Escalon Medical Corp. Reports Fiscal 2014 Results

ARDMORE, Pa., Sept. 26, 2014 /PRNewswire/ -- Escalon Medical Corp. (NASDAQ: ESMC) today announced its operating results for the fiscal year ended September 30, 2014.  The Company was also recently granted authority to apply the CE Mark to the Sonomed Escalon VuPad, its new tablet-based ultrasound imaging system. 

Fiscal 2014 Results

For the year ended June 30, 2014, the company reported a net loss of $381,883 and a net loss from continuing operations of $349,532, or $0.05 per share.  This compares to net income of $2.6 million, or $0.35 per share, for fiscal 2013, which includes a net gain of $3.9 million related to the sale of Drew and related debt settlement.  The net loss from continuing operations was $1.2 million, or $0.16 per share, for fiscal 2013. 

For fiscal 2014, consolidated product revenue increased 7.5% to $12.4 million from $11.5 million in fiscal 2013, led by a gain in sales of the Company's Sonomed Escalon Ultrasound and Digital products. 

For fiscal 2014, margins improved slightly to 49.1% compared to 48.6% in the prior year period due to product sales mix.  Marketing, general and administrative expenses decreased by 10.6% primarily due to declines in payroll expenses.  As a result of the planned update of existing products as well as the introduction of new products, research and development expenses for fiscal 2014 grew by 18.2% to $1.3 million from $1.1 million in the prior fiscal year.

At June 30, 2014, the Company had $2.0 million of cash and no long-term debt.  With the recent launch of the VuPad, the Company has built inventory to satisfy anticipated demand in fiscal 2015, contributing to the $609,657 use of cash for the year.  Inventory stood at $2.9 million at June 30, 2014. 

VuPad Receives CE Mark Authorization

The VuPad, which received FDA 510(k) clearance earlier in 2014, recently received authorization to apply the CE Mark, allowing sales in the 27 nations that comprise the European Union (EU).  The VuPad combines Sonomed Escalon's superior UBM and newly enhanced B-scan image quality with an ultra-high-resolution screen that has 25% larger viewing area than other portable ultrasound devices. 

"We are excited to offer the VuPad into our extensive European distribution channels, building upon its initial introduction within the United States earlier in the year," commented Chief Executive Officer, Richard J. DePiano, Jr.  "The CE marking is well-timed with recent production capacity coming online and our planned marketing activities.  We have received very positive feedback from European distributors and clinicians, including at a preview provided at the Societas Internationalis Pro Diagnostica Ultrasonica in Ophthalmologia (SIDUO) Congress held in Berlin, Germany this summer and at the European Society of Cataract and Refractive Surgeons (ESCRS) annual meeting held in London, England earlier this month."

"From a financial perspective, we are satisfied with the progress we have made during the year.  We were able to bring our cost structure down while continuing to invest in our ophthalmic product portfolio, including the VuPad, the VuMAX® HD and other new products.  While we reported breakeven results earlier in the year, the fourth quarter was hampered by the transition to new products which involved the discounting of our older product inventory as well as the distribution of demonstration devices to our distributors, which also pressured margins.  We also invested in new product inventory in the fourth quarter in advance of anticipated demand in 2015 as well as the American Academy of Ophthalmology Annual Meeting in October in Chicago."

Mr. DePiano concluded, "We remain committed to continuing to update our product portfolio and build on our position as a leader in ophthalmic diagnostic instrumentation and ultrasound solutions.  Recent new products are being well received and we are positioned to leverage our experienced sales force and distribution network to grow market share.  We will continue to invest in sales and marketing as well as research and development to remain best in class and believe this will lead to accelerated growth in 2015 and increased shareholder value longer term."

About Escalon Medical  

Founded in 1987, Escalon Medical Corp. (NASDAQ: ESMC) specializes in the development, marketing and distribution of ophthalmic diagnostic imaging and surgical products branded under the Sonomed Escalon name.  Products include a variety of ophthalmic ultrasound, digital imaging and photography, and image management systems as well as surgical products including intraocular gases, fiber optic light guides and sources, and other surgical vitreoretinal instruments.  The Company seeks to grow its ophthalmic business by further developing and diversifying its product offering through internal development programs, strategic partnerships, and the acquisition of technology so as to best leverage the Company's distribution capabilities. The Company has headquarters in Ardmore, Pennsylvania and research and development, manufacturing and distribution operations in Lake Success, New York, New Berlin, Wisconsin and Stoneham, Massachusetts.  For additional information visit www.escalonmed.com and www.sonomedescalon.com

Forward Looking Statements  

This press release contains statements that are considered forward-looking under the Private Securities Litigation Reform Act of 1995, including statements about the Company's future prospects. These statements are based on the Company's current expectations and are subject to a number of uncertainties and risks, and actual results may differ materially. The uncertainties and risks include whether the Company is able to: develop, obtain regulatory clearance of and launch new products, implement its growth and marketing strategies; improve upon the operations of the Company including the ability to make acquisitions and the integration of any acquisitions it may undertake, if any, of which there can be no assurance; grow our remaining ophthalmic business unit; improve our financial position; implement cost reductions; generate cash; and identify, finance and enter into business relationships and acquisitions.  Other factors include uncertainties and risks related to: new product development, commercialization, manufacturing and market acceptance of new products; marketing acceptance of existing products in new markets; research and development activities, including failure to demonstrate clinical efficacy; delays by regulatory authorities, scientific and technical advances by the Company or third parties; introduction of competitive products; ability to reduce staffing and other costs and retain benefit of prior reductions; third party reimbursement and physician training, and general economic conditions.  Further information about these and other relevant risks and uncertainties may be found in the Company's report on Form 10-K for year ended June 30, 2014, and its other filings with the Securities and Exchange Commission, all of which are available from the Securities and Exchange Commission as well as other sources.

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SOURCE Escalon Medical Corp.