Immunotec Reports Fourth Quarter and Full-Year 2016 Results

VAUDREUIL-DORION, QUEBEC–(Marketwired – Jan 26, 2017) – Immunotec Inc. (TSX VENTURE:IMM), a direct-to- consumer company and leader in the nutritional industry (the “Company” or “Immunotec”), today announced its fourth quarter financial results for Fiscal 2016. All amounts in this press release are in Canadian dollars unless otherwise indicated.

“Annual revenues surpassed our expectations and reached an all-time high of $109 million, reflecting solid performances in all regions by Immunotec’s Consultants and Employees. The weakness of the Mexican Peso significantly impacted profitability during the fourth quarter. On a currency neutral basis, we estimate that this volatility reduced the Adjusted EBITDA¹by approximately $3.4 million compared to last year”, said Charles Orr, Chief Executive Officer.

QUARTERLY PERFORMANCE HIGHLIGHTS

Network sales amounted to $29.7M, an increase of 30.7% over last year, while sponsoring¹ of new customers and consultants increased by 50.9% over last year.
Network sales in key geographies grew by 58.4% in Mexico, 15.9% in the United States and 6.7% in Canada.
Margin before expenses were down by 2.4%, to 73.0%, and Adjusted EBITDA¹amounted to 2.9% of revenues, considering the impact from the recent foreign currency devaluation of the Mexican Peso.
Net profit totalled $0.6M or $0.01 basic and fully diluted profit per common share.

“For the year, we are very pleased by the overall performance of our Network Sales and Sponsoring activities, representing a significant recovery over the prior year which was negatively impacted by the implementation of a 16% value-added tax in Mexico”, said Patrick Montpetit, Chief Financial Officer of Immunotec. “Management’s disciplined approach to corporate expenses led to a significant decline of these expenses as a percentage of total revenues. Finally, our balance sheet improved substantially with year-end cash of $13.9 million, reflecting solid cash flows from operations.”

“Among efforts to contain the impact of the weak Mexican Peso, we have implemented price increases of 5 to 7% in all our markets effective on January 1^st, 2017. This combined with other management initiatives should mitigate a significate portion of the foreign exchange impact on profitability. As we enter Fiscal 2017, we are confident in our ability to maintain the momentum of the past year and continue to better leverage the scale of our Company. Furthermore, the Company is pleased to announce that Charles Orr’s employment agreement has been renewed until June 30, 2017″, concluded Mr. Montpetit.

Results of operations


For the periods ended October 31,		Three-months				Twelve-months
(‘000s of C$, except for share and per share data)		2016		2015		2016	2015
Revenues		32,113		24,804		109,013	84,758
	Cost of sales	8,674		6,113		28,200	20,350
Margin before expenses		23,439		18,691		80,813	64,408
	Expenses	22,708		16,819		77,009	59,194
Operating income		731		1,872		3,804	5,214
	Net finance (income) expenses	(505	)	(58	)	179	137
	Income taxes	650		215		1,510	1,035
Net profit		586		1,715		2,115	4,042

Total comprehensive income		663		1,626		1,934	4,006
Total basic and diluted net profitper common share		0.01		0.02		0.03	0.06
Weighted average number ofcommon shares oustandingduring the year
	Basic	69,761,628		69,287,627		69,639,953	69,152,836
	Diluted	70,083,720		69,290,915		69,886,364	69,156,574


		Revenues and sponsoring ¹


For the periods ended October 31,		Three-months				Twelve-months
(‘000s of C$)		2016	2015	Variation		2016	2015	Variation
	Network sales	29,671	22,707	30.7	%	100,602	77,320	30.1	%
	Other revenue	2,442	2,097	16.4	%	8,411	7,438	13.1	%
		32,113	24,804	29.5	%	109,013	84,758	28.6	%

Network sales in key markets in local currency		2016	2015	Variation		2016	2015	Variation
Mexico (‘000s of Mexican pesos)		241,970	152,738	58.4	%	736,584	503,666	46.2	%
United States (‘000s of US$)		6,695	5,778	15.9	%	24,567	20,049	22.5	%
Canada (‘000s of C$)		3,134	2,936	6.7	%	12,022	11,312	6.3	%

Sponsoring¹of new customers and consultants in key markets (# of people)		2016	2015	Variation		2016	2015	Variation
Mexico		30,001	17,432	72.1	%	83,923	55,515	51.2	%
United States		6,158	6,137	0.3	%	22,844	18,747	21.9	%
Canada		1,967	1,691	16.3	%	8,140	6,291	29.4	%
		38,126	25,260	50.9	%	114,907	80,553	42.6	%

Calculation of adjusted EBITDA¹

For the periods ended October 31,		Three-months				Twelve-months
(‘000s of C$)		2016		2015		2016		2015
Net profit		586		1,715		2,115		4,042
Add:
	Depreciation and amortization	169		177		680		668
	Net finance (income) expenses	(505	)	(58	)	179		137
	Other expenses	45		30		1,046		197
	Income taxes	650		215		1,510		1,035
Adjusted EBITDA		945		2,079		5,530		6,079
as a % of Revenues		2.9	%	8.4	%	5.1	%	7.2	%