Microbix's virology revenue grows 24% in third quarter, company reports fourth consecutive quarterly profit

 Management Provides Detailed Corporate Update

TORONTO, Aug. 14, 2014 /CNW/ - Microbix Biosystems Inc. (TSX: MBX), an innovator of biological products and technologies, today reported financial results for its third quarter and nine months ending June 30, 2014.

Third Quarter Financial Results

For the third quarter, Microbix reported total revenue of $2,039,935, compared to $1,906,652 for the same period in 2013, or an increase of 7%. There was no R&D contract revenue in the third quarter, compared to $256,745 in R&D contract revenue in the same period in 2013. Virology products revenue was $2,039,935 in the third quarter, compared to $1,649,907 for the same period in 2013, or an increase of 24%. The higher virology products revenue was primarily due to continued growth in customer demand including significant new business from an existing customer, as well as a favourable currency impact. R&D contract revenue typically fluctuates with customer priorities.

Total expenses for the third quarter were $856,059 compared to $947,252 for the same quarter in 2013, or a 10% reduction primarily due to various cost saving initiatives implemented in the past year.  Operating income before income taxes for the second quarter was $294,561 compared to an operating loss of $22,687 for the same quarter last year.

Net cash flow decreased in the third quarter by $697,719, compared to a decrease of $71,931 for the same period in 2013.  The decline was primarily due to the investment in property, plant and equipment, primarily to build the LumiSort™ demonstration instrument; as well as intangible assets, in defense of the VIRUSMAX® patents, totaling $1,467,802; partially offset by the conversion of warrants during the quarter of $545,511 and the improvement in operating cash flow of $212,923.

Nine-Month Financial Results

In the first nine months of fiscal 2014, Microbix reported total revenue of $6,040,917, compared to $5,105,693 for the same period in 2013, or an increase of 18%. Virology products revenue was $5,852,548 for nine months compared to $4,301,328 for the same period in 2013, or an increase of 36%.  Strong customer demand and a favourable currency impact are the main drivers of this growth.  R&D contract revenue for nine months was $140,772 compared to $804,365 for the same period in 2013. 

Total expenses were $2,571,054 for nine months compared to $2,835,893 for the same period in 2013.  After adjusting for the one-time gain on the disposal of assets of $145,266 in 2013, normalized total expenses were $2,981,159 for the first nine months of 2013. As a result, total expenses in the first nine months of 2014 decreased 14% compared to the normalized total expenses in 2013; primarily driven by cost saving initiatives implemented in the past year. 

Operating income before income taxes for nine months was $778,587, compared to an operating loss of $403,755 for the same period last year, or an improvement in the bottom line of $1,182,342. Net cash flow increased in the nine months by $191,899 compared to a decrease of $175,667 for the same period in 2013, contributing to an improvement in the Company's ending cash position of $399,186.

Vaughn C. Embro-Pantalony, President and Chief Executive Officer remarked, "I am very pleased with the strong improvement in our bottom line of $1.2 million after nine months. We have generated a profit in five of our last six fiscal quarters, including the last four consecutive quarters. Sustained profitability is very important, as we strive to achieve predictable operating cash flow to support our strategic spending priorities."

Financial Highlights



3 months ended June 30


  9 months ended June 30












2014


2013


2014


2013










Revenue

$

2,039,935


1,906,652


6,040,917


5,105,693










Operating income (loss) before income taxes

$

294,561


(22,687)


778,587


(403,755)










Net income (loss)

$

210,567


(22,687)


520,600


(403,755)










Net income (loss) per share

$

0.003


(0.000)


0.008


(0.006)










Cash Flow

$

(697,719)


(71,931)


191,899


(175,667)

 

Corporate Update

LumiSort™
CEO, Embro-Pantalony explained, "We have just passed the halfway point in the development of our LumiSort™ semen-sexing demonstration instrument. After a recent in-depth review of the project's status with our development partner, Lathrop Engineering, I am pleased to confirm that we are on track to complete the work this fall.  We also continue to pursue patent protection for the many innovations that are being implemented during this phase of development. We look forward to having the opportunity to demonstrate to the industry later this year, the advantages of our LumiSort™ technology including speed, yield, and fertility.

VIRUSMAX®
In July, Microbix filed a new complaint against Novartis, alleging infringement of its VIRUSMAX® patents in Europe. In January, Microbix successfully defended its European patents against a challenge by Novartis at the European Patent Office. Earlier this year, the Company filed a complaint against Novartis in Texas, alleging infringement of its U.S. VIRUSMAX® patents.

Embro-Pantalony stated, "We continue to work closely with our legal counsel in both the U.S. and Europe with respect to these actions.  We are vigorously defending our VIRUSMAX® patent estate following our unequivocal success at the European Patent Office hearing last January."

Kinlytic®
The Company has advanced its discussions with several parties that are interested in exploring potential partnerships to return Kinlytic® to the U.S. market. Embro-Pantalony commented, "I am very encouraged by the strong interest being expressed by these potential investors to return this life saving therapy to the market. I remain optimistic that we will ultimately secure a new partner to commercialize this drug."

Please visit www.sedar.com for recent Microbix Biosystems, Inc. filings and financial information.

About Microbix Biosystems

Microbix Biosystems Inc. 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 LumiSort™ semen sexing technology for the livestock industries, Kinlytic®, a thrombolytic drug with several approved and potential applications including the treatment of life-threatening blood clots, and VIRUSMAX®, a proprietary technology for increasing virus yields in the manufacture of influenza vaccine. Established in 1988, Microbix is a publicly traded company, listed on the Toronto Stock Exchange, and headquartered in Mississauga, Ontario.

Disclaimer

This press release contains forward-looking statements which are subject to risks and uncertainties that could cause actual results to differ materially from those set forth in the forward-looking statements including the risks associated with development projects, operations in foreign jurisdictions, risks associated with engineering and construction generally, risks associated with production including control over costs, quality, quantity and timeliness of delivery of products, foreign currency and exchange rate risk, and risks of raising capital on acceptable terms or at all.  These forward-looking statements represent the Company's judgment as of the date of this press release. The Company disclaims any intent or obligation to update these forward-looking statements.

SOURCE Microbix Biosystems Inc.

For further information: Visit www.microbix.com or contact: Vaughn C. Embro-Pantalony, CEO, (905) 361-8910 x 350; or Charles Wallace, CFO, (905) 361-8910 x 255.