Earnings Updates: Breckford (BFDI) and Microbix (MBX.TO)

A few earnings updates for you guys:

1. Brekford (BFDI)

Full press release: Click Here

  • Brekford reported an outstanding earnings report for Q2 2015 yesterday after the market close. This continues to be an awesome story, and it appears momentum is really kicking in for their business as more revenues become both 1)recurring, and 2) much higher gross margins within the Automatic Traffic Safety Enforcement (ATSE) business. 
    • Some Specifics:
      • Revenue of $3.66 million compared to $3.89 million in the same period of 2014; 44.5% growth in targeted high margin Automated Traffic Safety Enforcement ("ATSE") services;
      • Gross profit increased 60.5% to $1.06 million, compared to $660,000 in the same period of 2014; gross profit margin increased to 28.9% for the quarter compared to 17.0% in the prior year period;
      • Operating expense decreased 40.6% to $862,000 compared to $1.45 million in the same period of 2014;
      • Operating income totaled $198,000, an improvement of $989,000 compared to a net loss of $791,000 in the same period of 2014;
      • Net loss narrowed to $29,000, compared to a net loss of $827,000 in the same period of 2014.
    • Some other exciting nuggets from the company:
      • New Rochelle, NY Red Light Camera Enforcement program targeted for implementation by the end of 2015;
      • Developed body worn camera national expansion strategy in conjunction with release of Panasonic Arbitrator BWC; submitted proposal to the City of Baltimore for 2,500 camera program with potential 5-year contract of $15-20 million;
      • Approved as a Master Contractor with the Maryland Department of Information Technology; provides opportunity for selected vendors to bid on $57 million of contract awards over the next six years;
  • I am most excited about the continued shift in revenues towards the higher margin business unit, that being the red light cameras and automated traffic safety enforcement (ATSE). As first seen by this report, gross margins have experienced a huge lift because of this shift in revenue, and this is only with 10 cameras now generating revenue in Mexico. Q3 will realize revenue from an additional 23 cameras to be added. 

2. Microbix (MBX.TO)

Full press release: Click Here

  • I have debated whether or not to sell my position in Microbix to raise some cash for other potential purchases. However, I keep holding on because the virology business alone is about where the stock is priced today, so you are essentially buying a call option if you buy the stock. 
  • The positive takeaway from the report was that it appears the company is finally making some headway in talking to monetize/commercialize LumiSort and Kinlytic. Should this happen, the company becomes much more valuable.
  • I will continue holding this one in our portfolio for the time being.