IBEX Technologies Inc.
TSX VENTURE : IBT

IBEX Technologies Inc.

June 28, 2011 08:00 ET

IBEX Reports Third Quarter Fiscal 2011 Results

MONTREAL, QUEBEC--(Marketwire - June 28, 2011) - IBEX Technologies Inc. (TSX VENTURE:IBT) today reported its financial results for the nine months ended April 30, 2011.

FINANCIAL RESULTS FOR THE THIRD QUARTER OF FISCAL 2011

Sales for the quarter ended April 30, 2011 totaled $597,074, an increase of 27% as compared to $469,502 in the same period of the prior year. The increase in sales can be attributed to a return to a normal ordering pattern by one of our major customers.

"We are pleased to see a return to more normal selling patterns, however the strong Canadian dollar continues to have a negative impact on our business profitability when compared to year-ago", said Paul Baehr, IBEX President and CEO.

Excluding financial and R&D expenses, operating expenses for the third quarter ended April 30, 2011 decreased 22% from $659,431 to $451,558. A significant portion of this reduction was due to an inventory related accounting gain which will be reversed in the next quarter.

The Company recorded net earnings of $131,577 compared to net earnings of $137,927 for the same period year ago. This decrease in net earnings is principally due to several factors such as:

  • lower currency gains related to forward contracts

  • increase in R&D expenses

  • increase in amortization expenses related to investments in new equipment

Due primarily to investment in inventory and capital assets, cash, cash equivalents, and marketable securities decreased 11% during the quarter ended April 30, 2011 to $1,986,434 from $2,231,287 as of January 31, 2011. The Company's working capital was $2,750,754 as at the end of the third quarter ended April 30, 2011 up from $2,598,828 as at the end of the prior quarter ending January 31, 2011. This increase in working capital traces to an increase in current assets such as inventory and accounts receivable.

FINANCIAL RESULTS FOR THE YEAR TO DATE

Reported sales for the nine months ended April 30, 2011 totaled $1,485,699, a decrease of 25% as compared to $1,987,196 for the same period in the prior year. This decrease in sales is principally due to a reduction in orders in both the enzymes and arthritis product lines. The reduction in the enzymes line was due to a temporary adjustment of inventories by our key customers, whose ordering pattern has now returned to normal. The reduction in arthritis assays stemmed from a decrease in the number of arthritis trials conducted by our key customers.

Research and development expenses for the nine months ended April 30, 2011 totaled $225,021 compared to $7,980 in the nine months ending April 31, 2010. In the third quarter of fiscal 2010, the Company hired new scientific specialists to work on its arthritis assays product line and should introduce new assays with financial benefits in Fiscal 2012.

Net loss for the nine months ended April 30, 2011 was $199,641, compared to net earnings of $634,797, for the same period in previous fiscal year. This net loss is mainly due to lower currency gains made on hedging against the US dollar, lower sales, and to the increase in R&D expenses.

Excluding R&D and financial expenses, operating costs for the nine months ended April 30, 2011 decreased to $1,503,945 from $1,762,712, principally due to a higher inventory allocation (the transfer of expenses to the balance sheet as a result of producing in current quarters for sale in future quarters), as well as reduced compensation costs.

Owing primarily to increased investment in inventory and capital assets, cash, cash equivalents, and marketable securities decreased 34% over the nine months ended April 30, 2011 to $1,986,434 from $3,033,556 on July 31, 2010. Working capital decreased to $2,750,754 on April 30, 2011 from $3,278,875 as at July 31, 2010.

Financial Summary for the nine months ending
April 30, 2011April 30, 2010
Revenues$1,485,699$1,987,196
(Loss) Earnings Before Interests, Tax, Depreciation & Amortization($99,730)$717,180
Depreciation & Amortization$117,655$93,676
Net (Loss) Earnings($199,641)$634,797
(Loss) Profit per Share($0.01)$0.03
Cash, Cash Equivalents & Marketable Securities$1,986,434$2,973,894
Working Capital$2,750,754$3,482,086
Outstanding shares at report date (Common Shares)24,703,24424,703,244

LOOKING FORWARD

Fiscal 2011 looks to be a difficult year for IBEX due to softness in the US business environment and the strong Canadian dollar.

Despite a difficult outlook for Fiscal 2011, we 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 adding to our line of arthritis immunoassays and also improving our existing assays. We expect to introduce new assays in calendar 2011, with financial benefits accruing in the second half of 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
April 30,July 31,
UNAUDITED20112010
$$
ASSETS
Current assets
Cash and cash equivalents1,286,4342,333,556
Marketable securities-300,000
Accounts receivable410,154422,761
Inventories452,229226,364
Prepaid expenses101,73068,236
Sub-total current assets2,250,5473,350,917
Long term deposit10,5008,650
Marketable securities700,000400,000
Property and equipment1,128,007760,384
Total assets4,089,0544,519,951
LIABILITIES
Current liabilities
Accounts payable and accrued liabilities199,793472,042
Total liabilities199,793472,042
SHAREHOLDERS' EQUITY
Capital stock52,660,07852,660,078
Contributed surplus563,753522,760
Deficit(49,334,570)(49,134,929)
Total shareholders' equity3,889,2614,047,909
Total liabilities and shareholders' equity4,089,0544,519,951
CONSOLIDATED STATEMENTS OF DEFICITApril 30,April 30,
20112010
$$
Balance - Beginning of period(49,134,929)(49,641,291)
Net (loss) earnings for the period(199,641)634,797
Balance - End of period(49,334,570)(49,006,494)
CONSOLIDATED STATEMENTS OF EARNING AND COMPREHENSIVE INCOME
UNAUDITED
Three months endedNine months ended
April 30April 30
2011201020112010
$$$$
Revenue597,074469,5021,485,6991,987,196
Operating expenses
Research and Development expenses(84,263)(7,980)(225,021)(7,980)
Selling, general and administrative expenses
and cost of goods sold(401,562)(633,496)(1,385,840)(1,669,035)
Amortization of property and equipment(49,996)(25,935)(117,655)(93,676)
Other interest and bank charges(2,370)(3,161)(7,331)(9,796)
Foreign exchange gain60,207353,02932,763437,989
Writteoff of property and equipment-(21,194)-(21,194)
Investment income12,4877,16217,74411,293
Total operating expenses(465,497)(331,575)(1,685,340)(1,352,399)
Net earnings (loss) and other comprehensive income131,577137,927(199,641)634,797
Net earnings (loss) and other comprehensive income per share
Basic and diluted$ 0.01$ 0.01($0.01)$ 0.03
See accompanying notes
CONSOLIDATED CASH FLOW STATEMENTSThree months endedNine months ended
April 30April 30
UNAUDITED2011201020112010
$$$$
Cash flows provided by (used in):
Operating activities
Net earnings (loss) for the period131,577137,927(199,641)634,797
Items not affecting cash -
Amortization of property and equipment49,99625,935117,65593,676
Stock-based compensation costs-9,37540,99370,155
Gain on disposal of property and equipment--
Cash flow relating to operating activities181,573173,237(40,993)798,628
Net changes in non-cash working capital items -
(Increase) decrease in accounts receivable(101,014)(37,327)12,607443,184
(Increase) decrease in inventories(162,241)37,046(225,865)(5,405)
(Increase) in prepaid expenses(73,615)(92,826)(35,344)(39,470)
(Decrease) increase in accounts payable and accrued liabilities(61,757)104,662(272,249)(285,700)
Net changes in non-cash working capital balances relating to operations(398,627)11,555(520,851)112,609
Cash flow relating to operating activities(217,054)184,792(561,844)911,237
Investing activities
Additions to property and equipment(27,799)(115,788)(485,280)(197,688)
--
Cash flow relating to financing activities(27,799)(115,788)(485,280)(197,688)
(Decrease) Increase in cash and cash equivalents during the quater(244,853)69,004(1,047,124)713,549
Cash and cash equivalents - Beginning of period2,231,2872,904,8903,033,5582,260,345
Cash and cash equivalents - End of period1,986,4342,973,8941,986,4342,973,894

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

Contact Information

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