Microbix Biosystems Inc. (
TSX: MBX, OTCQX: MBXBF,
Microbix®), a life sciences innovator, manufacturer, and
exporter, reports results for its year and fourth quarter ended
September 30, 2022 (“
2022” and
“
Q4”), with record sales and continued positive
net earnings, plus ongoing progress upon its strategic goal of
increasing its capacity for medical devices production and, over
time, to thereby grow sales, margins, and earnings.
Management Discussion
2022 sales achieved a new record of $19.1
million as Microbix continues to emphasize operational excellence
and increase sales of innovative, proprietary, and branded medical
devices. Sales of test quality assessment products
(“QAPs™”) and viral transport medium
(“DxTM™”) each realized double-digit percentage
increases over fiscal 2021. Sales of antigens were down versus
prior year due to continued pandemic impacts on the diagnostics
business. Product royalties were higher than 2021 due to higher
sales from licensees. Overall, sales achieved a favourable gross
margin but were suppressed by inflationary pressures. On a net
basis, these factors resulted in strong EBITDA performance and
continued positive operating and net income. Microbix continues to
pursue growth in sales of its medical devices and expects that
full-year fiscal 2023 will realize further sales growth and
continuing positive net earnings.
Year ending September 30, 2022
(“2022”)
2022 revenue was $19,076,241, a 3% increase from
prior year revenues of $18,592,960. Included were antigen revenues
of $8,287,908 (2021 - $9,082,021). QAPs revenues grew by 14% in
2022 to $5,375,329 (2021 - $4,704,671). Revenue from DxTM was
strong in 2022 at $5,004,359, up 11% from the prior year (2021 -
$4,506,900), and royalties were $408,694 (2021 - $299,368). 2022
revenues were most influenced by the continued uptake of our
growing base of QAPs products and strong DxTM sales.
2022 gross margin was 58%, down slightly from
2021 gross margins of 59%. Margins were impacted by increased
labour and manufacturing expenses, and higher supply costs; all due
to inflationary pressures.
Operating and finance expenses in 2022 increased
by 19% relative to 2021, due to increased QAPs product development,
investment in IT infrastructure, additional marketing spend to
support sales growth, and there being no grant funding as had been
received in fiscal 2021; collectively offsetting reduced interest
costs due to the repayment of debt and greater interest income from
short-term investments.
Stronger sales were offset by lower percentage
gross margin and increased operating expenses (due to increased
investment into business growth and infrastructure), leading to an
operating income (before finance expenses) of $2,610,213 and net
income of $1,788,689 versus a 2021 operating income of $4,836,595
and net income of $3,233,390. Cash provided by operating activities
was $3,465,199 compared to $2,106,736 in 2021, an improvement
largely driven by non-cash working capital account balances.
At the end of 2022, Microbix’s current ratio
(current assets divided by current liabilities) was 8.45 and its
debt to equity ratio (total debt over shareholders’ equity) was
0.33. Both of these financial health ratios continued to improve
from those in 2021.
Quarter Ending September 30, 2022
(“Q4”)
Q4 revenue was $4,329,052, down from 2021
revenues of $5,629,694. Included were antigen sales of $2,629,783
(2021 - $2,020,861), up 30% due to order timing and some
bounce-back in business. QAPs revenues were $1,601,950 up 34% in
fiscal 2022 (2021 - $1,195,545). In turn, revenue from DxTM was $0
due to timing of orders (2021 - $2,327,600), and royalties were
$97,319 (2021 - $85,689). The Q4 sales decline was most influenced
the lack of Ontario-driven deliveries of DxTM, offset by continued
diagnostics industry uptake of QAPs and stronger antigen sales.
Q4 gross margin was 47%, down from 58% during Q4
2021, due to a greater proportion of lower margin antigen sales,
the antigen product sales mix for the quarter, and the lack of DxTM
sales in the quarter.
Operating expenses (including financial
expenses) in Q4 were relatively flat when compared to Q4 2021. The
quarter also showed greater QAPs product development investment,
additional spending in sales and marketing to support sales growth,
and the lack of Ontario Together Fund (“OTF”) grant funding this
year vs. last year. This was offset by a reduction in interest
costs due to the repayment of debt and increased short term
investment income in fiscal 2022.
Overall, lower sales and less available gross
margin dollars led to a Q4 operating loss (before finance expenses)
of $256,885 and net loss of $464,080 versus Q4 2021 operating
income of 1,580,553 and net income of $778,929. Cash provided by
operating activities was $146,437 for Q4, compared to cash provided
by of $1,621,623 for Q4 2021, with the majority of the change
coming from change in Q4 operating income and changes in non-cash
working capital.
FINANCIAL HIGHLIGHTS |
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For the
years ended September 30 |
For the
quarter ended September 30 |
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2022 |
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2021 |
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2022 |
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2021 |
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Total Revenue |
$ |
19,076,241 |
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$ |
18,592,960 |
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$ |
4,329,052 |
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$ |
5,629,694 |
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Gross
Margin |
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11,124,842 |
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11,043,940 |
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2,020,539 |
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3,245,723 |
S,G&A
Expenses |
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6,715,354 |
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5,174,091 |
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1,832,907 |
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1,317,579 |
R&D
Expense |
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1,799,275 |
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1,033,254 |
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444,517 |
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347,591 |
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Operating
Income (Loss) before Interest Accretion Expense and Finance
Expenses |
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2,610,213 |
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4,836,595 |
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(256,885 |
) |
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1,580,553 |
Interest
accretion expense on debenture due to planned redemption, non
cash |
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- |
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|
517,651 |
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- |
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517,651 |
Finance
Expenses |
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744,290 |
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1,085,554 |
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129,961 |
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283,973 |
Income Tax
Expense |
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77,234 |
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- |
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77,234 |
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- |
Net Income
(Loss) and Comprehensive Income (Loss) for the period |
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1,788,689 |
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3,233,390 |
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(464,080 |
) |
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778,929 |
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Net Comprehensive Income (Loss) per share |
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0.013 |
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0.028 |
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(0.009 |
) |
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0.006 |
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Cash Provided (Used) by Operating Activities |
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3,465,199 |
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2,106,736 |
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146,436 |
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1,621,621 |
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Cash |
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13,488,075 |
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9,986,312 |
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Accounts receivable |
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3,057,797 |
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4,175,116 |
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Total current assets |
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22,408,372 |
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19,094,482 |
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Total assets |
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33,145,196 |
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28,829,034 |
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Total current liabilities |
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2,650,521 |
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5,194,194 |
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Total liabilities |
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8,206,541 |
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10,272,890 |
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Total shareholders' equity |
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24,938,655 |
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18,556,144 |
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Current ratio |
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8.45 |
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3.68 |
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Debt to equity ratio |
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0.33 |
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0.55 |
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Corporate OutlookMicrobix will
continue to drive sales growth across all of its three
revenue-generating business lines, and work to keep improving
percentage gross margins and driving bottom-line results.
Management currently expects Microbix to generate meaningful net
earnings growth 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 Wednesday, January 4 at 11am ET. Please register
here:
https://us02web.zoom.us/webinar/register/WN_u90QQLfDQreHCHkwoPMa0A.
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)
203-8793 ir@microbix.com |
Copyright © 2022 Microbix Biosystems Inc.
Microbix®, DxTM™, Kinlytic®, and QAPs™ are trademarks of Microbix
Biosystems Inc.
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