Encision Reports First Quarter Fiscal Year 2024 Results

BOULDER, CO / ACCESSWIRE / August 3, 2023 / Encision Inc. (PK:ECIA), a medical device company owning patented Active Electrode Monitoring (AEMĀ®) Technology that prevents dangerous radiant energy burns in minimally invasive surgery, today announced financial results for its fiscal 2024 first quarter that ended June 30, 2023.

Encision, Inc. , Thursday, August 3, 2023, Press release picture

The Company posted quarterly product net revenue of $1.61 million and service net revenue of $40 thousand, or total net revenue of $1.65 million for a quarterly net loss of $140 thousand, or $(0.01) per diluted share. These results compare to product net revenue of $1.70 million and service net revenue of $458 thousand, or total net revenue of $2.15 million for a quarterly net income of $265 thousand, or $0.02 per diluted share, in the year-ago quarter. Gross margin on product net revenue was 52% in the fiscal 2024 first quarter and 49% in the fiscal 2023 first quarter. Gross margin increased in the current year's first quarter compared to last year's first quarter due principally to higher operating efficiencies and increased selling prices.

"The fiscal 2024 first quarter presented significant challenges for Encision and for the medical device market in general," said Gregory Trudel, President and CEO of Encision Inc. "The demand for surgical procedures was diminished during the pandemic period and its rebound has been a slow process. The market has seen a number of positive indicators for an increase in demand and Encision continues to drive toward them. The service revenue that we were able to drive in the previous year was very helpful and we are working to recreate that revenue stream with new partners and opportunities to collaborate on our foundational technologies."

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, Colorado, the company pioneered the development and deployment of Active Electrode Monitoring, AEM technology, to eliminate dangerous stray energy burns during minimally invasive procedures. For additional information about all our products, please visit www.encision.com .

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 develop new or enhanced products and have such products accepted in the market, 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, 2023 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.
Unaudited Condensed Statements of Operations
(in thousands, except per share information)

    Three Months Ended  
    June 30, 2023     June 30, 2022  
Product revenue
  $ 1,613     $ 1,696  
Service revenue
    40       458  
Total revenue
    1,653       2,154  
              --  
Product cost of revenue
    770       870  
Service cost of revenue
    20          
Total cost of revenue
    790       870  
                 
Gross profit
    863       1,284  
Operating expenses:
               
Sales and marketing
    433       503  
General and administrative
    389       344  
Research and development
    169       170  
Total operating expenses
    991       1,017  
Operating (loss) income
    (128 )     267  
Interest expense, extinguishment of debt income and other income, net
    (12 )     (2 )
(Loss) income before provision for income taxes
    (140 )     265  
Provision for income taxes
    --       --  
Net (loss) income
  $ (140 )   $ 265  
Net (loss) income per share-basic and diluted
  $ (0.01 )   $ 0.02  
Weighted average number of basic shares
    11,770       11,720  
Weighted average number of diluted shares
    11,770       12,021  

Encision Inc.
Unaudited Condensed Balance Sheets
(in thousands)

    June 30, 2023     March 31, 2023  
ASSETS
           
Cash
  $ 131     $ 189  
Accounts receivable, net
    912       921  
Inventories, net
    1,867       1,899  
Prepaid expenses
    86       116  
Total current assets
    2,996       3,125  
Equipment, net
    287       303  
Right of use asset
    421       496  
Patents, net
    157       163  
Other assets
    54       47  
Total assets
  $ 3,915     $ 4,134  
LIABILITIES AND SHAREHOLDERS' EQUITY
               
Accounts payable
  $ 277     $ 253  
Secured notes
    45       44  
Line of credit
    179       177  
Accrued compensation
    219       218  
Other accrued liabilities
    66       85  
Accrued lease liability
    332       354  
Total current liabilities
    1,118       1,131  
Secured notes
    256       268  
Accrued lease liability
    174       240  
Total liabilities
    1,548       1,639  
Common stock and additional paid-in capital
    24,361       24,348  
Accumulated (deficit)
    (21,994 )     (21,853 )
Total shareholders' equity
    2,367       2,495  
Total liabilities and shareholders' equity
  $ 3,915     $ 4,134  

Encision Inc.
Unaudited Condensed Statements of Cash Flows
(in thousands)

    Three Months Ended  
    June 30, 2023     June 30, 2022  
Operating activities:
           
Net (loss) income
  $ (140 )   $ 265  
Adjustments to reconcile net (loss) income to cash
(used in) operating activities:
               
Depreciation and amortization
    22       20  
Share-based compensation expense
    13       12  
Provision for (recovery from) inventory obsolescence, net
    9       (1 )
Changes in operating assets and liabilities:
               
Right of use asset, net
    (12 )     (8 )
Accounts receivable
    8       27  
Inventories
    23       (214 )
Prepaid expenses and other assets
    24       11  
Accounts payable
    24       (188 )
Accrued compensation and other accrued liabilities
    (17 )     20  
Net cash (used in) provided by operating activities
    (46 )     (56 )
                 
Investing activities:
               
Acquisition of property and equipment
    --       (58 )
Patent costs
    (1 )     (5 )
Net cash (used in) investing activities
    (1 )     (63 )
                 
Financing activities:
               
(Paydown of) secured notes
    (11 )     (3 )
Net cash provided by (used in) financing activities
    (11 )     (3 )
                 
Net (decrease) in cash
    (58 )   $ (122 )
Cash, beginning of period
    189     $ 950  
Cash, end of period
  $ 131     $ 828  
                 

SOURCE: Encision, Inc.


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