Microbix Biosystems Inc. (
TSX: MBX, OTCQX: MBXBF,
Microbix®), a life sciences innovator, manufacturer, and
exporter, reports results for its second quarter and first half of
fiscal 2023 ended March 31, 2023 (“
Q2” and
“
H1”), a period in which a loss was incurred in
the first quarter and profitability restored in Q2. Microbix
remains well-capitalized and is targeting to continue increasing
sales of its testing-related medical devices and ingredients,
thereby growing sales, margins, and earnings.
Management Discussion
Q2 sales of $4.2 million reflected a recovery in
sales of test ingredients, flattish sales of test-controls
(“QAPs”) and none of sample collection media
(“DxTM™”). The resulting gross margin dollars and
control of expenditures enabled a small profit for Q2. For the
balance of fiscal 2023, Microbix expects increased sales of both
Antigens and QAPs to enable it to generate positive net earnings
for the full-year – for a third consecutive year of profitability
while further growth-oriented initiatives continue to be
executed.
For the three months ending March 31,
2023 (“Q2”)
Q2 revenue was $4,218,323, a decrease from Q2
2022 revenues of $4,880,564. Included were antigen revenues of
$3,004,730 (2022 - $1,607,970). QAPs revenues were $1,101,684 (2022
- $1,318,382). In turn, revenue from DxTM was zero in Q2 (2022 -
$1,860,704), and royalties were $111,910 (2022 - $93,508). The Q2
2022 sales mix and total was most greatly influenced by the
recovery of antigen sales and a lack of Ontario-driven deliveries
of DxTM.
Q2 gross margin was 60%, down slightly from 64%
in Q2 2022 due to a greater proportion of lower margin antigen
test-ingredient sales, which tend to have lower margins than
fully-regulated and branded medical devices such as QAPs and DxTM.
In addition, we continue to see double digit increases in our
supply chain costs, which can only be passed-through to
end-customers over time.
Q2 Operating expenses increased by 5% relative
to 2022, principally due to investment in IT infrastructure to
support growth objectives – namely start-up costs relating to our
“ERP” and “eQMS” implementations. Finance expenses were lower due
to repayment of debentures and long-term debt during 2022 and
short-term investment of cash balances. Overall, Q2 sales led to an
operating profit and net income of $31,616 versus a Q2 2022
operating income and net income of $733,489. Cash used in operating
activities was $1,055,856, compared to cash provided by operating
activities of $893,232 in Q2 2022, with the majority of the change
coming from deployment of cash into working capital accounts during
the quarter.
Six Months Ending March 31, 2023
(“H1”)
H1 revenue was $6,720,395, a 31% decrease from
H1 2021 revenues of $9,736,164. Included were antigen revenues of
$4,008,537 (2022 - $3,374,386), up 19% from last year. QAPs
revenues of $2,435,186 were flat year-over-year (2022 - $2,467,533)
due largely to delays in test finalization and launch timelines of
customers intending to incorporate Microbix’s QAPs in their kits of
test consumables. In turn, revenue from DxTM was zero (2022 -
$3,677,949), and royalties were $276,672 (2022 - $216,296). As a
whole, the lower H1 sales result was most driven by the lack of
deliveries of DxTM for the Province of Ontario.
H1 gross margin was 55%, down from 65% in H1
2022, due to the lack of VTM sales and the effects of a greater
proportion of antigen sales that have lower margins. In addition,
we continue to see double digit materials price increases across
our supply chain.
Operating expenses in H1 increased by 5%
relative to H1 2022, due to increased investment in IT
infrastructure that was partly offset by lower finance expenses due
to repayment of debentures and long-term debt during fiscal 2022
and short-term investment of cash balances. Overall,
weaker H1 sales led to an operating loss and net loss of $1,267,647
versus a H1 2022 operating income and net income of $1,614,267.
Cash used in operating activities was $1,769,723, compared to cash
provided by operating activities of $609,218 in H1 2022, with much
of the change coming from changes in working capital balances
during the period.
At the end of H1, Microbix’s current ratio
(current assets divided by current liabilities) was 6.29 and its
debt to equity ratio (total debt over shareholders’ equity) was
0.42.
FINANCIAL HIGHLIGHTS |
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Three months ended |
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Six months ended |
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For the three months and six months ended |
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March 31, 2023 |
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March 31, 2022 |
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March 31, 2023 |
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March 31, 2022 |
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Total Revenue |
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$ |
4,218,323 |
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$ |
4,880,564 |
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$ |
6,720,395 |
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$ |
9,736,164 |
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Gross Margin |
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2,527,280 |
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3,116,299 |
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3,713,255 |
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6,338,157 |
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SG&A Expenses |
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1,878,420 |
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1,676,788 |
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3,841,622 |
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3,312,657 |
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R&D Expense |
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525,925 |
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502,897 |
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950,883 |
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967,358 |
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Financial Expenses |
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91,319 |
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203,125 |
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188,397 |
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443,875 |
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Operating
Income (Loss) for the period |
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31,616 |
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733,489 |
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(1,267,647 |
) |
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1,614,267 |
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Net Income
(Loss) and Comprehensive Income (Loss) for the period |
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31,616 |
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733,489 |
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(1,267,647 |
) |
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1,614,267 |
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Cash
Provided (Used) by Operating Activities |
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(1,055,856 |
) |
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893,232 |
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(1,769,723 |
) |
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609,218 |
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As at |
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March 31, 2023 |
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September 30, 2022 |
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Cash |
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11,721,605 |
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13,488,075 |
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Accounts receivable |
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3,127,754 |
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3,057,797 |
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Total current assets |
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22,309,322 |
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22,408,372 |
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Total assets |
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33,194,482 |
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33,145,196 |
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Total current liabilities |
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3,549,060 |
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2,650,521 |
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Total liabilities |
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9,829,235 |
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8,206,541 |
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Total shareholders' equity |
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23,365,247 |
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24,938,655 |
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Current ratio |
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6.29 |
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8.45 |
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Debt to equity ratio |
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0.42 |
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0.33 |
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Corporate Outlook
Microbix will continue working to drive sales
growth across its three revenue-generating business lines, and on
improving percentage gross margins and driving bottom-line results.
Management currently expects Microbix to generate meaningful net
earnings across full-year fiscal 2023. Additionally, work continues
upon securing a partnership to advance its Kinlytic® urokinase
project.
Adelaide Capital will host a live webinar with
management on Tuesday, May 16 at 11am ET. Please register here:
https://us02web.zoom.us/webinar/register/WN_VCJbOVd8RAufxG0tdhqGIw.
It will also be live-streamed to YouTube at:
https://www.youtube.com/channel/UC7Jpt_DWjF1qSCzfKlpLMWw.
A replay of the webinar will also be made available
on Adelaide Capital’s YouTube channel.
About Microbix
BiosystemsMicrobix creates proprietary biological products
for human health, with over 100 skilled employees and annualized
sales targeting C$ 2.0 million per month. It makes a wide range of
critical ingredients and devices for the global diagnostics
industry, notably antigens for immunoassays and its laboratory
quality assessment products (QAPs™) that support clinical lab
proficiency testing, enable assay development and validation, or
help ensure the quality of clinical diagnostic workflows. Its
antigens drive the antibody tests of over 100 diagnostics makers,
while QAPs are sold to clinical laboratory accreditation
organizations, diagnostics companies, and clinical laboratories.
Microbix QAPs are now available in over 30 countries, distributed
by 1WA (Oneworld Accuracy Inc.), Alpha-Tec Systems, Inc.,
Diagnostic International Distribution SpA., Labquality Oy, The
Medical Supply Company of Ireland, Neo-Science Equipment LLC,
R-Biopharm AG, SDT Molecular Pte Ltd, Seegene Canada Inc., and
Thomas Scientific LLC. Microbix is ISO 9001 and 13485 accredited,
U.S. FDA registered, Australian TGA registered, Health Canada
establishment licensed, and provides CE marked products.
Microbix also applies its biological expertise
and infrastructure to develop other proprietary products and
technologies, most notably viral transport medium (DxTM™) to
stabilize patient samples for lab-based molecular diagnostic
testing and Kinlytic® urokinase, a biologic thrombolytic drug used
to treat blood clots. Microbix is traded on the TSX and OTCQX, and
headquartered in Mississauga, Ontario, Canada.
Forward-Looking InformationThis
news release includes “forward-looking information,” as such term
is defined in applicable securities laws. Forward-looking
information includes, without limitation, discussion of financial
results or the outlook for the business, risks associated with its
financial results and stability, its current or future products,
development projects such as those referenced herein, sales to
foreign jurisdictions, engineering and construction, production
(including control over costs, quality, quantity and timeliness of
delivery), 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.
Please visit www.microbix.com or www.sedar.com for
recent Microbix news and filings.
For further information, please contact Microbix
at:
Cameron Groome, CEO(905) 361-8910 |
|
Jim Currie, CFO(905) 361-8910 |
|
Deborah Honig, Investor RelationsAdelaide Capital Markets(647)
203-8793ir@microbix.com |
Copyright © 2023 Microbix Biosystems Inc.
Microbix®, DxTM™, Kinlytic®, and QAPs™ are trademarks of Microbix
Biosystems Inc.
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