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Microbix Reports Record Results for Q2 Fiscal 2022

Record Q2 Sales of $4.9 million, Q2 Net Earnings of $0.7 million

MISSISSAUGA, Ontario, May 12, 2022 (GLOBE NEWSWIRE) -- Microbix Biosystems Inc. (TSX: MBX, OTCQX: MBXBF, Microbix®), a life sciences innovator, manufacturer, and exporter, reports results for its second quarter and first half of fiscal 2022 ended March 31, 2022 (“Q2” and “H2”), with record sales and strong earnings, plus ongoing progress upon its strategic goal of increasing the proportion of revenues derived from medical devices to thereby continue growing sales, margins, and earnings.

Management Discussion

Q2 revenues achieved a record level of $4.9 million, up 12% from Q2 2021, as Microbix continues to emphasize operational excellence and the sale of innovative, proprietary, and branded medical devices. Microbix’s viral transport medium (branded “DxTM™”) contributed strongly, with Q2 sales of $1.9 million versus $255,000 in Q2 2021. Sales of antigens in Q2 were $1.6 million (with improved margins) and royalties were higher than Q2 2021. Sales of test quality assessment products (“QAPs™”) continued to be strong at $1.3 million. Overall, sales achieved a very favourable gross margin of 64% for Q2, in comparison to 60% in Q2 2021 and thereby drove strong net earnings and cash flow.

Microbix continues to pursue growth in sales of its medical devices and expects that fiscal 2022 will realize materially-positive net earnings, as were achieved in fiscal 2021.

Three Months Ending March 31, 2022 (“Q2”)

Q2 revenue was $4,880,564, a 12% increase from Q2 2021 revenues of $4,353,773. Included were antigen revenues of $1,607,970 (2021 - $$2,524,363). QAPs revenues were $1,318,382 (2021 - $1,495,088). In turn, revenue from DxTM was $1,860,704 (2021 - $255,000), and royalties were $93,508 (2021 - $79,322). Q2 2022 sales growth was most influenced by Ontario-driven deliveries of DxTM and offset predominantly by weaker antigen sales.

Q2 gross margin was 64%, up from 60% in Q2 2021, due to a greater proportion of sales of QAPs, new VTM sales, and the effects of antigen product sales mix with improved margins.

Operating expenses in Q2 increased by 33% relative to Q2 2021, due to increased investment in R&D projects for our QAPs business, additional spending in sales and marketing to support continued sales growth, no Ontario Together Fund (“OTF”) grant funding this quarter vs. Q2 2021; more than offsetting a reduction in interest costs due to the repayment of debentures and BDC loans. Overall, greater sales and more available gross margin dollars during the period led to an operating income and net income of $733,489 versus a Q2 2021 operating income and net income of $807,463. Cash provided by operating activities was $893,232, compared to cash provided by of $981,648 in Q2 2021.

Six Months Ending March 31, 2022 (“H1”)

H1 revenue was $9,736,164, a 30% increase from H1 2021 revenues of $7,511,432. Included were antigen revenues of $3,374,386 (2021 - $4,662,192). QAPs revenues were $2,467,533 (2021 - $2,457,509). In turn, revenue from DxTM was $3,677,949 (2021 - $255,000), and royalties were $216,296 (2021 - $136,731). H1 2022 sales growth was most influenced by Ontario-driven deliveries of DxTM, followed by continued diagnostics industry uptake of QAPs, and offset by weaker antigen sales.

H1 gross margin was 65%, up from 58% in H1 2021, due to a greater proportion of sales of QAPs, new VTM sales, and the effects of antigen product sales mix with improved margins.

Operating expenses in H1 increased by 38% relative to H1 2021, due to increased investment in R&D projects for our QAPs business, additional spending in sales and marketing to support continued sales growth, lack of eligibility for any Canada Emergency Wage Subsidies in Q1 and no Ontario Together Fund (“OTF”) grant funding this period vs. H1 2021; more than offsetting a reduction in interest costs due to the repayment of debentures and BDC loans. Overall, greater sales and more available gross margin dollars during the period led to an operating income and net income of $1,613,267 versus a H1 2021 operating income and net income of $938,282, growing 72% vs. prior year. Cash provided by operating activities was $609,218, compared to cash provided by of $1,168,450 in H1 2021, with the majority of the change coming from higher accounts receivables due to increased sales levels in the latter part of H1 2022.

At the end of H1, Microbix’s current ratio (current assets divided by current liabilities) was 6.49 and its debt to equity ratio (total debt over shareholders’ equity) was 0.38.

FINANCIAL HIGHLIGHTS        
         
For the three months and six months endedMarch 31, 2022 March 31, 2021 March 31, 2022 March 31, 2021 
         
Total Revenue$4,880,564 $4,353,773 $9,736,164 $7,511,432 
         
Gross Margin 3,116,299  2,605,105  6,338,157  4,352,403 
SG&A Expenses 1,676,788  1,315,363  3,312,657  2,471,561 
R&D Expense 502,897  216,283  967,358  414,161 
Financial Expenses 203,125  265,996  443,875  528,399 
         
Operating Income (Loss) for the period 733,489  807,463  1,614,267  938,282 
Net Income (Loss) and Comprehensive Income (Loss) for the period 733,489  807,463  1,614,267  938,282 
         
Cash Provided (Used) by Operating Activities 893,232  981,648  609,218  1,168,450 
         
 March 31, 2022 September 30, 2021     
         
Cash 12,201,008  9,986,312     
Accounts receivable 4,547,783  4,175,116     
Total current assets 23,126,824  19,094,482     
Total assets 32,946,690  28,829,034     
Total current liabilities 3,565,814  5,194,194     
Total liabilities 9,133,058  10,272,890     
Total shareholders' equity 23,813,632  18,556,144     
Current ratio 6.49  3.68     
Debt to equity ratio 0.38  0.55     
         

Corporate Outlook
Microbix will continue to drive sales growth across all of its three revenue-generating business lines, and work to keep improving percentage gross margins and driving bottom-line results. Management currently expects Microbix to generate meaningful net earnings growth across fiscal 2022. Additionally, work continues upon securing a partnership to advance its Kinlytic® urokinase project.

Adelaide Capital will host a live webinar with management, on Wednesday, May 18 at 11am ET. Please register here: https://us02web.zoom.us/j/87998516635?pwd=a1drZjJ5dyszM2FJN2hxVmpDY3V6dz09 .

It will also be live-streamed to YouTube at: https://www.youtube.com/channel/UC7Jpt_DWjF1qSCzfKlpLMWw.

A replay of the webinar will also be made available on Adelaide Capital’s YouTube channel.

About Microbix Biosystems

Microbix creates proprietary biological products for human health, with over 100 skilled employees and sales approaching C$ 2.0 million per month. It makes a wide range of critical ingredients and devices for the global diagnostics industry, notably antigens for immunoassays and its laboratory quality assessment products (QAPs™) that support clinical lab proficiency testing, enable assay development and validation, or help ensure the quality of clinical diagnostic workflows. Its antigens drive the antibody tests of over 100 diagnostics makers, while QAPs are sold to clinical laboratory accreditation organizations, diagnostics companies, and clinical laboratories. Microbix QAPs are now available in over 30 countries, distributed by 1WA (Oneworld Accuracy Inc.), Alpha-Tec Systems, Inc., Diagnostic International Distribution SpA., Labquality Oy, The Medical Supply Company of Ireland, R-Biopharm AG, SDT Molecular Pte Ltd, Seegene Canada Inc., and Thomas Scientific LLC. Microbix is ISO 9001 and 13485 accredited, U.S. FDA registered, Australian TGA registered, Health Canada establishment licensed, and provides CE marked products.

Forward-Looking Information
This news release includes “forward-looking information,” as such term is defined in applicable securities laws. Forward-looking information includes, without limitation, discussion of financial results or the outlook for the business, risks associated with its financial results and stability, its current or future products, development projects such as those referenced herein, sales to foreign jurisdictions, engineering and construction, production (including control over costs, quality, quantity and timeliness of delivery), foreign currency and exchange rates, maintaining adequate working capital and raising further capital on acceptable terms or at all, and other similar statements concerning anticipated future events, conditions or results that are not historical facts. These statements reflect management’s current estimates, beliefs, intentions and expectations; they are not guarantees of future performance. The Company cautions that all forward looking information is inherently uncertain and that actual performance may be affected by a number of material factors, many of which are beyond the Company’s control. Accordingly, actual future events, conditions and results may differ materially from the estimates, beliefs, intentions and expectations expressed or implied in the forward-looking information. All statements are made as of the date of this news release and represent the Company’s judgement as of the date of this new release, and the Company is under no obligation to update or alter any forward-looking information.

Please visit www.microbix.com or www.sedar.com for recent Microbix news and filings.

For further information, please contact Microbix at:

Cameron Groome,
CEO
(905) 361-8910
Jim Currie,
CFO
(905) 361-8910
Deborah Honig,
Investor Relations
Adelaide Capital Markets
(647) 203-8793
[email protected]
 Jim Macdonald,
Investor Relations
Torrey Hills Capital
(858) 456-7300
[email protected]
 

Copyright © 2022 Microbix Biosystems Inc.
Microbix®, DxTM™, Kinlytic®, and QAPs™ are trademarks of Microbix Biosystems Inc.


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