WAYNE, Pa., May 14, 2015 /PRNewswire/ -- Escalon Medical Corp. (NASDAQ: ESMC) today announced financial results for its third quarter and first nine months ended March 31, 2015.
Consolidated product revenue increased 8.8% to $3.4 million in the third quarter of fiscal 2015 from $3.2 million in the year ago period primarily as a result of an increase in sales of the Company’s Sonomed Escalon Digital Imaging and Axis image management systems as well as an increase in the sales of the Company’s Ultrasound and surgical products.
For the quarter ended March 31, 2015, the Company reported net income of $56,542 and net income from continuing operations of $7,440, or $0.00 per share. This compares to net income of $86,084 for the third quarter of fiscal 2014 and net income from continuing operations of $112,354, or $0.01 per share.
Marketing, general and administrative expenses increased by 5.8% in the quarter primarily due to increased stock option, rent and commission expense as well as added sales personnel offset by reduced advertising and meeting and exhibition expense. As a percentage of sales, marketing, general and administrative expenses decreased to 38.6% from 40.3% in the second quarter and 39.7% in the year ago period. Research and development expenses for the third quarter of fiscal 2015 decreased to $289,848 as compared to $315,850 in the prior year period. For the third quarter of fiscal 2015, gross margins declined to 47.3% from 53.3% in the prior year period primarily due to lower sales prices and increased costs of certain ultrasound products with older technology. The older products are being phased out and will be discontinued once existing inventories are exhausted. New products with enhanced technology and higher margins have been introduced, and margins are expected to rise above 50% once transition to the newer products is completed.
For the first nine months of fiscal 2015, revenue reached $9.8 million, a 4.3% increase from $9.4 million in the year ago period and the Company reported a net loss of $476,506 and a net loss from continuing operations of $509,504, or $0.07 per share. The Company had net income from continuing operations of $68,426, or $0.01 per share, for the first nine months of the prior fiscal year.
At March 31, 2015, the Company had $1.2 million of cash and no long-term debt with inventory of $2.4 million.
“The Company returned to profitability in the quarter on the strength of new product sales and a continued focus on organizational efficiency,” commented Chief Executive Officer, Richard J. DePiano, Jr. “While the Company’s transition to newer feature-rich ultrasound products has adversely impacted gross margins in the short term due to price pressures being placed on older products, and the impact will continue through the end of the fiscal year, the Company believes margins will improve as older products are discontinued and ongoing initiatives to enhance operational and manufacturing efficiencies take effect.”
“The Company has further strengthened our internal sales organization and distributor channels in the quarter in order to continue to accelerate market penetration and expand into new markets, including optometry,” Mr. DePiano added. “These initiatives are designed to take advantage of the ongoing enhancement of the Company’s product offerings, achieved through the Company’s focused research and development efforts, and should further support sales growth in the quarters ahead.”
Mr. DePiano concluded, “While the sales momentum achieved over the last two quarters is encouraging and a testament to the hard work of the Company’s sales team, the Company has much work ahead of it to further educate the market about Sonomed Escalon’s ophthalmic solutions. The Company remains committed to further enhancing its sales organization and distribution channels and providing them with best-in-class products in order to grow market share and will remain focused on operational and manufacturing efficiencies to drive improved financial results throughout the rest of fiscal 2015 and into fiscal 2016.”
About Escalon Medical
Founded in 1987, Escalon Medical Corp. (NASDAQ: ESMC) specializes in the development, marketing and distribution of ophthalmic diagnostic imaging and surgical products branded under the Sonomed Escalon name. Products include a variety of ophthalmic ultrasound, digital imaging and photography, and image management systems as well as surgical products including intraocular gases, fiber optic light guides and sources, and other surgical vitreoretinal instruments. The Company seeks to grow its ophthalmic business by further developing and diversifying its product offering through internal development programs, strategic partnerships, and the acquisition of technology so as to best leverage the Company’s distribution capabilities. The Company has headquarters in Wayne, Pennsylvania and research and development, manufacturing and distribution operations in Lake Success, New York, New Berlin, Wisconsin and Stoneham, Massachusetts. For additional information visit www.escalonmed.com and www.sonomedescalon.com.
Forward Looking Statements
This press release contains statements that are considered forward-looking under the Private Securities Litigation Reform Act of 1995, including statements about the Company’s future prospects. These statements are based on the Company’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 the Company is able to: develop, obtain regulatory clearance of and launch new products, implement its growth and marketing strategies; improve upon the operations of the Company including the ability to make acquisitions and the integration of any acquisitions it may undertake, if any, of which there can be no assurance; grow our remaining ophthalmic business unit; improve our financial position; improve organizational efficiency; enhance the Company’s sales organization and distribution channels, implement cost reductions; generate cash; and identify, finance and enter into business relationships and acquisitions, although no acquisitions are currently contemplated. Other factors include uncertainties and risks related to: new product development, commercialization, manufacturing and market acceptance of new products; marketing acceptance of existing products in new markets; achievement of improved margins as older products are discontinued and newer products with enhanced technology are accepted by the market and sold; research and development activities, including failure to demonstrate clinical efficacy; delays by regulatory authorities, scientific and technical advances by the Company or third parties; introduction of competitive products; ability to reduce staffing and other costs and retain benefit of prior reductions; third party reimbursement and physician training, and general economic conditions. Further information about these and other relevant risks and uncertainties may be found in the Company’s report on Form 10-K for year ended June 30, 2014, and its other filings with the Securities and Exchange Commission, all of which are available from the Securities and Exchange Commission as well as other sources.
--financial tables to follow--
ESCALON MEDICAL CORP. AND SUBSIDIARY | |||||||
Unaudited Condensed Consolidated Statements of Operations | |||||||
Three Months Ended | Nine Months Ended | ||||||
March 31, | March 31, | ||||||
2015 | 2014 | 2015 | 2014 | ||||
Revenues, net | $ 3,427,564 | $ 3,151,651 | $ 9,757,538 | $ 9,360,219 | |||
Costs and expenses: | |||||||
Cost of goods sold | 1,806,877 | 1,473,334 | 5,076,847 | 4,539,870 | |||
Marketing, general and administrative | 1,323,419 | 1,250,159 | 4,192,428 | 3,743,548 | |||
Research and development | 289,848 | 315,850 | 997,852 | 1,016,082 | |||
Total costs and expenses | 3,420,144 | 3,039,343 | 10,267,127 | 9,299,500 | |||
Income (loss) from operations | 7,420 | 112,308 | (509,589) | 60,719 | |||
Other income (expense) | |||||||
Other income | -- | -- | -- | 7,543 | |||
Interest income | 20 | 46 | 85 | -- | |||
Total other income | 20 | 46 | 85 | 7,707 | |||
Net income (loss) from continuing operations | 7,440 | 112,354 | (509,504) | 68,426 | |||
Net income (loss) from discontinued operations | 49,102 | (26,270) | 32,998 | (77,649) | |||
Net income (loss) | $ 56,542 | $ 86,084 | $ (476,506) | $ (9,223) | |||
Basic and Diluted Net income (loss) per share | |||||||
Continuing operations | $ -- | $ 0.01 | $ (0.07) | $ 0.01 | |||
Discontinued operations | 0.01 | -- | 0.01 | (0.01) | |||
Net income (loss) | $ 0.01 | $ 0.01 | $ (0.06) | $ -- | |||
Weighted Average Shares - basic | 7,526,430 | 7,526,430 | 7,526,430 | 7,526,430 | |||
Weighted average shares diluted | 7,526,430 | 7,526,430 | 7,526,430 | 7,526,430 | |||
Selected Balance Sheet Data (Unaudited) | ||
March 31, 2015 | June 30, 2014 | |
Cash and Cash Equivalents | $1,214,817 | $2,009,554 |
Inventory | 2,409,428 | 2,910,727 |
Working Capital | 3,065,116 | 3,546,233 |
Total Assets | 6,899,473 | 7,656,274 |
Total Liabilities | 3,861,092 | 4,192,451 |
Stockholders’ Equity | 3,038,381 | 3,463,823 |
To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/escalon-medical-corp-reports-third-quarter-fiscal-2015-results-300083775.html
SOURCE Escalon Medical Corp.
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