Mr. Cameron Groome reports

MICROBIX REPORTS RECORD RESULTS FOR Q1 FISCAL 2024

Microbix Biosystems Inc. has released results for its first quarter of fiscal 2024 ended Dec. 31, 2023 (Q1), with record quarterly revenues and a record quarterly profit, reflective of continuing progress to increase sales from its diagnostic-test-related ingredients and devices, and material licensing revenues from its fully financed program to revalidate and relaunch its approved drug, Kinlytic urokinase.

Management discussion

Results for Q1 demonstrate strong growth in sales of each of Microbix's test ingredients (antigens) and its test quality assessment products (QAPs), which were collectively up by 80 per cent year-over-year. In addition, Microbix recognized and received material licensing payments relating to Kinlytic. Collectively, the resulting revenues of over $8.4-million led to strong net earnings and set the stage for a record full year fiscal 2024. Microbix believes sales growth will continue for antigens and QAPs, alongside satisfaction with the progress of Kinlytic toward Food and Drug Administration reapproval and relaunch into the United States market.

Quarter ending Dec. 31, 2023

Q1 revenue was $8,407,884, a 236-per-cent increase from Q1 2023 revenues of $2,502,072. Antigen sales grew by 95 per cent to $1,953,677 (Q1 fiscal 2023 -- $1,003,608), while QAPs grew by 69 per cent to $2,248,236 (Q1 fiscal 2023 -- $1,333,503). Revenue from royalties decreased to $119,311 (Q1 fiscal 2023 -- $164,762). Q1 revenues were also greatly influenced by the recognition of $4,086,000 in Kinlytic licensing milestone payments (Q1 fiscal 2023 -- nil).

Q1 gross margin was 74 per cent, significantly up from Q1 2023 gross margins of 47 per cent. Gross margins were primarily impacted by Kinlytic licensing revenues, to which no COGS (cost of goods sold) were attached. Without the impact of the Kinlytic licensing revenues, the company's gross margins of 49 per cent were up from 47 per cent last year.

Operating and finance expenses in Q1 increased by 52 per cent relative to Q1 2023 principally due to consulting fees related to Microbix's Kinlytic licensing agreement that were absorbed into general and administrative. In addition, Q1 costs reflect the continuing costs of the company's new information technology systems which began in the latter half of fiscal 2023, and amortization relating to the reversal of the impairment of the Kinlytic intangible asset which began at the end of fiscal 2023.

Increased sales and higher gross margins were partially offset by increased operating expenses (due to increased investment into business growth and infrastructure). The above results led to a Q1 operating income and net income of $2,455,379 versus a Q1 2023 operating loss and net loss of ($1,299,262). Cash provided by operating activities was $1,338,952, compared with cash used in operating activities of ($713,867) in Q1 2023.

At the end of Q1, Microbix's current ratio (current assets divided by current liabilities) was 8.53 and its debt to equity ratio (total debt over shareholders' equity) was 0.35, both measures having improved from the prior-year first quarter (Q1 2023) and the immediately preceding fourth quarter (Q4 2023).

Corporate outlook

Microbix will continue to drive sales growth across all of its business lines, and work to keep improving percentage gross margins and driving bottom-line results. Management currently expects Microbix to generate meaningful year-over-year growth in revenues and net earnings across full year fiscal 2024.

Adelaide Capital will host a live webinar with management, on Wednesday, Feb. 14, at 10 a.m. ET.

It will also be live streamed to YouTube.

A replay of the webinar will also be made available on Adelaide Capital's YouTube channel.

About Microbix Biosystems Inc.

Microbix Biosystems creates proprietary biological products for human health, with over 100 skilled employees and annualized sales targeting $2-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 approximately 100 diagnostics makers, while QAPs are sold to clinical lab accreditation organizations, diagnostics companies and clinical labs. Microbix QAPs are now available in over 30 countries, supported by a network of international distributors. Microbix is ISO 9001 and 13485 accredited, U.S. Food and Drug Administration registered, Australian Therapeutic Good Administration registered, and Health Canada establishment licensed, and provides CE marked products.

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