Microbix Biosystems Inc. (
TSX: MBX, OTCQX: MBXBF,
Microbix®), a life sciences innovator, manufacturer, and
exporter, reports results for its first quarter ended December 31,
2022 (“
Q1”), a period in which reduced sales
across two major product lines resulted in the first quarterly net
loss in two years. 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
Q1 sales were $2.5 million, meaningfully below
the past several quarters. This sales decline was due to zero sales
of viral transport medium (“DxTM™”) as a result of
the ongoing reorganization of provincial procurement, lower sales
of test ingredients (“Antigens”) caused by the
timing of deliveries being outside of Q1, and delays in order-flow
of quality assessment products (“QAPs™”). The
resulting reduction in gross margin dollars created a meaningful
net loss for Q1. For the balance of fiscal 2023, Microbix expects
increasing sales of both Antigens and QAPs to enable it to generate
positive net earnings for the full-year of fiscal 2023 – for a
third consecutive year of profitability, as well as there being
further activity with the company’s portfolio of liquid sample
stabilization devices, including DxTM.
Quarter Ending December 31, 2022
(“Q1”)
Q1 revenue was $2,502,072, a decrease from Q1
2022 revenues of $4,855,600. Included were antigen sales of
$1,003,807 (2021 - $1,766,416). QAPs revenues were $1,333,503 (2021
- $1,149,151) for segment growth of 16%. In turn, revenue from DxTM
was zero in Q1 (2021 - $1,817,245), and royalties were $164,762
(2021 - $122,787). The Q1 2022 sales shortfall was most influenced
by lack of Ontario-driven deliveries of DxTM and weaker antigen
sales due to order timing, which were only partly offset by
continued diagnostics industry uptake of QAPs.
Q1 gross margin was 47%, down from 66% in Q1
2021 and due to a high proportion of sales of lower-margin
antigens, a lack of DxTM sales, and the impact of a supplier
quality issue collectively more than offsetting ongoing growth in
QAPs sales. In addition, Microbix continues to see double digit
increases in supply chain costs, which take time to pass-through
into product pricing.
Operating expenses in Q1 increased by 6%
relative to Q1 2022, due mainly to increased investment in IT
infrastructure to support our continued growth objectives - namely
start-up costs relating to our “ERP” and “eQMS” implementations.
Finance expenses were lower than the prior year due to repayment of
debt during fiscal 2022 and short-term investment of cash balances.
Overall, weaker sales led to an operating loss and net loss of
$1,299,262 versus a Q1 2022 operating income and net income of
$880,778. Cash used in operating activities was $713,867, compared
to cash used in operating activities of $284,014 in Q1 2022, with
the majority of the change coming from the operating loss incurred
during the quarter.
At the end of Q1, Microbix’s current ratio
(current assets divided by current liabilities) was 6.32 and its
debt to equity ratio (total debt over shareholders’ equity) was
0.39.
Financial Highlights |
|
|
|
|
|
As at and for the quarter
ended |
December 31, 2022 |
|
December 31, 2021 |
|
|
|
|
Total Revenue |
$ |
2,502,072 |
|
$ |
4,855,600 |
|
|
|
|
Gross Margin |
1,185,975 |
|
3,221,858 |
SG&A Expenses |
1,963,201 |
|
1,635,869 |
R&D Expense |
424,958 |
|
464,461 |
Financial Expenses |
97,078 |
|
240,750 |
|
|
|
|
Operating Income for the
period |
(1,299,262) |
|
880,778 |
Net Income and
Comprehensive Income for the period |
(1,299,262) |
|
880,778 |
|
|
|
|
Cash Provided (Used) by
Operating Activities |
(713,867) |
|
(284,014) |
|
|
|
|
|
December 31, 2022 |
|
September 30, 2022 |
|
|
|
|
Cash |
12,425,322 |
|
13,488,075 |
Accounts receivable |
2,838,376 |
|
3,057,797 |
Total current assets |
22,065,997 |
|
22,408,372 |
Total assets |
32,693,681 |
|
33,145,196 |
Total current liabilities |
3,489,193 |
|
2,650,521 |
Total liabilities |
9,232,431 |
|
8,206,541 |
Total shareholders' equity |
23,461,250 |
|
24,938,655 |
Current ratio |
6.32 |
|
8.45 |
Debt to equity ratio |
0.39 |
|
0.33 |
|
|
|
|
Corporate OutlookMicrobix 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 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 Tuesday, February 14 at 11am ET. Please register
here:
https://us02web.zoom.us/webinar/register/WN_FZVtajDxSRSS8iFmeCEXkA.
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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