HIGHLIGHTS
• Sales revenue up 48% on prior corresponding period to $14.339 million
• Net profit of $1.238 million compared with net loss of $3.482 in prior corresponding period
• Cash balance of $23.53 million as at 31 December 2014
• Excellent progress made across key elements of strategic growth agenda
• Introduction of direct sales operation in North America announced February 6th
Nanosonics today announced its half year results for the period ending 31 December 2014. Sales for the half year were $14.339 million, up 48% on the prior corresponding period ($9.68 million) with gross profit increasing 53% to $9.171 million. Gross profit margin was 64.0% compared to 61.8% in H1 FY14 due to an increase in the proportion of higher margin consumable sales, the favourable impact of foreign exchange and an increase of higher margin direct sales in Europe.
Other income increased $794,000 compared with the prior corresponding period mainly due to an increase in reimbursement of costs received from a distributor plus foreign exchange gains recorded. Operating expenditure decreased by $740,000 on the previous corresponding period mainly due to lower employment related costs.
The Company derived a net profit of $1.238 million compared with a net loss of $3.482 million in the prior corresponding period.
Cash balance as at 31 December 2014 was $23.53 million with additional cash receipts of $4.84 million received in January relating to sales in the second quarter.
“Significant progress has been made over the last six months as we continue to execute on our strategic growth plans, said Michael Kavanagh, Nanosonics Chief Executive Officer and President. “In addition to very pleasing sales results, this half saw excellent progress across many aspects of our operations including:
• Distribution expanded into five new countries in Europe with our partner Miele Professional;
• Identification of new corporate facilities with a move scheduled by June 2015;
• Expansion of our clinical studies program in both Europe and the USA;
• Progress in our R&D strategy for next generation trophon plus development of a number of pipeline opportunities; and
• Announcement of a direct sales operation being established in North America alongside distribution partner GE Healthcare.”
“In North America, trophon® EPR is now represented in 44 of the top 50 hospitals, and over 1500 hospitals in total. With an installed base in excess of 4000 units and the market fundamentals for adoption continuing to strengthen, momentum in this region is growing well. The implementation of our direct sales operations alongside distribution partner GE Healthcare is expected to further drive broader and deeper adoption across the total hospital and private physician market.
In Europe the number of institutions adopting trophon EPR continued to grow during the half. The UK saw the introduction of new guidelines stressing the need for automated, validated decontamination systems as the optimum decontamination process, with trophon EPR positioned well to meet the needs of these new guidelines. The dual sales model of direct operations together with a distribution partner in the UK is proving successful with growth from both operations during the half. New clinical data from Germany was announced demonstrating superior outcomes with trophon EPR compared to the current standard practice of manual procedure with disinfectant wipes. European operations were expanded with the addition of five new countries represented by Miele professional. Market development is progressing well in all these countries.
During the half regulatory approval in Japan was also received and the commercialisation strategy for this important market is currently under development.
“There will be a period of transition over the next half as we implement our North American direct sales operations,” said Mr Kavanagh. “During this transition period, purchases by GE Healthcare from Nanosonics are unlikely to be significant. However, revenues from direct sales are expected to grow steadily as the full Nanosonics sales team comes into effect establishing significant momentum going into FY16.
“We remain committed to building shareholder value by establishing trophon EPR as the new standard of care globally and through strategic investment in our overall growth strategy. This includes expanding our global footprint and extending our platform technology beyond ultrasound probe decontamination into areas of significant unmet needs of our healthcare customers in microbial control”, said Michael Kavanagh, CEO and President.
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