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Warnex Reports Revenues Of CAD4.7 Million In Q3 2009

Warnex Inc. (Warnex), a Canada-based life sciences company, has reported revenues of CAD4.7 million for the third quarter of 2009, down 30%, compared with the revenues of CAD6.7 million in the year-ago quarter. It has also reported a net loss of CAD0.8 million, or CAD0.01 loss per share, for the third quarter of 2009, compared with the net earnings of CAD0.5 million, or CAD0.01 per share, in the year-ago quarter.

“Our year-to-date revenues of CAD17.6 million are slightly below last year due to reduced volume in our Bioanalytical division. We have had an unprecedented number of cancellations and postponements of bioanalytical projects in the third quarter, which are a testament to the economic and industry conditions experienced during the summer months. The industry seems to be returning to more normal levels for the last quarter and our business development efforts are ongoing to increase our business from new and existing customers,” said Mark Busgang, President and CEO of Warnex. “In addition, we are preparing for the potential outbreak of the pandemic influenza A H1N1 virus. Our test, which provides rapid turnaround times, can assist healthcare professionals in diagnosing their patients faster. We are also pleased to collaborate with Biron to offer this testing service to industrial companies, allowing them to rapidly take appropriate action to limit the spread of infection in their workforce.”

For the nine-month period ended September 30, 2009, revenue reached CAD17.6 million from CAD18.7 million for the same period in 2008.

For the nine-month period ended September 30, 2009, net loss totalled CAD26,700 or CAD0.00 per share compared to net earnings of CAD1.7 million or CAD0.03 per share in 2008, which included a gain on extinguishment of debt of CAD1.8 million.

Earnings before interest, taxes, depreciation and amortization (EBITDA) for the quarter amounted to CAD(0.4) million versus CAD1.4 million for the same quarter last year. For the nine-month period ended September 30, 2009, EBITDA amounted to CAD1.5 million compared to CAD2.1 million in 2008.

Gross margins for the three-month period ended September 30, 2009, amounted to CAD0.4 million or 9% of sales compared to CAD2.3 million or 35% of sales for the same quarter last year. The decrease of CAD1.9 million in gross margin is mainly explained by the lower revenue in the Bioanalytical division compared to the same quarter last year. Gross margin for the nine-month period ended September 30, 2009, amounted to CAD4.5 million or 26% of sales compared to CAD5.2 million or 28% of sales in 2008, a decrease of CAD0.7 million.

Selling and administrative expenses amounted to CAD1.3 million for the three-month period ended September 30, 2009, compared to CAD1.2 million last year. The increase of CAD0.1 million is mainly explained by a loss on foreign exchange due to the strength of the Canadian dollar compared to the U.S dollar, the cost of options and an increased investment in business development. In proportion of revenue, administrative and selling expenses were higher than last year at 28% in 2009 (2008 – 18%). For the nine-month period ended September 30, 2009, selling and administrative expenses amounted to CAD4.3 million compared to CAD4.0 million for the same period in 2008.

Financial expenses for the quarter were similar to last year at CAD0.3 million. For the nine-month period ended September 30, 2009, financial expenses amounted to CAD0.9 million (2008 – CAD1.0 million).