Encision Reports Third Quarter Fiscal Year 2024 Results

BOULDER, CO / ACCESSWIRE / February 14, 2024 / Encision Inc. (OTC PINK: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 third quarter that ended December 31, 2023.

The Company posted quarterly product net revenue of $1.56 million and service net revenue of $20 thousand, or total net revenue of $1.58 million for a quarterly net loss of $207 thousand, or $(0.02) per diluted share. These results compare to product net revenue of $1.68 million and no service net revenue, or total net revenue of $1.68 million for a quarterly net loss of $216 thousand, or $(0.02) per diluted share, in the year-ago quarter. Gross margin on product net revenue was 46% in the fiscal 2024 third quarter and 53% in the fiscal 2023 third quarter.

The Company posted nine months product net revenue of $4.93 million and service net revenue of $134 thousand, or total net revenue of $5.06 million for a nine months net loss of $355 thousand, or $(0.03) per diluted share. These results compare to product net revenue of $5.08 million and service net revenue of $459 thousand, or total net revenue of $5.54 million for a nine months net loss of $231 thousand, or ($0.02) per diluted share, in the year-ago nine months. Gross margin on product net revenue was 48% in the fiscal 2024 nine months and 50% in the fiscal 2023 nine months.

"The fiscal 2024 third 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 starting to gain traction in recreating that revenue stream with a few 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     Nine Months Ended  
    December 31, 2023     December 31, 2022     December 31, 2023     December 31, 2022  
Product revenue
  $ 1,561     $ 1,684     $ 4,927     $ 5,084  
Service revenue
    20       --       134       459  
Total revenue
    1,581       1,684       5,061       5,543  
                                 
Product cost of revenue
    843       786       2,539       2,528  
Service cost of revenue
    11       --       69       --  
Total cost of revenue
    854       786       2,608       2,528  
                                 
Gross profit
    727       898       2,453       3,015  
Operating expenses:
                               
Sales and marketing
    414       502       1,237       1,494  
General and administrative
    352       360       1,107       1,103  
Research and development
    151       247       420       641  
Total operating expenses
    917       1,109       2,764       3,238  
Operating income (loss)
    (190 )     (211 )     (311 )     (223 )
Interest expense and other income, net
    (17 )     (5 )     (44 )     (8 )
(Loss) before provision for income taxes
    (207 )     (216 )     (355 )     (231 )
Provision for income taxes
    --       --       --       --  
Net (loss)
  $ (207 )   $ (216 )   $ (355 )   $ (231 )
Net (loss) per share-basic and diluted
  $ (0.02 )   $ (0.02 )   $ (0.03 )   $ (0.02 )
Weighted average shares-basic and diluted
    11,770       11,763       11,770       11,761  

Encision Inc.
Unaudited Condensed Balance Sheets
(in thousands)

    December 31,
2023
    March 31,
2023
 
ASSETS
           
Cash
  $ 99     $ 189  
Accounts receivable
    923       921  
Inventories, net
    1,554       1,899  
Prepaid expenses
    129       116  
Total current assets
    2,705       3,125  
Equipment, net
    269       303  
Right of use asset
    1,083       496  
Patents, net
    166       163  
Other assets
    64       47  
Total assets
  $ 4,287     $ 4,134  
LIABILITIES AND SHAREHOLDERS' EQUITY
               
Accounts payable
  $ 302     $ 253  
Secured notes
    45       44  
Line of credit
    --       177  
Accrued compensation
    233       218  
Other accrued liabilities
    130       85  
Accrued lease liability
    351       354  
Total current liabilities
    1,061       1,131  
Secured notes
    233       268  
Accrued lease liability
    800       240  
Total liabilities
    2,094       1,639  
Common stock and additional paid-in capital
    24,401       24,348  
Accumulated (deficit)
    (22,208 )     (21,853 )
Total shareholders' equity
    2,193       2,495  
Total liabilities and shareholders' equity
  $ 4,287     $ 4,134  

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

    Nine Months Ended        
    December 31, 2023     December 31,
2022
 
Operating activities:
           
Net (loss)
  $ (355 )   $ (231 )
Adjustments to reconcile net (loss) to cash generated by
(used in) operating activities:
                       
Depreciation and amortization
    64       64  
Share-based compensation expense
    53       39  
Provision for inventory obsolescence, net
    63       53  
Changes in operating assets and liabilities:
                       
Right of use asset, net
    (30 )     (31 )
Accounts receivable
    (2 )     118  
Inventories
    282       (375 )
Prepaid expenses and other assets
    (30 )     (28 )
Accounts payable
    49       (274 )
Accrued compensation and other accrued liabilities
    60       (73 )
Net cash generated by (used in) operating activities
    154       (738 )
                         
Investing activities:
                       
Acquisition of property and equipment
    (12 )     (173 )
Patent costs
    (20 )     (10 )
Net cash (used in) investing activities
    (32 )     (183 )
                         
Financing activities:
                       
Net proceeds from options exercised
    --       21  
Borrowings from secured notes
    (212 )     70  
Net cash (used in) provided by financing activities
    (212 )     91  
                         
Net (decrease) in cash
    (90 )     (830 )
Cash, beginning of period
    189       950  
Cash, end of period
  $ 99     $ 120  
                         

SOURCE: Encision, Inc.


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