Epicore BioNetworks Inc. Continues Strong Fiscal Year 2011 for the period ended 31 March 2011

CALGARY, May 30, 2011 /CNW/ - Epicore set another quarterly sales record in Q3 building on quality products, an effective marketing program and continued strong demand for shrimp. Sales at $1.4 million significantly beat (by 29%) a record quarter three set last year.  For the year to date (YTD) sales were $3.4 million or 23% ahead of prior year. While shrimp prices remain high, producers continue to rely on Epicore products to deliver higher productivity from hatcheries and farms.  The Epicore sales team and our distributors continued to add new customers and to pursue new applications for Epicore products.  Epicore continued a major initiative to improve its science resources, which should position the Company for significant future growth and increase the reliability of its manufacturing operations.  Some highlights versus prior fiscal year were:

  • Increased quarterly sales to $1.4 million (a 29% increase) and to $3.4 million YTD (a 23% increase).
  • Increased quarterly gross profit to $0.9 million (a 28% increase).
  • Quarterly operating expenses increased 25% to $0.6 million.
  • Increased EBITDA 32% to $0.2 million.
  • Generated another quarter of positive net income ($0.2 million) despite a 461% increase in income tax expense.
  • Achieved approximately same basic and diluted earnings per share as prior year quarter three.
  • Increased shareholders' equity to $4.0 million (a 46% increase compared to prior year).
  • Higher cash balance of $1.3 million compared to $1.0 million in prior year quarter three (a 25% increase).

Quarterly and YTD gross profit increased with higher sales volume.  Gross margin was nearly flat on the quarter but decreased YTD from 62.6% to 60.9% due to the sales mix and inflation in raw material costs.  Operational expenses increased by 25% due to inflationary increases and non-recurring costs due to site subdivision and IFRS implementation. In fiscal 2010 Epicore recognized $0.89 million of net operating loss as a future income tax asset.  Because the NOL was no longer available to offset income before tax, quarter three fiscal 2011 results include an income tax expense of $0.1 million, versus a prior year tax expense of $0.02 million.  Because of the tax effect, net income for the quarter and YTD were slightly lower in fiscal 2011 (by 8% and 15%, respectively).  EBITDA, a more meaningful financial measure than net income, was significantly higher for the quarter and YTD (by 32% and 44%, respectively).  The following table summarizes some key financial results:

  For the Quarter Ending March 31  
    (US$)       2011    2010
    Sales                1,419,000   1,103,000
    Gross Profit         855,000   667,000
    Operating Expenses                 577,000   460,000
    Income Before Tax             270,000   198,000
    Income Tax Expense              105,000   19,000
    Net Income                              165,000   179,000
    EBITDA         288,000   217,000

Cash at the end of March was $1.3 million, an increase of 25% over prior year quarter three.  With these funds, expected sales revenue growth and continued relatively low operating costs, management expects there will be sufficient cash to meet the fiscal year's financial requirements, to fund expansion of aquaculture and environmental remediation marketing efforts and to pursue new strategies for enhancing shareholder value.  In support of its growth strategy, the Company anticipates additional expenditure during fiscal 2011 in property, plant and equipment, through the addition of capital equipment and enhancements to its production facility in New Jersey, and in product development through its ongoing R&D programs.  This is expected to be financed by a combination of the Company's cash reserves, continued positive earnings and third-party financing.

Epicore BioNetworks Inc. is a leading producer of environmental biotechnology and animal nutrition products.  It manufactures in the USA and markets worldwide to a variety of industries to reduce environmental pollution and increase operational productivity.

The financial statements of the company have been prepared in accordance with Canadian GAAP.  Epicore BioNetworks Inc. is a public corporation with a registered office in Calgary, Alberta, Canada and with shares listed on the TSX Venture Exchange (symbol EBN).  [Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.]

            This press release contains forward-looking statements that involve significant risks and uncertainties.  The actual results, performance or achievements of the company might differ materially from the results, performance or achievements of the company expressed or implied by such forward-looking statements.  Such forward-looking statements include, without limitation, those regarding the future growth of the Company, expected improvements in the quality and reliability of manufacturing operations, acceleration of the Company's penetration into new business areas, the development plans of the company, the expected timing and results of such development and the expectation by management that there will be sufficient cash to meet the fiscal year's financial requirements.  We can provide no assurance that such development will proceed as currently anticipated, that the expected timing or results of such development will be realized or that the company will be able to generate sufficient cash to meet its obligations.  We are subject to various risks, including the uncertainties of product development, markets for our products and regulatory review, our need for additional capital to fund our operations, our reliance on collaborative partners, our history of losses, and other risks inherent in the biotechnology industry.

SOURCE Epicore BioNetworks Inc.

For further information:

Mr. William P. Long (Chief Executive Officer) USA. Tel: 609-267-9118, Email: Investors@EpicoreBioNetworks.com


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