Fiscal 2003 Net Income Rose 75% on 11% Increase in Revenues
WAYNE, Pa., Sept. 26 /PRNewswire-FirstCall/ -- Escalon Medical Corp.
(Nasdaq: ESMC) today announced results for its fiscal fourth quarter and year
ended June 30, 2003. For fiscal 2003, Escalon Medical reported a 74.9% gain
in net income to $1,712,377, or $0.479 per diluted share, from net income of
$978,857, or $0.291 per diluted share, in fiscal 2002. Net revenue for fiscal
2003 was $13,366,030 compared to $12,073,932 in the prior year period, a 10.7%
gain. Product revenue increased by 8.7% during the year to $11,191,493.
For the fourth quarter of fiscal 2003, Escalon Medical reported net income
of $650,414, or $0.170 per diluted share, a 208% gain over net income of
$211,140, or $0.063 per diluted share, in the fourth quarter of fiscal 2002.
Net revenues for the fourth quarter of fiscal 2003 increased 21.0% to
$3,703,622 compared to $3,060,408 in the fourth quarter of fiscal 2002.
Product revenue increased 22.6% to $3,152,192 in the quarter.
For the fourth quarter, revenue from Sonomed increased 32.2% to $1,855,000
compared to $1,403,000 in the prior year period. Strong gains in the domestic
market more than offset declines in Latin America, Africa and Asia. Revenue
in the Vascular business increased 1.6% to $730,000 in the fourth quarter of
fiscal 2003 compared to $719,000 in the year ago period. Product revenue in
the Company's Medical / Trek business increased 39.1% to $445,000 in the
quarter from $320,000 in the fourth quarter of fiscal 2002 driven by gains in
OEM business. Revenue in the EMI business unit was $121,000 for the quarter
compared to $131,000 in the fourth quarter of 2002. Royalty revenue was
$552,000 in the quarter compared to $488,000 in the year ago period.
Additional royalty revenue, which is largely based upon future sales of
Silicone Oil by Bausch & Lomb, is expected to continue through fiscal 2005.
In addition to Silicone Oil, the Company also receives royalty payments
related to the licensing of its intellectual laser properties. The Company's
two royalty revenue streams will fluctuate depending on the demand of the
underlying products.
The gross margin as a percent of product revenue was 56.9% in the current
quarter compared to 56.4% in the year ago period. Marketing, general and
administrative expenses declined to 33.7% of net revenues in the fourth
quarter from 44.0% of sales in the year ago period, despite increases in
selling expenses. Research and development spending increased to $201,996
from $155,017 in the year ago quarter. For fiscal 2003, the gross margin as a
percent of product revenue was 56.3% compared to 54.9% in 2002. Marketing,
general and administrative expenses declined to 37.7% of net revenues in 2003
compared to 42.2% in 2002. Research and development spending increased to
$780,333 compared to $554,760 in 2002.
"We ended fiscal 2003 on a high note, with another record in terms of net
revenues and net income and full year EBITDA of over $2.8 million. We have
been particularly pleased with the performance in our Sonomed, Vascular and
Trek businesses. Importantly, our strong financial results have enabled us to
continue to pay down debt and reinvest in our technologies, which should
position us well for the future," commented Richard J. DePiano, Chairman and
Chief Executive Officer.
Mr. DePiano continued, "At Sonomed, our domestic business continued to
exhibit strength, with solid demand for our pachymeter, a device becoming
popular with optometrists for use in glaucoma screening. Internationally,
while economies remain soft, we see opportunities to expand further into Latin
America, Africa and Asia. In addition, recent management changes in Europe
should help the business there gain traction going forward. We continue to
invest in R&D at Sonomed and our newly introduced B-Scan, the E-Z Scan(TM),
which has been well received in Europe and the U.S., began limited shipments
recently."
"Our Vascular segment performed solidly in the quarter with continued
growth in our PD Access(TM) and Smart Needle(TM) business. We are also in the
process of making enhancements to our Doppler Guided IV Needle as a result of
user feedback from our test markets. We continue to add to our sales team and
will be ready to take advantage of the opportunity we see in the oncology and
anesthesia markets when the product is rolled out more widely."
Mr. DePiano concluded, "Management's focus on generating cash has led to
significant improvements to our balance sheet in fiscal 2003. Total debt
declined by nearly $2.0 million and shareholders' equity increased by over
$1.7 million to $8.9 million at June 30, 2003. We also continue to make
progress operationally in our niche markets and look forward to taking
advantage of our targeted growth opportunities in the year ahead."
Founded in 1987, Escalon develops, markets and distributes ophthalmic
diagnostic, surgical and pharmaceutical products as well as vascular access
devices. 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 the Company's distribution capabilities. Escalon has headquarters in
Wayne, Pennsylvania and manufacturing operations in Long Island, New York and
New Berlin, Wisconsin.
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 improve upon
the operations of the Company's business units, 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, research and development activities, including
failure to demonstrate clinical efficacy, delays by regulatory authorities,
scientific and technical advances by the Company 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 OPERATIONS
Three Months Ended Year Ended
June 30, June 30,
2003 2002 2003 2002
Product revenue $ 3,152,192 $ 2,572,035 $ 11,191,493 $ 10,293,051
Other revenue 551,430 488,373 2,174,537 1,780,881
Revenues, net 3,703,622 3,060,408 13,366,030 12,073,932
Costs and expenses:
Cost of goods sold 1,359,234 1,120,875 4,895,574 4,640,325
Research and
development 201,996 155,017 780,333 554,760
Marketing, general
and administrative 1,247,704 1,345,997 5,033,852 5,096,994
Write-down of
Povidone Iodine
license and
distribution rights -- -- 195,950 --
Total costs
and expenses 2,808,934 2,621,889 10,905,709 10,292,079
Income from
operations 894,688 438,519 2,460,321 1,781,853
Other income and (expenses):
Loss from
termination of
joint venture -- (23,434) -- (23,434)
Equity in income
(loss) of
unconsolidated
joint venture -- -- -- 8,848
Interest income 726 542 2,813 2,347
Interest expense (132,588) (204,487) (638,345) (790,757)
Total other
income and (expense) (131,862) (227,379) (635,532) (802,996)
Income before
income taxes 762,826 211,140 1,824,789 978,857
Income taxes 112,412 -- 112,412 --
Net income $650,414 $211,140 $1,712,377 $978,857
Basic net income
per share $0.193 $0.063 $0.509 $0.293
Diluted net income
per share $0.170 $0.063 $0.479 $0.291
Weighted average
shares - basic 3,365,359 3,345,851 3,365,359 3,345,851
Weighted average
shares - diluted 3,573,192 3,360,492 3,573,192 3,360,492
SELECTED BALANCE SHEET DATA: June 30, June 30,
2003 2002
(audited) (audited)
Cash, cash equivalents
and investments $ 298,390 $ 220,826
Total current assets 4,758,660 4,287,590
Total assets 16,890,231 16,912,441
Current liabilities 3,870,322 4,527,697
Long-term debt 4,080,461 5,191,393
Total shareholders' equity 8,939,448 7,193,351
SOURCE Escalon Medical Corp.
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Related links:
http://WWW.FRBINC.COM
CONTACT:
Richard J. DePiano, Chairman and CEO of
Escalon, +1-610-688-6830; Weber Shandwick or Alison Ziegler both
of FRB Weber Shandwick, +1-212-445-8432
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