TORONTO, ONTARIO--(Marketwired - Dec. 23, 2016) - Microbix Biosystems Inc. (TSX:MBX) ("Microbix" or the "Company"), an innovator of biological products and technologies, today reported financial results for the three months and year ended September 30, 2016, and provided an update on its operations.
Financial Highlights - Fiscal 2016 vs. Fiscal 2015
- Virology revenue increased by 13%
- Total operating expenses declined by 12%
- Net Income increased by 22%
- Cash generated from operations increased by 53%
Full Year Financial Results
Microbix reported total revenue of $9,517,137 in fiscal 2016 ("F2016"), an increase of 7% from $8,873,912 in fiscal 2015 ("F2015"). This was the fifth consecutive fiscal year that the Company achieved record total revenue. Virology products revenue was $9,236,152 in F2016 compared to $8,191,720 in F2015, or an increase of 13%. There was no licensing revenue in F2016 compared to $413,895 in the prior-year period, as F2015 included a one-time recognition of non-refundable deferred revenue received from a prospective distributor of the Company's LumiSort™ technology. Royalty revenue in F2016 was $280,985 compared to $268,297 in F2015, due to increased royalties from the Company's rabies virus technology. Total expenses decreased by 12% to $4,831,637 in F2016 compared to $5,490,589 in F2015, driven primarily by lower legal costs.
Net Income grew 22% to $748,407 in F2016 from $613,984 in F2015. Net cash flow was negative $98,765 in F2016, compared to negative $443,176 in F2015. Cash generated from operations in F2016 was $913,308 compared to $595,402 in F2015. Cash used in investing activities was $1,641,126 in F2016 compared to $4,842,022 in the prior-year period, primarily due to completion of the LumiSort™ prototype in F2015. Cash generated from financing activities in F2016 was $629,053 compared to $3,803,444 in the prior-year period, primarily due to higher loan proceeds of $840,000 and proceeds from exercised warrants of $1,738,434 in F2015.
Vaughn Embro-Pantalony, Microbix' President and Chief Executive Officer, remarked, "Despite a weak first quarter, we were able to deliver very strong full-year financial results, characterized by the highest-ever total revenue, operating cash flow and net income."
Fourth Quarter Financial Results
Driven by 64% year-over-year growth, total revenue in the fourth quarter of F2016 was $3,470,580, compared to $2,114,160 in the same period of F2015, which represents the highest quarterly revenue ever achieved by the Company, surpassing the previous record set in the second quarter of F2016. Virology sales increased 110% to $3,349,785 from $1,612,615 in Q4, F2015, driven by expanded antigen sales in Europe and East Asia. Licensing revenue was zero in Q4, F2016 compared to $413,895 in the fourth quarter of F2015, due to the previously noted one-time recognition of deferred revenue from a prospective distributor of the Company's LumiSort™ technology in Q4, F2015.
Net income in the fourth quarter of F2016 was $862,930, an increase of 114% from $403,116 in Q4, F2015. Cash generated by operations was $367,235 compared to $84,394 in the fourth quarter last year. Cash used in investing activities was $267,276 compared to $499,512 in Q4, F2015. Cash used in financing activities was $99,633. In summary, net cash flow in the fourth quarter of F2016 was $325 positive compared to $125,865 positive in Q4, F2015.
"Our sales performance in the fourth quarter was slightly better than the preliminary results announced in October," said Mr. Embro-Pantalony. "Now, moving forward into fiscal 2017, we anticipate continued solid revenue growth based on current order projections by our customers."
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Microbix confirmed that its new bioreactor manufacturing process has been commissioned and is producing commercial product. The Company continues to work with its customers to confirm the product meets required validation specifications. Once that work is complete, Microbix will be in a position to begin shipping commercial quantities and, thereby, realize the expected significant improvements in cost efficiency and production capacity.
The Company is also continuing the development of its new molecular controls product line, including the upgrading of manufacturing quality systems, to the new standard required for certification. Microbix expects to launch this new product offering later in 2017.
As previously reported in October, Zeptometrix Corporation filed a statement of claim against Microbix in Canadian Federal Court alleging infringement of its Canadian patent.
Mr. Embro-Pantalony commented, "While this legal action is at an early stage, we are very confident our products and processes do not infringe our competitor's Canadian patent and we are vigorously defending our competitive position against these allegations."
Advanced partnering discussions continued during the fourth quarter of F2016 with several parties interested in returning Kinlytic® to the market. These discussions have reached the stage where management is now preparing to meet with the U.S. Food and Drug Administration in early 2017, with the goal of establishing a more specific clinical and regulatory pathway for the reintroduction of the drug to the U.S. market.
Mr. Embro-Pantalony commented, "We have received conditional expressions of interest from several parties willing to contribute funds to return this life saving therapeutic to market. I am optimistic we will close a partnership in 2017 to re-launch Kinlytic® in the U.S., and possibly additional markets."
Partnering discussions continued during the fourth quarter with animal genetics companies interested in funding the development investment needed to successfully commercialize the LumiSort™ technology.
Mr. Embro-Pantalony said, "We are talking to several companies about partnering the LumiSort™ technology. Ongoing patent litigation in the U.S. has created some uncertainty, which has extended the negotiations. However, the fundamentals of LumiSort™ remain unchanged. This groundbreaking technology can ultimately provide the livestock industry with superior yields and throughput of sexed semen. And, in so doing, we believe it can unlock significant value for the industry. We will continue to provide updates as developments materialize."
Earlier this month, the Company announced it had arranged a new credit facility with The Toronto Dominion Bank and Export Development Canada to facilitate its growth strategy.
Mr. Embro-Pantalony explained, "This new credit facility is a cost-effective source of capital that provides the necessary liquidity to support our growth objectives, without diluting shareholders. We appreciate the vote of confidence in our strategy being demonstrated by the TD Bank and EDC."
Microbix specializes in the research and development of biological solutions, including products for human health applications, namely in the vaccine, therapeutic and diagnostic markets, as well as animal reproductive markets worldwide. The Company manufactures and distributes a wide range of infectious disease antigens to a worldwide customer base. The Company's pipeline of innovative technologies and products includes Kinlytic, a thrombolytic drug with several approved and potential applications including the treatment of life-threatening blood clots and LumiSort semen sexing technology for the livestock industries. Established in 1988, Microbix is a publicly traded company, listed on the Toronto Stock Exchange, and headquartered in Mississauga, Ontario.
This news release includes "forward-looking information", as such term is defined in applicable securities laws. Forward-looking information includes, without limitation, the risks associated with its revenue business, development projects, operations in foreign jurisdictions, engineering and construction generally, production (including control over costs, quality, quantity and timeliness of delivery of products), foreign currency and exchange rates, maintaining adequate working capital and raising further capital on acceptable terms or at all, and other similar statements concerning anticipated future events, conditions or results that are not historical facts. These statements reflect management's current estimates, beliefs, intentions and expectations; they are not guarantees of future performance. The Company cautions that all forward-looking information is inherently uncertain and that actual performance may be affected by a number of material factors, many of which are beyond the Company's control. Accordingly, actual future events, conditions and results may differ materially from the estimates, beliefs, intentions and expectations expressed or implied in the forward-looking information. All statements are made as of the date of this news release and represent the Company's judgement as of the date of this new release, and the Company is under no obligation to update or alter any forward-looking information.
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