TORONTO, ONTARIO--(Marketwired - Aug. 15, 2016) - Microbix Biosystems Inc. (TSX:MBX), an innovator of biological products and technologies, today reported financial results for its third quarter ending June 30, 2016.

Third Quarter Financial Results

Total revenue was $2,253,373 in the third quarter compared to $2,219,160 in the third quarter last year, or an increase of 2%, as demand for Virology products remains strong following a weak first quarter. The Company recorded deferred revenue of $1,169,129 at the end of the quarter compared to $189,550 for the same period last year. This revenue represents prepayments on orders for delivery in the fourth quarter. Net income in the third quarter was $47,953 compared to net income of $82,155 in the third quarter of 2015. The lower net income this quarter resulted from higher operating costs, including higher raw material costs driven by the stronger U.S. dollar and lower investment tax credits compared to the third quarter last year. These higher operating costs were partially offset by the higher sales in the third quarter compared to the same period last year.

Cash generated from operations was $501,463 in the third quarter compared to $180,333 used in operations during the same period last year, primarily due to an increase in deferred revenue, which was partially offset by an increase in accounts receivable compared to the prior year. Cash used by financing activities was $239,940 for debt repayment in the third quarter compared to $51,308 generated in the third quarter last year. Cash used in investing activities was $263,890 in the third quarter compared to $1,009,559 in the same period last year, primarily due to completion of the LumiSort prototype in the prior year and reduced investment in the bioreactor process as it nears completion this year. As a result, net cash flow was $2,366 negative in the third quarter compared to $1,138,584 negative in the third quarter of last year.

Nine-Month Financial Results

Microbix reported total revenue of $6,046,557 in the first nine months of 2016 compared to $6,759,752 for the same period in 2015, or a decrease of 10%. This decline was attributable to lower than normal revenue in the first quarter of 2016, which resulted from abnormally lower demand from a large customer. This customer returned to a normal purchasing schedule in the second and third quarters, though a significant amount of this order volume is not due for delivery until the fourth quarter. The weak first quarter sales contributed to a net loss for the first nine months of $114,523 compared to a net income of $210,868 in the first nine months of 2015. The nine-month operating loss was mitigated by significantly lower legal expenses in the period.

Cash generated from operations in the first nine months was $476,581 compared to $511,008 generated from operations in the first nine months of 2015. The positive cash was caused by an increase in deferred revenue, which was partially offset by an increase in accounts receivable compared to the prior year. Cash generated from financing activities in the first nine months was $728,686, due to loan proceeds for the bioreactor of $250,000 and the issuance of a private placement of $531,674, compared to $3,261,820 generated from financing activities in the same period last year, mainly from the proceeds of exercised common share warrants and options. Cash used in investing activities in the first nine months was $1,304,358 compared to $4,342,510 for the same period in 2015. This decrease was primarily due to the completion of the LumiSort prototype in the prior year. Net cash flow in the first nine months was $99,090 negative compared to $569,041 negative in the same period last year.

Vaughn C. Embro-Pantalony, Chief Executive Officer commented, "I am pleased with the strong sales of Virology products in the third quarter. We continue to recover from the revenue shortfall that we experienced earlier this year. And we expect continued strong sales performance in the fourth quarter based on significant shipments in July and strong customer orders for delivery in this quarter, which supports our earlier projection of record sales for the current fiscal year." 

Corporate Update

LumiSort™

Microbix also confirmed that discussions continue with global animal genetics companies to secure a partnership to complete the LumiSort development program.

Mr. Embro-Pantalony commented, "We continue to manage and monitor various complexities that have resulted in the protracted timeline for completion of a partnership agreement. We remain confident that we will reach a near term conclusion that will ultimately be beneficial for Microbix shareholders."

Kinlytic®

The Company reports that discussions continue to advance with third parties interested in making an investment to re-launch Kinlytic in the U.S., Canadian and international markets.

Mr. Embro-Pantalony commented, "Detailed evaluations of the Kinlytic opportunity by potential stakeholders continues. Our objective is to have committed funding to re-commercialize Kinlytic as soon as possible, through a combination of investors, licensees and government agencies to return this approved thrombolytic drug to market."

About Microbix Biosystems

Microbix Biosystems Inc. specializes in the research and development of biological solutions. This includes products for human health applications in the vaccine, therapeutic and diagnostic markets and a product for the worldwide animal reproduction market. In its revenue generating business, the Company manufactures and distributes a wide range of infectious disease antigens to a worldwide customer base. The Company's pipeline of innovative technologies and products includes LumiSort semen sexing technology for the livestock industries, Kinlytic, a thrombolytic drug with several approved and potential applications including the treatment of life-threatening blood clots, and VIRUSMAX, a proprietary technology for increasing virus yields in the manufacture of influenza vaccine. Established in 1988, Microbix is a publicly traded company, listed on the Toronto Stock Exchange, and headquartered in Mississauga, Ontario.

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, the risks associated with its revenue business, development projects, operations in foreign jurisdictions, engineering and construction generally, production (including control over costs, quality, quantity and timeliness of delivery of products), 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.

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