IBEX Technologies Inc. (TSX VENTURE:IBT), today reported its financial results
for the six months ended January 31, 2011.
"As previously forecast, the second quarter did not produce a profit for IBEX,
primarily due to an anticipated reduction in orders from several major
customers", said Paul Baehr, President and CEO. "However, we do see signs of a
strengthening in demand, as customer orders for the third and fourth quarter
have picked up. We are also pleased to note the successful completion of our
enzyme-lyophilization production project which will increase our capacity by
over 100% and the completion of recruitment in our arthritis assay R&D expansion
project".
FINANCIAL RESULTS FOR THE YEAR TO DATE
Sales for the six months ended January 31, 2011 were $888,625 compared to
$1,517,693 for the same period in the prior year, representing a decrease of
41%. The net decrease in sales can be traced to softness in both the enzyme and
arthritis-assay product lines, as well as the negative effect of a weak US
dollar (approximately $83,000).
Research and development expenses for the six months ended January 31, 2011
totaled $140,758, as the Company re-started its efforts to improve the precision
of its arthritis assays, and prepare for introduction of new assays. The Company
did not incur any research and development expenditures in the same period ended
January 31, 2010.
Net loss for the six months ended January 31, 2011 was $331,218, compared to net
earnings of $496,870, for the same period in previous fiscal year.
Excluding R&D and Financial Expenses (i.e. foreign exchange, interest revenues
and bank charges), Operating Costs for the six months ended January 31, 2011
decreased to $1,051,937 from $1,103,282, principally due to reduced compensation
costs.
Cash, cash equivalents, and marketable securities decreased 34% over the six
months ended January 31, 2011 to $2,231,387 from $3,033,556 on July 31, 2010.
Working capital decreased to $2,598,829 as at January 31, 2011 from $3,278,875
as at July 31, 2010. The reduction in cash and in working capital is
attributable to both the reduced sales, and to the now- completed investment in
new production capacity for the Company's enzyme diagnostics.
FINANCIAL RESULTS FOR THE SECOND QUARTER OF FISCAL 2011
Sales for the quarter ended January 31, 2011 totaled $375,650, a decrease of 57%
as compared to $871,037 in the same period of the prior year. The decline in
sales is mainly attributable to the items mentioned above.
Excluding financial (i.e. foreign exchange etc.) and R&D expenses, Operating
Expenses for the second quarter ended January 31, 2011 decreased by $120,987 to
$454,401 due to reduced compensation costs.
The Company incurred a Net Loss of $153,280 compared to Net Earnings of $424,993
for the same period year ago. The decrease in Net Earnings, as mentioned above,
is principally due to lower sales, an increase in R&D expenses, compounded by
the weakening of the US dollar vs. the Canadian dollar (IBEX sells its goods in
US dollars).
Cash, cash equivalents, and marketable securities decreased 22% during the
quarter to $2,231,287 from $2,853,555. The Company's working capital was
$2,598,829 as at the end of the second quarter ended January 31, 2011 down from
$3,007,680 as at the end of the prior quarter ending October 31, 2010. As
mentioned above, the principal reason for the decrease traces to the net loss in
the second quarter, plus the costs associated with the now completed expansion
in enzyme related production capacity.
Financial Summary for the six months ending
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January 31, January 31,
2011 2010
Revenues $888,625 $1,517,693
(Loss) Earning Before Interests, Tax,
Depreciation & Amortization ($268,816) $560,481
Depreciation & Amortization $67,659 $67,743
Net (Loss) Earnings ($331,218) $496,870
(Loss) Profit per Share ($0.01) $0.02
Cash, Cash Equivalents & Marketable
Securities $2,231,287 $2,904,889
Working Capital $2,598,828 $3,433,285
Outstanding shares at report date (Common
Shares) 24,703,244 24,703,244
LOOKING FORWARD
Fiscal 2011 looks to be a difficult year for IBEX due to softness in the US
business environment. Additionally, the Canadian dollar is forecast to remain
strong against the US dollar, which does not work in our favour. We therefore do
not expect to have positive net earnings in Fiscal 2011, but expect to return to
profitability in Fiscal 2012, as business conditions in the US improve.
Despite a difficult outlook for Fiscal 2011 we will have made two important
investments in our future. IBEX has recently completed a project to add
additional enzyme-related manufacturing capacity, and has also re-established a
small R&D group with the object of improving our existing arthritis immuno
assays, and adding to this product line. We expect to introduce new kits in
calendar 2011, with financial benefits accruing in Fiscal 2012.
ABOUT IBEX
The Company manufactures and markets a series of proprietary enzymes
(heparinases and chondroitinases). These enzymes are used in pharmaceutical
research, quality assurance, and in the case of Heparinase I, in diagnostic
devices which measure hemostasis in patients.
IBEX also manufactures and markets a series of arthritis assays which are widely
used in pharmaceutical research. These assays enable the measurement of both the
synthesis and degradation of cartilage components, and are powerful tools in the
study of osteo- and rheumatoid arthritis.
For more information, please visit the Company's web site at www.ibex.ca.
Safe Harbor Statement
All of the statements contained in this news release, other than statements of
fact that are independently verifiable at the date hereof, are forward-looking
statements. Such statements, based as they are on the current expectations of
management, inherently involve numerous risks and uncertainties, known and
unknown. Some examples of known risks are: the impact of general economic
conditions, general conditions in the pharmaceutical industry, changes in the
regulatory environment in the jurisdictions in which IBEX does business, stock
market volatility, fluctuations in costs, and changes to the competitive
environment due to consolidation or otherwise. Consequently, actual future
results may differ materially from the anticipated results expressed in the
forward-looking statements. IBEX disclaims any intention or obligation to update
these statements.
CONSOLIDATED BALANCE SHEETS
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January 31, July 31,
UNAUDITED 2011 2010
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$ $
ASSETS
Current assets
Cash and cash equivalents 1,531,287 2,333,556
Marketable securities 300,000 300,000
Accounts receivable 309,140 422,761
Inventories 289,988 226,364
Prepaid expenses 29,965 68,236
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Sub-total current assets 2,460,380 3,350,917
Long term deposit 8,650 8,650
Marketable securities 400,000 400,000
Property and equipment 1,150,206 760,384
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Total assets 4,019,236 4,519,951
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LIABILITIES
Current liabilities
Accounts payable and accrued liabilities 261,552 472,042
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Total liabilities 261,552 472,042
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SHAREHOLDERS' EQUITY
Capital stock 52,660,078 52,660,078
Contributed surplus 563,753 522,760
Deficit (49,466,147) (49,134,929)
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Total shareholders' equity 3,757,684 4,047,909
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Total liabilities and shareholders' equity 4,019,236 4,519,951
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CONSOLIDATED STATEMENTS OF DEFICIT January 31, January 31,
2011 2010
--------------------------------------------------------------------------
$ $
Balance - Beginning of period (49,134,929) (49,641,291)
Net (loss) earnings for the period (331,218) 496,870
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Balance - End of period (49,466,147) (49,144,421)
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CONSOLIDATED STATEMENTS OF EARNING AND COMPREHENSIVE INCOME
UNAUDITED
Three months ended Six months ended
January 31st January 31st
--------------------------------------------------------------------------
2011 2010 2011 2010
-----------------------------------------------------
$ $ $ $
Revenue 375,650 871,037 888,625 1,517,693
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Operating expenses
Research and
Development
expenses (83,984) - (140,758) -
Selling, general
and administrative
expenses and cost
of goods sold (422,066) (540,414) (984,278) (1,035,539)
Amortization of
property and
equipment (32,335) (34,974) (67,659) (67,741)
Other interest and
bank charges (2,182) (3,166) (4,961) (6,635)
Foreign exchange
gain (loss) 8,242 129,673 (27,444) 84,960
Investment income 3,345 2,837 5,257 4,132
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Total operating
expenses (528,980) (446,044) (1,219,843) (1,020,823)
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Net (loss) earnings
and other
comprehensive income (153,330) 424,993 (331,218) 496,870
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Net (loss) earnings
and other
comprehensive income
per share
Basic and diluted $ (0.01) $ 0.02 ($0.01) $ 0.02
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See accompanying notes
CONSOLIDATED CASH FLOW STATEMENTS
Three months ended Six months ended
January 31st January 31st
--------------------------------------------
UNAUDITED 2011 2010 2011 2010
--------------------------------------------------------------------------
$ $ $ $
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Cash flows provided by (used
in):
Operating activities
Net (loss) profit for the
period (153,330) 424,993 (331,218) 496,870
Items not affecting cash -
Amortization of property and
equipment 32,285 34,974 67,659 67,741
Stock-based compensation
costs 14,287 60,780 40,993 60,780
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Cash flow relating to
operating activities (106,758) 520,747 (222,566) 625,391
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Net changes in non-cash
working capital items -
Decrease (increase) in
accounts receivable 55,837 170,123 113,622 480,511
Increase in inventories (77,993) (67,136) (63,624) (42,451)
Decrease (increase) in
prepaid expenses 9,952 33,450 38,272 53,356
(Decrease) increase in
accounts payable and
accrued liabilities (201,213) (395,446) (210,493) (390,360)
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Net changes in non-cash
working capital balances
relating to operations (213,417) (259,009) (122,223) 101,056
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Cash flow relating to
operating activities (320,175) 261,738 (344,789) 726,447
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Investing activities
Additions to property and
equipment (302,093) (18,415) (457,480) (81,902)
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Cash flow relating to
financing activities (302,093) (18,415) (457,480) (81,902)
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(Decrease) Increase in cash
and cash equivalents during
the quater (622,268) 243,323 (802,269) 644,545
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Cash and cash equivalents -
Beginning of period 2,153,555 2,661,567 2,333,556 2,260,345
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Cash and cash equivalents -
End of period 1,531,287 2,904,890 1,531,287 2,904,890
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