WAYNE, Pa., Feb. 15 /PRNewswire-FirstCall/ -- Escalon Medical Corp.
(Nasdaq: ESMC) today announced results for its fiscal second quarter and
six months ended December 31, 2006.
For the second quarter of fiscal 2007, the Company reported net revenue
of $7,636,740, a 4.5% increase from the $7,310,290 reported in the prior
year period. Product revenue at the Company's Sonomed and Medical/Trek/EMI
business units increased approximately 36% and 69%, respectively, during
the second quarter ended December 31, 2006, when compared with the same
period last fiscal year. This growth was offset by decreases in the
Company's Drew and Vascular business units. Revenue at Drew and Vascular
decreased 22% and 10%, respectively, during the three-month period ended
December 31, 2006 when compared with the same period last fiscal year.
Product revenue increased approximately 2.8% to $7,034,000 for the
three- month period ended December 31, 2006, compared with $6,846,000 for
the same period last fiscal year. For the second quarter of fiscal 2007,
the Company reported a net loss of $(470,103), or $(0.07) per diluted
share, compared with a net loss of $(981,801) or $(0.16) per diluted share,
in the second quarter of fiscal 2006.
For the six-month period ended December 31, 2006, the Company reported
net revenue of $14,804,900 compared with $14,743,160 in the prior period
and product revenue of $13,577,446 compared with $13,608,849 in the prior
year six-month period. The decrease was primarily related to decreases in
the Drew and Vascular business units. The Company reported a net loss for
the six months ended December 31, 2006 of $(1,184,220), or $(0.19) per
diluted share, compared with a net loss of $(267,454), or $(0.04) per
diluted share, in the prior year period. During July 2005, the Company sold
58,555 shares of IntraLase common stock that had originally been received
by the Company in connection with the license of its laser properties to
IntraLase in 1997. The stock was sold at a price of $19.8226 per share and
yielded 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 six-month period ended December 31, 2005.
The Company continues to execute its previously announced changes to
the Drew business model, with the goal of stabilizing and increasing Drew's
revenue base while enhancing operational efficiency, increase operating
margins, lowering infrastructure costs and rationalizing facilities.
Recap of Fiscal Second Quarter 2007
"Our operating results reflect the integration of MRP's retinal imaging
systems with EMI's existing ophthalmic photography product portfolio and
the continued reorganization of the Drew business, which we believe will be
instrumental in returning Escalon to profitability and ultimately add value
to our organization," said Richard J. DePiano, Chairman and Chief Executive
Officer. "Our target for cost reductions is annualized savings of
$1,900,000, with approximately $700,000 of these cost reductions to be
realized in fiscal 2007."
Mr. DePiano added, "Looking at our operating performance for the second
quarter of fiscal 2007, product revenue increased approximately 2.8%, to
$7,034,000, for the three-month period ended December 31, 2006, compared
with the same period last fiscal year. As expected, product revenue in our
Drew business unit decreased $773,000, or 22.2%, compared with the same
period last fiscal year, primarily due to the aging of Drew's product line
and delays in bringing its new products to market. We anticipate that sales
at Drew will continue to decline until the new products become available
for sale and currently expect that Drew will release two new products for
sale in the fourth quarter of the current fiscal year."
"At our Sonomed business unit, product revenue increased $729,000, or
36.4%, compared with the same period last fiscal year as we realized an
increase in sales, both domestically and internationally, of the Company's
new VuMax II ultrasound systems along with continued demand for Sonomed's
existing product line. In our Vascular business unit, product revenue
decreased $90,000, or 10.2%, to $796,000, primarily due to a decrease in
direct sales to end users by the Company's domestic sales team and lower
revenue from our domestic distributor network. Additionally, anticipated
sales in Europe and Latin America did not materialize due to price point
pressures on Vascular's product offering."
"In our Medical/Trek/EMI unit, product revenue increased $322,000, or
69%, to $789,000, primarily attributable to strong sales of digital imaging
systems from the Company's MRP division, which was acquired in January
2006. As our business unit results show, the integration of MRP's retinal
imaging systems has clearly strengthened our position in the ophthalmic
marketplace. With this integration largely behind us, we expect to realize
continued benefits of this strategic acquisition in the coming year."
Mr. DePiano concluded, "Overall, we continue to execute on our strategy
of maximizing our assets, improving our operational performance in our
newer operations and generating greater cost efficiencies in our
organization. We intend to continue this focus while making additional
headway in our legacy businesses throughout the remainder of 2007."
Non-GAAP Measures
To supplement the Company's consolidated financial statements presented
in accordance with GAAP, the Company has begun providing certain non-GAAP
measures of financial performance. These non-GAAP measures include non-GAAP
net loss and non-GAAP loss per fully diluted share.
The Company's reference to these non-GAAP measures should be considered
in addition to results prepared under current accounting standards, but are
not a substitute for, nor superior to, GAAP results. These non-GAAP
measures are provided to enhance investors overall understanding of the
Company's current financial performance and provide further information for
comparative purposes due to the adoption of the new accounting standard FAS
123R.
Specifically, the Company believes the non-GAAP measures provide useful
information to both management and investors by isolating certain expenses,
gains and losses that may not be indicative of its core operating results
and business outlook. In addition, the Company believes non-GAAP measures
that exclude stock-based compensation expense enhance the comparability of
results against prior periods. The non-GAAP measures and the reconciliation
to the most directly comparable GAAP measure of all non-GAAP measures are
as follows:
Three Months Ended Six Months Ended
December 31, December 31,
2006 2005 2006 2005
Net Loss $(470,103) $(1,032,201) $(1,184,220) $(267,454)
Non-GAAP adjustments:
Stock based compensation $123,772 $- $123,772 $-
Depreciation and
amortization $135,279 $107,752 $282,082 $217,944
Total adjustments $259,051 $107,752 $405,854 $217,944
Non-GAAP adjusted loss $(211,052) $(924,449) $(778,366) $(49,510)
Shares used in computing
basic and fully diluted
earnings per share 6,347,972 6,070,477 6,346,315 6,017,384
Non-GAAP adjusted loss
per fully diluted share $(0.03) $(0.15) $(0.12) $(0.01)
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 business unit, 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. The Company 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 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 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 implement
its growth and marketing strategies, improve upon the operations of the
Company's business units, including the integration of Drew's and MRP's
operations and any acquisitions it may undertake, if any, of which there
can be no assurance, implement cost reductions, 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 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 SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
Three Months Ended Six Months Ended
December 31, December 31,
2006 2005 2006 2005
Net revenues:
Product revenue $7,033,860 $ 6,846,159 $13,577,446 $13,608,849
Other revenue $ 602,880 $ 464,131 $ 1,227,454 $ 1,134,311
Revenues, net $7,636,740 $ 7,310,290 $14,804,900 $14,743,160
Costs and expenses:
Cost of goods sold $3,878,214 $ 3,883,395 $ 7,508,594 $ 7,628,384
Research and
development $1,080,950 $ 661,870 $ 1,794,555 $ 1,418,030
Marketing, general
and administrative $3,144,611 $ 3,827,839 $ 6,700,511 $ 7,111,890
Total costs and
expenses $8,103,775 $ 8,373,104 $16,003,660 $16,158,304
(Loss) from operations $ (467,035) $(1,062,814) $(1,198,760) $(1,415,144)
Other income and
(expense):
Gain on sale of
available for sale
securities $ - $ - $ - $ 1,157,336
Equity in Ocular
Telehealth
Management, LLC $ (12,155) $ (33,035) $ (30,698) $ (51,464)
Interest income $ 13,498 $ 72,877 $ 58,934 $ 77,724
Interest expense $ (5,654) $ (9,229) $ (14,939) $ (19,906)
Total other income
and (expense) $ (4,311) $ 30,613 $ 13,297 $ 1,163,690
Net (loss) before taxes $ (471,346) $(1,032,201) $(1,185,463) $ (251,454)
Provision for income
taxes $ (1,243) $ (50,400) $ (1,243) $ 16,000
Net (loss) $ (470,103) $ (981,801) $(1,184,220) $ (267,454)
Basic net (loss) per
share $ (0.07) $ (0.16) $ (0.19) $ (0.04)
Diluted net (loss) per
share $ (0.07) $ (0.16) $ (0.19) $ (0.04)
Weighted average shares
- basic 6,347,972 6,070,477 6,346,315 6,017,384
Weighted average shares
- diluted 6,347,972 6,070,477 6,346,315 6,017,384
ESCALON MEDICAL CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
December 31, June 30,
2006 2006
Cash, cash equivalents and Investments $1,628,270 $2,429,930
Total current assets $14,661,881 $14,911,249
Total assets $38,117,067 $38,644,767
Current liabilities $4,668,729 $4,295,109
Long-term debt $1,153,894 $1,249,551
Total shareholders' equity $32,294,444 $33,100,107
SOURCE Escalon Medical Corp.
 back to top
CONTACT:
Richard J. DePiano, Chairman and CEO of
Escalon Medical Corp., +1-610-688-6830; or Joseph Calabrese of
Financial Relations Board, +1-212-827-3772
|
