Net Income Rose 140% on 13% Increase in Revenues
WAYNE, Pa., Nov. 10 /PRNewswire-FirstCall/ -- Escalon Medical Corp.
(Nasdaq: ESMC) today announced results for its fiscal first quarter ended
September 30, 2003. For the first quarter of fiscal 2004, Escalon Medical
reported a 140.5% gain in net income to $623,156, or $0.154 per diluted share,
from net income of $259,159, or $0.076 per diluted share, in the first quarter
of fiscal 2003. Net revenue for the quarter was $3,411,642 compared to
$3,008,340 in the prior year period, a 13.4% gain. Product revenue increased
by 13.0% during the quarter to $2,841,127.
For the first quarter, revenue from Sonomed increased 22.8% to $1,705,000
compared to $1,389,000 in the prior year period. Strong gains in the domestic
market as well as increases in Europe more than offset declines in Asia and
the Pacific Rim. Revenue in the Vascular business increased 10.2% to $734,000
in the first quarter of fiscal 2004 compared to $666,000 in the year ago
period. Product revenue in the Company's Medical / Trek business increased
3.2% to $357,000 in the quarter from $346,000 in the first quarter of fiscal
2003. Revenue in the EMI business unit was $45,000 for the quarter compared
to $113,000 in the first quarter of 2003. Royalty revenue was $571,000 in the
quarter compared to $495,000 in the year ago period, largely driven by sales
of Silicone Oil. 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 57.3% in the current
quarter compared to 57.1% in the year ago period. Marketing, general and
administrative expenses declined to 35.6% of net revenues in the first quarter
from 42.8% of net revenues in the year ago period. Research and development
spending increased to $207,130 from $190,318 in the year ago quarter.
"We began fiscal 2004 with another solid quarter, particularly in our
Sonomed and Vascular businesses. Income from operations of over $777,000 in
the first quarter was targeted at additional debt repayment. During the
quarter we repaid an additional $500,000 of our credit line as well as over
$365,000 on our term loan. Continued strengthening of our balance sheet led
to a 38.4% decline in our interest expense in the quarter and will provide us
with added flexibility to reinvest in our businesses," commented Richard J.
DePiano, Chairman and Chief Executive Officer.
Mr. DePiano continued, "At Sonomed, our domestic business continued to
exhibit strength, led by solid demand for our pachymeter, which is becoming
popular with optometrists for use in glaucoma screening. We will also be
exhibiting our new B-Scan, the E-Z Scan(TM) and an enhanced combination
A-scan/B-scan version at the American Academy of Ophthalmology Annual Meeting
in November. Internationally, our European business began to benefit from the
recent management changes put in place, with revenues up over 100% in the
quarter off a base of $62,000. Revenues in Asia and the Pacific Rim, where we
see longer-term opportunities, have yet to see an upturn."
"Revenues in our Vascular segment grew a solid 10.2% in the quarter with
continued growth in usage of our PD Access(TM) and Smart Needle(TM) products.
We continue to make good progress in the area of product development and we
are also deploying our management and sales resources into several new markets
in the U.S."
Mr. DePiano concluded, "We are pleased to see continued revenue growth
across our businesses. Throughout 2004 we will continue to focus on
generating cash, paying down debt and increasing shareholder value by
investing in product development and key sales initiatives. We also see many
opportunities for growth outside of the U.S. 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
September 30,
2003 2002
Product revenue $ 2,841,127 $ 2,513,518
Other revenue 570,515 494,822
Revenues, net 3,411,642 3,008,340
Costs and expenses:
Cost of goods sold 1,212,799 1,078,919
Research and development 207,130 190,318
Marketing, general and administrative 1,214,196 1,288,128
Total costs and expenses 2,634,125 2,557,365
Income from operations 777,517 450,975
Other income and (expenses):
Interest income 679 650
Interest expense (118,559) (192,466)
Total other income and (expense) (117,880) (191,816)
Income before income taxes 659,637 259,159
Income taxes 36,481 --
Net income $623,156 $259,159
Basic net income per share $0.185 $0.077
Diluted net income per share $0.154 $0.076
Weighted average shares - basic 3,365,359 3,345,851
Weighted average shares - diluted 4,049,298 3,403,863
SELECTED BALANCE SHEET DATA: September 30, June 30,
2003 2003
(unaudited) (audited)
Cash, cash equivalents and investments $64,220 $298,390
Total current assets 4,308,475 4,758,660
Total assets 16,401,859 16,890,231
Current liabilities 3,174,027 3,870,322
Long-term debt 3,665,228 4,080,461
Total shareholders' equity 9,562,604 8,939,448
SOURCE Escalon Medical Corp.
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CONTACT:
Richard J. DePiano, Chairman and CEO of
Escalon Medical Corp., +1-610-688-6830, or Alison Ziegler of FRB
Weber Shandwick, +1-212-445-8432
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