Reports on Progress at IntraLase Corp.
WAYNE, Pa., Feb. 3 /PRNewswire/ -- Escalon Medical Corp. (Nasdaq: ESMC)
today announced record results for its fiscal second quarter ended December
31, 1998, marking the sixth consecutive profitable quarter in the Company's
history.
For the second quarter of fiscal 1999, Escalon Medical reported net income
of $113,368, or $0.027 per diluted share, compared to net income of $20,500,
or $0.008 per diluted share, in the second quarter of fiscal 1998, an increase
of 453%. All share amounts have been adjusted to reflect the one-for-four
reverse stock split effective November 24, 1997 and assume the conversion of
preferred stock during the second quarter of 1999.
Revenues in the second quarter of fiscal 1999 increased 18% to $1,774,675
from $1,509,476 in the second quarter of fiscal 1998. The increase reflects
continued growth in unit sales of Adatosil(R)5000 Silicone Oil, Betadine(R)5%
Sterile Ophthalmic Prep Solution, disposable products and accessories. During
the quarter, the Company experienced a decrease in sales of ISPAN(TM)
Intraocular Gases and OEM manufactured products. OEM revenues can vary
quarter to quarter depending on timing of orders and lead-time needed to
produce the product.
Selling, general and administrative expenses declined 10% on an absolute
basis in the second quarter of fiscal 1999 compared to the second quarter of
1998. As a percent of sales, SG&A declined to 40.3% compared to 52.7% in the
year ago period. The savings are primarily a result of the consolidation of
corporate functions instituted in January 1998 as well as modifications to the
sales commission structure. Last year's second quarter benefited from a
$101,000 favorable accrual reversal resulting from the licensing of the
Company's laser technology to IntraLase Corp.
Research and development costs increased 55% in the current quarter from
the comparable quarter of fiscal 1998. This reflects expenditures related to
the start of preclinical trials of OcufitSR(R), our drug delivery device for
which the Company recently filed an IND, and povidone-iodine 2.5% solution.
An IND for povidone-iodine is expected to be filed in the current fiscal year.
Additional costs related to ISO/CE certification and prototype development
were also incurred in the quarter.
Other income declined by 68% in the quarter. In the second quarter of
last year, Escalon reported $75,000 of other income related to the licensing
of its laser technology.
For the six months ended December 31, 1998, Escalon reported net income of
$280,437, or $0.068 per diluted share, compared to net income of $51,441, or
$0.019 per diluted share in the comparable period, an increase of 445%.
Revenues for the first six months of fiscal 1999 increased 20% to $3,460,097
from $2,880,640 for the comparable six month period.
"We are pleased to report the continued improvement in profitability at
Escalon Medical," said Richard J. DePiano, the Company's Chairman and Chief
Executive Officer. "Over the last year and a half the Company has undergone
many changes. By focusing on our core surgical and pharmaceutical product
lines we have been able to maximize our profits and control our costs.
Demonstrating our strategy of acquiring profitable niche product lines and
diversifying our business, we recently acquired the vascular access business
of Radiance Medical Systems. We expect this niche business to provide
additional growth opportunities, supplement our core ophthalmic products and
take advantage of our contract manufacturing capabilities."
Mr. DePiano added, "With the vascular access acquisition and the
repurchase of our outstanding preferred stock occurring after quarter end, our
new $2.0 million credit facility from PNC Bank will provide us with the
financial flexibility to continue to pursue our growth strategy."
Commenting on IntraLase Corp., in which Escalon has an equity stake, Mr.
DePiano added, "The progress at IntraLase, which was created through the
combination of our ultrafast laser business with that of the University of
Michigan, has been very exciting. In January, IntraLase received $3.0 million
of additional financing led by Brentwood Venture Capital and Enterprise
Development Fund. These funds are earmarked for European clinical studies and
the commercialization and scale-up of the IntraLase laser vision correction
system. In addition, IntraLase appointed Randy Alexander as its President and
Chief Executive Officer. Most recently with Chiron Vision, a division of
Bausch & Lomb, Mr. Alexander was a Senior Vice President as well as the
President of Refractive Surgery and was heavily involved with the introduction
of Chiron's keratome and eximer laser products. These milestones reflect the
significant progress being made at IntraLase as it continues its steps toward
commercialization in this rapidly growing market."
Founded in 1987, Escalon develops, markets and distributes ophthalmic
surgical and pharmaceutical products as well as vascular access devices which
provide a base of positive cash flow to fund a targeted research and
development effort. The Company utilizes 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 Company's distribution capabilities. Escalon has
headquarters in Wayne, Pennsylvania and manufacturing operations near
Milwaukee, Wisconsin.
Note: This press release contains statements that are forward-looking,
including statements about the Company's future prospects. They 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 improve upon
the operations of the vascular access business, continue to make gains in its
research and development programs as well as 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, 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 SUBSIDIARY
CONDENSED STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ended Six Months Ended
December 31, December 31,
1998 1997 1998 1997
Product revenues $1,774,675$1,509,476$3,460,097$2,880,640
Cost of goods sold 792,148 671,561 1,509,004 1,277,576
Gross margin 982,527 837,915 1,951,093 1,603,064
Costs and expenses:
Marketing, general and
administrative 715,010 795,444 1,397,973 1,459,763
Research and development 185,813 120,089 341,250 216,478
Total costs and expenses 900,823 915,533 1,739,223 1,676,241
Income (loss) from operations 81,704 (77,618) 211,870 (73,177)
Other income and expenses:
Other income -- 75,000 -- 75,000
Interest income 33,090 23,164 70,018 49,767
Interest expense (1,426) (46) (1,451) (149)
Total other income and expense 31,664 98,118 68,567 124,618
Net income $113,368 $20,500 $280,437 $51,441
Basic net income per share $0.034 $0.008 $0.084 $0.020
Diluted net income per share $0.027 $0.008 $0.068 $0.019
Weighted average shares - basic 3,017,184 2,629,375 3,028,668 2,629,375
Weighted average shares - diluted4,181,7432,682,847 4,103,395 2,682,847
SELECTED BALANCE SHEET DATA: December 31, June 30,
1998 1998
(Unaudited)
Cash, cash equivalents and investments $2,665,665 $2,593,983
Current assets 4,482,673 4,150,491
Total assets 7,048,382 6,734,128
Current liabilities 861,941 685,476
Total shareholders' equity 6,186,441 6,048,652
SOURCE Escalon(R) Medical Corp.
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CONTACT:
Richard J. DePiano, Chairman and CEO of
Escalon, 610-688-6830; or General Info., Alison Ziegler, Analyst
Info., Nicole Salas, or Media Info., Marty Gitlin, 212-661-8030,
all of The Financial Relations Board
NOTE TO EDITORS: To receive additional information on Escalon
Medical Corp., via fax, at no charge, dial 1-800-PRO-INFO and
enter code ESMC
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