WAYNE, Pa., May 16 /PRNewswire-FirstCall/ -- Escalon Medical Corp.
(Nasdaq: ESMC) today announced results for its fiscal third quarter and nine
months ended March 31, 2005. For the third quarter of fiscal 2005, Escalon
reported net revenue of $7,229,077 compared to $3,612,778 in the prior year
period, a 100.1% gain, primarily attributable to revenues resulting from the
July 2004 acquisition of Drew Scientific Group, Plc ("Drew"). For the nine-
month period ended March 31, 2005, Escalon reported net revenue of $18,882,726
compared to $10,782,345 in the prior period, a 75.1% gain, primarily
attributable to revenues resulting from the Drew acquisition.
For the third quarter of fiscal 2005, Escalon reported net income of
$743,558, or $0.119 per diluted share, from net income of $739,174 or $0.172
per diluted share, in the third quarter of fiscal 2004. Diluted shares
outstanding increased by 45.8% year over year due to the issuance of 876,543
of a possible 900,000 shares related to the acquisition of Drew, 800,000
common shares in the March 2004 private equity financing and the exercise of
stock options.
Fiscal Third Quarter and Year-To-Date Results for Escalon Excluding
Results for Drew
* Q3 product revenues were $3,240,000, a 7.28% increase, and year-to-date
product revenues were $8,875,000 a 1.44% decrease.
* Q3 other revenues were $931,000, a 57.0% increase, and year-to-date
other revenues were $2,234,000, a 25.65% increase. The increase
primarily relates to an increase in royalty payments received from
Intralase.
* Q3 gross margin was $2,872,000, or 68.86%, as compared to $2,248,000,
or 62.22% during Q3 2004; and year-to-date gross margin was $6,811,000
or 62.12%, as compared to $6,955,000, or 64.51%, during fiscal 2004.
* Q3 income from operations was $0.161 per diluted share compared to
$0.192 per diluted share in Q3 2004; and year-to-date income from
operations was $0.230 per diluted share compared to $0.663 per diluted
share in the prior year. Year-to-date operating expenses increased as
a result of unusually high amounts of legal and accounting fees,
primarily related to Escalon's first quarter filing with the Securities
and Exchange Commission, Intralase litigation costs and increased
auditor's fees.
* Q3 net income was $0.150 per diluted share as compared to $0.172 per
diluted share in Q3 2004; and year-to-date net income was $0.220 per
diluted share as compared to $0.564 per diluted share in fiscal 2004.
Fiscal Third Quarter and Year-To-Date Results for Drew
* Q3 net revenues were $3,058,000 and year-to-date net revenues were
$7,919,000.
* Q3 gross margin was $1,358,000, or 44.41%, and year-to-date gross
margin was $3,052,000, or 38.54%.
* Q3 loss from operations was $0.029 per diluted share and year-to-date
loss from operations was $0.141 per diluted share.
* Q3 net loss was $0.031 per diluted share and year-to-date net loss was
$0.151 per diluted share.
Richard J. DePiano, Chairman and Chief Executive Officer commented, "In
less a year since the acquisition of Drew, by focusing on prudent balance
sheet management and increasing both revenue and profitability drivers,
Escalon today is on course to become a much stronger company. The performance
of our business and delivery of the integration benefits were in line with the
acquisition plan and, while the impact of our efforts to date is not fully
demonstrated in our third quarter operating results, we are pleased with the
progress we have made in bringing Drew into the Escalon family."
Mr. DePiano continued, "Turning to our 2005 third quarter results, our
Sonomed business unit experienced a modest revenue decrease of approximately
$1,000, or 0.05%, resulting from continued softness in domestic demand for our
pachymeter. As you may recall, we experienced significant expansion of this
product in fiscal 2004, and demand has returned to normalized levels. This
softening was offset by maintained momentum and increasing demand for our E-Z
Scan(TM) product line, which was launched at the end of fiscal 2004. In our
Vascular business unit, we are pleased to report that revenue increased
14.01%, to $830,000, primarily relating to an increase in direct sales to end
users by Escalon's domestic sales team and, to a lesser extent, increases in
the European market."
"Despite the reduction in cash from June 30, 2004 we continue to maintain
stringent financial discipline and our balance sheet remains strong.
Consistent with our objectives, we paid off $6.3 million in debt since fiscal
year end. IntraLase's IPO in October has enabled us to book our holdings in
their stock. As of March 31, 2005, the shares we held in IntraLase were worth
approximately $4.2 million."
Mr. DePiano added, "Looking ahead, we remain confident that the strategic
decisions and the initiatives to integrate Drew will serve our shareholders
and Escalon well in the long-term. We are now set for the next, and I believe
most exciting, stage in the evolution of our company."
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 division, 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 improve upon the operations of Escalon's business
units, including Drew, generate cash and identify, finance, integrate
operations of Drew 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, 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 STATEMENT OF OPERATIONS
(Unaudited)
Three Months Ended Nine Months Ended
March 31, March 31,
2005 2004 2005 2004
Product revenue $ 6,246,836 $ 3,019,536 $16,648,739 $ 9,004,696
Other revenue 982,241 593,242 2,233,987 1,777,649
Revenues, net 7,229,077 3,612,778 18,882,726 10,782,345
Costs and expenses:
Cost of goods sold 2,998,745 1,364,600 9,019,701 3,827,059
Research and
development 463,808 167,123 1,257,132 600,245
Marketing, general
and administrative 2,938,673 1,254,516 8,050,678 3,789,801
Total costs and 6,401,226 2,786,239 18,327,511 8,217,105
expenses
Income from
operations 827,851 826,539 555,215 2,565,240
Other income and
expenses:
Equity in Ocular
Telehealth
Management, LLC (13,632) - (49,942) -
Interest income 9,166 9,356 53,607 10,317
Interest expense (15,915) (93,794) (42,534) (320,233)
Total other income
and expenses (20,381) (84,438) (309,916) (38,869)
Income before income
taxes 807,470 742,101 516,346 2,255,324
Income taxes 63,912 2,927 83,938 72,033
Net income $ 743,558 $ 739,174 $ 432,408 $ 2,183,291
Basic net income
per share $ 0.125 $ 0.192 $ 0.075 $ 0.619
Diluted net income
per share $ 0.119 $ 0.172 $ 0.069 $ 0.564
Weighted average
shares - basic 5,932,920 $ 3,839,937 5,787,753 3,524,603
Weighted average
shares - diluted 6,251,847 4,286,761 6,238,515 3,869,901
Selected Balance Sheet Data:
March 31, June 30,
2005 2004
(Unaudited) (Audited)
Cash and cash equivalents $ 2,514,793 $ 12,601,971
Total current assets 18,277,865 17,565,760
Total assets $ 40,798,222 $ 29,457,115
Current liabilities 5,079,634 3,600,427
Long-term debt, net of current portion 461,608 2,396,019
Total shareholders' equity 35,256,980 23,460,669
Reconciliation of Segmental Statement of Operations to Consolidated
Statement of Operations
Condensed
Consolidated
Escalon Statement of
(excluding Drew) Drew Operations
Three Nine Three Nine Three Nine
Months Months Months Months Months Months
Ended Ended Ended Ended Ended Ended
March March March March March March
31, 31, 31, 31, 31, 31,
2005 2005 2005 2005 2005 2005
(in (in (in (in (in (in
thou- thou- thou- thou- thou- thou-
sands) sands) sands) sands) sands) sands)
Product revenue $3,240 $8,875 $3,007 $7,775 $6,247 $16,650
Other revenue 931 2,090 51 144 982 2,234
Total revenue 4,171 10,965 3,058 7,919 7,229 18,884
Cost of goods sold 1,299 4,154 1,700 4,867 2,999 9,021
Gross margin 2,872 6,811 1,358 3,052 4,230 9,863
Operating expenses 1,863 5,380 1,538 3,929 3,401 9,309
Income/(loss) from
operations 1,009 1,431 (180) (877) 829 554
Other income/(expense) (5) 28 (16) (66) (21) (38)
Income/(loss) before
income taxes 1,004 1,459 (196) (943) 808 516
Income taxes 64 84 - - 64 84
Net income/(loss) $940 $1,375 $(196) $(943) $744 $432
Diluted net
income/(loss) per
share $0.150 $0.220 $(0.031) $(0.151) $0.119 $0.069
SOURCE Escalon Medical Corp.
 back to top
CONTACT:
Richard J. DePiano, Chairman and CEO, Escalon
Medical Corp., +1-610-688-6830; Joseph Calabrese, Financial
Relations Board, +1-212-827-3772
|
