EASTAMPTON, N.J., May 23, 2014 (GLOBE NEWSWIRE) -- Epicore BioNetworks Inc. (TSX-V: EBN ) revenue for Q3 at $2.2 million was 44% higher than last year's Q3 and set a new company Q3 record. This record follows three previous consecutive quarterly records. It also is the first time Epicore quarterly sales broke the $2 million mark. Sales were broad based with the third quarter increases coming from both Latin America and the rest of the world. High demand for Epicore products comes from producers trying to capitalize on record high shrimp prices. Early Mortality Syndrome (EMS) in Asia and now in Mexico has reduced the worldwide supply of shrimp, which in turn has pushed shrimp prices to record levels. World consumption of shrimp has decreased but producer profit possibility is a larger driver of Epicore product demand.
Latin America remains the strongest sales region for Epicore, but barely edged out the rest of the world in Q3. Ecuador is the largest single country market. Ecuadorian sales grew 47% in the quarter as the disease-free Ecuadorian industry responded to record shrimp prices. A significant contributor to Latin American sales was the program of seeding hatchery shrimp into raceways before seeding into ponds. The program consumes high quantities of Epicore probiotics and specialty feeds. Despite a challenging environment, there was exceptionally strong demand from Asia for Epicore products in Q3, especially from areas first hit with EMS. Sales to areas more recently hit with EMS decreased. Our newest Pacific Rim customers in China and Australia increased their purchases in Q3.
Some highlights versus prior fiscal year quarter three were as follows:
- Revenue increased by 44% over last year's Q3
- Gross profit increased by 53% over Q3 last year
- Operating expenses increased by 13% compared to last year's Q3
- Net income increased by 806% versus last year's Q3
- EBITDA increased by 176% compared to last year's Q3
- Cash was $1.0 million higher than prior year Q3
- Shareholder equity increased over prior year Q3 by 29% to $6.5 million
Gross profit was 53% higher than prior year quarter three. While most of the increase was due to sales volume, higher average selling price and lower operating costs had a positive impact in Q3. Higher average selling price was the result of price increases and sales mix. The operating cost improvement came from the Company's 2013 investment in production equipment.
Operating expense increased 13%, mostly from personnel areas. Selling expense increased as sales and marketing staff were reorganized and increased to support sales growth. Social benefit costs increased in Ecuador. The additional production equipment enabled scale-up of several research products so increased R&D expense compared to prior year. Our ISO 9001:2008 quality system certification also contributed to operational reliability.
Higher gross profit combined with the modest operating expense increase to produce record Q3 net income that was 806% higher than prior year Q3. EBITDA (earnings before interest, taxes, depreciation and amortization) increased 176% over prior year from $0.2 million to $0.7 million. The following table summarizes the Q3 results (rounded to thousands of US dollars):
| For the Quarter ended March 31 | ||||||||
| 2014 | 2013 | Increase (Decrease) | ||||||
| Revenue | $2,180 | $1,516 | $664 | 44% | ||||
| Gross profit | $1,400 | $915 | $485 | 53% | ||||
| Operating expenses | $762 | $675 | $87 | 13% | ||||
| Net income | $444 | $49 | $395 | 806% | ||||
| Earnings per share | $0.018 | $0.002 | $0.016 | 800% | ||||
| Shareholders' equity | $6,498 | $5,041 | $1,457 | 29% | ||||
| Cash balance | $2,547 | $1,515 | $1,032 | 68% | ||||
Epicore continues to generate positive cash flows from operating activities. Cash at the end of the quarter was $2.5 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 was 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 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 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
