSCzfKlpLMWw.
A replay of the webinar will also be made available on Adelaide Capital’s YouTube channel.
About Microbix Biosystems
Microbix creates proprietary biological products for human health, with over 100 skilled employees and sales approaching C$ 2.0 million per month. It makes a wide range of critical ingredients and devices 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, or help ensure the quality of clinical diagnostic workflows. Its antigens drive the antibody tests of over 100 diagnostics makers, while QAPs are sold to clinical laboratory accreditation organizations, diagnostics companies, and clinical laboratories. Microbix QAPs are now available in over 30 countries, distributed by 1WA (Oneworld Accuracy Inc.), Alpha-Tec Systems, Inc., Diagnostic International Distribution SpA., Labquality Oy, The Medical Supply Company of Ireland, R-Biopharm AG, SDT Molecular Pte Ltd, Seegene Canada Inc., and Thomas Scientific LLC. Microbix is ISO 9001 and 13485 accredited, U.S. FDA registered, Australian TGA registered, Health Canada establishment licensed, and provides CE marked products.
Microbix also applies its biological expertise and infrastructure to develop other proprietary products and technologies, most notably viral transport medium (DxTM™) to stabilize patient samples for lab-based molecular diagnostic testing and Kinlytic® urokinase, a biologic thrombolytic drug used to treat blood clots. Microbix is traded on the TSX and OTCQX, 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 news and filings.
For further information, please contact Microbix at:
|Cameron Groome, CEO
Adelaide Capital Markets
(647) 203-8793 email@example.com
Torrey Hills Capital
Copyright © 2022 Microbix Biosystems Inc.
Microbix®, DxTM™, Kinlytic®, and QAPs™ are trademarks of Microbix Biosystems Inc.