Epicore BioNetworks Inc. Reports Results for Q1 Fiscal Year 2018 for the quarter ended 30 September 2017, in US dollars

EASTAMPTON, NJ, Nov. 16, 2017 /PRNewswire/ - Revenue for Q1 at $2.8 million was 15% higher than last year's Q1, setting a new Q1 sales record. Sales increases were achieved in several areas.  Sales were especially strong in Ecuador, Venezuela, Africa, and Australia.  Overall, the rest of Latin America maintained the strong level of sales achieved in fiscal 2017 because of strong sales to Venezuela.  Sales to Asia were close to fiscal 2017 level.  The early mortality syndrome (EMS) disease continues to significantly affect production in Asia and Mexico and has been found in other Latin American countries, including Ecuador.  Net income increased by 59% and earnings per share increased to $0.01. 

Gross profit increased 26% over prior year in Q1 due to the increase in sales, sales mix, and operating efficiencies.  Operating expense increased 18% over prior year Q1 mainly due to higher selling expense and corporate spending on M&A.  Selling expenses increased due to higher commissions and extensive travel. Earnings before tax increased 42% to $0.6 million.  Net income at $0.4 million was 59% above the prior year Q1.  Ending cash balance increased 24% over prior year Q1. Some highlights versus prior fiscal year were:

• Q1 revenue of $2.8 million was 15% higher than Q1 last year
• Q1 gross profit of $1.7 million was 26% higher than Q1 last year
• Q1 operating expenses of $1.1 million were 18% higher than Q1 last year
• Q1 earnings before taxes of $0.6 million were 42% higher than Q1 last year
• Q1 net income of $0.4 million was 59% higher than Q1 last year
• Q1 basic earnings per share of $0.014 were 44% higher than Q1 last year
• Q1 shareholders' equity of $11.5 million was 20% higher than Q1 last year
• Q1 cash balance of $4.6 million was 24% higher than Q1 last year
• YTD cash flow from operating activities was $0.1 million

The following summarizes financial results for quarters ended September 30 (rounded to thousands of US dollars): 

Epicore continues to generate positive cash flows from operating activities with $0.1 million generated in Q1 fiscal 2018. Investment in infrastructure continued.  A new retail store in Ecuador was completed.  Cash at the end of the year was $4.6 million, up 24% over prior year Q1 but unchanged versus beginning Q1 fiscal 2018. 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. 

Our ISO 9001:2008 and Global GAP quality system certifications contributed to operational reliability.   They position Epicore to be compliant with the US Food Safety Modernization Act.

As previously announced on October 16, 2017, Epicore and Neovia S.A.S. ("Neovia") entered into an arrangement agreement dated October 13, 2017 pursuant to which a subsidiary of Neovia will acquire all of the issued and outstanding shares of Epicore on a fully-diluted basis for a price per share of Cdn$1.30, valuing Epicore at approximately Cdn$35.6 million.  The transaction is proposed to be carried out in accordance with a Plan of Arrangement under the Business Corporations Act (Alberta).  If the Arrangement is completed, the shares of Epicore will be delisted from the TSX Venture Exchange.

The Information Circular in respect of the Epicore shareholder meeting to approve the Plan of Arrangement, scheduled for December 13, 2017, is expected to be mailed to Epicore shareholders on or before November 22, 2017.  If approved, the transaction is expected to close in December, 2017.

The Company's assumption is that operations will continue as before the Arrangement was contemplated.

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 proposed Plan of Arrangement and the expectation by management that there will be sufficient cash to meet the fiscal year's financial requirements and to fund expansion of aquaculture and environmental remediation marketing efforts and to pursue new strategies for enhancing shareholder value in the event the Plan of Arrangement is not completed.  We can provide no assurance that the sale of the shares of Epicore to Neovia will proceed as currently anticipated.  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. In addition, the Plan of Arrangement is subject to shareholder approval and final Court approval .

SOURCE Epicore BioNetworks Inc.

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