Epicore Bionetworks earns $386,000 (U.S.) in fiscal Q3
2017-05-17 16:38 ET - News Release
Mr. William Long reports
EPICORE BIONETWORKS INC. REPORTS QUARTER THREE RESULTS FOR FISCAL YEAR 2017 FOR THE QUARTER ENDED 31 MARCH 2017, IN US DOLLARS
Epicore Bionetworks Inc. has released its results for the third quarter of fiscal 2017. All figures are in U.S. dollars, unless otherwise specified. The company had third quarter revenue of $3-million and net income of $400,000, or 1.5 cents per share, for the period ended March 31, 2017.
Third quarter revenue was 3% higher than last year's Q3. Revenue for the first nine months at $8.5 million was 18% higher than last year. Net income was $0.4 million in Q3, a decrease of $0.3 million or 41% less than prior year Q3. Q3 earnings before interest, tax, and depreciation (EBITDA) were $1.0 million or 7% above prior year. Taxes increased by $0.3 million over prior year Q3 because of a reduction in tax provision estimated earlier in the year in anticipation of completing a new building in NJ. The building start is delayed so the tax depreciation will move to fiscal 2018. Sales grew in most business sectors with the largest increase in Latin America.
The shrimp industry continued to recover in Q3 of fiscal 2016 as shrimp prices slowly increase. Early mortality syndrome disease affects most of Southeast Asia so inhibits shrimp production recovery to 2015 levels. The use of improved culturing systems, like raceways, has helped Asia start to recover from disease. But, with higher shrimp prices farmers are more willing to try a crop, which is good for Epicore's hatchery product sales.
Results versus prior fiscal year quarter two are as follows:
Q3 revenue of $3.0 million was 3% higher than Q3 last year Q3 gross profit of $2.1 million was 13% higher than Q3 last year Q3 operating expenses of $1.2 million were 19% higher than Q3 last year Q3 earnings before taxes (EBT) of $0.9 million were 7% higher than Q3 last year Q3 net income of $0.4 million was 41% lower than Q3 last year Q3 EBITDA1 of $1.0 million was 7% higher than last year Q3 Q3 basic earnings per share of $0.015 were 44% lower than Q3 last year Q3 shareholders' equity of $10.8 million was 17% higher than Q3 last year Q3 cash balance of $4.4 million was 61% higher than Q3 last year YTD cash flow from operating activities was $1.3 million
Gross profit increased 13% in Q3 versus prior year due to the increase in revenues and to a higher average gross margin. The cost of goods sold was lower in Q3 versus prior year and average selling price was lower due to product sales mix. Operating expense increased 19% over prior year Q3 and 8% for the first three quarters. Selling expenses accounted for the largest increase and was due to increased travel. Corporate expenses increased due to increased board activity.
Higher tax expense offset higher EBT so decreased net income by 41% to $0.4 million. The following table summarizes the Q3 results (rounded to thousands of US dollars):
For the Quarter ended March 31 2017 2016 Increase (Decrease) Revenue $3,026 $2,930$96 3% Gross profit $2,063 $1,829$234 13% Operating expenses $1,150 $964 $186 19% Net income $386 $656 ($270) (41%) Earnings per share $0.015 $0.027($0.012) (44%) Shareholders' equity$10,750$9,207$1,543 17% Cash balance $4,372 $2,715$1,657 61%
Epicore continues to generate positive net income from operating activities. Cash at the end of the quarter was $4.4 million versus $2.7 million at the end of Q3 fiscal 2016. With these funds, expected sales revenue growth and continued relatively low operating costs, management expects there will be sufficient cash to meet the fiscal year's financial requirements, to fund expansion of aquaculture and environmental remediation marketing efforts and to pursue new strategies for enhancing shareholder value.
Over the last two years, Epicore has invested materially in a second building and automated packaging equipment. This added space has been critical to our ability to increase production levels. All automated packaging equipment is in place and operational. The board has approved an ongoing capital program to increase production capacity and enhance operational efficiencies.
The financial statements of the company have been prepared in accordance with International Financial Reporting Standards. Epicore BioNetworks Inc. is a public corporation with a registered office in Calgary, Alberta, Canada and with shares listed on the TSX Venture Exchange (symbol EBN). [Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.]
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