Epicore BioNetworks Inc. Reports Record Results in Fiscal Year 2012
for the year ended 30 June 2012
CALGARY, Oct. 16, 2012 /PRNewswire/ - Epicore fiscal 2012 sales revenue grew 12% over a very strong prior fiscal year and set sales records for three of four quarters of fiscal 2012. With increased sales and cost control, net income increased 63%.
Epicore continued to grow its sales revenues and profit despite a difficult year for the shrimp aquaculture industry. Consumer demand for shrimp remained high throughout fiscal 2012 fueled in part by severe supply shortages due to disease and natural disasters. These problems create a favorable atmosphere for Epicore's productivity improving products but also cause farm closures that can hurt Epicore sales, as they did in fiscal 2012. The Epicore sales team and our distributors responded to this challenge by securing new customers, opening new market areas and exploiting new applications for Epicore products.
Epicore continued its major initiative to improve its scientific and manufacturing resources, which will position the Company for significant future growth and increase the reliability of its operations. Despite additional spending on strategic initiatives, net income grew above prior year. Some highlights (in US$) versus prior fiscal year were:
- Increased revenue from $5.0 million to $5.6 million (a 12% increase)
- Increased gross profit from $3.0 million to $3.4 million (a 16% increase)
- Increased net income from $0.4 million to $0.7 million (a 65% increase)
- Increased EBITDA from $0.9 million to $1.3 million (a 42% increase)
- Increased shareholders' equity from $4.1 million to $4.8 million (a 17% increase)
- Decreased cash from $1.7 million only to $1.6 million (a 4% decrease)
- Increased basic and diluted earnings per share from $0.02 to $0.03 (a 63% increase)
Gross profit grew 16% due to the increase in sales volume and an improvement in gross margin that was mainly due to product mix. Operational expenses increased by 6% in fiscal 2012 due to increased selling effort, inflation and our strategic initiative. Research and development expenses decreased 20% with the expiry of a research consultant contract. With the research and development strategy in place and the production resources being added, management expects to continue to improve the quality and reliability of its manufacturing operations and to accelerate the Company's reach and penetration into new business areas.
Epicore generated positive net income of $0.7 million to give Epicore its ninth consecutive year of profitable operation. Versus prior year, net income increased by $0.3 million (65%). EBITDA (earnings before interest, taxes, depreciation and amortization) increased 42% over prior year from $0.9 million to $1.2 million, as the following results show:
| 2012 | 2011 | Increase (Decrease) | ||
| Revenue | $5,635,700 | $5,014,600 | $621,100 | 12% |
| Gross profit | $3,429,000 | $2,956,300 | $472,700 | 16% |
| Operating expenses | $2,229,000 | $2,110,100 | $118,900 | 6% |
| Net income | $659,900 | $400,700 | $259,200 | 65% |
| Earnings per share | $0.03 | $0.02 | $0.01 | 61% |
| Shareholders' equity | $4,849,800 | $4,109,900 | $739,900 | 18% |
| Cash balance | $1,628,300 | $1,690,600 | ($62,300) | (4%) |
Epicore continues to generate positive cash flows from operating activities of $0.9 million in fiscal 2012, which was $0.16 million more than fiscal 2011. Cash at the end of the year was $1.6 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.
Fiscal 2012 was a successful year not only on a financial basis, but it saw major progress on several operational and strategic issues including the restructuring of ownership of Epicore's Eastampton, NJ site. A limited liability partnership was dissolved and Epicore acquired the land parcel on which our building is located plus approximately two adjacent acres of unoccupied land. The Company also invested in a major expansion to its Eastampton facility to support its growing and profitable core aquaculture business and to create new opportunities to enhance shareholder value. A financing commitment was secured from a leading North American bank for $1.6 million of production equipment, which has been delivered and is being installed. The new equipment will significantly expand Epicore's current production capacity for biological products. The expansion will improve the reliability and efficiency of current production as well as provide production capability for new products generated from the Company's research and development program.
We also are proud to report that ISO 9001:2008 quality system certification was obtained in fiscal 2012. This is a major achievement for Epicore and reflects well on the Company's quality system. Many of our shrimp processing customers have one or more international certifications like ISO. Additionally, many government aquaculture product registration authorities require quality certification.
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 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, 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.
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