WAYNE, Pa., May 15 /PRNewswire-FirstCall/ -- Escalon Medical Corp.
(Nasdaq: ESMC) today announced results for its fiscal third quarter and
nine months ended March 31, 2006.
For the third quarter of fiscal 2006, Escalon reported net revenue of
$7,840,000 compared to $7,229,000 in the prior year period, a 8.5% gain.
Product revenue increased 16.6%, to $7,286,000 in the third quarter of
fiscal 2006 as compared to $6,247,000 in the third quarter of fiscal 2005.
The increase in both net revenue and product revenue is primarily
attributable to strong sales in the Company's Drew, Sonomed, Vascular and
Medical/Trek/EMI business units. For the third quarter of fiscal 2006,
Escalon reported a net loss of $576,000, or $0.092 per diluted share,
compared with net income of $744,000, or $0.119 per diluted share, in the
third quarter of fiscal 2005.
For the nine-month period ended March 31, 2005, Escalon reported net
revenue of $22,583,000 compared to $18,883,000 in the prior year period, a
19.6% gain, and product revenue of $20,896,000 compared to $16,649,000 in
the prior year period, a 25.5% increase. For the nine-month period ended
March 31, 2006, the Company reported a net loss of $844,000, or $0.138 per
diluted share, compared with net income of $432,000, or $0.069 per diluted
share in the prior year period.
"This quarter reflects the efforts of a well-focused team and a
continued commitment to being a resource to our customers," Richard J.
DePiano, Chairman and Chief Executive Officer commented. "We recognize
there are tremendous opportunities in both our current markets and in new
markets to increase the Company's performance level. During the quarter we
continued operational initiatives to expand our sales team and build our
brand through key trade show and marketing activities and believe these
investments will deliver considerable long-term benefits to our
organization."
Mr. DePiano added, "Turning to our quarterly operating performance, we
achieved increases across all major product groups and reported 2006 third
quarter product revenues of $7,286,000, representing growth of 16.6% year-
over-year. These results are highlighted by 28.7% top-line growth at our
Drew business unit, which realized product revenue of $3,870,000. The
performance at Drew was driven by additional sales in the domestic market
of diabetics and hematology instruments, partially offset by a small
decrease in international sales of instruments."
"Our Sonomed business unit achieved product revenues of $2,001,000
during the quarter, representing modest growth of 1.2% year-over-year.
Growth at Sonomed was driven by an increase in product revenues of the
Company's EZ AB scan ultrasound systems and an increase in export product
revenues, partially offset by a decrease in domestic product revenues and
in demand for its pachymeter product. Product revenue at our Vascular unit
rose 7.6%, year- over-year, to $893,000 driven by an increase in direct
sales to end users by our domestic sales team."
"In our Medical/Trek/EMI unit, product revenue increased 20.3% to
$522,000, primarily attributable to an increase in Trek in OEM revenue and
an increase in EMI sales of digital imaging systems. During the quarter, we
were pleased to complete the acquisition of MRP Group, Inc., a privately
held ophthalmic technology solutions provider. While we have not yet begun
to realize the full benefits of this strategic acquisition, we have begun
the integration of MRP's retinal imaging systems with EMI's existing
ophthalmic photography product portfolio which will clearly strengthen our
position in the ophthalmic marketplace."
Mr. DePiano concluded, "Looking ahead, our strategic focus remains on
the basics of our business and ensuring strong operating performance. We
are committed to improving the performance of the Company, maximizing the
long-term value of our key products and building our presence worldwide."
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. Escalon 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 the 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 Escalon's future prospects. They are based
on the Escalon'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 Escalon is able to implement its
growth and marketing strategies, improve upon the operations of Escalon's
business units, including the integration of Drew's operations and any
acquisitions it may undertake, if any, of which there can be no assurance,
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 Escalon'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 Nine Months Ended
March 31, March 31,
2006 2005 2006 2005
Net revenues:
Product revenue $7,286,704 $6,246,836 $20,895,553 $16,648,739
Other revenue 553,054 982,241 1,687,365 2,233,987
Revenues, net 7,839,758 7,229,077 22,582,918 18,882,726
Costs and expenses:
Cost of goods sold 4,382,268 2,998,745 12,010,652 9,019,701
Research and development 717,920 463,808 2,135,950 1,257,132
Marketing, general and
administrative 3,283,722 2,938,673 10,395,612 8,050,678
Total costs and
expenses 8,383,910 6,401,226 24,542,214 18,327,511
(Loss) income from
operations (544,152) 827,851 (1,959,296) 555,215
Other (expense) and income:
Gain on sale of available
for sale securities 0 0 1,157,336 0
Equity in Ocular
Telehealth
Management, LLC (18,508) (13,632) (69,972) (49,942)
Interest income 33,974 9,166 111,698 53,607
Interest expense (27,515) (15,915) (47,421) (42,534)
Total other (expense)
and income (12,049) (20,381) 1,151,641 (38,869)
Net (loss) income before
taxes (556,201) 807,470 (807,655) 516,346
Provision for income taxes 20,024 63,912 36,024 83,938
Net (loss) income $(576,225) $743,558 $(843,679) $432,408
Basic net (loss) income
per share $(0.092) $0.125 $(0.138) $0.075
Diluted net (loss)
income per share $(0.092) $0.119 $(0.138) $0.069
Weighted average shares
- basic 6,255,665 5,932,920 6,091,938 5,787,753
Weighted average shares
- diluted 6,255,665 6,251,847 6,091,938 6,238,515
ESCALON MEDICAL CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
March 31, June 30,
2006 2005
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents $3,154,427 $5,115,772
Available for sale securities 69,600 1,207,317
Accounts receivable, net 5,180,361 4,752,310
Inventory, net 6,576,841 5,856,285
Notes receivable 500,000 100,000
Other current assets 225,940 633,214
Total current assets 15,707,169 17,664,898
Furniture and equipment, net 990,800 911,700
Goodwill 21,253,187 20,166,450
Trademarks and trade names, net 620,106 616,906
Patents, net 337,718 402,814
Other intangibles 267,925 0
Other assets 369,152 286,568
Total assets $39,546,057 $40,049,336
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt $243,957 $230,344
Accounts payable 1,694,137 1,135,680
Accrued expenses 2,176,494 2,685,670
Total current liabilities 4,114,588 4,051,694
Long-term debt, net of current portion 224,729 391,793
Accrued post-retirement benefits 1,087,000 1,087,000
Total liabilities 5,426,317 5,530,487
Shareholders equity:
Preferred stock, $0.001 par value;
2,000,000 shares authorized; no
shares issued Common stock, $0.001
par value; 35,000,000 share authorized;
6,344,670 and 5,963,477 issued and
outstanding at March 31, 2006 and
June 30, 2005, respectively 6,345 5,964
Common stock warrants 1,601,346 1,601,346
Additional paid-in capital 65,699,370 63,898,190
Retained earnings (32,980,166) (32,136,487)
Accumulated other comprehensive
(loss) income (207,155) 1,149,836
Total shareholders' equity 34,119,740 34,518,849
Total liabilities and shareholders'
equity $39,546,057 $40,049,336
SOURCE Escalon Medical Corp.
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CONTACT:
Richard J. DePiano, Chairman and CEO of
Escalon Medical Corp., +1-610-688-6830; or Joseph Calabrese of
Financial Relations Board for Escalon Medical Corp,
+1-212-827-3772
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