IBEX TECHNOLOGIES INC.
TSX : IBT

IBEX TECHNOLOGIES INC.

June 13, 2007 08:00 ET

IBEX Reports Fiscal 2007 Third Quarter Results

MONTREAL, QUEBEC--(Marketwire - June 13, 2007) - IBEX Technologies Inc. (TSX:IBT), an innovator in the development of research-use diagnostics for the management of cancer and arthritis, and a supplier of high-purity glycobiology enzymes, today reported its financial results for the three and nine-month periods ended April 30, 2007.

"We are pleased to report that revenues continue to increase, led by a robust performance from our haematology glycobiology enzymes" said Paul Baehr, IBEX President and CEO, "and our restructuring plan is on-track to achieve cash positive operational results in the quarter commencing November 1, 2007".

Operational Results

During the three-month period ended April 30, 2007 and up to the date of this release, the IBEX activities include the following developments:

- As announced on May 7, 2007, IBEX terminated its previously-announced proposed acquisition of 100% of the shares of Garvinci Inc. due to material adverse changes in Garvinci's business.

- As announced on May 16, 2007, the Company implemented a restructuring plan aimed at conserving cash and creating a cash positive business. In order to accomplish this goal IBEX will eliminate all programs not essential to the sale and marketing of its specialty glycobiology enzymes and arthritis assays.

- As part of its cost-reduction program, IBEX is in discussions with several companies for the out licensing of its kallikrein patent portfolio.

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 April 30, 2007 month-end rate C$1.00 equals US$ 0.9008. 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 April 30, 2007 totaled $586,768 (US$529,000) compared to $496,185 in the third quarter of fiscal 2006, representing an increase of 18 percent. IBEX's sales revenues increased 11% over the same period last year. Sales revenues of IBEX enzyme products increased while arthritis products sales decreased, when compared to the same period last year.

Revenue for the nine-month period ended April 30, 2007 totaled $1,642,224 (US$1,480,000) compared to $1,514,158 for the same period in the prior year, representing an increase of 8 percent. There was a change in revenue mix in the period when compared to prior year, due to research tax credit revenue recorded based on management's best estimate and sales revenue decreasing by $60,045.

Net loss for the third quarter of fiscal 2007 was $815,603 (US$735,000) or ($0.04) per share, compared to a net loss of $854,461 or ($0.04) per share for the same period in fiscal 2006. Most notable variances in the quarter just ended versus same quarter prior year, were an increase in revenues, a significant decrease in research and development expense, all offset by the write-off of deferred transaction costs.

Net loss for the nine months ended April 30, 2007 was $1.9 million (US$1.7 million) or ($0.08) per share compared to a net loss of $2.3 million or ($0.10) per share for the same period in fiscal 2006. The decreased net loss in the first nine months of fiscal 2007 is primarily attributable to a significant decrease in research and development expenses, an increase in revenues, a nonrecurring reduction in the Company's provision for tax liabilities, partially offset by an increase in selling, general and administrative expenses and cost of goods sold.

Research and development (R&D) expenses for the three months ended April 30, 2007 were $407,938 (US$367,000) versus $581,479 in the same period a year ago. For the nine months ended April 30, 2007, R&D expenses were $1,174,916 (US$1.06 million) versus $1,678,645 million in the same period a year ago.

The decrease in expenses in both the three and nine-month periods ended April 30, 2007 is entirely 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 April 30, 2007 were $952,111 (US$858,000) versus $745,494 in the same period a year ago. Selling, general and administrative expenses and cost of goods sold for the nine months ended April 30, 2007 were $2,569,270 (US$2.3 million) versus $2,048,418 million in the same period a year ago.

The primary contributor to the increase in expenses in the three and nine-month periods ended April 30, 2007 was the write-off of transaction related deferred costs in connection with the abandoned Garvinci transaction. Also contributing to the increase in expenses in the nine-month period ended April 30, 2007 was due diligence consulting and legal expenses relating to merger and acquisition candidates.

Pursuant to a non-binding letter of intent in connection with the announced but later abandoned Garvinci transaction, the Company disbursed $375,000 for the three months ended April 30, 2007 and a total of $1,000,000 for the nine months ended April 30, 2007 as exclusivity fees during the negotiation period. The fees were paid as a loan bearing interest to be reimbursed to the Company, in the event the transaction did not close. As per the terms of the agreement, Garvinci Inc. will be obligated to reimburse IBEX at the latest on May 7, 2008, the full amount of the loan plus accrued interest.

At April 30, 2007, IBEX cash and cash equivalents totaled $2.2 million (US$2.0 million), and the Company's net working capital was $1.6 million (US$1.4 million). Following the completion of the restructuring at the end of October 2007, IBEX expects to have cash of approximately $1 million and generate a positive cash flow on a quarter to quarter basis.

About IBEX

IBEX currently markets a series of arthritis assays which are widely used in pharmaceutical research. These assays are based on the discovery of a number of specific molecular biomarkers associated with collagen synthesis and degradation.

The Company also markets a series of proprietary enzymes (heparinases and chondroitinases) for research use, as well Heparinase I which is used in many leading hemostasis monitoring devices.


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 April 30, 2007 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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April 30, July 31,
unaudited 2007 2006
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$ $
ASSETS

Current assets
Cash and cash equivalents 2,166,588 816,452
Marketable securities (note 2) - 3,674,489
Accounts receivable 441,540 551,385
Inventories 118,006 181,796
Prepaid expenses 158,081 138,149
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2,884,215 5,362,271
Property and equipment 517,841 635,994
Identifiable intangible assets 3,888,232 4,102,154
Other assets (note 6) 1,000,000 -
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8,290,288 10,100,419
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-------------------------------------------------------------------------

LIABILITIES

Current liabilities
Accounts payable and accrued liabilities 1,098,150 1,042,033
Balance of payments (note 3) 195,450 181,800
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1,293,600 1,223,833
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SHAREHOLDERS' EQUITY

Capital stock 52,496,759 52,496,759
Contributed surplus 319,842 298,802
Deficit (45,819,913) (43,918,975)
-------------------------------------------------------------------------
6,996,688 8,876,586
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8,290,288 10,100,419
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CONSOLIDATED STATEMENTS OF DEFICIT
--------------------------------------------------------------------------
For the nine months ended April 30th (unaudited) 2007 2006
--------------------------------------------------------------------------
$ $
Balance - Beginning of period (43,918,975) (41,038,603)
Net loss for the period (1,930,938) (2,254,376)
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Balance - End of period (45,849,913) (43,292,979)
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CONSOLIDATED STATEMENTS OF LOSS

Three months ended Nine months ended
April 30th April 30th
--------------------------------------------------------------------------
(unaudited) 2007 2006 2007 2006
--------------------------------------------------------------------------
$ $ $ $
Revenue (note 8) 586,768 496,185 1,642,224 1,514,158
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(Expenses) income
Research and
development
expenditures (407,938) (581,479) (1,174,916) (1,678,645)
Selling, general
and administrative
expenses and cost
of goods sold (952,111) (745,494) (2,569,270) (2,048,418)
Amortization of
property and
equipment (33,497) (39,584) (100,409) (101,681)
Amortization of
identifiable
intangible assets (809) (809) (2,427) (2,427)
Other interest and
bank charges (8,435) (11,269) (24,266) (38,426)
Foreign exchange loss (48,872) (12,698) (27,785) (37,832)
Investment income 48,897 40,687 143,725 139,451
Loss on sale of
marketable securities - - - (556)
--------------------------------------------------------------------------
(1,402,765) (1,350,646) (3,755,348) (3,768,534)
--------------------------------------------------------------------------
(815,997) (854,461) (2,113,124) (2,254,376)
Current Income taxes (394) - (212,186) -
--------------------------------------------------------------------------
Net loss (815,603) (854,461) (1,900,938) (2,254,376)
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--------------------------------------------------------------------------

Net loss per share
Basic and diluted $ (0.04) $ (0.04) $ (0.08) $ (0.10)
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CONSOLIDATED CASH FLOW STATEMENTS

Three months ended Nine months ended
April 30th April 30th
---------------------------------------------------------------------------
(unaudited) 2007 2006 2007 2006
---------------------------------------------------------------------------
$ $ $ $

Cash flows provided by
(used in):
Operating activities
Net loss for the period (815,603) (854,461) (1,900,938) (2,254,376)
Items not affecting cash -
Amortization of property
and equipment 42,270 52,425 126,726 136,022
Amortization of
identifiable intangible
assets 71,308 71,308 213,922 213,924
Stock-based compensation
costs 4,520 13,927 21,040 48,390
Accretion of interest on
balance of payments 4,550 8,700 13,650 26,100
Loss on sale of marketable
securities - - - 556
--------------------------------------------------------------------------
(692,955) (708,101) (1,525,600) (1,829,384)
--------------------------------------------------------------------------

Net changes in non-cash
working capital items
Decrease in accounts
receivable 52,917 161,272 109,845 517,294
Decrease (increase) in
inventories 22,595 (37,682) 63,790 (157,930)
Increase in prepaid
expenses (48,174) (24,194) (19,932) (41,952)
Increase in accounts
payable and accrued
liabilities 358,827 201,449 56,117 16,401
--------------------------------------------------------------------------
386,165 300,845 209,820 333,813
--------------------------------------------------------------------------
(306,790) (407,256) (1,315,780) (1,495,571)
--------------------------------------------------------------------------

Investing activities
Additions to marketable
securities (2,001,239) (4,166,756) (5,640,573) (9,450,064)
Proceeds on disposal of
marketable securities 4,290,850 4,873,204 9,315,062 11,467,179
Additions to property and
equipment (550) (74,867) (8,573) (194,523)
Increase in other assets
(note 6) (360,371) - (1,000,000) -
--------------------------------------------------------------------------
1,928,690 631,581 2,665,916 1,822,592
--------------------------------------------------------------------------

Increase in cash and cash
equivalents during the year 1,621,900 224,325 1,350,136 327,021
Cash and cash equivalents -
Beginning of period 544,688 470,896 816,452 368,200
--------------------------------------------------------------------------
Cash and cash equivalents -
End of period 2,166,588 695,221 2,166,588 695,221
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Contact Information

  • IBEX Technologies Inc.
    Paul Baehr
    President & CEO
    514-344-4004
    or
    IBEX Technologies Inc.
    Danny Netto
    Vice-President, Finance
    514-344-4004