Microbix may 15th TORONTO, ONTARIO--(Marketwired - May 15, 2017) - Microbix Biosystems Inc. (MBX.TO) ("Microbix" or the "Company"), an innovator of biological products and technologies, today reported financial results for its fiscal second quarter and six months ended March 31, 2017 ("Q2" and "H1").
Second Quarter Financial Results
Total Q2 revenue was $2,646,649, down 3% compared to a record quarter in the prior year (2016 - $2,729,779). Included was Virology product revenue of $2,580,005, down 4% compared to the same quarter in 2016, due to some expected Q2 sales instead occurring in the first quarter. The balance of revenue was from royalties totaling $66,644 (2016 - $47,787).
Gross margin increased by $81,819 or 6%, primarily due to an improvement in the product mix.
Operating expenses increased by $136,149 compared to the second quarter last year. This was primarily due to ongoing costs related to the new bioreactor manufacturing process.
In total, the Company experienced a net profit for the period of $257,649 (2016 - $175,944. Cash generated from operations in Q2 was $143,721 compared to cash used of $6,816 in the second quarter of 2016.
Six-Month Financial Results
Total H1 revenue was $4,599,151, or a 21% increase over the same period last year (2016 - $3,793,184). Included was Virology product revenue of $4,466,829 - an increase of 21% versus the same period last year due to increased sales in Asian markets and to our key customers. Revenue from royalties was $132,322 (2016 - $101,876).
Gross margin increased by $538,894 or 32% in H1 compared to 2016, due to increased revenues as outlined above and a positive change in the product mix.
H1 Operating expenses increased by $3,531,276 compared to last year, with 80% of that increase due to one-time costs related to (1) a non-cash adjustment of $2,582,526 related to a restructuring of existing debt that was necessary to implement an enhanced revolving credit facility, and (2) the settlement of a 2012 trade dispute in the amount of $258,540.
As a result, the Company experienced a net loss for the period of $2,958,823 (2016 - $162,476 net loss). Adjusting for one-time costs, the net operating loss before debt restructuring and WFI settlement expenses was $417,757 for H1 compared to a net loss of $266,441 in the same period last year.
Cash generated from operations in H1 was $453,263 compared to cash used of $24,882 in the first half of 2016.
Vaughn Embro-Pantalony, President and CEO of Microbix remarked, "I am very pleased with our operating results through the first half of fiscal 2017. We continue to experience strong top- line growth in Virology products, which has contributed to a significant improvement in cash from operations. Based on current projections, we expect to see continued growth in the second half of the fiscal year and for Microbix to potentially achieve record revenues in fiscal 2017."
To view Table 1: Financial Highlights, please visit the following link:https://media3.marketwire.com/docs/1094683-T1.pdf
Corporate Updates
Virology Products
The Company continues to upgrade its manufacturing and quality processes to support the launch of its new line of molecular control products. The Company is also investing to build inventory to support the expansion of sales in the Asia Pacific market under its recently announced partnership with Meridian Life Sciences. The Meridian agreement allows Microbix to utilize its production capacity to support growing demand in those markets.
Mr. Embro-Pantalony commented, "These initiatives are very important growth drivers for our Virology products business that will continue to strengthen our position within the global diagnostics industry."
Kinlytic®
Microbix recently reported that it has consulted with the U.S. Food and Drug Administration (the "FDA") regarding its plans to return the thrombolytic biologic drug, Kinlytic®, to the U.S. market. The Company believes the results of its consultation will accelerate its work to obtain financing, complete its re-launch program and then submit an application to FDA for re-approval in the U.S. market. The Company has already received expressions of interest to license or acquire Kinlytic and to provide full funding for its re-launch program. Following its consultation with FDA, the Company now intends to accelerate its work to conclude such an agreement.