Microbix earns $188,646 in fiscal Q3

Mr. Cameron Groome reports: MICROBIX REPORTS RECORD THIRD QUARTER & NINE MONTH SALES

 

Microbix Biosystems Inc. has released its financial results for the fiscal third quarter and nine months ended June 30, 2017.

 

Third quarter financial results

Total third quarter revenue was $2,773,365, an increase of 23 per cent compared with 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 long-standing customers, with double-digit increases in sales of multiple products. The balance of revenue was derived from royalties on an out-licensed technology, which totalled $67,954.

Gross margin for the third quarter was 54 per cent, an increase of 3 per cent over the same quarter of 2016 and an indicator of continuing work to optimize product pricing. The gross margin contribution for the third quarter was $1,497,787, an increase of $340,926 from the same quarter of 2016. Operating expenses increased by $363,948 compared with the third quarter last year, with the increase largely due to continuing costs related to validation of Microbix's 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 per cent 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 the third quarter, 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 nine months were $7,372,516, a 22-per-cent increase compared with fiscal 2016. Most revenues were derived from sales of antigen products, with growth driven by increased orders from long-standing customers. The balance of revenue was derived from royalties, which totalled $200,276.

 

Gross margin for the nine months was 51 per cent, up by 4 per cent over 2016 and again indicative of continuing price optimization. Nine-month 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 with the same period last year, largely due to continuing 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 nine months, for an increase of 56 per cent from 2016.

Cameron Groome, chief executive officer and president of Microbix, remarked: "These record sales demonstrate the excellent prospects for Microbix's 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."

 

                               FINANCIAL HIGHLIGHTS      

                                              Three months             Nine months
                                             ended June 30           ended June 30 
                                          2017        2016         2017       2016 
                                                                                   
Revenue                             $2,773,365  $2,253,373   $7,372,516 $6,046,557 
Operating income (loss) before debt   (164,104)   (141,082)    (581,861)  (407,523)
Restructuring and settlement expense                                                 
Debt restructuring and settlement
(expense)                             (202,750)          -    2,638,316          - 
Net income (loss)                      188,646      47,953   (2,770,177)  (114,523)
Net income (loss) per share              0.002       0.001       (0.033)    (0.001)
Cash flow (loss)                       131,130      (2,366)     158,532    (99,090)

 

Corporate updates

Virology

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.

Kinlytic urokinase

In April, Microbix consulted with the U.S. Food and Drug Administration 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 relaunch program and submit an application for reapproval in the U.S. market.

LumiSort cell-sorting technology

Continuing 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 Inc.

Microbix specializes in the development of proprietary biological and technology solutions for human health and well-being in the global therapeutic, vaccine and diagnostic markets. The company manufactures a wide range of highly purified infectious microorganism antigens for the global diagnostics industry, with sales of approximately $10-million per year. The company also applies its biological expertise and technology platforms to create other innovative products and technologies.