News and Events
Flotsam and Jetsam
Sustained business development efforts paid off in 2009 as the Company overcame a recessionary environment and delivered a record fiscal Q2. Sales at $1.0 million were the strongest quarter two in Company history, beating Q1 this fiscal year by 43% and beating last year’s record Q2 by 9%. The world economy hurt several key Latin American customers but new customers, new products and strength in Asia offset the shortfall. Quarterly gross profit grew 18% over prior year. Operating expenses increased 23% over prior year Q2 as a result of Epicore’s continued spending to improve future business prospects. Despite the extra spending Q2 net income increased 20% over prior year to $0.1 million, which was $0.01 per share. Some highlights were:
- Revenue for the quarter (at $1.0 million) 9% higher than Q2 last year.
- Gross profit (at $0.7 million) 18% higher than Q2 last year.
- Quarterly operating expenses (at $0.5 million) 23% higher than Q2 last year.
- Net income (at $0.1 million) 20% higher than Q2 last year.
- Basic and diluted earnings per share (at $0.01) for the quarter the same as last year.
- Shareholders’ equity (at $2.5 million) increased 12% over the prior year Q2.
- Cash inflow of $0.1 million significantly more than last year’s Q2 cash outflow of $0.1 million.
Aquaculture remains the Company’s strongest market sector, producing 97% of total sales. The ongoing economic downturn continues to adversely affect portions of Epicore’s business forcing the Company to work harder for new sales. The 2009 shrimp season was very weak for several major customers leaving them with higher than expected stock of unsold products. The Epicore sales and marketing team worked hard all year to develop new customers and new products. Asian customers weathered the recession better than most and contributed strongly to the record Q2 success. It appears that the world shrimp market maintains a cautious approach to 2010 but a more optimistic one than 2009. Much will depend on the extent to which western consumer spending on restaurant meals recovers.
The Epicore sales and marketing team added new customers and explored non-aqua applications. One result was a much broader pond sales program in South America and Asia. Our newer, powdered EPICIN-D and EPICIN-G2 products continue to sell well. Our lower cost liquid hatchery feeds marketed under the name EPILITE gained in popularity with customers under cost pressure.
Quarterly gross profit grew 18% over prior year because of the sales increase and also because of a more favorable sales mix. Gross profit as a percentage of sales revenue was higher in Q2 (66% vs. 61%) than in the prior year as a result of sales mix. Operating expenses at $0.5 million increased by $0.1 million or 28% in Q2 fiscal 2010 compared to prior year Q2. Research and development expenses were $0.1 million, an increase of 350% over prior year, reflecting the Company’s major commitment to R&D. With these added resources, the Company should be able to significantly expand its new product development program and improve its manufacturing quality and reliability. Sales and marketing expenses increased this quarter as the Company sought new customers to replace ones affected by recession. Also, funds were invested in upgrading Epicore aqua product literature, upgrading the Company’s website and employee education to prepare for the new IFRS accounting standards.
Higher expenses largely offset higher gross profit but a lower tax provision increased net income by 20%.
The Company generated a net income of $0.14 million versus $0.12 million in prior year quarter two, as
summarized below:
| (US$) | 2010 | 2009 | |
| Sales | 995,000 | 910,000 | |
| Gross Profit | 651,000 | 554,000 | |
| Expenses | 478,000 | 389,000 | |
| Other Income (Expense) | (9,000) | (9,000) | |
| Income Taxes | 20,000 | 36,000 | |
| Net Income | 144,000 | 120,000 |
Cash at quarter end was $0.95 million, a 68% increase over prior year and a 17% increase over fiscal 2010 quarter one. Increases in working capital balances particularly offset quarterly cash income but left a positive cash flow of $0.1 million. With these funds, expected sales revenue and continued control of operating costs, management expects there will be sufficient cash to meet the fiscal year’s financial requirements.
Additionally, Epicore BioNetworks Inc. announces it has granted stock options to non-executive directors, pursuant to the Company’s director compensation plan. The number of options granted is 150,000 which is equivalent to 0.6% of Epicore’s issued common stock. With this grant Epicore has 2,390,000 options outstanding. Under the terms of the Epicore Stock Option Plan, options may be issued from time to time in any amount up to a maximum of 4,704,247 Epicore common shares. These options have an exercise price of Cdn $0.10 and expire in five years.
The financial statements of the Company have been prepared in accordance with Canadian GAAP. 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 the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the polices of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.]
About Epicore
Epicore BioNetworks Inc. (TSXV: EBN) is a leading developer, manufacturer and marketer of innovative, environmentally responsible biotechnology products based on the use of natural microbes and enzymes. Epicore’s product lines are applicable in aquaculture, agriculture, bioremediation and wastewater treatment, municipal services and cleaning. The cost effectiveness, premium quality and customer service offered by Epicore have attracted a growing and devoted customer base of end customers and distributors in twentynine countries worldwide. With a registered office in Calgary, Alberta, Canada, Epicore has its U.S. headquarters in Eastampton, New Jersey and a Latin American office in Ecuador. Phone 1-609-3267-9118 or visit www.epicorebionetworks.com for more information.
Forward Looking Statements
This press release contains forward-looking statements that involve significant risks and uncertainties. Readers should not put undue reliance on forward-looking statements. The statement about having sufficient cash to meet the fiscal year’s financial requirements is based on the assumption that the Company’s sales will continue as expected. The statement that the Company should be able to expand its new product development program and improve its manufacturing quality and reliability is based on an assumption of technical success. Such forward-looking statements include, without limitation, those regarding the development plans of the Company and the expected timing and results of such development. 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. We can provide no assurance that such development will proceed as currently anticipated or that the expected timing or results of such development will be realized. We are subject to various risks, including the uncertainties of product development, markets for our products and regulatory review, risk that we will not have the ability to retain key scientific and managerial personnel, 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.
Company Contact:
William P. Long
Chief Executive Officer
Epicore BioNetworks Inc.
+1-609-267-9118
Investors@EpicoreBioNetworks.com
Despite challenging market and economic conditions, Epicore managed to maintain strong sales revenue but did not equal the Company’s record quarter one of last year. Sales at $0.7 million were the second strongest quarter one in Company history. Last year Epicore distributors bought strongly expecting a good 2009 shrimp season; few expected the worst recession in many years. This year in quarter one Epicore customers were cautiously optimistic but did not maintain inventories at the same high levels as 2008. Epicore sales revenues were 14% lower than prior year. Some highlights were:
- Revenue for the quarter (at $0.7 million) 14% lower than Q1 last year.
- Gross profit lower than last year’s Q1 by 18%.
- Higher year-on-year quarterly operating expenses by 28%.
- Net income 89% lower than Q1 last year.
- Basic and diluted earnings per share decreased by $0.01.
- Shareholders’ equity increased 11% over the prior year’s comparative quarter.
- Cash inflow of $0.06 million significantly higher than last year’s Q1 cash outflow of $0.09 million.
The most severe economic downturn since the Great Depression continues to adversely affect Epicore’s business. Aquaculture remains the Company’s strongest market sector, producing 97% of total sales. While most Epicore customers adjusted to the economic conditions and reduced inventory levels throughout the year, a few key ones entered quarter one with higher than expected stock of unsold products. Several strong buyers in 2008 have been slow to gear up for 2010. The world shrimp market maintains a cautious approach to 2010. However, USA shrimp imports have been increasing since March.
The Epicore sales team adjusted to changing market conditions and redoubled efforts to add new customers and to explore new applications. One result was a much broader pond sales program in South America and Asia. Our lower cost liquid hatchery feeds marketed under the name EPILITE also sold well to customers under cost pressure.
Gross profit decreased due to the sales revenue decrease and to product mix. Operating expenses increased 28% over prior year. Research and development expenses were $0.06 million, an increase of over 350% versus prior year. In fiscal 2009, the Company made a major commitment to R&D. With these added resources to the Epicore technical team, the Company should be able to significantly expand its new product development program and improve its manufacturing quality and reliability. Lower gross profit and higher expenses decreased net income by 89%. The Company generated net income of $0.02 million versus $0.18 million in prior year quarter one, as summarized below:
| (US$) | 2010 | 2009 | ||
| Sales | 697,000 | 808,000 | ||
| Gross Profit | 432,000 | 524,000 | ||
| Expenses | 399,000 | 313,000 | ||
| Other Income (Expense) | (9,000) | (9,000) | ||
| Income Taxes | 4,000 | 25,000 | ||
| Net Income | 20,000 | 177,000 |
Cash at the end of September was $0.9 million, a 27% increase compared to prior year and a 7% increase compared to fiscal 2009 quarter four. Lower working capital balances, mainly from decreases in inventory, contributed to the positive cash flow.
With these funds, expected sales revenue and continued control of operating costs, management expects there will be sufficient cash to meet the fiscal year’s financial requirements.
The financial statements of the Company have been prepared in accordance with Canadian GAAP. 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 the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the polices of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.]
About Epicore
Epicore BioNetworks Inc. (TSXV: EBN) is a leading developer, manufacturer and marketer of innovative,
environmentally responsible biotechnology products based on the use of natural microbes and enzymes.
Epicore’s product lines are applicable in aquaculture, agriculture, bioremediation and wastewater
treatment, municipal services and cleaning. The cost effectiveness, premium quality and customer
service offered by Epicore have attracted a growing and devoted customer base of end customers and
distributors in twenty-nine countries worldwide. With a registered office in Calgary, Alberta, Canada,
Epicore has its U.S. headquarters in Eastampton, New Jersey and a Latin America office in Ecuador. Phone 1-609-267-9118 or visit www.epicorebionetworks.com for more information.
Forward Looking Statements
This press release contains forward-looking statements that involve significant risks and uncertainties,
such as the one about having sufficient cash to meet the fiscal year’s financial requirements. This
statement is based on the assumption that the Company’s sales will continue as expected. 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 development plans of the
Company and the expected timing and results of such development. We can provide no assurance that
such development will proceed as currently anticipated or that the expected timing or results of such
development will be realized. 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.
Company Contact:
William P. Long
Chief Executive Officer
Epicore BioNetworks Inc.
+1 609-267-9118
Investors@EpicoreBioNetworks.com
Despite extremely challenging market and economic conditions, Epicore managed to maintain basically
the same level of revenue as last year at $3.2 million. Epicore started fiscal 2009 before the recession
fully hit and was able to enjoy a half-year of good sales as distributors geared up for another normal year
in calendar 2009. With low consumer consumption of shrimp at the end of 2008, producers cut back in
early 2009 so Epicore sales suffered. While individual customer purchasing levels may have decreased,
the company was able to increase its customer base to somewhat offset this decrease, thereby
maintaining sales levels. The company was fortunate to maintain revenues at fiscal 2008 level and
remain above US$3 million. While many companies cut back in 2009, Epicore launched a major initiative
to improve its science resources, which will position the company for significant future growth. Some
highlights were:
- Maintained sales at $3.2 million.
- Held operating expenses to $1.5 million despite an 88% increase in R&D costs.
- Generated another year of positive net income ($0.4 million or 80% of prior year).
- Achieved net income as a percentage of sales revenue of 12%.
- Achieved basic and diluted earnings per share of $0.02.
- Shareholders’ equity increased 20% over prior year.
- Maintained cash at $0.8 million (105% of prior year).
Research and development expenses increased 88% as the company increased its scientific resources. A senior scientific consultant with extensive experience in environmental microbiology was employed. A research microbiologist with extensive experience in fermentation also was employed. The university program to develop the next generation of aquaculture probiotic continued to produce useful information. With these increased and talented resources management expects to improve the quality and reliability of its manufacturing operations and to accelerate the company’s penetration into new business areas.
The change in the customer base during 2009 resulted in a change in sales mix, thereby generating an allocation weighted more in favor of products with lower margins. This, combined with slightly higher input costs produced an overall decrease (5%) in gross profit as compared to the prior year. Operational expenses decreased by almost 2%, as expenditures were controlled to compensate for sluggish sales. Epicore recorded another year of positive net income but fell short by 20% in matching prior year level, as the following results show:
| (US$) | 2009 | 2008 | ||
| Sales | 3,190,000 | 3,192,000 | ||
| Gross Profit | 1,991,000 | 2,099,000 | ||
| Operating Expenses | 1,492,000 | 1,516,000 | ||
| Other Expenses | 36,000 | 34,000 | ||
| Income Taxes | 82,000 | 74,000 | ||
| Net Income (Loss) | 381,000 | 475,000 |
Cash at the end of June was $0.8 million, an increase of 5% over prior year. 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 Canadian GAAP. 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 development plans of the company, the expected timing and results of such development 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 such development will proceed as currently anticipated, 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.
For more information, please contact: Mr. William P. Long (Chief Executive Officer) USA. Tel: 609-267-9118
Epicore’s aquaculture product literature has a new look and format. The new literature summarizes all the key product features and benefits in a concise one-page (two-sided) format. Technical background has been limited to only essential information. The literature has been updated with he most current technical recommendations so is worth a look even by long-term customers. Customers should find the new format easier to use and more consistent in content product to product. Spanish versions of the literature are in the works and should be available soon. The literature sports the new Epicore logo reflecting the never-ending process of growth and improvement by the Company.
Customers interested in receiving copies of the new literature may contact Epicore’s Eastampton headquarters: 1-609-267-9118, ext. 10 or Information@EpicoreBioNetworks.com.
Epicore is pleased to announce successful commercial trials with the newest formulation of its flagship aquaculture probiotic: EPICIN®. With over 15 years commercial usage in over twenty-five countries EPICIN is one of most widely recognized aquaculture probiotics. Its record of delivering consistent quality and excellent performance in aquaculture hatcheries and ponds is unequaled. Epicore’s goal is to provide the best and the most cost-effective aquaculture products possible. In this spirit of continuous product improvement, research began three years ago to develop a simple to use formulation of EPICIN. This work produced EPICIN-PILLS, a ten-gram pill of 30 mm diameter and 11 mm thickness. The pill form can be added to aquaculture systems with no prior hydration. Its pre-measured form makes dosing systems as close to foolproof as possible.
Although originally conceived for aquaculture grow-out ponds, EPICIN-PILLS found its first use in Ecuador in shrimp hatcheries in 2008. Ease of use and consistent dosing were big appeals. Because of its high strength of probiotic microbes, the number of pills added to the system is low. Hatchery managers report the same effective control of water pollutants, like ammonia, and the same control of pathogen organisms as with regular EPICIN.
EPICIN-PILLS also is providing good performance in Ecuadorian shrimp raceways. Ing. Ac. Angel Norton, biologist in charge of raceways at the Barcelona Shrimp Farm Owned by the Mr. Ju Group and located in the Gulf of Guayaquil comments: “I use the EPICIN-PILLS aquaculture treatment with fantastic results. I use two tablets per day per 80-ton tank for 21 days before and after stocking with 45 PL per liter. The results with EPICIN-PILLS were amazing. The water was clear with no odor. The level of green colonies in was less than 200 cfu per ml versus control levels up to 600 cfu per ml. Survival in the treated tanks was 89% versus 65% for the controls. This product is very easy to use: just throw it into the tank and solve pollution problems.”
Ecuadorian usage has expanded to shrimp larvae transport. Ing. Ac. Johnnie Loayza, shrimp biologist of Escalante Island Shrimp Farm, owned by Isla Bonita Company and located in the Gulf of Guayaquil, shares his experience with the use of EPICIN-PILLS: “I use one tablet for every five tons of water used to transport larvae from a Peninsula of Santa Elena hatchery to our farm, which is 400 km. away (an eight hour journey). With the EPICIN-PILLS use we see a marked improvement in health and activity of post larvae, reduced stress and increased survival. These results are simply very cost effective for my company.”
A new program recently launched in Ecuador uses EPICIN-PILLS in a pond-side grow-up program designed to deliver a large number of probiotic cells at a very economical cost. The protocol has advantages over reported low cost grow-up inoculants in the high strength of the EPICIN-PILLS starting seed culture and its consistent quality. Also, EPICIN-PILLS does not have gram-negative contaminants as some cheaper products do. Epicore Ecuador S.A. has launched the new product and protocol with the advertising line, “Mr. Aquaculturist, put an end to your headache with the most practical and secure solution: EPICIN-PILLS.”
In Mexico, where the pill form was originally targeted, grow-out farms used EPICIN-PILLS for the first time in 2009. Farmers were pleased with the ease of use and reported good performance in their ponds.
Treatment of aquaculture grow-out ponds with specially formulated products based on carefully selected, natural bacteria provides a natural way to eliminate pollution and to create a beneficial microbial environment that inhibits the development of harmful organisms. Bacteria have a powerful capacity to utilize pollutants such as ammonia, nitrates and nitrites in their normal metabolism. Additionally, a thriving culture of the right natural bacteria provide a “probiotic” environment which suppresses the growth of harmful organisms. Through these two mechanisms, a healthier aquatic creature is raised that has greater vitality and immunity to disease.
7th Philippine Shrimp Congress
March 17 - 19, 2010
Planta Hotel, Bacolod City
Epicore will be participating along with our distributor Cruz Aquaculture and will include a technical presentation.
For reservations and inquiries, please contact the Secretariat
at Tel: (034) 433-2131
International Conference & Exhibition On Shrimp Aquaculture
May 5 - 7, 2010
Jakarta Convention Center, Indonesia
Epicore is a proud exhibitor at the ICE-SA in 2010. If you haven't already, please make plans to attend.
We look forward to seeing you in Jakarta!
Epicore hosts educational seminars on a regular basis.
Please contact Fernando Garcia
for exact times and locations.
Fernando.Garcia@EpicoreBioNetworks.com
(Scroll down for a listing of planned events.)
None planned at this time.