WAYNE, Pa., May 15 /PRNewswire/ -- Escalon Medical Corp. (Nasdaq: ESMC)
today announced results for its fiscal third quarter ended March 31, 2000.
For the third quarter of fiscal 2000, Escalon Medical reported a net loss
of $633,241, or $0.195 per diluted share. In the third quarter of fiscal
1999, the Company reported net income of $841,800. Net income for the third
quarter of 1999 included a gain of $879,159 from the sale of the Company's
Betadine(R)5% Sterile Ophthalmic Prep Solution product line. Due to the
recognition of a non-cash dividend, accreted as a result of the retirement of
convertible preferred stock, the Company reported a net loss of $0.001 per
basic share in the third quarter of 1999. All share amounts reflect the
retirement of this preferred stock and the issuance of the associated common
shares during the third quarter of 1999.
Product revenue in the third quarter of fiscal 2000 increased 2% to
$2,109,521 from $2,066,009 in the third quarter of fiscal 1999. The
composition of the Company's revenue has changed significantly as a result of
its strategy to focus on niche products that it owns, rather than products
that it distributes. This was the first quarter that included the results of
Sonomed, which was acquired on January 14, 2000. Revenue attributed to
Sonomed in the quarter was $1,160,680, nearly replacing the $1,218,836 in
revenue from the Silicone Oil and Betadine(R) product lines, which were sold
in August and March of 1999, respectively. The vascular access business
contributed $621,378 to revenue in the quarter, an increase of 25% over the
third fiscal quarter of 1999. Revenue for the Company's original ophthalmic
equipment business was $327,463 in the quarter, consistent with revenues in
the second fiscal quarter.
Costs associated with Sonomed and the vascular access business contributed
to the 45% increase in marketing, general and administrative expenses in the
quarter from $951,845 in the year ago period to $1,383,349. The Company is
also establishing the systems and management infrastructure necessary to
support the planned growth of the business. Research and development costs
also increased, rising 23% in the current quarter to $296,929 from $242,251 in
the comparable quarter of fiscal 1999 due to spending in the Sonomed,
povidone-iodine 2.5% and vascular access areas as well as other product
development and research projects.
"The January 2000 acquisition of Sonomed, Inc., a privately-held
manufacturer and marketer of ophthalmic ultrasound diagnostic devices, better
focuses the Company on profitable niche products where we can be a leader,"
said Richard J. DePiano, Chairman and Chief Executive Officer. "As a
recognized expert in diagnostic devices to the ophthalmic industry, Sonomed is
creating synergies with Escalon's own ophthalmic product offerings and will
help create a stronger presence in the marketplace."
Mr. DePiano added, "Having taken the first major step in the execution of
our new strategy, management will now focus on exploiting the profit and
growth potential of our new organization. We remain committed to our strategy
of expanding our product lines with unique niche products to enhance
shareholder value."
For the first nine months of fiscal 2000, Escalon Medical reported a net
loss of $465,564, or $0.144 per diluted share, compared to net income of
$1,122,235, or $0.081 per diluted share, in the first nine months of fiscal
1999. Included in net income in the current period is a gain of $1,848,215
for the August 1999 sale of the license and distribution rights of
Adatosil(R)5000 Silicone Oil as well as the $432,859 non-cash charge related
to Ocufit SR(R). Net income for the previous period included $879,159 for the
sale of the Betadine(R) product line.
Revenues for the first nine months of fiscal 2000 were $4,419,733 compared
to $5,526,106 in fiscal 1999. The decline reflects the sale of the Silicone
Oil and Betadine(R) product lines in August and March of 1999, respectively
and the changing composition of the Company's revenue as a result of its
strategy to focus on niche products that it owns, rather than products that it
distributes.
Founded in 1987, Escalon develops, markets and distributes ophthalmic
diagnostic, surgical and pharmaceutical products as well as vascular access
devices. 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 in Long Island, New York and 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.
To receive additional information on Escalon Medical Corp., via fax, at no
charge, dial 1-800-PRO-INFO and enter code ESMC.
ESCALON MEDICAL CORP. and SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ended Nine Months Ended
March 31, March 31,
2000 1999 2000 1999
Product revenues $2,109,521 $2,066,009 $4,419,733 $5,526,106
Costs and expenses:
Cost of goods sold 820,866 922,168 1,975,064 2,431,172
Research and
development 296,930 242,251 764,313 583,502
Marketing,
general and
administrative 1,383,349 951,845 3,361,419 2,349,818
Total costs and
expenses 2,501,145 2,116,264 6,100,796 5,364,492
Income (loss) from
operations (391,624) (50,255) (1,681,063) 161,614
Other income and expenses:
Sale of Silicone Oil
product line -- -- 1,848,215 --
Sale of Betadine
product line -- 879,159 -- 879,159
Write-off of Ocufit 22,253 -- (432,859) --
Interest income 32,561 31,246 126,348 101,264
Interest expense (252,573) (18,350) (282,345) (19,802)
Total other income
and expense (197,759) 892,055 1,259,359 960,621
Income (loss) before
income taxes (589,383) 841,800 (421,704) 1,122,235
Income taxes 43,860 -- 43,860 --
Net income (loss) $(633,243) $841,800 $(465,564) $1,122,235
Basic net income
(loss) per share $(0.195) $(0.001) $(0.144) $0.082
Diluted net income
(loss) per share $(0.195) $(0.001) $(0.144) $0.081
Weighted average
shares - basic 3,242,184 3,162,184 3,242,184 3,072,524
Weighted average
shares - diluted 3,242,184 3,162,184 3,242,184 3,116,671
SELECTED BALANCE SHEET DATA: March 31, 2000 June 30, 1999
(Unaudited)
Cash, cash equivalents and investments
(restricted and unrestricted) $2,271,918 $4,854,240
Total current assets 5,961,543 7,192,512
Total assets 19,532,457 10,402,773
Current liabilities 8,120,320 3,391,740
Long-term debt 5,600,000 733,332
Total shareholders' equity 5,812,137 6,277,701
SOURCE Escalon Medical Corporation
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CONTACT:
Richard J. DePiano, Chairman and CEO of
Escalon Medical Corp., 610-688-6830, or General Info., Alison
Ziegler, Analysts, Cecelia Heer, or Media, Marty Gitlin, all of
The Financial Relations Board, 212-661-8030
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