EASTAMPTON, N.J., Oct. 10, 2013 (GLOBE NEWSWIRE) -- Epicore (TSX-V: EBN ) was able to maintain its fiscal 2013 sales revenues at fiscal 2012 level despite a difficult year for the shrimp aquaculture industry. Quarter four sales outperformed the first three months of the year and set a Company record. Fiscal 2013 gross profit increased 3% due to sales mix. Cash generation was strong in the year (19% above fiscal 2012) and shareholder equity increased 12% to $5.4 million. Fiscal 2013 saw a major investment in manufacturing resources, which will have a favorable effect on future operations but contributed to a 27% drop in fiscal 2013 net income.
Consumer demand for shrimp remained high throughout fiscal 2013 although high prices caused import drops in several major markets. Severe supply shortages due to disease pushed up shrimp prices to record levels. High shrimp prices create a favorable atmosphere for Epicore's productivity improving products but farm closures due to disease hurt Epicore sales, even more than they did in fiscal 2012. The Epicore sales team and our distributors responded to this challenge by securing new customers, opening new market areas and exploiting new applications for Epicore products.
Epicore completed its major initiative to improve its science and manufacturing resources, which will position the Company for significant future growth and increase the reliability of its operations. Our ISO 9001:2008 quality system certification also contributed to operational reliability. Some highlights (in US$) versus prior fiscal year were:
- No change in revenue at $5.6 million
- Increase in gross profit from $3.4 million to $3.5 million (a 3% increase)
- Increase in operating expenses from $2.2 to $2.7 million (a 21% increase)
- Decrease in net income from $0.7 million to $0.5 million (a 27% decrease)
- Decrease in EBITDA from $1.2 million to $0.9 million (a 28% decrease)
- Increase in shareholders' equity from $4.8 million to $5.4 million (a 12% increase)
- Increase in cash from $1.6 million to $1.9 million (a 19% increase)
- Decrease in basic and diluted earnings per share from $0.03 to $0.02
Gross profit grew 3% due to an improvement in gross margin that was mainly due to product mix. Operational expenses increased by 21% in fiscal 2013 due to increased selling effort, inflation and spending on our strategic initiative. A cornerstone of the initiative was new production equipment that was installed in fiscal 2013 but was in a commissioning mode and not in a production mode for most of the fiscal year. Research and development expenses increased 5% because of higher outside research effort. With the research and development strategy in place and the production resources that were added, management expects to continue to improve the quality and reliability of its manufacturing operations and to accelerate the Company's reach and penetration into new business areas.
Epicore generated positive net income of $0.5 million to give Epicore its tenth consecutive year of profitable operation. Versus prior year, net income decreased by $0.2 million (27%). EBITDA (earnings before interest, taxes, depreciation and amortization) decreased 28% over prior year from $1.2 million to $0.9 million, as the following results show:
| 2013 | 2012 | Increase (Decrease) | ||
| Revenue | $5,613,100 | $5,635,700 | ($22,600) | 0% |
| Gross profit | $3,545,500 | $3,429,000 | $116,500 | 3% |
| Operating expenses | $2,702,400 | $2,229,000 | $473,400 | 21% |
| Net income | $482,200 | $659,900 | ($177,700) | (27%) |
| Earnings per share | $0.02 | $0.03 | ($0.01) | (32%) |
| Shareholders' equity | $5,431,600 | $4,849,800 | $581,800 | 12% |
| Cash balance | $1,938,800 | $1,628,300 | $310,500 | 19% |
Epicore continues to generate positive cash flows from operating activities with $0.7 million generated in fiscal 2013, which was $0.2 million less than fiscal 2012. Cash at the end of the year was $1.9 million. With these funds, expected sales revenue growth and continued relatively low operating costs, management expects there will be sufficient cash to meet the fiscal year's financial requirements, to fund expansion of aquaculture and environmental remediation marketing efforts and to pursue new strategies for enhancing shareholder value.
Fiscal 2013 was a successful year not only on a financial basis, but it saw major progress on several operational and strategic issues. The Company actively worked to maintain its ISO 9001:2008 certification and began a program to get HACCP (hazard analysis and critical control point) and Global GAP certification. Many shrimp processing companies have one or more international certifications. Additionally, many government aquaculture product registration authorities are looking for some type of quality certification.
Fiscal 2013 also saw progress on several corporate issues.
- To strengthen its Board of Directors, the Company added a fifth member.
- Also in the year, Epicore met the requirements for and was granted Tier One status by the TSX Venture Exchange. This move up from Tier Two status reflects the evolving maturity of Epicore's business.
- Epicore was recognized as the New Jersey member of the year by the World Trade Center of Greater Philadelphia at the WTCGP annual dinner. The WTCGP has provided Epicore export advice and opened doors for Epicore in China.
The financial statements of the company have been prepared in accordance with International Financial Reporting Standards. Epicore BioNetworks Inc. is a public corporation with a registered office in Calgary, Alberta, Canada and with shares listed on the TSX Venture Exchange (symbol EBN). [Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.]
This press release contains forward-looking statements that involve significant risks and uncertainties. The actual results, performance or achievements of the company might differ materially from the results, performance or achievements of the company expressed or implied by such forward-looking statements. Such forward-looking statements include, without limitation, those regarding the future growth of the Company, expected improvements in the quality and reliability of manufacturing operations, acceleration of the Company's penetration into new business areas, the development plans of the company, the expected timing and results of such development and the expectation by management that there will be sufficient cash to meet the fiscal year's financial requirements. We can provide no assurance that such development will proceed as currently anticipated, that the expected timing or results of such development will be realized or that the company will be able to generate sufficient cash to meet its obligations. We are subject to various risks, including the uncertainties of product development, markets for our products and regulatory review, our need for additional capital to fund our operations, our reliance on collaborative partners, our history of losses, and other risks inherent in the biotechnology industry.
Mr. William P. Long (Chief Executive Officer) USA Tel: 609-267-9118 Email:
