Epicore BioNetworks Inc. Releases Preliminary Quarter 4 Results for Fiscal Year 2017

EASTAMPTON, New Jersey, July 27, 2017 /PRNewswire/ --

for the Quarter ended 30 June 2017, in US dollars

Epicore BioNetworks Inc. (TSXV: EBN) is providing an update on fourth quarter and fiscal year results. Revenue was $3.1 million and net income was $0.55 million or $0.02 per share for the quarter ended June 30, 2017. 

Historically, quarter four is a weaker sales period for the Company than other quarters. In fiscal 2017, Q4 was the strongest of the fiscal year and was particularly strong when compared to Q4 fiscal 2016. 

Unaudited fourth quarter revenue was $3.1 million versus $2.3 million in Q4 2016, a 37% increase. Revenue for the 2017 fiscal year was $11.5 million, 22% higher than fiscal 2016. Quarterly net income was $0.55 million or 337% higher than prior year Q4. Annual net income at $1.9 million was $0.7 million or 67% higher than prior fiscal year. Fourth quarter earnings before tax (EBT) were $0.9 million or 134% higher than prior year Q4. Annual EBT at $3.0 million was $1.2 million or 72% higher than prior fiscal year.  Taxes for the quarter increased by $0.1 million or 28% over prior year Q4. Taxes for the year increased by $0.5 million or 80% over prior fiscal year. Cash flow provided year-end cash of $4.6 million, a 33% increase.

The shrimp industry has continued to recover throughout the fiscal year and shrimp prices have slowly increased. Early mortality syndrome (EMS) disease still affects most of Southeast Asia and some areas in the Americas but the use of improved culturing systems, like raceways, has helped farmers start to recover from disease. But, with higher and steadily increasing shrimp prices farmers are more willing to try a crop. 

Epicore sales in Q4 and the fiscal year grew in most world business sectors with the largest increase in Latin America. The Company set sales records in every quarter of fiscal 2017.  Epicore's Ecuadorian subsidiary had strong and increasing sales throughout the year with the industry reporting record shrimp exports. Sales in the rest of Latin America also were strong except for Mexico, which has been hit hard with EMS. Most Asian countries also booked sales increases in Q4 and fiscal 2017.  Newer areas like Australia and Madagascar contributed strongly.  Our newest product, EPI-ALGAE, made impressive early sales.

Results versus prior fiscal year quarter four are as follows:

• Q4 revenue of $3.1 million was 37% higher than Q4 last year
• Q4 gross profit of $2.0 million was 60% higher than Q4 last year
• Q4 operating expenses of $1.1 million were 17% higher than Q4 last year
• Q4 earnings before taxes of $0.9 million were 134% higher than Q4 last year
• Q4 net income of $0.55 million was 337% higher than Q4 last year
• Q4 basic earnings per share of $0.02 were 300% higher than Q4 last year
• Q4 cash balance of $4.6 million was 33% higher than Q4 last year

Gross profit increased 60% in Q4 versus prior year due to the increase in revenues and to a higher average gross margin. The unit cost of goods sold was lower in Q4 versus prior year and average selling price was slightly higher, both due to product sales mix. Higher production was achieved without a significant increase in production labor costs. Operating expense increased 17% over prior year Q4 and 12% for the fiscal year. R&D and corporate expenses accounted for the largest increases. Corporate expenses increased due to increased board activity. Tax expense increased in line with higher EBT.  The following table summarizes the Q4 and fiscal 2017 results (rounded to thousands of US dollars):

                                   For the Quarter ended June 30
                           2017       2016            Increase (Decrease)
    Revenue                  $3,076   $2,250            $826          37%
    Gross profit             $2,015   $1,257            $758          60%
    Operating expenses       $1,135     $968            $167          17%
    Earnings before tax        $864     $369            $495         134%
    Net income                 $555     $127            $428         337%
    Earnings per share        $0.02   $0.005          $0.015         300%
    Cash balance             $4,615   $3,478          $1,137          33%

                                   For the Year ended June 30
                          2017     2016        Increase (Decrease)
    Revenue              $11,542   $9,437      $2,105          22%
    Gross profit          $7,295   $5,482      $1,813          33%
    Operating expenses    $4,300   $3,848        $452          12%
    Earnings before tax   $3,034   $1,767      $1,267          72%
    Net income            $1,866   $1,117        $749          67%
    Earnings per share     $0.07    $0.04       $0.04          75%
    Cash balance          $4,615   $3,478      $1,137          33%

Audited financial results will be available in October. 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.]

Mr. William P. Long (Chief Executive Officer) USA, Tel: +1-609-267-9118, Email: Investors@EpicoreBioNetworks.com