Encision, Inc. Reports Fourth Quarter And Fiscal Year 2014 Results
BOULDER, Colo., May 21, 2014 /PRNewswire/ -- Encision Inc. (ECIA:PK), a medical device company owning patented surgical technology that prevents dangerous stray electrosurgical burns in minimally invasive surgery, today announced financial results for its fiscal 2014 fourth quarter and fiscal year ended March 31, 2014.
The Company posted quarterly product revenue of $2.413 million and quarterly service revenue of $91 thousand for a quarterly net loss of $1.453 million, or $(0.14) per share. These results compare to product revenue of $2.650 million and service revenue of $87 thousand for a net loss of $279 thousand, or $(0.03) per share, in the year-ago quarter. The net loss for the fiscal 2014 fourth quarter included product impairment charges of $1.1 million. Excluding product impairment charges, the net loss was $353 thousand, or $(0.03) per share, in the fiscal 2014 fourth quarter. Gross margin on product revenue was 1.8 percent in the fiscal 2014 fourth quarter and 59.4 percent in the fiscal 2013 fourth quarter. Excluding product impairment costs, gross margin on product revenue was 47.4 percent in the fiscal 2014 fourth quarter and 59.4 percent in the fiscal 2013 fourth quarter. Excluding product impairment costs, gross margin on product revenue was lower in the fiscal 2014 fourth quarter as a result of severance costs, increased inventory reserves, higher material costs and higher unit overhead costs on lower sales volume. Interest and other expense includes $233 thousand for the medical device excise tax that started January 1, 2013.
The Company posted fiscal year product revenue of $10.265 million and fiscal year service revenue of $282 thousand for a fiscal year net loss of $1.782 million, or $(0.20) per share. These results compare to product revenue of $11.216 million and service revenue of $551 thousand for a net loss of $616 thousand, or $(0.08) per share, in the year-ago fiscal year. Excluding product impairment charges, the net loss was $682 thousand, or $(0.08) per share, in the fiscal 2014 year. Gross margin on product revenue was 41.5 percent compared to 57.5 percent in the year-ago fiscal year. Excluding product impairment costs, gross margin on product revenue was 52.2 percent compared to 57.5 percent in the year-ago fiscal year.
"After assessing poor performance of our pistol-grip disposable suction irrigation electrode and our cold scissors, we decided to discontinue future sales of these instruments. As a result, we incurred a non-cash, one-time write off of $1.1 million in our fourth quarter that ended March 31, 2014, for inventory and equipment of these instruments and for other inventory that we will not use in the future," said Greg Trudel, President and CEO.
"During the fourth quarter, we took internal actions to drive growth and efficiencies for our fiscal year 2015 ("FY15"), which ends March 31, 2015. We have also realigned our sales team to provide greater customer support and to enable further channel expansion in the US market. While maintaining relationships in key domestic markets, we have increased regional responsibilities among our team to provide greater focus and accountability for growth and customer support."
"We are excited to further refine our focus on patient safety with our proprietary Active Electrode Monitoring ("AEM®") technology and to deliver best in class education to our customers at every level. The CMS Hospital Acquired Conditions ("HAC") Reduction Initiative has shed new light on the hazards created by stray energy during laparoscopy. Our customers are hungry for technology that will protect their patients from unwanted outcomes and their institutions from the potentially steep penalties of the HAC Reduction Initiative that will start later this year. Our FY15 external focus will be to share the opportunity to eliminate this source of risk for patients and hospitals through an intense education initiative that is targeted at multiple levels within the healthcare community. Our sales team and channel partners are trained and equipped to deliver the AEM safety message and to enable our customers to make AEM technology their standard of care."
"We are committed to increasing the adoption of our AEM technology and we have made significant advancements in convenience and ease of use of our system with the introduction of our AEM EndoShield ("EndoShield") burn protection system. Expected to launch this summer, EndoShield integrates our patented AEM technology into a disposable smart cord and eliminates the need for a separate AEM monitor. The feedback from the marketplace has been very positive. Our customers appreciate the advancement of the technology, the increase in ease of use, and the freedom from the constraint of capital expense. We look forward to launching our new device and to increasing the proliferation of AEM technology and patient safety."
Encision Inc. designs and markets a portfolio of high performance surgical instrumentation that delivers advances in patient safety with AEM technology, surgical performance, and value to hospitals across a broad range of minimally invasive surgical procedures. Based in Boulder, CO, the company pioneered the development and deployment of Active Electrode Monitoring, AEM technology, to eliminate dangerous stray energy burns during minimally invasive procedures.
In accordance with the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, the Company notes that statements in this press release and elsewhere that look forward in time, which include everything other than historical information, involve risks and uncertainties that may cause actual results to differ materially from those indicated by the forward-looking statements. Factors that could cause the Company's actual results to differ materially include, among others, its ability to increase net sales through the Company's distribution channels, its ability to compete successfully against other manufacturers of surgical instruments, insufficient quantity of new account conversions, insufficient cash to fund operations, delay in developing new products and receiving FDA approval for such new products and other factors discussed in the Company's filings with the Securities and Exchange Commission. Readers are encouraged to review the risk factors and other disclosures appearing in the Company's Annual Report on Form 10-K for the year ended March 31, 2013 and subsequent filings with the Securities and Exchange Commission. We do not undertake any obligation to update publicly any forward-looking statements, whether as a result of the receipt of new information, future events, or otherwise.
CONTACT: Mala Ray, Encision Inc., 303-444-2600, mray@encision.com
Encision Inc. | ||||
Condensed Balance Sheets | ||||
(Amounts in thousands) | ||||
(Unaudited) | ||||
March 31, 2013 | March 31, 2013 | |||
ASSETS | ||||
Cash and cash equivalents | $ 1,690 | $ 126 | ||
Accounts receivable, net | 863 | 986 | ||
Inventories, net | 2,224 | 2,929 | ||
Prepaid expenses | 65 | 66 | ||
Total current assets | 4,842 | 4,107 | ||
Equipment, net | 1,106 | 1,629 | ||
Patents, net | 249 | 238 | ||
Other assets | 14 | 9 | ||
Total assets | $ 6,211 | $ 5,983 | ||
LIABILITIES AND SHAREHOLDERS' EQUITY | ||||
Accounts payable | 666 | 824 | ||
Accrued compensation | 265 | 319 | ||
Other accrued liabilities | 409 | 446 | ||
Lease and deferred rent payable short term | 97 | |||
Total current liabilities | 1,437 | 1,589 | ||
Lease and deferred rent payable long term | 186 | |||
Total liabilities | 1,623 | 1,589 | ||
Common stock and additional paid-in capital | 23,545 | 21,570 | ||
Accumulated (deficit) | (18,957) | (17,176) | ||
Total shareholders' equity | 4,588 | 4,394 | ||
Total liabilities and shareholders' equity | $ 6,211 | $ 5,983 | ||
Encision Inc. | |||||||||
Condensed Statements of Operations | |||||||||
(Amounts in thousands, except per share information) | |||||||||
(Unaudited) | |||||||||
Three Months Ended | Fiscal Years Ended | ||||||||
March 31, 2014 | March 31, 2013 | March 31, 2014 | March 31, 2013 | ||||||
Net revenue: | |||||||||
Product | $ 2,413 | $ 2,650 | $10,265 | $11,216 | |||||
Service | 91 | 87 | 282 | 551 | |||||
Total revenue | 2,504 | 2,737 | 10,547 | 11,767 | |||||
Cost of revenue: | |||||||||
Product | 1,270 | 1,076 | 4,905 | 4,769 | |||||
Product - Impairment | 1,100 | -- | 1,100 | -- | |||||
Service | 42 | 152 | 161 | 463 | |||||
Total cost of revenue | 2,412 | 1,228 | 6,166 | 5,232 | |||||
Gross profit | 92 | 1,509 | 4,381 | 6,535 | |||||
Operating expenses: | |||||||||
Sales and marketing | 687 | 902 | 2,952 | 3,617 | |||||
General and administrative | 462 | 359 | 1,533 | 1,712 | |||||
Research and development | 340 | 463 | 1,407 | 1,756 | |||||
Total operating expenses | 1,489 | 1,724 | 5,892 | 7,085 | |||||
Operating loss | (1,397) | (215) | (1,511) | (550) | |||||
Interest and other expense, net | (56) | (64) | (271) | (66) | |||||
Loss before provision for income taxes | (1,453) | (279) | (1,782) | (616) | |||||
Provision for income taxes | |||||||||
Net loss | $(1,453) | $ (279) | $(1,782) | $ (616) | |||||
Net loss per sharebasic and diluted | $ (0.14) | $ (0.03) | $ (0.20) | $(0.08) | |||||
Basic and diluted weighted average number of shares | 10,673 | 8,210 | 8,922 | 8,200 | |||||
SOURCE Encision Inc.
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