Microbix Reports Significant Revenue Growth in First Quarter
Company Records Non-Cash Debt Restructuring Expense to Refinance Debentures and Fund Continued Growth Initiatives
TORONTO, February 14, 2017 – Microbix Biosystems Inc. (TSX: MBX) (“Microbix” or the “Company”), an innovator of biological products and technologies, today reported financial results for its fiscal first quarter ended December 31, 2016.
First Quarter Financial Results
Microbix reported total revenue of $1,952,502 in the first quarter, an increase of 84% from $1,063,405 in the first quarter last year. Virology product revenue increased 87% to $1,886,824 in the first quarter from $1,009,316 for the same period last year, driven by strong growth in Asian markets and increased sales to the Company’s key customers.
Operating expenses in the first quarter were $4,181,001 compared to $785,874 in the first quarter last year, primarily due to a one-time non-cash expense of $2,582,526 related to the restructuring of the Company’s convertible debentures as part of an overall debt refinancing plan to access an enhanced credit facility for the Company to support strategic growth. The Company also incurred a one-time expense to settle a dispute with the buyer of its WFI business in 2012 in the amount of $258,540. The Company incurred a net loss of $3,216,472 in the first quarter, compared to a net loss of $338,420 in the same period last year. Adjusting for these one-time costs, the net loss before debt restructuring and WFI settlement expenses would be $525,406 for the quarter compared to a net loss of $428,420 in the same period last year.
Cash generated from operations was $309,542 in the first quarter compared to negative $31,698 in the same period last year, primarily due to increased sales. Cash from financing activities was negative $107,536 in the first quarter compared to $670,735 in the same period last year. This was driven primarily by the repayment of shareholder loans during the quarter, and the issuance of common shares and the receipt of equipment loans in the same period last year. Cash used in investing activities was $205,741 in the first quarter compared to $676,784 in the same period last year; this positive change was due to the completion of the Company’s bioreactor automation project. As a final result, net cash flow was $3,735 negative in the first quarter, compared to $37,747 negative in the same quarter last year.
Vaughn C. Embro-Pantalony, Microbix’ President and Chief Executive Officer, commented, “I am very pleased with the strong sales performance of our Virology products in the first quarter, which builds on the strong momentum we established in 2016. We are optimistic that sales will continue to grow in the coming months based on strong customer orders, supporting our expectation of strong sales growth for the current fiscal year.”
|3 Months Ended Dec 31|
|Net (loss) income||$||(3,216,472)||(338,420)|
Net (loss) income per share
In January 2017, Microbix launched a new partnership with Meridian Life Sciences to expand its Virology product sales in the Asia Pacific market. The new agreement will allow the Company to utilize new production capacity from its bioreactor manufacturing process to support growing demand for antigens in these markets.
Mr. Embro-Pantalony commented, “We are very excited to be working with Meridian Life Sciences, a recognized leader in the global diagnostics industry, to better serve diagnostics customers in the Asian market and help expand both companies’ sales in the region.”
Microbix also reported that development work is now underway on its new line of molecular control products, while work continues on upgrading the manufacturing and quality process standards required to ensure the operation is compliant with regulatory standards for medical devices. The Company plans to commercially launch the new product line in the fall of this calendar year.
Microbix has formally requested a meeting with the U.S. Food and Drug Administration (“FDA’) to seek input on the Company’s scientific and clinical development plan for the return of urokinase to the market in the United States. The meeting is expected to take place in the near future, depending on FDA staff schedules.
Mr. Embro-Pantalony commented, “We look forward to receiving important feedback from the FDA on our urokinase program that will help guide us and our potential partners to the specific clinical and regulatory approaches best suited to the expeditious re-launch of Kinlytic® in the U.S. With this information in hand, we will be well-positioned to advance discussions with potential partners.”
The Company continues to evaluate partnership opportunities to complete the development and commercialization of its LumiSort technology. As previously disclosed, there are many complexities that have contributed to the extension of the timeline to consummate a partnership, including the challenging legal landscape in the animal genetics industry.
Mr. Embro-Pantalony added, “LumiSort is a game-changing technology that can help the livestock industry achieve superior yields and throughput of sexed semen. We believe this can generate efficiency improvements and cost savings for the industry and, at the same time, unlock significant value for Microbix shareholders”.
About Microbix Biosystems
Microbix Biosystems Inc. specializes in the research, development, marketing and distribution of biological solutions. This includes products for human health applications in the vaccine, therapeutic and diagnostic markets, in addition to a product for the worldwide animal reproduction market. In its revenue generating business, the Company manufactures and distributes a wide range of infectious disease antigens to a worldwide customer base. The Company is also developing a pipeline of innovative technologies and product candidates, including LumiSort semen sexing technology for the livestock industries and Kinlytic, a thrombolytic drug with several approved and potential applications, including the treatment of life-threatening blood clots. Established in 1988, Microbix is a publicly traded company, listed on the Toronto Stock Exchange, and headquartered in Mississauga, Ontario.
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 revenue business, development projects, 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.
Please visit www.sedar.com for recent Microbix Biosystems Inc. filings.
For further information, please visit www.microbix.com or contact:
Vaughn C. Embro-Pantalony CEO
(905) 361-8910 x 350
(905) 361-8910 x 255
Stephen Kilmer Investor Relations (647) 872-4849