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Encision, Inc. (ECIA) Reports Profitable Third Quarter Results


1/31/2011 7:56:26 AM

BOULDER, Colo., Jan. 31, 2011 /PRNewswire/ -- Encision Inc. (Pink Sheets: ECIA), a medical device company owning patented surgical technology that is emerging as a standard of care in minimally-invasive surgery, reported profitable financial results for its third fiscal quarter ended December 31, 2010.

The Company recorded net income of $234,000 or $0.04 per share for the third quarter of fiscal year 2011 on net sales of $2.917 million, representing a slight increase in net sales from our second quarter ended September 30, 2010, and a 10.5% decrease from net sales of $3.260 million for the third quarter of fiscal year 2010. The Company's net income compared favorably to the $149,000 or $0.02 per share for the third quarter of fiscal year 2010.

Gross profit margin for the third quarter of fiscal year 2011 grew to 62.4% as compared to 61.6% for the third quarter of fiscal year 2010. The gross profit margin increase in the third quarter of fiscal year 2011 was the result of an increase, as a percentage of net sales, of higher gross margin net sales, especially our disposable scissor inserts.

"We managed to become profitable in our third quarter by aligning our costs to net sales. We trimmed staffing levels, eliminated certain outside services, and reduced executive salaries and board of directors' fees," said Jack Serino, President and CEO of Encision Inc. "During the third quarter, we implemented a new sales strategy that we believe will result in greater sales in our future quarters."

Mr. Serino also noted, "We issued a press release last week which addressed how our patented AEM technology may have prevented a patient's injuries from a defective laparoscopic device, Jury Awards Patient $2.2 Million in Defective Laparoscopic Instrument Design Verdict; Encision's Patented AEM Laparoscopic Surgical Devices Can Mitigate Such Injuries. The press release may be found on Encision's website, under the Media Room tab, at www.encision.com. And, last week, we filed a Form 8-K with the Security and Exchange Commission to report that we and Boston Scientific Corporation entered into a Development, License and Non-Commercial Supply Agreement."

Mr. Serino added, "We are very encouraged by the judicial confirmation of the value of our AEM technology, as witnessed by the recent jury verdict and, with our agreement with Boston Scientific and our new sales strategy, the potential positive impact on our revenue."

Net sales for the nine months ended December 31, 2010 totaled $8.695 million, representing a 10% decrease from net sales of $9.650 million for the nine months ended December 31, 2009. The Company recorded a net loss of $30,000 or $0.00 per share for the nine months ended December 31, 2010 compared to net income of $359,000 or $0.06 per share for the nine months ended December 31, 2009. Gross profit margin for the nine months ended December 31, 2010 was 63.2% as compared to 62% for the nine months ended December 31, 2009. The gross profit margin increase in the nine months ended December 31, 2010 was the result of an increase, as a percentage of net sales, of higher gross margin net sales.

Encision Inc. designs, develops, manufactures and markets innovative surgical devices that allow surgeons to optimize technique and patient safety during a broad range of surgical procedures. Based in Boulder, Colorado, the Company pioneered the development of patented AEM® Laparoscopic Instruments to improve electrosurgery and reduce the chance for patient injury in minimally invasive surgery.

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, 2010 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: Marcia McHaffie, Encision Inc., 303-444-2600, mmchaffie@encision.com

Encision Inc.

Condensed Balance Sheets

(Amounts in thousands)

(Unaudited)




December 31,
2010


March 31,
2010

ASSETS





Cash and cash equivalents


$ 55


$ 114

Accounts receivable, net


1,112


1,286

Inventories, net


2,476


2,477

Prepaid expenses


86


43

Total current assets


3,729


3,920

Equipment, net


1,138


1,149

Patents, net


262


266

Other assets


26


24

Total assets


$ 5,155


$ 5,359

LIABILITIES AND SHAREHOLDERS' EQUITY





Accounts payable


$ 380


$ 684

Accrued compensation


285


405

Other accrued liabilities


351


277

Line of credit


447


--

Total current liabilities


1,463


1,366

Line of credit


--


350

Common stock and additional paid-in capital


19,756


19,677

Accumulated (deficit)


(16,064)


(16,034)

Total shareholders' equity


3,692


3,643

Total liabilities and shareholders' equity


$ 5,155


$ 5,359




Encision Inc.

Condensed Statements of Operations

(Amounts in thousands, except per share information)

(Unaudited)



Three Months Ended


Nine Months Ended


December 31,
2010


December 31,
2009


December 31,
2010

December 31,
2009

Net sales

$ 2,917


$ 3,260


$ 8,695

$ 9,650

Cost of sales

1,096


1,251


3,195

3,664

Gross profit

1,821


2,009


5,500

5,986

Operating expenses:







Sales and marketing

964


1,146


3,225

3,580

General and administrative

341


362


1,134

1,059

Research and development

269


341


1,136

947

Total operating expenses

1,574


1,849


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