for the period ended 31 March 2013, in US dollars
CALGARY, May 24, 2013 /PRNewswire/ - Revenue for Q3 at $1.5 million was 4% lower than last year's Q3. Year-to-date (YTD) revenue at $3.9 million was 5% lower than last year. The shrimp aquaculture market has had a difficult year in fiscal 2013. Early Mortality Syndrome in Asia has caused farm closures that continue to negatively impact Epicore sales. Expected sales from new territories were delayed because of protracted regulatory approval processes. Latin American pond sales are weaker in 2013 because of changes in import codes in one major market. Demand for shrimp and shrimp prices have remained high, which in turn supports the demand for Epicore's productivity enhancing products. Epicore has completed installation of its manufacturing capabilities expansion and is in the final stages of commissioning. The new capability will allow the Company to capitalize on its research program, lower product costs and increase the reliability of its product supply. Some Q3 highlights were:
- Revenue decreased 4% compared to last year's Q3
- Gross profit decreased 7% compared to Q3 last year
- Operating expenses increased 10% compared to last year's Q3
- Net income decreased 74% from $0.2 million in last year's Q3 to $0.05 million
- Basic and diluted earnings per share decreased from $0.008 in last year's Q3 to $0.002
- EBITDA decreased 34% compared to Q3 last year
- Shareholders' equity increased 3% in the quarter to $5.0 million
- Cash increased from $1.4 to $1.5 million compared to last year's Q3
Gross profit has tracked lower with decreases of 7% for the quarter and 6% for the year to date. The Q3 gross profit decrease was due to lower sales revenue and to lower gross margin caused by sales mix. The proportion of lower margin dry feed sales was much higher in Q3 than in prior year. Increased expenditures on product development, marketing, travel, quality initiatives and manufacturing capability improvements have contributed to an increase of 10% in operating expenses over prior year Q3. Our new building modification and manufacturing equipment addition are still in commissioning mode so are not yet contributing the expected financial benefits. It is expected that we will see these benefits next quarter. Q3 fiscal 2013 results include a US federal income tax expense of $0.14 million, along with $0.05 million for New Jersey and Ecuadorian taxes. Net income of $0.05 million was 74% lower than Q3 fiscal 2012 because of lower gross profit, higher operating expenses and higher taxes, as the following results show (rounded to thousands in US dollars):
|For the Quarter Ended March 31|
|Earnings Before Tax||236,000||366,000|
|Income Tax Expense||188,000||177,000|
Cash at the end of March was $1.5 million, an increase of 9% over prior year Q3. 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. In support of its growth strategy, the Company anticipates relatively little additional expenditure during the rest of fiscal 2013 in property, plant and equipment and in enhancements to its production facility in New Jersey. Any required expenditures are expected to be financed by a combination of the Company's cash reserves and continued positive earnings.
Two events that occurred after Q3 close are worth mentioning.
Epicore has met the requirements for and has been granted Tier One status by the TSX Venture Exchange. This move up from Tier Two status reflects the evolving maturity of Epicore's business.
Secondly, Epicore BioNetworks Inc. 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 future sales volumes, 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 and expectations respecting availability of financing for such development, 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.
SOURCE Epicore BioNetworks Inc.