EASTAMPTON, N.J., Oct. 16, 2014 (GLOBE NEWSWIRE) -- Fiscal 2014 was a remarkable year for Epicore (TSX-V:EBN). Sales records were set in every quarter and net income (without exceptional adjustments) broke the million dollar mark for the first time. Epicore's productivity enhancing products were in high demand as shrimp producers readily accepted new tools and techniques to fight the ravages of Early Mortality Syndrome (EMS) disease. This disease forced closure of some Epicore end customers in fiscal 2013 and hurt Epicore sales but in 2014 decreased shrimp supply pushed shrimp prices to record levels and attracted new usage of our products. Our marketing program increased usage of Epicore products in several new areas. Net income increased by 144% to deliver earnings per share of $0.05.
After a decade of growth, world farm production of shrimp peaked in 2011 at 4.1 million metric tons but declined in 2012 through 2014 to 3.8 million metric tons because of disease problems. The supply shortage caused by EMS has forced shrimp prices to record levels. The effect on Epicore's business has been mixed. When the disease hits farms using Epicore products, it hurts sales. However, higher shrimp prices make Epicore's products more affordable so increase demand for Epicore products from operating farms. High prices encourage farms in affected areas to risk production. In unaffected areas, like South America, India and Indonesia, the high prices encourage farmers to increase production. High prices have decreased shrimp consumption. The Epicore sales team and our distributors responded to this challenge by securing new customers, opening new market areas and exploiting new applications for Epicore products.
The benefit of the manufacturing expansion started in fiscal 2012 was realized all year in 2014. Our ISO 9001:2008 quality system certification contributed to operational reliability and provided the foundation for our Global GAP initiative. Some highlights (in US$) versus prior fiscal year were:
- Increase in revenue from $5.6 million to $7.6 million (a 36% increase)
- Increase in gross profit from $3.5 million to $4.9 million (a 38% increase)
- Increase in operating expenses from $2.7 to $2.8 million (a 5% increase)
- Increase in net income from $0.5 million to $1.2 million (a 144% increase)
- Increase in EBITDA from $0.9 million to $2.1 million (a 133% increase)
- Increase in shareholders' equity from $5.4 million to $6.7 million (a 24% increase)
- Increase in cash from $1.9 million to $3.0 million (a 54% increase)
- Increase in basic and diluted earnings per share from $0.02 to $0.05
Gross profit grew 38% mainly due to the increase in revenues with an improvement in gross margin that was mainly due to lower production costs from the manufacturing expansion of 2013. Operational expenses increased by 5% in fiscal 2014 due to increased selling effort, inflation and spending on research and development. Research and development expenses increased 48% as new research products were scaled up to produce material for field testing.
Epicore generated positive net income of $1.2 million to give Epicore its eleventh consecutive year of profitable operation. Versus prior year, net income increased by $0.7 million (144%). EBITDA, a non-GAAP measure (earnings before interest, taxes, depreciation and amortization), increased 133% over prior year from $0.9 million to $2.1 million, as the following results (rounded to thousands of US dollars) show:
| 2014 | 2013 | Increase (Decrease) | ||
| Revenue | $7,617 | $5,613 | $2,004 | 36% |
| Gross profit | $4,879 | $3,545 | $1,334 | 38% |
| Operating expenses | $2,847 | $2,702 | $145 | 5% |
| Net income | $1,174 | $482 | $692 | 144% |
| Earnings per share | $0.05 | $0.02 | $0.03 | 150% |
| Shareholders' equity | $6,746 | $5,432 | $1,314 | 24% |
| Cash balance | $2,976 | $1,939 | $1,037 | 54% |
Epicore continues to generate positive cash flows from operating activities with $1.0 million generated in fiscal 2014, which was $0.7 million more than fiscal 2014. Cash at the end of the year was $3.0 million. 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.
Fiscal 2014 was a successful year not only on a financial basis, but it saw major progress on several operational and strategic issues. The Company actively worked to maintain its ISO 9001:2008 certification and began a program to get HACCP (hazard analysis and critical control point) and Global GAP certification. Many shrimp processing companies have one or more international certifications. Additionally, many government aquaculture product registration authorities are looking for some type of quality certification.
Fiscal 2014 also saw progress on several corporate issues.
- Following TSX Venture Exchange ("TSXV") acceptance, Epicore established a Normal Course Issuer Bid through the facilities of the TSXV. In the year the Company acquired and cancelled 54,000 shares of Epicore common stock. The Company has not renewed the program, which expired on August 28, 2014.
- The Company participated in a CEO online interview program to increase investor interest.
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, expected improvements in the quality and reliability of manufacturing operations, acceleration of the Company's penetration into new business areas, 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 and to fund expansion of aquaculture and environmental remediation marketing efforts and to pursue new strategies for enhancing shareholder value. 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, Email: Investors@EpicoreBioNetworks.com