Mr. Patrick Montpetit reports
IMMUNOTEC REPORTS 2015 YEAR-END RESULTS
Immunotec Inc. has released its fourth quarter and year-end consolidated financial results for fiscal 2015. (All amounts in this press release are denominated in Canadian dollars unless otherwise indicated.)
"We ended fiscal 2015 with the strongest quarter in company history both in terms of revenues, adjusted earnings before interest, taxes, depreciation and amortization, and net profit. This year was marked by solid progress in the U.S. market, as we continue to expand our capabilities in the United States," said Charles L. Orr, chief executive officer of Immunotec.
"Revenues for the fourth quarter place the company on the trajectory to reach $100-million in annual revenues. Scale is critical to our business model, and based on a recent industry survey, we ranked 97th worldwide among direct selling companies.
"In October, 2014, management made the prudent decision to charge value-added taxes on product sales in Mexico. As expected, this decision impacted our sales on a short-term basis, but we made a progressive recovery throughout the second half of 2015.
"Our sales growth in the U.S. market confirms the sustainability of our business model in a growing economy and with a relatively low unemployment rate. The attractiveness of our products and the need for supplementary income is driving the growth of our network in the U.S.
"We continue to make investments in experimental and clinical research programs, which underpin our health, wellness and performance platform. We enter fiscal 2016 with great confidence and backed by a solid balance sheet," concluded Mr. Orr.
Performance highlights
Revenues for the three- and 12-month periods ended Oct. 31, 2015, reached $24.8-million and $84.8-million compared with $23.3-million and $80.8-million during the same periods in the previous year, an increase of $1.5-million or 6.4 per cent for the three-month period and an increase of $4.0-million or 4.9 per cent for the 12-month period. The growth in revenue resulted from the strengthening of the U.S. currency and increased network sales in the United States.
In the United States, the increase in network sales is the result of an increase in the sponsoring of new consultants and customers. For the three- and 12-month periods ended Oct. 31, 2015, the number of new independent consultants and customers in the United States increased by 49.9 per cent and 36.7 per cent compared with the corresponding periods in the previous year. This increase primarily reflects the company's continued success in attracting new customers and independent consultants throughout the United States.
In Mexico, sponsoring activities declined by 5.1 per cent and 13.2 per cent over the same periods the previous year, mostly attributable to the 16-per-cent value-added tax (VAT), which the company began charging on the sale of its products in Mexico as of Oct. 1, 2014. Management has and continues to collaborate closely with its field leaders in Mexico to drive growth strategies.
In Canada, the number of new customers and independent consultants increased by 6.8 per cent for the three-month period and by 7.7 per cent for the 12-month period compared with the same periods in the previous year. This increase was from both the western and eastern provinces of Canada.
REVENUES AND SPONSORING HIGHLIGHTS
(000s of Cdn $)
Three months Twelve months
ended ended
Oct. 31, Oct. 31,
2015 2014 2015 2014
Network sales $22,707 $21,590 $77,320 $74,554
Other revenue 2,097 1,720 7,438 6,236
Total 24,804 23,310 84,758 80,790
Network sales in key
markets in local
currency 2015 2014 2015 2014
Mexico (000s of
Mexican pesos) 152,738 162,563 503,666 540,385
United States (000s
of U.S.$) 5,778 4,762 20,049 16,136
Canada (000s of Cdn$) 2,936 3,101 11,312 11,784
Sponsoring of new
customers and
consultants in key
markets (number of
people) 2015 2014 2015 2014
Mexico 17,432 18,368 55,515 63,982
United States 6,137 4,093 18,747 13,712
Canada 1,691 1,583 6,291 5,839
Total 25,260 24,044 80,553 83,533
Adjusted earnings before interest, taxes, depreciation and amortization for the three- and 12-month periods ended Oct. 31, 2015, amounted to $2.1-million or 8.4 per cent of revenues and $6.1-million or 7.2 per cent of revenues, compared with $1.2-million or 5 per cent and $5.0-million or 6.2 per cent in the same periods the previous year.
The company generated a net profit of $1.7-million and $4.0-million for the three- and 12-month periods, compared with a net profit of $50,000 and a net loss of ($2.7-million) for the corresponding periods a year ago. Total basic and fully diluted profit per common share for the three- and 12-month periods ended Oct. 31, 2015, was two cents and six cents, compared with nil and (four cents) for the same periods a year earlier.
Developments during the year:
- November, 2014: Immunotec and Institut de recherches cliniques de
Montreal (IRCM) announced clinical results showing that Immunocal
with statistical significance imparts a performance benefit of
approximately 10 per cent in muscle strength. This is very relevant for
healthy aging, as the aging process is typically associated with a
decrease in muscle strength that may contribute to disability in older
age and to loss of quality of life.
- February and March, 2015: Immunotec hosted two conventions and used this
opportunity to launch two new products: Wholistics, addressing demand
in the skin care market for Mexico, and Contralenta, targeting the
support of cartilage and healthy joints market for Canada and the United
States.
- April, 2015: Immunotec was ranked 97th on the Direct Selling News sixth-annual DSN Global 100 list. This list is an exclusive ranking of the top
revenue-generating companies in the direct-selling industry worldwide.
- May, 2015: Immunotec announced that Health Canada granted a new health
claim specific to Immunocal's ability to help increase muscle strength
and enhance performance when combined with regular exercise.
- May, 2015: Immunotec welcomed Dr. Ronald Prussick, MD, FRCP, as a
distinguished member of the Immunotec scientific advisory board. Dr.
Prussick currently serves as the medical director of the Washington
Dermatology Center and assistant clinical professor at George Washington
University in Washington. He works with the Immunotec product
development committee, playing an integral role in the development
of a new skin care line.
- July, 2015: Immunotec announced additional financing in the total amount
of $2.8-million, to support growth, activities of its Mexican subsidiaries and
the modernization of its Canadian manufacturing infrastructure.
- July, 2015: Immunotec announced it reached a conclusive agreement with
both tax authorities, Procuraduria de la Defensa del Contribuyente
and Servicio Administracion Tributaria in regard to
the company's Mexican subsidiary's imports into Mexico. Administrative
matters associated with the finalizing of the conclusive agreement are
expected to be resolved during the second quarter of fiscal 2016.
CALCULATION OF ADJUSTED EBITDA
(000s of Cdn $)
Three months Twelve months
ended Oct. 31, ended Oct. 31,
2015 2014 2015 2014
Net profit (loss) $1,715 $48 $4,042 $(2,692)
Add (deduct)
Depreciation, amortization and
impairment 177 262 668 940
Net finance (income) expenses (58) (55) 137 539
Other expenses 30 725 197 5,270
Income taxes 215 191 1,035 961
Adjusted EBITDA 2,079 1,171 6,079 5,018
As a % of revenues 8.4% 5.0% 7.2% 6.2%
We seek Safe Harbor.
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