Epicore BioNetworks Inc. Reports Record Results for Quarter One Fiscal Year 2014

EASTAMPTON, N.J., Nov. 5, 2013 (GLOBE NEWSWIRE) -- Epicore BioNetworks Inc. (TSX-V:EBN) revenue for Q1 at $1.6 million was 48% higher than last year's Q1 and set a new company Q1 record. This record follows a record fiscal 2013 Q4. Sales were broad based and not regionally limited as producers worldwide try to capitalize on record high shrimp prices. Early Mortality Syndrome (EMS) in Asia has caused farm closures that hurt Epicore sales throughout 2013 and have reduced the worldwide supply of shrimp, which in turn has pushed up shrimp prices. Demand for shrimp has dropped slightly because of the high prices. Epicore products help shrimp operations enhance their productivity so are in high demand when shrimp prices are high.

Latin America remains the strongest sales region for Epicore. In Q1 the region drove Epicore sales to record levels. Central America has always been a strong sales region for Epicore. Ecuadorian sales grew 18% in the quarter as the disease-free Ecuadorian industry responded to record shrimp prices. This summer, EMS was found in Mexican shrimp farms. Although the cause of EMS was identified by the University of Arizona, it will take time for the industry to develop mitigating treatments. Sales in Mexico benefitted from the EMS outbreak as farmers scrambled to try probiotics in an attempt to control the disease. The challenging environment in Southeast Asia has forced Epicore to work even harder to find new customers not ruined by disease and floods. Distributors in Asia bought strongly in Q1.

Some highlights versus prior fiscal year quarter one were:

  • Increase in revenue of 48% over last year's Q1
  • Increase in gross profit of 61% over Q1 last year
  • Operating expenses higher by 27% compared to last year's Q1
  • Increase in net income of 894% versus last year's Q1
  • EBITDA higher by 295%
  • Increase in basic and diluted earnings per share from $0.001 to $0.007
  • Cash $0.03 million higher than prior quarter and $0.14 higher than prior year Q1
  • Shareholders' equity increased $0.3 million (5%) over prior quarter

Gross profit has tracked higher than revenue with an increase of 61% for the quarter. While most of the increase was due to sales volume, sales price increases and sales mix had a positive impact in Q1. Also, a significant part of the gross profit improvement came from the Company's 2013 investment in production equipment.

Increased expenditures on product development, sales commissions, employee benefits and the new equipment lease have contributed to an increase of 27% in operating expenses. Research and development expenses increased 163% because of higher outside research effort and due to the costs of producing developmental products for field testing. With the research and development strategy in place and the production resources that were 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. Our ISO 9001:2008 quality system certification also contributed to operational reliability.

Higher gross profit more than offset higher operating expenses to result in a record Q1 net income that was 894% higher than prior year Q1. EBITDA (earnings before interest, taxes, depreciation and amortization) increased 295% over prior year from $0.1 million to $0.3 million, as the following results show:

For the Quarter ended September 30, ($000)
2013 2012 Increase (Decrease)
Revenue $1,614 $1,093 $521 48%
Gross profit $1,072 $665 $407 61%
Operating expenses $740 $581 $159 27%
Net income $169 $17 $152 894%
Earnings per share $0.007 $0.001 $0.006 894%
Shareholders' equity $5,711 $4,872 $839 17%
Cash balance $1,968 $1,826 $142 8%

Epicore continues to generate positive cash flows from operating activities. Cash at the end of the quarter was $2.0 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 such as the Normal Course Issuer Bid that has been put in place in Q1.

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.

For more information, please contact: Mr. William P. Long (Chief Executive Officer) USA. Tel: 609-267-9118, Email: Investors@EpicoreBioNetworks.com

CONTACT: Mr. William P. Long Chief Executive Officer Tel: 609-267-9118 Email: Investors@EpicoreBioNetworks.comSource:Epicore BioNetworks Inc.