EASTAMPTON, N.J., May 6, 2015 (GLOBE NEWSWIRE) -- Revenue for Q3 at $2.6 million was 18% higher than last year's Q3 and set a new company Q3 record. This record follows seven previous consecutive quarterly records. Sales were broad based with Latin America significantly ahead of prior year. High demand for Epicore products comes from producers trying to capitalize on high shrimp prices and on our successful marketing programs. Early Mortality Syndrome (EMS) in Asia and Mexico has reduced the worldwide supply of shrimp, which in turn pushed shrimp prices to record levels in 2014. Following a weak holiday season for shrimp consumption prices have fallen 35% from an early 2014 high. Net income decreased by 28% but still delivered earnings per share of $0.012. Demand for Epicore products remains strong.
Some highlights versus prior fiscal year quarter three were as follows:
- Revenue increased by 18% over last year's Q3
- Gross profit increased by 3% over Q3 last year
- Operating expenses increased by 20% compared to last year's Q3
- Net income decreased by 28% versus last year's Q3
- EBITDA decreased by 20% compared to last year's Q3
- Cash was $0.8 million lower than prior year Q3
- Shareholder equity increased to $7.9 million
Gross profit was only 3% higher than prior year quarter three despite higher sales revenue. Sales mix yielded lower average selling price that adversely affected gross profit. Higher production overhead and higher import duty in Ecuador also had a negative impact on Q3 gross profit.
Operating expense increased 20%, from personnel cost and higher research activity, including consultant cost. Selling expense increased due to extra staff added in Asia. Employee expenses increased due to inflationary and merit pay increases and added staff. Operating expense increased more than gross profit to decrease earnings before tax. Q3 net income was 28% lower than prior year Q3.
The following table summarizes the Q3 results (rounded to thousands of US dollars):
| For the Quarter ended March 31 | ||||
| 2015 | 2014 | Increase (Decrease) | ||
| Revenue | $2,567 | $2,180 | $387 | 18% |
| Gross profit | $1,440 | $1,400 | $40 | 3% |
| Operating expenses | $913 | $762 | $151 | 20% |
| Net income | $317 | $444 | ($127) | (28%) |
| Diluted earnings per share | $0.012 | $0.018 | ($0.006) | (35%) |
| Shareholders' equity | $7,939 | $6,746 | $1,193 | 18% |
| Cash balance | $1,715 | $2,547 | ($832) | (33%) |
Epicore continues to generate positive cash flows from operating activities. Cash at the end of the quarter was $1.7 million. Cash declined $0.9 million in the quarter due to construction of a second building at Epicore's Eastampton site and to higher working capital. 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.
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 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 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.