EASTAMPTON, N.J., Feb. 18, 2014 (GLOBE NEWSWIRE) -- Epicore BioNetworks Inc. (TSX-V: EBN ) revenue for Q2 at $1.7 million was 25% higher than last year's Q2 and set a new company Q2 record. This record follows a record Q1 and a record fiscal 2013 Q4. Sales were broad based and not regionally limited as producers worldwide try to capitalize on record high shrimp prices. Early Mortality Syndrome (EMS) in Asia has reduced the worldwide supply of shrimp, which in turn has pushed shrimp prices to record levels. High shrimp prices have increased the demand for Epicore's productivity enhancing products.
Latin America remains the strongest sales region for Epicore and Ecuador is the largest single country market. In Q2 the region drove Epicore sales to record levels. Central American hatcheries bought strongly in Q2 as they stocked up for the 2014 growing season. Ecuadorian sales grew 17% in the quarter as the disease-free Ecuadorian industry responded to record shrimp prices. Despite a challenging environment, there was exceptionally strong demand from Asia for Epicore products in quarter two. Groundwork has been laid for 2014 sales to new Asian areas. Working closely with our distributor, special, high image packaging has been developed for China. Our new Australian distributor is gearing up to sell Epicore products in 2014.
Some highlights versus prior fiscal year quarter two were as follows:
- Revenue increased by 25% over last year's record Q2
- Gross profit increased by 37% over Q2 last year
- Operating expenses decreased by 9% compared to last year's Q2
- Net income increased by 295% versus last year's Q2
- EBITDA increased by 273% compared to last year's Q2
- Cash was $1.1 million higher than last year's Q2
- Shareholders' equity increased $0.4 million (6%) over prior quarter
Gross profit has tracked higher than revenue with an increase of 37% for the quarter. While most of the increase was due to sales volume, sales price increases and sales mix had a positive impact in Q2. Also, a significant part of the gross profit improvement came from the Company's 2013 investment in production equipment.
Operating expenses decreased 9% as expenses related to our manufacturing expansion were employed for beneficial production. Research and development expenses decreased 11% because of the expansion. The manufacturing expansion is proving its worth in improving the quality and reliability of our manufacturing operations and supporting our new product development program. Our ISO 9001:2008 quality system certification also contributed to operational reliability.
Higher gross profit combined with lower operating expenses to produce a record Q2 net income that was 295% higher than prior year Q2. EBITDA (earnings before interest, taxes, depreciation and amortization) increased 273% over prior year from $0.1 million to $0.5 million, as the following results show:
| For the Quarter ended December 31, ($000) | ||||
| 2013 | 2012 | Increase (Decrease) | ||
| Revenue | $1,653 | $1,321 | $332 | 25% |
| Gross profit | $1,126 | $824 | $302 | 37% |
| Operating expenses | $628 | $692 | ($64) | (9%) |
| Net income | $320 | $81 | $239 | 295% |
| Earnings per share | $0.013 | $0.003 | $0.010 | 333% |
| Shareholders' equity | $6,075 | $4,899 | $1,176 | 24% |
| Cash balance | $2,642 | $1,506 | $1,136 | 75% |
Epicore continues to generate positive cash flows from operating activities. Cash at the end of the quarter was $2.6 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 such as the Normal Course Issuer Bid that has been put in place in Q1.
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.
For more information, please contact: Mr. William P. Long (Chief Executive Officer) USA. Tel: 609-267-9118, Email: Investors@EpicoreBioNetworks.com
