for the period ended 30 December 2012, in US dollars
CALGARY, Feb. 28, 2013 /PRNewswire/ - Revenue for Q2 at $1.3 million was 9% lower than last year's record Q2. Demand for shrimp and shrimp prices have remained high, which in turn increases the benefits of Epicore's productivity enhancing products. However, Early Mortality Syndrome (EMS) in Asia has caused farm closures which negatively impacted Epicore sales. Central America producers delayed buying for the 2013 season. Expected sales from new territories were delayed because of protracted regulatory approval processes. A significant volume of orders were missed in Q2 that will be filled in Q3. Epicore has nearly completed its manufacturing capabilities expansion, which will allow the Company to capitalize on its research program and will increase the reliability of its product supply. Some Q2 highlights were:
- Revenue decreased 9% compared to last year's record Q2
- Gross profit decreased 13% compared to Q2 last year
- Operating expenses increased 26% compared to last year's Q2
- Net income decreased 60% from $0.2 million in last year's Q2 to $0.1 million
- Basic and diluted earnings per share decreased from $0.009 million in last year's Q2 to $0.003
- EBITDA decreased 65% compared to Q2 last year
- Increased shareholders' equity increased 1% in the quarter to $4.9 million
- Cash decreased $0.2 million compared to last year's Q2
Gross profit fell 13% due to the sales decrease. Because of a less favorable sales mix Epicore gross margin (gross profit as a percentage of sales) decreased 3%. Operational expenses increased by 26% due to compensation increases, revenue driven costs, higher marketing travel expense, higher financial expense and one-time expenses related to strategic initiatives. Q2 fiscal 2013 results include a US federal income tax expense of $0.02 million, along with $0.03 million for New Jersey and Ecuadorian taxes. Net income of $0.1 million was 60% lower than Q2 fiscal 2012 because of lower gross profit and higher operating expenses, as the following results show (rounded to thousands in US dollars):
|For the Quarter Ended December 30|
|Earnings Before Tax||129,000||383,000|
|Income Tax Expense||48,000||177,000|
Cash at the end of December was $1.5 million, a decrease of 8% over prior year Q2. 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.
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.