November 14, 2011
Warnex Reports Third Quarter 2011 Results
Laval, Quebec, November 14, 2011 - Warnex Inc. (TSX: WNX) announced today financial results for the third quarter ended September 30, 2011.
- Restructured its outstanding debentures, which included extending the maturity dates to November 8, 2011, and modifying various other terms. Subsequent to the quarter, the Company announced that it is currently in advanced negotiations to extend the maturity dates of all of its outstanding convertible debentures that have become due, to modify various other terms and conditions of the debentures and to obtain additional financing to cover current operating expenses as well as certain disbursements.
- Reorganized the operations of its subsidiary Warnex Analytical Services Inc., including the shutdown of its analytical laboratories located in Laval and consolidation all of its analytical services at its Neopharm Laboratories facility located in Blainville
- Obtained funding from the federal government for forensic mitochondrial DNA testing
- Launched PRO-DNA® Lead, a new forensic DNA testing service
- Received DEQAS certification for vitamin D analysis
- Launched new website - www.pca3.ca - for its PCA3 test for prostate cancer detection
- Subsequent to the quarter, signed an exclusive agreement with deCODE Genetics to distribute in Canada 10 of deCODE Genetics' DNA-based tests for assessing the risk of developing certain common diseases
"The restructuring of our Analytical Services subsidiary is now complete and our efforts are ongoing to improve the efficiency of our operations and to increase our business development efforts," said Mark Busgang, President and CEO of Warnex. "At the same time, we have had achievements across all of our divisions with the vitamin D certification in Bioanalytical, the launch of the PCA3 website and the agreement with deCODE in Medical, and the launch of PRO-DNA® Lead and the government grant in our PRO-DNA Services division."
Consolidated revenue for the three-month period ended September 30, 2011, amounted to $5.0 million compared to $5.5 million during the same quarter a year ago, a decrease of 10%. For the nine-month period ended September 30, 2011, revenue amounted to $15.6 million compared to $17.0 million for the same period in 2010.
Net loss for the quarter amounted to $0.7 million or $0.01 per share compared to $28,436 or $0.00 per share for the same quarter in 2010. For the nine-month period ended June 30, 2011, net loss totalled $1.6 million or $0.02 per share compared to $0.9 million or $0.01 per share in 2010.
For the three-month period ended September 30, 2011, the Company had earnings before interest, taxes, depreciation and amortization (EBITDA) of $0.3 million compared to $0.6 million for the same quarter last year. For the nine-month period ended September 30, 2011, EBITDA amounted to $0.5 million compared to $1.1 million in 2010.
Gross margin for the three-month period ended September 30, 2011, amounted to $1.2 million or 23% of revenues compared to $1.3 million or 23% of revenues for the same quarter last year. Gross margin for the nine-month period ended September 30, 2011, amounted to $3.6 million or 23% of revenues compared to $3.8 million or 23% of revenues in 2010.
For the three-month period ended September 30, 2011, selling expenses remained similar to last year at $0.3 million. In proportion of revenue, selling expenses were similar to last year at 6%. For the nine-month period ended September 30, 2011, selling expenses were $0.9 million compared to $1.0 million last year.
General and administrative expenses for the quarter were $1.1 million compared to $1.3 million last year. In proportion of revenue, general and administrative expenses were lower than last year at 21% (23% in 2010). For the nine-month period ended September 30, 2011, general and administrative expenses amounted to $3.6 million compared to $3.8 million last year.
Financial expenses for the quarter remained similar to last year at $0.3 million. For the nine-month period ended September 30, 2011, financial expenses were similar to last year at $0.9 million.
Research and development tax credits for the quarter decreased to $0.2 million in 2011 from $0.5 million in 2010. For the nine-month period ended September 30, 2011, research and development tax credits amounted to $0.4 million compared to $0.8 million in 2010.
Warnex (www.warnex.ca) is a life sciences company devoted to protecting public health by providing laboratory services to the pharmaceutical and healthcare sectors. Warnex Analytical Services provides pharmaceutical and biotechnology companies with a variety of quality control services, including chemistry, chromatography, microbiology, method development and validation, and stability studies. Warnex Bioanalytical Services specializes in bioequivalence and bioavailability studies for clinical trials. Warnex Medical Laboratories provides specialized testing for the healthcare industry as well as pharmaceutical and central laboratory services. Warnex PRO-DNA Services offers DNA identification tests for paternity, maternity and other family relationships, as well as for immigration and forensic testing purposes. Warnex has three facilities located in Laval and Blainville, Quebec, and Thunder Bay, Ontario.
CAUTION REGARDING FORWARD-LOOKING STATEMENTS
Certain statements contained in this news release are forward-looking and are subject to numerous risks and uncertainties, known and unknown. For information identifying known risks and uncertainties, relating to financial resources, liquidity risk, key customers and business partners, credit risk, foreign currency risk, government regulations, laboratory facilities, volatility of share price, employees, suppliers, and other important factors that could cause actual results to differ materially from those anticipated in the forward-looking statements, please refer to the heading Risks and Uncertainties in Warnex's most recent Management's Discussion and Analysis, which can be found at www.sedar.com. Consequently, actual results may differ materially from the anticipated results expressed in these forward-looking statements.