Epicore BioNetworks Inc. Reports Record Results for Quarter Two Fiscal Year 2015

for the quarter ended 31 December 2014, in US dollars

EASTAMPTON, NJ, Feb. 19, 2015 /CNW/ - Revenue for Q2 at $2.4 million was 45% higher than last year's Q2 and set a new company Q2 record.  This record follows six previous consecutive quarterly records.  Sales were broad based with second quarter increases in every world region.  High demand for Epicore products comes from producers trying to capitalize on record 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 has pushed shrimp prices to record levels.  World consumption of shrimp has decreased slightly but producer profit is at record highs.  Net income decreased by 11% but still delivered earnings per share of $0.012.

Some highlights versus prior fiscal year quarter one were as follows:

• Revenue increased by 45% over last year's Q2
• Gross profit increased by 34% over Q2 last year
• Operating expenses increased by 56% compared to last year's Q2
• Net income decreased by 11% versus last year's Q2
• EBITDA increased by 5% compared to last year's Q2
• Cash was $0.4 million higher than prior year Q2
• Shareholder equity increased to $7.5 million

Gross profit was 34% higher than prior year quarter two. Most of the increase was due to higher sales revenue. Sales mix yielded lower average selling price that adversely affected gross profit. Higher dry feed raw material costs had a negative impact on Q1 gross profit. 

Operating expense increased 56%, from personnel costs and higher research and product development costs, including consultant costs. Selling expense increased due to extra staff added in Asia and Ecuador. Selling expense increased due to sales commissions, travel and advertising needed to support sales growth. 

Gross profit increased more than operating expenses to modestly increase earnings before tax. Because of higher income tax Q2 net income was11% lower than prior year Q2. EBITDA (earnings before interest, taxes, depreciation and amortization) increased 5% over prior year Q2. The following table summarizes the Q2 results (rounded to thousands of US dollars):

	For the Quarter ended December 31
	2014	2013	Increase (Decrease)
Revenue	$2,398	$1,653	$745	45%
Gross profit	$1,506	$1,126	$380	34%
Operating expenses	$977	$628	$349	56%
Net income	$284	$320	($36)	(11%)
Earnings per share	$0.012	$0.013	($0.001)	(8%)
Shareholders' equity	$7,524	$6,075	$1,449	24%
Cash balance	$2,682	$2,642	$40	2%

 

Epicore continues to generate positive cash flows from operating activities. Cash at the end of the quarter was $2.7 million.  Cash declined $0.6 million in the quarter due to construction of a second building at Epicore's Eastampton site. 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.

SOURCE Epicore BioNetworks Inc.

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