Microbix Biosystems Inc.

Good morning, everyone. Thanks for joining us today to discuss Microbix's Q2 results, which they posted this morning. With me, I have Cameron Groom, CEO, Ken Hughes, COO, and Jim Curry, CFO. I think the format will be just a bit of an overview of the quarter and then Q&A, of course. So if you have any questions, feel free to input them in the Q&A box at the bottom of your screen. Alternatively, you can email them to me. at deborah at adcap.ca. We may not work off a presentation today, but just so you're aware, this session will contain forward-looking statements. You can find out more about those on the company's presentation on their website, which we're hopeful to update later today with the financial results. With that out of the way, Cameron, why don't you take the mic and give us a little bit of an overview on the quarter?

Sure thing. Thank you so much, Debra. And thank you, everybody, for taking the time to spend with us this morning. These results, of course, are for our second quarter of fiscal 2024. That's the quarter ended March 31st. And we were very pleased to report strong results for the quarter. Our revenues were quite robust at $5.6 million for the quarter, a smidge over $5.6 million. This is in fact our best ever quarter for product sales by a smidge and exceeds a previous high that was heavily weighted with DXTM sales sales to government in the current order, but we beat that prior all-time record in spite of that. The overall sales were up quite strongly, a 34% increase year over year, driven by strength in, interestingly, both our antigens and test ingredients business and our quality assessment products, medical device business were both up strongly. Gross margins were acceptable. I think we could have done better if everything had clicked over perfectly in terms of manufacturing for the quarter. But at 52, 53%, we were broadly satisfied with that. And really, dropping for we had good cost control on the selling general and admin r d expenses and interest expenses so with that level of revenues very much in line with i think the um the loose guidance we provided that about five billion a quarter is our break-even level for revenues with a reasonable product mix And that approximately $0.50 of the dollar beyond that breaking point has the potential to move to the bottom line with $377,000 in net earnings or about $400,000. It's a 7% net. margin for the company in the quarter. And I think given this particular level of revenues, that's what we would hope to achieve with them. So I think by and large, we're pleased with the quarter. The combination of strong revenues and spending control led to that margin and obviously good free cash flow and balance sheet position as well. Maybe I can invite Jim to supplement those comments, and if there's any further color you wanted to provide, Jim.

Maybe just a few points. One of the areas that we saw some good, strong growth, obviously, was in our antigens or test ingredients business with over $4 million in sales in the quarter. And we're seeing good, excellent growth coming from our agent distributors. of note is the fact that we've actually in the first half of this year quadrupled what we had last year for the first half and we're up more than 50 percent from the second half of last year in terms of sales to that Asian distributor so we've been talking about the fact that we've been starting to see a ramp up we saw the start of the ramp up in last year and we're seeing the the fruits of that ramp up in the first quarter half of this year and we're expecting some strong performance from that distributor in the second half of this year as well. We had a really good strong mix of all products. Often we get margins and bottom line impacted by the mix of the products that we had, but we had contributions from all of our more significant products this quarter. We've got a good strong order backlog. We're sitting at over $9 million in order backlog at the end of the half. Our cash position is still strong. We've got over 12 to 13 million in cash and another 2 million in the credit facility. And we've also been using this cash in a couple of areas. One is in the purchase of capital equipment. So we've added another $600,000 of capital equipment in the quarter. And that has been predominantly used for enhancing the equipment and adding equipment to further the growth in manufacturing. We also have used cash in share buyback program, and we've acquired close to 1.2 million shares in the first half of the year. We've added another 100,000 or so in the last few months or month and a half as well. So overall, good, strong financial performance. Good, strong balance sheet at this point.