EASTAMPTON, N.J., Nov. 19, 2015 (GLOBE NEWSWIRE) -- Revenue for Q1 at $2.1 million was 12% lower than last year's Q1 and ended our string of consecutive quarterly records. Sales increases were achieved in some areas but declines outnumbered gains. Early Mortality Syndrome (EMS) continues to afflict several shrimp producing regions, especially in Southeast Asia where Epicore sales have been affected. Regions free of EMS increased shrimp production in our fiscal 2015. This increase in the worldwide supply of shrimp has caused shrimp prices to fall from record 2014 levels back to the more normal 2013 prices. While prices have stabilized and even increased slightly, producers are afraid of further erosion. This concern and the fear of EMS have made producers highly cautious, producing a curtailment in shrimp stocking and therefore a decreased demand for Epicore products in quarter one. Net income decreased by 42% to deliver earnings per share of $0.01.
Some highlights versus prior fiscal year quarter one were as follows:
- Revenue decreased 12% to $2.1 million from $2.3 million last year Q1
- Gross profit decreased 10% to $1.2 million from $1.4 million
- Operating expenses increased by 10% to $0.9 million from $0.8 million
- Income before taxes decreased 37% to $0.4 million from $0.6 million
- Net income decreased 42% to $0.2 million from $0.4 million
- Achieved basic earnings per share of $0.01
- Shareholders' equity increased 3% in the quarter to $8.4 million from $8.1 million
- Cash increased 22% in the quarter to $2.8 million from $2.3 million
- Cash flow from operations contributed $0.7 million in the quarter
Gross profit decreased along with the decrease in revenues. However, the decline was a lower percentage (10%) than the sales decrease. Sales mix yielded higher average selling price that favorably affected gross profit. An increase in production efficiencies was offset in the quarterly comparison due to an increase in one major purchased material.
Operating expense increased 10% from personnel cost, increased depreciation for our new building, and higher research activity. Consultant expense was lower in Q1 but outside research expense was higher. Selling expense increased due to extra sales staff added in Asia and technical staff added in the USA. As a consequence, we have material increased our technical capacity to develop new products and applications for existing ones. The personnel increase in Asia supports our strategy to increase market share in the world's largest shrimp producing area.
Lower gross profit combined with the higher operating expenses to produce lower Q1 net income than prior year Q1. EBITDA (earnings before interest, taxes, depreciation and amortization) decreased 27% over prior year from $0.6million to $0.4 million. The following table summarizes the Q1results (rounded to thousands of US dollars):
| For the Quarter ended September 30 | ||||||||
| 2015 | 2014 | Increase (Decrease) | ||||||
| Revenue | $2,079 | $2,349 | ($270) | (12%) | ||||
| Gross profit | $1,235 | $1,377 | ($142) | (10%) | ||||
| Operating expenses | $893 | $815 | $78 | 10% | ||||
| Net income | $231 | $397 | ($166) | (42%) | ||||
| Earnings per share | $0.009 | $0.016 | $0.007 | (44%) | ||||
| Shareholders' equity | $8,407 | $7,160 | $1,247 | 17% | ||||
| Cash balance | $2,753 | $3,270 | ($517) | (16%) | ||||
Epicore (TSX-V: EBN ) continues to generate positive cash flows from operating activities. Cash at the end of the quarter was $2.8 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.
Over the last two years, Epicore has invested materially in a new building and automated packaging equipment. As previously reported the new building was completed and is occupied. This extra space is critical to our ability to increase production level. Liquid packaging equipment was installed in Q1 and is operating well. It reduces packaging time so effectively increases production rate. Automated dry packaging equipment is on order and should be operational in Q2.
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, that investments now in place and planned for new plant and equipment will result in production efficiencies and increased capacities 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
