WAYNE, Pa., Nov. 14 /PRNewswire-FirstCall/ -- Escalon Medical Corp. today announced results for its fiscal first quarter ended September 30, 2005.
Net revenue for the first quarter of fiscal 2006 totaled $7,793,000, a 47.3% increase from the $5,292,000 reported in the first quarter of fiscal 2005. Product revenue increased 53.6%, to $7,123,000 in the first quarter of fiscal 2006 as compared to $4,636,000 in the first quarter of fiscal 2005. The increase in both net revenue and product revenue is primarily attributable to strong sales in the Company’s Drew, Sonomed and Vascular business units.
For the first quarter of fiscal 2006, Escalon reported net income of $714,000, or $0.112 per diluted share, from net income of $116,000, or $0.019 per diluted share, in the first quarter of fiscal 2005. During July 2005, Escalon sold 58,555 shares of IntraLase common stock that had originally been received in connection with the license of Escalon’s intellectual laser properties to IntraLase in 1997. The stock was sold at $19.8226 per share and resulted in net proceeds of $1,157,336 after the payment of brokers’ commissions and other fees. The net proceeds were recorded as other income in the three-month period ended September 30, 2005.
Diluted shares outstanding increased 3.8% to 6,372,742 at September 30, 2005, from 6,141,958 at September 30, 2004, due primarily to Drew shares being outstanding for the entire first quarter of fiscal 2006.
Comments from Management
Richard J. DePiano, Chairman and Chief Executive Officer commented, “We are pleased to announce strong first quarter operating results reflecting the success of initiatives to accelerate growth rates, expand our product portfolio and enhance our mix of businesses. Our performance this quarter was driven by strong growth in our Drew business unit, which realized 138.1% year- over-year revenue growth as a result of increased sale of diabetics and hematology instruments and the related reagents and controls that are used to operate the instruments in both domestic and international markets.”
“Our Sonomed business unit realized 9.4% product revenue growth, year- over-year, driven by increased sales of the Company’s EZ AB scan ultrasound systems and an increase in export sales, which were partially offset by a continued decrease in demand for the Company’s pachymeter product. Product revenue at our Vascular business unit increased 34.0% during the first quarter of fiscal 2006, primarily attributable to an increase in direct sales to end users by the Company’s domestic sales team and, to a lesser extent, increases in the European market.”
“We are also extremely excited about our recent announcements to acquire substantially all of the assets of MRP Group, Inc., a privately held ophthalmic technology solutions provider, and the signing of a non-exclusive co-marketing agreement with privately-held Anka Systems, Inc., a leader in web-based connectivity solutions for the ophthalmic physician. We expect these developments will significantly enhance our Escalon Digital Solutions business and position us to secure a leadership role in ophthalmic digital imaging and data management solutions.”
Mr. DePiano concluded, “Looking ahead to the balance of this fiscal year and beyond, we remain confident with regard to the outlook for both the markets we serve and our Company and believe the numerous initiatives we have underway all support our strategy to build a well-balanced portfolio that promises consistent growth.”
Founded in 1987, Escalon develops, markets and distributes ophthalmic diagnostic, surgical and pharmaceutical products as well as vascular access devices. Drew, which operates as a separate division, provides instrumentation and consumables for the diagnosis and monitoring of medical disorders in the areas of diabetes, cardiovascular diseases and hematology, as well as veterinary hematology and blood chemistry. Escalon seeks to utilize strategic partnerships to help finance its development programs and is also seeking acquisitions to further diversify its product line to achieve critical mass in sales and take better advantage of the Escalon’s distribution capabilities. Escalon has headquarters in Wayne, Pennsylvania and manufacturing operations in Long Island, New York, New Berlin, Wisconsin, Dallas, Texas, Oxford, Connecticut and Barrow-in-Furness, U.K.
Note: This press release contains statements that are considered forward- looking under the Private Securities Litigation Reform Act of 1995, including statements about Escalon’s future prospects. They are based on the Escalon’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 Escalon is able to implement its growth and marketing strategies, improve upon the operations of Escalon’s business units, including the integration of Drew’s operations and any acquisitions it may undertake, if any, of which there can be no assurance, generate cash and identify, finance and enter into business relationships and acquisitions, uncertainties and risks related to new product development, commercialization, manufacturing and market acceptance of new products, marketing acceptance of existing products in new markets, the continuity of royalty revenue, litigation and non- recurring expenses, research and development activities, including failure to demonstrate clinical efficacy, delays by regulatory authorities, scientific and technical advances by Escalon or third parties, introduction of competitive products, third party reimbursement and physician training as well as general economic conditions. Further information about these and other relevant risks and uncertainties may be found in Escalon’s report on Form 10- K, and its other filings with the Securities and Exchange Commission, all of which are available from the Commission as well as other sources.
ESCALON MEDICAL CORP. and SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) Three Months Ended September 30, 2005 2004 Product revenue $7,123,354 $ 4,636,457 Other revenue 670,180 655,704 Revenues, net 7,793,534 5,292,161 Costs and expenses: Cost of goods sold 4,105,653 2,671,348 Research and development 756,160 315,762 Marketing, general and administrative 3,284,051 2,182,487 Total costs and expenses 8,145,864 5,169,597 (Loss) income from operations (352,330) 122,564 Other income and (expense): Gain on Sale of Available for Sale Securities 1,157,336 -- Equity in Ocular Telehealth Management (18,429) (29,201) Interest income 4,847 32,092 Interest expense (10,677) 3,413 Total other income and (expense) 1,133,077 6,304 Income before income taxes 780,747 128,868 Income taxes 66,400 12,969 Net income $714,347 $115,899 Basic net income per share $0.120 $0.021 Diluted net income per share $0.112 $0.019 Weighted average shares - basic 5,964,292 5,564,469 Weighted average shares - diluted 6,372,742 6,141,958 SELECTED BALANCE SHEET DATA: September 30, June 30, 2005 2005 (unaudited) (audited) Cash, cash equivalents and investments $5,325,697 $5,115,772 Total current assets 17,257,301 17,664,898 Total assets 39,780,546 40,049,336 Current liabilities 4,340,228 4,051,694 Long-term debt 329,565 391,793 Total shareholders’ equity 34,023,753 34,518,849
Escalon
CONTACT: Richard J. DePiano, Chairman and CEO, +1-610-688-6830, ofEscalon; or Joseph Calabrese, +1-212-827-3772i, for Escalon
