TSO3 Reports Record Third Quarter 2017 Results
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| [06-November-2017] |
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QUEBEC CITY and MYRTLE BEACH, SC, Nov. 6, 2017 /PRNewswire/ - TSO3 Inc. (TSX: TOS), an innovator in sterilization technology for medical devices in healthcare settings, reported financial results for its third fiscal quarter 2017 ended September 30, 2017. Third Quarter 2017 Financial Summary
Management Commentary "We are pleased with our financial results in the third quarter, and our training and support efforts continue to positively impact the rate at which our distributor is winning new business," stated R. M. (Ric) Rumble, TSO3's President and CEO. "We are looking forward to a productive fourth quarter 2017 and fiscal year 2018. We are moving forward with plans for our new, higher capacity, US assembly facility, and we continue to have a positive dialogue with US regulators regarding our application to further enhance our sterilizers' claims to include duodenoscopes. Q3-2017 Conference Call TSO3's President and CEO R.M. (Ric) Rumble and CFO Glen Kayll, will host the conference call, followed by a question and answer period. Date: Tuesday, November 7, 2017 Analysts and institutional investors are invited to participate on the call. Please call the conference telephone number 5-10 minutes prior to the start time. An operator will register your name and organization. If you have any difficulty connecting with the conference call, please contact Gilmartin Group at 1-610-368-6505. Other interested parties may listen to the live webcast of the conference call at http://event.on24.com/r.htm?e=1528844&s=1&k=1F38C510E7E63BE8C2A79B736CDC2790 which will be available for replay in the Investors section of the Company's website at www.tso3.com.
Quarterly Sequential Summary
2016 2017
$000's
------
Q1 Q2 Q3 Q4 Q1 Q2 Q3
--- --- --- --- --- --- ---
Revenues 3,071 2,977 3,507 3,746 4,211 4,630 5,105
Cost of sales 1,961 2,143 2,368 2,716 2,641 2,871 3,102
------------- ----- ----- ----- ----- ----- ----- -----
Gross Profit 1,110 834 1,139 1,030 1,570 1,759 2,003
Gross Margin 36% 28% 32% 28% 37% 38% 39%
Expenses
Research and
Development 606 803 806 1,297 1,353 1,539 1,562
Selling, general and
administration 1,385 1,529 1,841 1,774 2,209 2,396 2,131
Financial expenses
(income) (1,588) - (50) (21) (39) 49 48
------------------ ------ --- --- --- --- --- ---
Net Income (loss)
before tax 707 (1,499) (1,458) (2,020) (1,953) (2,225) (1,738)
Income taxes 58 (12) 15 48 27 29 33
------------ --- --- --- --- --- --- ---
Net Income (loss) 649 (1,487) (1,473) (2,068) (1,980) (2,254) (1,771)
Basic and diluted net
income (loss) per
share 0.01 (0.02) (0.02) (0.02) (0.02) (0.02)
(0.02)
Non-cash share based
compensation 216 267 333 286 609 592 632
Cash, cash equivalents
and investments 24,385 21,338 20,744 19,260 19,590 16,740 16,109
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Summary of Results
Periods ended September 30, 2017 and 2016 (Unaudited, IFRS Basis, in thousands of US dollars, except per
share amounts)
Third Quarter Nine months
2017 2016 2017 2016
$ $ $ $
--- --- --- ---
Revenues 5,105 3,507 13,946 9,555
Cost of sales 3,102 2,368 8,613 6,472
------------- ----- ----- ----- -----
Gross profit 2,003 1,139 5,333 3,083
------------ ----- ----- ----- -----
Expenses
Research and development 1,562 806 4,456 2,215
Selling, general and
administrative 2,131 1,841 6,735 4,755
Financial expenses (income) 48 (50) 58 (1,637)
-------------------------- --- --- --- ------
Net loss before income
taxes (1,738) (1,458) (5,916) (2,250)
Income taxes 33 15 89 62
------------ --- --- --- ---
Net loss and total
comprehensive loss (1,771) (1,473) (6,005) (2,312)
------------------- ------ ------ ------ ------
Basic and diluted net loss
per share (0.02) (0.02) (0.07) (0.03)
-------------------------- ----- ----- ----- -----
Consolidated Statements of Financial Position
(Unaudited in thousands of US dollars)
September 30, December 31,
2017 2016
$ $
--- ---
Current Assets
Cash and Cash Equivalents 7,642 2,698
Short-term Investments 8,467 15,064
Accounts Receivable 613 2,318
Inventories 2,595 1,703
Prepaid Expenses 165 102
---------------- --- ---
19,482 21,885
Non-current Assets
Long-term Investments - 1,498
Property, Plant and Equipment 2,944 2,357
Intangible Assets 1,885 1,836
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4,829 5,691
----- -----
24,311 27,576
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Current Liabilities
Accounts Payable and Accrued
Liabilities 2,664 2,272
Warranty Provision 1,103 575
Deferred Revenues 1,103 1,004
----------------- ----- -----
4,870 3,851
Non-current Liabilities
Deferred Income Tax Liabilities 198 109
Deferred Revenues 5,204 5,945
----------------- ----- -----
10,272 9,905
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Equity
Share Capital 111,215 110,406
Reserve - Share-based Compensation 6,273 4,709
Deficit (101,737) (95,732)
Accumulated Other Comprehensive Loss (1,712) (1,712)
------------------------------------ ------ ------
14,039 17,671
------ ------
24,311 27,576
------ ------
Consolidated Statements of Cash Flows
As of September 30, 2017 and 2016 (Unaudited, IFRS Basis, in thousands
of US dollars)
Nine months
2017 2016
$ $
--- ---
Cash flows from operating
activities
Net loss (6,005) (2,312)
Adjustments for:
Depreciation and amortization 715 328
Loss on write-down of PP&E 39 -
Deferred income tax liabilities 89 -
Share-based compensation 1,833 817
Investment income (138) (131)
----------------- ---- ----
(3,467) (1,298)
Changes in non-cash operating
working capital items 883 (3,134)
Interest received 127 95
----------------- --- ---
Cash flows used in
operating activities (2,457) (4,337)
--------------------- ------ ------
Cash flows from investing
activities
Acquisition of investments (2,909) (22,917)
Disposal of investments 11,015 8,845
Acquisition of property, plant
and equipment (1,057) (635)
Acquisition of intangible assets (190) (248)
Proceed from disposal of
property, plant and equipment 2 -
------------------------------ --- ---
Cash flows generated by
investing activities 6,861 (14,955)
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Cash flows from financing
activities
Options exercised 540 672
Warrants exercised - 10,145
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Cash flows generated by
financing activities 540 10,817
----------------------- --- ------
Increase (decrease) in
cash and cash equivalents 4,944 (8,475)
Cash and cash equivalents
at the beginning 2,698 12,654
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Cash and cash equivalents
at the end 7,642 4,179
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About the STERIZONE® VP4 Sterilizer The STERIZONE® VP4 Sterilizer is a low-temperature sterilization system that utilizes the dual-sterilants of vaporized hydrogen peroxide (H2O2) and ozone (O3) to achieve terminal sterilization of heat and moisture sensitive medical devices. Its single pre-programmed cycle can sterilize a large number and wide range of compatible devices, creating a cost-effective sterilization process with error free cycle selection. The device's unique Dynamic Sterilant Delivery System™ automatically adjusts the quantity of injected sterilant based on the load composition, weight and temperature. This capability removes the guesswork and potential for human error, as there is no need to sort instruments and choose the appropriate cycles as with other machines. The STERIZONE® VP4 Sterilizer is the only terminal sterilization method that is FDA cleared to sterilize multi-channeled flexible endoscopes (with a maximum of four channels) of up to 3.5 meters in length, such as video colonoscopes and gastroscopes - an industry first for any medical device sterilization process. The STERIZONE® VP4 Sterilizer is also the only cleared low temperature sterilizer that can process a mixed load consisting of general instruments, single channel flexible endoscopes, and single or double channel rigid endoscopes in the same cycle with load weights of up to 75lbs. The ability to run mixed loads significantly reduces labor costs by minimizing the amount of instrument sorting required, while maximizing the device turns (more productivity from increased throughput capacity). More information about the STERIZONE® VP4 Sterilizer is available through TSO3's website, under the Products section at http://www.tso3.com/en/products/sterizone-vp4/. About TSO3 Founded in 1998, TSO3's activities encompass the sale, production, maintenance, research, development and licensing of sterilization processes, related consumable supplies and accessories for heat-sensitive medical devices. The Company designs products for sterile processing areas in the hospital environment that offer an advantageous replacement solution to other low temperature sterilization processes currently used in hospitals. TSO3 also offers services related to the maintenance of sterilization equipment and compatibility testing of medical devices with such processes. For more information about TSO3, visit the Company's website at www.tso3.com. The statements in this release and oral statements made by representatives of TSO3 relating to matters that are not historical facts (including, without limitation, those regarding the timing or outcome of TSO3's regulatory filings, revenue, business or operations) are forward-looking statements that involve certain risks, uncertainties and hypotheses, including, but not limited to, the ability of the Company to obtain the required regulatory clearances to market its products, general business and economic conditions, the condition of the financial markets, the ability of TSO3 to obtain financing on favourable terms and other risks and uncertainties. Although TSO3 believes that the expectations reflected in such forward-looking statements are reasonable, it can give no assurance that such expectations will prove to have been correct. The complete versions of the cautionary note regarding forward-looking statements as well as a description of the relevant assumptions and risk factors likely to affect TSO3's actual or projected results are included in the Management's Discussion and Analysis for the year ended December 31, 2016, which is available on the Company's website. The forward-looking statements contained in this press release are made as of the date hereof, and TSO3 does not assume any obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise unless expressly required by applicable securities laws.
SOURCE TSO3 Inc. |
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Company Codes: Toronto:TOS |