Mr. Paul Baehr reports

IBEX REPORTS RESULTS FOR THE THIRD QUARTER AND THE NINE MONTHS ENDED APRIL 30, 2023

IBEX Technologies Inc. has released its financial results for the third quarter and the nine months ended April 30, 2023.

According to Paul Baehr, IBEX president and chief executive officer: "Our net earnings for the quarter increased 57 per cent versus the same period year ago. Revenues were up 2 per cent for this reporting period, well above expectations based on the extremely strong FY 2022, where customers had built inventories due to COVID concerns regarding supply chain interruptions. However, when compared to the same period in fiscal 2021, revenues were up 54 per cent."

He further stated: "We now expect FY 2023 revenues, while lower than the exceptional 2022 fiscal year, to be significantly higher than fiscal year 2021. The engine for this growth is the underlying increasing demand and market penetration of our major customers in the high-growth, hemostasis-rapid-testing market segment."

Note: The company's audited consolidated financial statements for the year ended July 31, 2022, and the accompanying notes and the related management's discussion and analysis can be found on the company's website or under the company's profile on SEDAR.

Financial results for the third quarter of fiscal 2023

Revenues for the quarter ended April, 2023, totalled $2,264,196, up $54,962 from $2,209,234 for the same period the prior year, and 54 per cent higher than the same period in fiscal 2021.

Fiscal 2023 revenues were higher than expected, which IBEX attributes to higher foreign exchange rates as well as to underlying growth of the market segments in which the company competes, which has the effect of depleting the inventories build up in FY 2022 faster than forecasted.

Net expenses totalled $1,372,765, a decrease of $266,867 versus $1,639,632. The decrease is mainly due to lower financial expenses of $100,466 as a result of an increase in interest income, the recording of the SR&ED (scientific research and experimental development) tax credits of $195,617, offset mainly by an increase in R&D (research and development) expenses of $52,607.

Net earnings totalled $891,431, an increase of $321,829 as compared with Q3 FY 2022, as explained above.

The company recorded EBITDA (earnings before interest, taxes, depreciation and amortization) of $919,650 versus $686,674 in the same period a year ago, an increase of $232,976 mainly due to the increase in earnings, partially offset by the increase in interest income (interest income is excluded from the EBITDA calculation).

It should be noted that EBITDA is not a performance measure defined by IFRS (international financial reporting standards), but IBEX, as well as investors and analysts, consider that this performance measure facilitates the evaluation of the company's continuing operations and its ability to generate cash flows to finance the company's cash requirements, including IBEX's capital expenditures program. Note that IBEX's definition of this measure may differ from the ones used by other public corporations.

Financial results for the nine months ended April 30, 2023

Revenues for the nine months ended April 30, 2023, totalled $5,737,837, a decrease of $84,636 as compared with $5,822,473 in the same period of the prior year, but 45 per cent higher than the same period in fiscal 2021.

Fiscal 2023 revenues were higher than expected which IBEX attributes to the impact of higher foreign exchange rates as well as to the underlying growth of the market segments in which the company competes.

Net year-to-date expenses totalled $4,067,866, a decrease of $114,976. The drop relates mainly to a significant decrease in financial expenses of $222,692, due to higher interest income on the company's cash balances, as well as to the positive impact of SR&ED tax credits for FY 2022 and FY 2023 ($195,617). These two factors are partially offset by an increase in R&D expenses of $290,911, relating mainly to the diamine oxidase (DiaMaze) development program.

Net earnings totalled $1,669,971, up $30,340 versus the same period a year ago, as a result of a decrease in net expenses of $114,976 offset by a decrease in revenues of $84,636.

The company recorded EBITDA of $1,778,130, a decrease of $167,538 versus $1,945,668 in the same period a year ago, despite the slight increase in net earnings. The difference is attributed mainly to an increase in net interest of $226,242 due to higher interest income on the company's cash balances, which is excluded from EBITDA.

The company's substantial cash balance of $7,518,058 decreased by $122,994 despite a strong EBITDA. This was mainly due to the timing of a receivable, the purchases of production-related fixed assets and the payout of the FY 2022 profit-sharing plan (PSP) which was recorded in Q4 FY 2022.

Net working capital increased by $1,119,716 during the nine months ended April 30, 2023, as compared with the year ended July 31, 2022, due to strong earnings, despite significant purchases of production-related fixed assets during the year.

Looking forward

As always, the future financial results of the company are difficult to predict as the company's customers have significant variations in their purchasing patterns, as has been illustrated in the quarterly results over the past few years. The impact of COVID-19 added further variability.

IBEX's expectation for FY 2023 was that it would experience a significant revenue downturn as customers worked off their inventory excess but, to date, the company has not seen such an effect. IBEX attributes this mainly to the underlying strength of the markets it serves. The company may see some softening in the fourth quarter, but the positive trend points to IBEX generating net earnings significantly higher than FY 2021, although not approaching the extraordinary FY 2022.

Looking beyond fiscal 2023, the future looks very favourable for IBEX as the market for hemostasis testing grows at a rapid pace, driven by the accelerated adoption of the new rapid viscoelastic testing devices.

The company continues to work on a number of new heparinase-containing clinical device projects with its key customers, some of which may result in additional revenues in fiscal 2023. However, as with all developmental projects, the company cannot give assurances that any of these customer-driven projects will come to market and produce significant revenues.

Development of DiaMaze (diamine oxidase) continues to advance. DiaMaze is an enzyme targeted to persons suffering from histamine intolerance and will be marketed as a nutraceutical. IBEX continues to make good progress in the development of a commercial-scale manufacturing process. The next critical development steps will be selecting a manufacturer for commercial product and conducting toxicology studies which, if undertaken, will increase R&D expenses considerably in fiscal 2024.

About IBEX Technologies Inc.

IBEX manufactures and markets proteins for biomedical use through its wholly owned subsidiary IBEX Pharmaceuticals Inc. (Montreal, Que.). IBEX Pharmaceuticals also manufactures and markets a series of arthritis assays, which are widely used in osteoarthritis research.

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