IBEX TECHNOLOGIES INC.
TSX VENTURE : IBT

IBEX TECHNOLOGIES INC.

March 23, 2011 08:00 ET

IBEX Reports Second Quarter Fiscal 2011 Results

MONTREAL, QUEBEC--(Marketwire - March 23, 2011) - IBEX Technologies Inc. (TSX VENTURE:IBT), today reported its financial results for the six months ended January 31, 2011.

"As previously forecast, the second quarter did not produce a profit for IBEX, primarily due to an anticipated reduction in orders from several major customers", said Paul Baehr, President and CEO. "However, we do see signs of a strengthening in demand, as customer orders for the third and fourth quarter have picked up. We are also pleased to note the successful completion of our enzyme-lyophilization production project which will increase our capacity by over 100% and the completion of recruitment in our arthritis assay R&D expansion project".

FINANCIAL RESULTS FOR THE YEAR TO DATE

Sales for the six months ended January 31, 2011 were $888,625 compared to $1,517,693 for the same period in the prior year, representing a decrease of 41%. The net decrease in sales can be traced to softness in both the enzyme and arthritis-assay product lines, as well as the negative effect of a weak US dollar (approximately $83,000).

Research and development expenses for the six months ended January 31, 2011 totaled $140,758, as the Company re-started its efforts to improve the precision of its arthritis assays, and prepare for introduction of new assays. The Company did not incur any research and development expenditures in the same period ended January 31, 2010.

Net loss for the six months ended January 31, 2011 was $331,218, compared to net earnings of $496,870, for the same period in previous fiscal year.

Excluding R&D and Financial Expenses (i.e. foreign exchange, interest revenues and bank charges), Operating Costs for the six months ended January 31, 2011 decreased to $1,051,937 from $1,103,282, principally due to reduced compensation costs.

Cash, cash equivalents, and marketable securities decreased 34% over the six months ended January 31, 2011 to $2,231,387 from $3,033,556 on July 31, 2010. Working capital decreased to $2,598,829 as at January 31, 2011 from $3,278,875 as at July 31, 2010. The reduction in cash and in working capital is attributable to both the reduced sales, and to the now- completed investment in new production capacity for the Company's enzyme diagnostics.

FINANCIAL RESULTS FOR THE SECOND QUARTER OF FISCAL 2011

Sales for the quarter ended January 31, 2011 totaled $375,650, a decrease of 57% as compared to $871,037 in the same period of the prior year. The decline in sales is mainly attributable to the items mentioned above.

Excluding financial (i.e. foreign exchange etc.) and R&D expenses, Operating Expenses for the second quarter ended January 31, 2011 decreased by $120,987 to $454,401 due to reduced compensation costs.

The Company incurred a Net Loss of $153,280 compared to Net Earnings of $424,993 for the same period year ago. The decrease in Net Earnings, as mentioned above, is principally due to lower sales, an increase in R&D expenses, compounded by the weakening of the US dollar vs. the Canadian dollar (IBEX sells its goods in US dollars).

Cash, cash equivalents, and marketable securities decreased 22% during the quarter to $2,231,287 from $2,853,555. The Company's working capital was $2,598,829 as at the end of the second quarter ended January 31, 2011 down from $3,007,680 as at the end of the prior quarter ending October 31, 2010. As mentioned above, the principal reason for the decrease traces to the net loss in the second quarter, plus the costs associated with the now completed expansion in enzyme related production capacity.

Financial Summary for the six months ending

  January 31, 2011   January 31, 2010
 
Revenues $888,625   $1,517,693
(Loss) Earning Before Interests, Tax, Depreciation & Amortization ($268,816 ) $560,481
Depreciation & Amortization $67,659   $67,743
Net (Loss) Earnings ($331,218 ) $496,870
(Loss) Profit per Share ($0.01 ) $0.02
Cash, Cash Equivalents & Marketable Securities $2,231,287   $2,904,889
Working Capital $2,598,828   $3,433,285
Outstanding shares at report date (Common Shares) 24,703,244   24,703,244

LOOKING FORWARD

Fiscal 2011 looks to be a difficult year for IBEX due to softness in the US business environment. Additionally, the Canadian dollar is forecast to remain strong against the US dollar, which does not work in our favour. We therefore do not expect to have positive net earnings in Fiscal 2011, but expect to return to profitability in Fiscal 2012, as business conditions in the US improve.

Despite a difficult outlook for Fiscal 2011 we will have made two important investments in our future. IBEX has recently completed a project to add additional enzyme-related manufacturing capacity, and has also re-established a small R&D group with the object of improving our existing arthritis immuno assays, and adding to this product line. We expect to introduce new kits in calendar 2011, with financial benefits accruing in Fiscal 2012.

ABOUT IBEX

The Company manufactures and markets a series of proprietary enzymes (heparinases and chondroitinases). These enzymes are used in pharmaceutical research, quality assurance, and in the case of Heparinase I, in diagnostic devices which measure hemostasis in patients.

IBEX also manufactures and markets a series of arthritis assays which are widely used in pharmaceutical research. These assays enable the measurement of both the synthesis and degradation of cartilage components, and are powerful tools in the study of osteo- and rheumatoid arthritis.

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.

CONSOLIDATED BALANCE SHEETS        
  January 31,   July 31,  
UNAUDITED 2011   2010  
  $   $  
ASSETS        
   
Current assets        
Cash and cash equivalents 1,531,287   2,333,556  
Marketable securities 300,000   300,000  
Accounts receivable 309,140   422,761  
Inventories 289,988   226,364  
Prepaid expenses 29,965   68,236  
Sub-total current assets 2,460,380   3,350,917  
   
Long term deposit 8,650   8,650  
   
Marketable securities 400,000   400,000  
   
Property and equipment 1,150,206   760,384  
Total assets 4,019,236   4,519,951  
   
LIABILITIES        
   
Current liabilities        
Accounts payable and accrued liabilities 261,552   472,042  
Total liabilities 261,552   472,042  
   
SHAREHOLDERS' EQUITY        
   
Capital stock 52,660,078   52,660,078  
Contributed surplus 563,753   522,760  
Deficit (49,466,147 ) (49,134,929 )
Total shareholders' equity 3,757,684   4,047,909  
Total liabilities and shareholders' equity 4,019,236   4,519,951  
   
   
CONSOLIDATED STATEMENTS OF DEFICIT January 31,   January 31,  
  2011   2010  
  $   $  
   
Balance - Beginning of period (49,134,929 ) (49,641,291 )
   
Net (loss) earnings for the period (331,218 ) 496,870  
Balance - End of period (49,466,147 ) (49,144,421 )
                       
                       
                       
CONSOLIDATED STATEMENTS OF EARNING AND COMPREHENSIVE INCOME            
   
UNAUDITED                      
    Three months ended   Six months ended  
    January 31st   January 31st  
   
    2011     2010   2011     2010  
    $     $   $     $  
   
Revenue   375,650     871,037   888,625     1,517,693  
   
Operating expenses                      
  Research and Development expenses   (83,984 )   -   (140,758 )   -  
  Selling, general and administrative expenses and cost of goods sold   (422,066 )   (540,414 ) (984,278 )   (1,035,539 )
  Amortization of property and equipment   (32,335 )   (34,974 ) (67,659 )   (67,741 )
  Other interest and bank charges   (2,182 )   (3,166 ) (4,961 )   (6,635 )
  Foreign exchange gain (loss)   8,242     129,673   (27,444 )   84,960  
  Investment income   3,345     2,837   5,257     4,132  
Total operating expenses   (528,980 )   (446,044 ) (1,219,843 )   (1,020,823 )
   
Net (loss) earnings and other comprehensive income   (153,330 )   424,993   (331,218 )   496,870  
   
   
Net (loss) earnings and other comprehensive income per share                      
  Basic and diluted $ (0.01 ) $ 0.02   ($0.01 ) $ 0.02  
   
   
See accompanying notes                 
         
         
         
CONSOLIDATED CASH FLOW STATEMENTS     
  Three months ended   Six months ended  
  January 31st   January 31st  
UNAUDITED 2011   2010   2011   2010  
   
  $   $   $   $  
   
Cash flows provided by (used in):                
Operating activities                
Net (loss) profit for the period (153,330 ) 424,993   (331,218 ) 496,870  
Items not affecting cash -                
  Amortization of property and equipment 32,285   34,974   67,659   67,741  
  Stock-based compensation costs 14,287   60,780   40,993   60,780  
   
Cash flow relating to operating activities (106,758 ) 520,747   (222,566 ) 625,391  
   
Net changes in non-cash working capital items -                
  Decrease (increase) in accounts receivable 55,837   170,123   113,622   480,511  
  Increase in inventories (77,993 ) (67,136 ) (63,624 ) (42,451 )
  Decrease (increase) in prepaid expenses 9,952   33,450   38,272   53,356  
  (Decrease) increase in accounts payable and accrued liabilities (201,213 ) (395,446 ) (210,493 ) (390,360 )
Net changes in non-cash working capital balances relating to operations (213,417 ) (259,009 ) (122,223 ) 101,056  
Cash flow relating to operating activities (320,175 ) 261,738   (344,789 ) 726,447  
   
Investing activities                
Additions to property and equipment (302,093 ) (18,415 ) (457,480 ) (81,902 )
   
Cash flow relating to financing activities (302,093 ) (18,415 ) (457,480 ) (81,902 )
   
(Decrease) Increase in cash and cash equivalents during the quater (622,268 ) 243,323   (802,269 ) 644,545  
Cash and cash equivalents - Beginning of period 2,153,555   2,661,567   2,333,556   2,260,345  
Cash and cash equivalents - End of period 1,531,287   2,904,890   1,531,287   2,904,890  

The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release.

Contact Information

  • IBEX Technologies Inc.
    Paul Baehr
    President & CEO
    514-344-4004 x 143
    www.ibex.ca