WAYNE, Pa., Feb. 14 /PRNewswire-FirstCall/ -- Escalon Medical Corp. today announced results for its fiscal second quarter and six months ended December 31, 2005.
For the second quarter of fiscal 2006, Escalon reported net revenue of $7,310,000 compared to $6,338,000 in the prior year period, a 15.3% gain. Product revenue increased 19.2%, to $6,846,000 in the second quarter of fiscal 2006 as compared to $5,743,000 in the second 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 six month period ended December 31, 2005, Escalon reported net revenue of $14,743,000 compared to $11,640,000 in the prior period, a 26.6% gain, and product revenue of $13,609,000 compared to $10,389,000 in the prior period, a 31.0% increase.
For the second quarter of fiscal 2006, Escalon reported a net loss of $982,000, or $0.162 per diluted share, compared with a net loss of $423,000, or $0.072 per diluted share, in the second quarter of fiscal 2005. For the six month period ended December 31, 2005, the Company reported a net loss of $267,000, or $0.044 per diluted share, compared with a net loss of $309,000, or $0.054 per diluted share in the prior year period.
"Focused on solidifying Escalon's competitive position in the marketplace and leveraging our business segments for future growth opportunities, we remain committed to investing in key growth initiatives," Richard J. DePiano, Chairman and Chief Executive Officer commented. "During the first six months of 2006, these efforts included expanding our sales team and increasing trade show and marketing activity, beginning the integration of the MRP Group product line with the Escalon Medical Imaging (EMI) business line, accelerating efforts in new product development for a number of our business units, including the introduction in our Sonomed business unit of its new Ultrasound Biomicrosope instrument ('UBM") which was introduced at the American Academy of Ophthalmology meeting in October 2005. As a result of these and other investments, Escalon's operating expenses during the first six months of fiscal 2006 increased by approximately 44.7%. While the benefits of these investments are not fully demonstrated in our second quarter financial performance, we are pleased with the progress the Escalon team made during the quarter to accelerate our growth strategy and deliver value to our customers."
Mr. DePiano added. "Second quarter sales for our Drew business unit totaled $3,490,000, a 22.8% increase over 2005 second quarter sales of $2,841,000. Growth at Drew was driven by an increase in sales of hematology and diabetics instruments in the US market. Our Sonomed business unit realized 7% product revenue growth, year-over-year, driven by sales of its EZ AB ultrasound systems. Product revenue at our Vascular business unit increased 22.9% during the second quarter of fiscal 2006, primarily attributable to an increase in sales to end users in the US market which resulted from the Company's fiscal 2004 investment in an expanded domestic sales force."
"We are also extremely pleased to have completed our previously announced acquisition of substantially all of the assets of MRP Group, Inc., a privately held ophthalmic technology solutions provider. MRP Group is a terrific complement to our organization and by integrating our respective products lines and sales and marketing teams we are positioned to provide clinical practices with a full range of technologically innovative products, superior image quality, enhanced customer support and improved quality of care."
Mr. DePiano concluded, "We are executing our strategic growth plan on schedule and, looking ahead, remain steadfast in our commitment to enhance shareholder value through long term growth and diversification. We remain responsive to our customers' needs and focused on maximizing the long-term value of our key products and building our presence worldwide."
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 INCOME (Unaudited) Three Months Ended Six Months Ended December 31, December 31, 2005 2004 2005 2004 Net revenues: Product revenue $6,846,159 $5,742,848 $13,608,849 $10,388,801 Other revenue 464,131 595,296 1,134,311 1,251,000 Revenues, net 7,310,290 6,338,144 14,743,160 11,639,801 Costs and expenses: Cost of goods sold 3,883,395 3,337,468 7,628,384 6,013,333 Research and development 661,870 474,779 1,418,030 791,478 Marketing, general and administrative 3,827,839 2,916,770 7,111,890 5,105,729 Total costs and expenses 8,373,104 6,729,017 16,158,304 11,910,540 (Loss) from operations (1,062,814) (390,873) (1,415,144) (270,739) Other income and (expense): Gain on sale of available for sale securities 0 0 1,157,336 0 Equity in Ocular Telehealth Management, LLC (33,035) (7,109) (51,464) (36,310) Interest income 72,877 12,349 77,724 44,441 Interest expense (9,229) (29,934) (19,906) (26,521) Total other income and (expense) 30,613 (24,694) 1,163,690 (18,390) Net (loss) before taxes (1,032,201) (415,567) (251,454) (289,129) Provision for income taxes (50,400) 7,058 16,000 20,027 Net (loss) $(981,801) $(422,625) $(267,454) $(309,156) Basic net (loss) per share $(0.162) $(0.072) $(0.044) $(0.054) Diluted net (loss) per share $(0.162) $(0.072) $(0.044) $(0.054) Weighted average shares - basic 6,070,477 5,869,028 6,017,384 5,716,748 Weighted average shares - diluted 6,070,477 5,869,028 6,017,384 5,716,748 ESCALON MEDICAL CORP. AND SUBSIDIARIES SELECTED BALANCE SHEETS December 31, June 30, 2005 2005 (Unaudited) Cash and cash equivalents $4,579,431 $5,115,772 Total current assets 16,398,514 17,664,898 Total assets 38,943,201 40,049,336 Total current liabilities 4,314,753 4,051,694 Long-term debt 267,260 391,793 Accrued post-retirement benefits 1,087,000 1,087,000 Total shareholders' equity 33,274,188 34,518,849
Escalon Medical Corp.CONTACT: Richard J. DePiano, Chairman and CEO, Escalon Medical Corp.,+1-610-688-6830; or Joseph Calabrese, Financial Relations Board,+1-212-827-3772
