IBEX TECHNOLOGIES INC.
TSX : IBT

IBEX TECHNOLOGIES INC.

December 15, 2006 11:36 ET

IBEX Reports Fiscal 2007 First Quarter Results

MONTREAL, QUEBEC--(CCNMatthews - Dec. 15, 2006) - IBEX Technologies Inc. (TSX:IBT), an innovator in the development of diagnostics for the management of cancer and arthritis, and a supplier of high-purity glycobiology enzymes, today reported its financial results for the three-month period ended October 31, 2006.

During the quarter the important focus of the Company's efforts have been on selecting and performing due diligence on a number of merger and acquisition candidates. As announced on November 17th IBEX has entered into a non-binding letter of intent in connection with a proposed acquisition by IBEX of a private company based in Montreal. The Company expects to sign a definitive agreement by the end of December.

As previously reported, the Company received an unsolicited takeover bid from Miraculins Inc. On December 13, Miraculins announced that they were withdrawing their bid.

Operational Results

During the three-month ended October 31, 2006 and up to the date of this release, the IBEX activities include the following developments:

- The issuance of four important US and European patents covering IBEX's human kallikrein program. Two issued patents for human kallikrein 15 (hK15), and human kallikrein 5 (hK5) cover the use of human kallikreins for therapeutic use and the remaining two cover the use of human kallikreins 10 and 6 for diagnostic use. These human kallikreins may have utility as cancer diagnostics.

- The advancement of our urine C2C ELISA assay development will be completed by the end of this month and the assay will be available for sale in January.

- The completion of development work and first sale of an improved version of the current C2C ELISA. This version comes with a pre-coated plate, improving ease of use and precision. The manufacturing process for this new version C2C ELISA has also been improved, saving production and testing costs.

- The completion of development on a new version of the CP II ELISA with pre-coated plates. This version will be introduced in Q1 of calendar 2007.

- The presentation by IBEX of a poster at the annual scientific meeting of the American College of Rheumatology in November 2006. The poster described initial results from the biochemical characterization of the C2C biomarker in the urine of adults and children.

Financial Results

Solely for the convenience of the reader, selected financial results expressed in Canadian dollars on the financial statements, have been translated into U.S. dollars at the October 31, 2006 month-end rate C$1.00 equals US$ 0.8904. This translation should not be construed as an application of the recommendations relating to the accounting for foreign currency translation, but rather as supplemental information for the reader.

Revenue for the three-month period ended October 31, 2006 totaled $428,068 (US$381,000) compared to $487,691 in the first quarter of fiscal 2006, representing a decrease of 12% over the same period of the prior year. Sales revenues of IBEX enzyme products increased, while arthritis products sales decreased due principally to the effect of a large one-time study included in the 2006 results, when compared to same period last year.

Net loss for the first quarter of fiscal 2007 was $774,529 (US$690,000) or ($0.03) per share, compared with a net loss of $646,346 or ($0.03) per share in the same period a year ago. The Company's increased net loss in the period was primarily attributable to the Company incurring expense relating to conducting due diligence on merger and acquisition candidates.

Research and development expenses for the three-month ended October 31, 2006 decreased to $384,252 (US$342,000) from $538,853 in the same period of the prior year due to the previously announced decision of the Company not to further pursue its kallikrein therapeutic program.

Selling, general and administrative expenses and cost of goods sold for the three-month period ended October 31, 2006 increased to $812,180 (US$723,000) from $594,501 for the same period in fiscal 2006. The primary contributors to the increase in expenses in the quarter were $150,000 for due diligence consulting and legal expenses relating to the merger and acquisition candidates and $30,000 due to a reversal in fiscal 2006 of an over-accrual at year-end 2005 relating to certain remuneration matters.

During the first fiscal quarter ended October 31, 2006, pursuant to a non-binding letter of intent in connection with a proposed transaction, the Company paid $250,000 for a two month negotiation exclusivity fee. The fee is paid as a loan bearing interest to be reimbursed to the Company, in the event the transaction does not close.

At October 31, 2006, IBEX cash, cash equivalents and marketable securities totaled $3.8 million (US$3.4 million), and the Company's net working capital was $3.2 million (US$2.9 million). The Company believes it has adequate financial resources to support its current on-going programs for the next 20 months.

About IBEX

IBEX is focused on the development of diagnostics for the management of cancer and arthritis. The Company's cancer program is based on a novel family of genes known as kallikreins, IBEX is developing kallikrein-based diagnostics for screening and monitoring cancer. The Company's arthritis program is based on a series of biomarkers of cartilage degradation and synthesis.

IBEX markets a number of products, including its high-purity proprietary enzymes (heparinases and chondroitinases), as well as a series of arthritis and kallikrein-based assays. Heparinase I IBEX is used in many leading hemostasis monitoring devices, while IBEX arthritis assays are used by leading pharmaceutical companies for research purposes. For more information, please visit the Company's web site at www.ibex.ca.

Safe Harbor Statement

All of the statements contained in this news release, other than statements of fact that are independently verifiable at the date hereof, are forward-looking statements. Such statements, based as they are on the current expectations of management, inherently involve numerous risks and uncertainties, known and unknown. Some examples of known risks are: the impact of general economic conditions, general conditions in the pharmaceutical industry, changes in the regulatory environment in the jurisdictions in which IBEX does business, stock market volatility, fluctuations in costs, and changes to the competitive environment due to consolidation or otherwise. Consequently, actual future results may differ materially from the anticipated results expressed in the forward-looking statements. IBEX disclaims any intention or obligation to update these statements.

TO THE SHAREHOLDERS OF IBEX TECHNOLOGIES INC.

The interim consolidated balance sheet of IBEX Technologies Inc. as of October 31, 2006 and the interim consolidated statements of loss and deficit and cash flows for the period then ended have not been reviewed by the Company's auditors, PricewaterhouseCoopers LLP. These financial statements are the responsibility of management and have been reviewed and approved by the Audit Committee.



CONSOLIDATED BALANCE SHEETS
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October 31, July 31,
unaudited 2006 2006
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$ $
ASSETS

Current assets
Cash and cash equivalents 702,566 816,452
Marketable securities (note 2) 3,084,902 3,674,489
Accounts receivable 409,599 551,385
Inventories 162,991 181,796
Prepaid expenses 95,438 138,149
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4,455,496 5,362,271

Property and equipment 594,363 635,994
Identifiable intangible assets 4,030,846 4,102,154
Other assets (note 6) 250,000 -
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9,330,705 10,100,419
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LIABILITIES

Current liabilities
Accounts payable and accrued liabilities 1,030,298 1,042,033
Balance of payments (note 3) 186,350 181,800
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1,216,648 1,223,833
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SHAREHOLDERS' EQUITY

Capital stock 52,496,759 52,496,759
Contributed surplus 310,802 298,802
Deficit (44,693,504) (43,918,975)
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8,114,057 8,876,586
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9,330,705 10,100,419
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CONSOLIDATED STATEMENTS OF DEFICIT
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For the three months ended October 31st
(unaudited) 2006 2005
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$ $

Balance - Beginning of period (43,918,975) (41,038,603)
Net loss for the period (774,529) (646,346)
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Balance - End of period (44,693,504) (41,684,949)
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CONSOLIDATED STATEMENTS OF LOSS
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For the three months ended October 31st
(unaudited) 2006 2005
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$ $
Revenue 428,068 487,691
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(Expenses) income
Research and development expenditures (384,252) (538,853)
Selling, general and administrative
expenses and cost of goods sold (812,180) (594,501)
Amortization of property and equipment (33,511) (29,994)
Amortization of identifiable
intangible assets (809) (809)
Other interest and bank charges (8,659) (11,395)
Foreign exchange loss (2,631) (11,178)
Investment income 39,445 53,249
Loss on sale of marketable securities - (556)
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(1,202,597) (1,134,037)
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Net loss (774,529) (646,346)
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Net loss per share
Basic and diluted $(0.03) $(0.03)
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CONSOLIDATED CASH FLOW STATEMENTS
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For the three months ended October 31st
(unaudited) 2006 2005
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$ $
Cash flows provided by (used in):
Operating activities
Net loss for the period (774,529) (646,346)
Items not affecting cash -
Amortization of property and equipment 42,284 40,786
Amortization of identifiable intangible assets 71,308 71,309
Stock-based compensation costs 12,000 20,017
Accretion of interest on balance of payments 4,550 8,700
Loss on sale of marketable securities - 556
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(644,387) (504,978)
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Net changes in non-cash working capital items
Decrease in accounts receivable 141,786 252,880
Decrease (increase) in inventories 18,805 (106,706)
Decrease in prepaid expenses 42,711 34,365
Decrease in accounts payable and accrued
liabilities (11,735) (82,780)
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191,567 97,759
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(452,820) (407,219)
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Investing activities
Additions to marketable securities (1,822,051) -
Proceeds on disposal of marketable securities 2,411,638 374,655
Additions to property and equipment (653) (54,497)
Increase in other assets (note 6) (250,000) -
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338,934 320,158
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Decrease in cash and cash equivalents
during the year (113,886) (87,061)
Cash and cash equivalents - Beginning
of period 816,452 368,200
Cash and cash equivalents - End of period 702,566 281,139
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Contact Information

  • IBEX Technologies Inc.
    Paul Baehr
    President & CEO
    514-344-4004
    or
    LaVoie Group
    Donna LaVoie
    978-745-4200 X103
    dlavoie@lavoiegroup.com