Mr. Paul Baehr reports

IBEX REPORTS RESULTS FOR THE YEAR ENDED JULY 31, 2023

IBEX Technologies Inc. has released its financial results for the fiscal (F) year ended July 31, 2023.

According to Paul Baehr, IBEX president and chief executive officer, "We were pleased by the overall F2023 performance when compared to an exceptional F2022, and, in particular, with the company's performance as compared to F2021 and F2020."

Highlights:

• Revenues for the year were only 5 per cent lower than fiscal 2022, well above expectations, and were 41 per cent higher than the benchmark fiscal 2021.
• Earnings before tax were down 15 per cent as compared with fiscal 2022, but up over 200 per cent when compared with fiscal 2021 and fiscal 2020.
• Year-ending cash and cash equivalents were $8,547,043, up 12 per cent versus fiscal 2022 and up 193 per cent versus fiscal 2021.

Mr. Baehr further stated, "Looking forward, we expect F2024 results to be in line with F2023."

Highlights continued:

• Revenues are expected to be in the fiscal 2023 range, with continued strong growth in the hemostasis business.
• Offsetting the strong growth in hemostasis is the negative impact of the company's exit from the marginally profitable arthritis Eliza kit business and some softness in other reagent customers.
• Earnings before tax for fiscal 2024 are expected to be in line with fiscal 2023.
• Year-ending cash is expected to reach $10-million, an increase of 17 per cent.

Note that all figures are in Canadian dollars unless otherwise stated. The company's audited consolidated financial statements for the year ended July 31, 2023, 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 fourth quarter of fiscal 2023

Revenues for the quarter ended July 31, 2023, totalled $1,753,902, decreasing by $316,112 (15 per cent) from $2,070,014 in the same period last year.

Expenses before tax totalling $1,397,079 were up by $74,257 versus the same quarter a year ago, relating to many offsetting factors: a negative foreign exchange impact of $64,935 and an increase in salaries and benefits of $63,459, mainly due to a higher profit-sharing plan accrual in the quarter; offset by a decrease in finance expenses of $69,446 driven by interest on the cash balances.

The company recorded earnings before tax for the quarter of $356,623, down $390,369 versus earnings before tax of $746,992 on a comparable basis in fiscal 2022.

The increase in net earnings to $2,223,643 from $34,764 in the same period last year is mainly due to a tax reorganization resulting in the recording of previously unrecorded tax assets on the balance sheet. This led to an income tax recovery of $1,867,020 for the quarter versus an income tax expense of $712,228 in the same quarter last year.

The decrease in earnings before tax for the quarter, led the company to record an EBITDA (earnings before interest, taxes, depreciation and amortization) of $383,570, versus $815,219 in the same period year ago.

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

Financial results for the year

Revenues for the year ended July 31, 2023, totalled $7,491,739, compared with $7,892,487 in the prior year, a decrease of 5 per cent.

Expenses before taxes totalled $5,473,925, a decrease of $31,939. This small variance is due to many offsetting factors, mainly: an increase in R&D (research and development) costs of $323,210, offset by an increase in SR&ED (scientific research and experimental development) tax credits of $277,401 for the year. Lower finance expenses of $292,137, driven by interest income on the cash balances, offset the negative foreign exchange impact of $151,356.

As mentioned above, the company recognized previously unrecognized tax assets, resulting in an income tax recovery for the year ended July 31, 2023. Due to this tax recovery, net earnings totalled $3,893,614, compared with net earnings in fiscal year 2022 of $1,674,395.

The company recorded EBITDA of $2,161,702, versus $2,760,885 in the same period last year, a decrease of $599,183, due mainly to the decrease in revenues.

NCIB (normal course issuer bid)

On July 17, 2023, the company announced that the TSX Venture Exchange approved the renewal of the normal course issuer bid (the 2024 NCIB) that was originally launched on July 29, 2022. Under the terms of the 2024 NCIB, the company may purchase for cancellation up to 1.5 million common shares of the company, which represented 10 per cent of its public float as at July 14, 2023. The new 2024 NCIB commenced on Aug. 5, 2023, and will end on the earlier of Aug. 4, 2024, or when the company completes its maximum purchases under the NCIB. Furthermore, IBEX entered into an agreement with a broker to facilitate purchases of its common shares under the NCIB. Under IBEX's automatic share purchase plan, the broker may purchase common shares, which would ordinarily not be permitted due to regulatory restrictions or self-imposed blackout periods. After year-end and as of the date of the financial statements, 64,600 shares were repurchased and cancelled for a total of $42,584 for the original 2023 NCIB and 114,400 shares have been repurchased for the 2024 NCIB for a total of $111,820.

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 can be seen from the company's quarterly results over the past few years.

COVID-19 had a significant impact, as customers increased their purchases in fiscal 2022 for fear of supply chain interruptions. The company's sales softened somewhat as some of those customers worked off those inventories in fiscal 2023.

On a positive note, IBEX's largest market (hemostasis) continues to grow at a rapid pace, which the company expects to continue into fiscal 2024. Customers in other markets appear to be working off their inventory cushion, which may have an impact in fiscal 2024.

The company continues to work on a number of new heparinase-containing clinical device projects with its key customers. However, as with all developmental projects, IBEX 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 in fiscal 2025.

About IBEX Technologies Inc.

IBEX manufactures and markets proteins for biomedical use through its wholly owned subsidiary, IBEX Pharmaceuticals Inc. (Montreal, Que.).

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