for the period ended 30 September 2012, in US dollars
CALGARY, Nov. 19, 2012 /PRNewswire/ - Gross profit grew 6% in quarter one (Q1) and revenue at $1.1 million was only 2% lower than last year's record Q1. Demand for shrimp and shrimp prices have remained high, which increase the demand for Epicore's productivity enhancing products. However, Early Mortality Syndrome in Asia has caused farm closures that have hurt Epicore sales throughout 2012. The severe US Midwest drought drove up spot prices of agricultural commodities and reduced availability. This event caused a shortage of critical raw materials for Epicore's dry feed products and produced finished feed stock-outs. A significant volume of orders were missed in Q1 that will be filled in Q2. Epicore continued a major initiative to increase its science resources, which will position the Company for significant future growth and increase the reliability of its manufacturing operations. Some Q1 highlights were:
- Decrease in revenue of 2% over last year's record Q1
- Increase in gross profit of 6% over Q1 last year
- Increase in operating expenses of 14% over Q1 last year
- Decrease in net income of 73% versus last year's Q1
- Decrease in EBITDA of 42% versus last year's Q1
- Increase in cash of $0.2 million from prior quarter
- Achieved basic and diluted earnings per share of $0.001, down from $0.003 in prior year Q1.
- Increased shareholders' equity 0.5% in the quarter to $4.9 million.
Epicore gross margin (gross profit as a percentage of sales) increased due to price increases and to sales mix Operational expenses increased by 14% due to inflation, higher marketing travel expense, quality initiative expense and outside research expense. Quarter one fiscal 2012 results include a US federal income tax expense of $0.04 million, along with $0.02 million for New Jersey and Ecuadorian taxes. Net income of $0.02 million was lower than fiscal 2011 because of higher operating expenses, as the following results show (rounded to thousands in US dollars):
|For the Quarter Ended September 30|
|Earnings Before Tax||75,000||126,000|
|Income Tax Expense||58,000||62,000|
Cash at the end of September was $1.8 million, an increase of 12% over prior year quarter four. 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 additional expenditure during fiscal 2013 in property, plant and equipment, through the addition of leased capital equipment and enhancements to its production facility in New Jersey, and in product development through its ongoing R&D programs. This is expected to be financed by a combination of the Company's cash reserves, continued positive earnings and third-party financing.
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.