WAYNE, Pa., Nov. 15 /PRNewswire/ -- Escalon Medical Corp. (Nasdaq: ESMC)
today announced results for its fiscal first quarter ended September 30, 1999.
For the first quarter of fiscal 2000, Escalon Medical reported net income
of $1,398,921, or $0.429 per diluted share, compared to net income of
$167,069, or $0.041 per diluted share, in the first quarter of fiscal 1999.
Included in net income in the current quarter was a gain of $1,848,215 for the
August 1999 sale of the license and distribution rights of Adatosil(R)5000
Silicone Oil.
Revenues in the first quarter of fiscal 2000 decreased 16% to $1,423,677
from $1,685,422 in the first quarter of fiscal 1999. This decline reflects
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. Revenue from Adatosil(R)5000 Silicone Oil declined by $424,900
over the first quarter of fiscal 1999 as a result of the sale of the related
license and distribution rights, while Betadine(R)5% Sterile Ophthalmic Prep
Solution, which was sold in March 1999, generated no revenues in the current
quarter compared to revenue of $262,300 in the prior year period. Partially
offsetting this decline was the addition of $508,600 in revenue from the
January 1999 acquisition of the vascular access product line. Revenue from
the Company's capital equipment, disposables and OEM products also declined in
the quarter while revenue from ISPAN(TM) gas products rose. Contact
manufacturing revenue can vary quarter to quarter depending on timing of
orders and lead-time needed to produce such products.
The Company's strategy to focus on products that it owns, manufactures and
distributes led to a decline in the gross margin to 48.5% in the quarter from
57.5% in the year ago period. Costs associated with the vascular access
business also contributed to an increase in marketing, general and
administrative expenses, which rose to 65.9% of sales compared to 40.5% of
sales in the comparable quarter last year. Research and development costs
also increased 51% in the current quarter from the comparable quarter of
fiscal 1999 due to pre-clinical and clinical trials for povidone-iodine 2.5%
and Ocufit SR(R), as well as spending in the vascular access area.
"The recent sale of the license and distribution rights for
Adatosil(R)5000 Silicone Oil and Betadine(R)5% Sterile Ophthalmic Prep
Solution is in line with our strategy to better control our destiny," said
Richard J. DePiano, Chairman and Chief Executive Officer. "Our market
strategy is to acquire profitable niche medical products that we own and
control the rights to, in niche markets where Escalon can be a leader. These
businesses would also be able to utilize our current distribution channels and
better leverage our expense structure."
Mr. DePiano added, "Our financial condition remains strong, with working
capital of $5.5 million at September 30, 1999 up from $3.8 million at
June 30, 1999. We remain committed to our strategy of using the profits from
a diversified portfolio of niche businesses to fund our promising R&D programs
in order to create value for our shareholders."
Founded in 1987, Escalon develops, markets and distributes ophthalmic
surgical and pharmaceutical products as well as vascular access devices that
provide a base of positive cash flow to fund a targeted research and
development effort. 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 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
September 30,
1999 1998
Product revenues $1,423,677 $1,685,422
Costs and expenses:
Cost of goods sold 732,840 716,856
Research and development 235,434 155,437
Marketing, general and administrative 938,601 682,963
Total costs and expenses 1,906,875 1,555,256
Income from operations (483,198) 130,166
Other income and expenses:
Sale of Silicone Oil product line 1,848,215 --
Interest income 48,885 36,928
Interest expense (14,981) (25)
Total other income and expense 1,882,119 36,903
Net income $1,398,921 $167,069
Basic net income per share $0.431 $0.051
Diluted net income per share $0.429 $0.041
Weighted average shares - basic 3,242,184 3,040,152
Weighted average shares - diluted 3,264,610 4,114,879
SELECTED BALANCE SHEET DATA: Sept. 30, 1999 June 30, 1999
(Unaudited)
Cash, cash equivalents and investments
(restricted and unrestricted) $4,378,951 $4,854,240
Total current assets 7,619,465 7,192,512
Total assets 10,510,346 10,402,773
Current liabilities 2,150,393 3,391,740
Long-term debt 683,331 733,332
Total shareholders' equity 7,676,622 6,277,701
SOURCE Escalon Medical Corp.
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CONTACT:
Richard J. DePiano, Chairman and CEO of
Escalon Medical Corp., 610-688-6830; or General Info., Alison
Ziegler, Analyst Info., Cecelia Heer, or Media Info., Marty
Gitlin, all of The Financial Relations Board, Inc., 212-661-8030,
for Escalon Medical Corp.
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