Mr. Cameron Groome reports
MICROBIX REPORTS RESULTS FOR FISCAL 2019
Microbix Biosystems Inc. has provided its results for its fiscal year and fourth quarter ended Sept. 30, 2019, with stronger sales and progress toward its operational goals.
In 2019, Microbix advanced upon its goal of sustained profitability, achieving record sales of $13.4-million and improving its gross margin, operating earnings and cash provided by operations.
For fiscal 2020, further sales growth and continuing improvements to gross and net margins are expected. Microbix remains committed to improving its operational and financial strength and thereby driving share price appreciation.
12-month financial results
Two thousand nineteen full-year revenue was $13,412,341, a 7-per-cent increase from 2018 revenue of $12,510,558. Included were antigen and quality product revenues of $13,067,727, 7 per cent higher than 2018. Sales were strong across multiple customers in North America and Europe and several of the company's key products. Revenue from royalties were $344,614 (2018 -- $319,201).
Percentage gross margin for 2019 was 49 per cent, up from 43 per cent in 2018, with the improvement due to resolution of yield control issues and favourable changes to product mix.
Operating expenses increased by 6 per cent in 2019, primarily a result of increased investment in sales and marketing and $135,000 of financing expenses which had been capitalized in prior years. In 2019, stronger sales and gross margins led to an operating income of $43,681 versus an operating loss of $742,808 in 2018, and a net income of $31,918 versus a net loss of $8,621,566 in 2018 (that included an asset writedown). Cash provided by operations (CFO) was $44,368 in 2019, compared with cash used of $537,005 the prior year.
Fourth quarter financial results
Total Q4 revenue was $3,587,285, a 6-per-cent increase from 2018 fourth quarter revenue of $3,389,574. Included were antigen and quality product revenues of $3,503,268 (2018 -- $3,308,913) and revenue from royalties of $84,017 (2018 -- $80,661). Q4 sales were principally to antigen customers in North American and Europe and were across multiple customers and products.
Gross margin for Q4 was 44 per cent, up from 41 per cent in Q4 of fiscal 2018, with the increase due to the mix of products sold and improvement in margin for a key product. Revenues from bioreactor-produced antigen were lower than expected, due to a delay in the conversion of a key customer that was resolved in Q4, and that will affect fiscal 2020 sales mix with expected benefits to percentage gross margin.
Operating expenses for Q4 increased by $22,286 from 2018, due to further investment in sales and marketing and debenture interest costs that were previously capitalized. As a result, a net loss of $48,816 was reported in Q4, versus a prior year net loss of $8,185,894 that included an asset writedown (a Q4 2018 net loss of $307,136, without that asset charge). Cash provided by operations (CFO) in Q4 was $574,570 (primarily due to increased gross margins), compared with $349,783 in Q4 2018.
For the years ended For the three months ended
2019 2018 2019 2018
Revenue $13,412,341 $12,510,558 $3,587,285 $3,389,574
Gross margin 6,547,447 5,369,436 1,576,078 1,374,393
S, G&A Expenses 4,395,496 4,170,641 1,168,587 1,143,087
R&D expense 1,042,192 1,089,746 270,527 318,239
Financial expenses 1,066,078 851,857 264,702 220,203
Operating income (loss)for the period 43,681 (742,808) (127,738) (307,136)
Net comprehensive income (loss) 31,918 (8,621,566) (48,816) (8,185,894)
Net comprehensive income (loss) per share 0.000 (0.090) (0.001) (0.085)
For fiscal 2020, Microbix will work to continue improving the percentage gross margins from its critical ingredients (antigens) business and achieve strong growth in sales of its lines of innovative, proprietary and branded quality assessment products (QAPs). If Microbix achieves its budget targets, the company will generate meaningful net earnings for fiscal 2020. Additionally, work continues with regards to securing a partnership agreement to advance Microbix's Kinlytic urokinase project.
About Microbix Biosystems Inc.
Microbix develops proprietary biological solutions for human health and well-being, with sales averaging over $1-million/month and 75 skilled employees. It makes a wide range of critical materials for the global diagnostics industry, notably antigens for immunoassays and quality assessment products (QAPs) that support clinical lab proficiency testing, enable assay development and validation, or help ensure quality control of clinical diagnostic tests.
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