Biosensors Reports Financial Results for the First Quarter of Fiscal Year 2014
SINGAPORE, Aug. 7, 2013 /PRNewswire/ -- Biosensors International Group, Ltd. ("Biosensors" or the "Company", Bloomberg: BIG SP; Reuters: BIOS.SI; SGX: B20), a developer, manufacturer and marketer of innovative medical devices, today announced financial results for its fiscal first quarter ended 30 June 2013 (Q1 FY14).
Quarter Highlights and Other Recent Updates:
- Total revenue was US$76.7 million, compared to US$86.3 million for the first quarter of Fiscal Year 2013 (Q1 FY13). Channel inventory adjustment in China and lower royalty and licensing revenues contributed to the year-over-year decline.
- Initiated inventory drawdown in China sales channels in light of ongoing and upcoming drug-eluting stent (DES) tender activities, aimed at strengthening the Company's position for future sales growth.
- Continued double-digit year-over-year growth in DES sales in EMEA and APAC regions.
- Achieved initial success in collaboration with Terumo Corporation ("Terumo") co-promoting Nobori DES ("Nobori") in Japan.
- Consolidated the recently-acquired business of Spectrum Dynamics ("SD") into the Company's financial results. SD also recently received regulatory approval for its D-SPECT Cardiac Imaging System in Japan.
"In the first quarter, our financial performance was impacted by a disruption in DES sales and lower royalty revenues. We initiated an inventory drawdown in China in light of ongoing and upcoming tender activities. Although this initiative has resulted in additional pressure on our first quarter DES sales, we expect this adjustment to help us better position ourselves in the China DES market and grow our sales in the near future. In other major market regions such as EMEA and APAC, we achieved double-digit year-over-year sales growth, thanks to our superior product and investments in key symposiums such as Euro PCR," said Biosensors' CEO Dr. Jack Wang. "The integration process of our recently acquired business, SD, is well on track. We are excited about the recent Japanese regulatory approval of its D-SPECT system and we remain confident of our ability to unlock the potential of this business."
For Q1 FY14, Biosensors reported total revenue of US$76.7 million, an 11% decline from US$86.3 million in Q1 FY13, which resulted from both lower product revenue and lower licensing and royalty revenue. Product revenue of US$65.0 million represented a 6% year-on-year decline over US$69.0 million in Q1 FY13, which was the result of a 7% reduction in the Company's Interventional Cardiology ("IVP") revenue partially offset by a slight increase in the Company's critical care products ("CCP") revenue and the consolidation of the Company's newly-acquired Cardiac Diagnostics business.
Licensing and royalty revenue for Q1 FY14 was US$11.6 million, down US$5.6 million or 33% from US$17.3 million in Q1 FY13.
Gross margin on total product sales was 75% for the quarter, down from 81% in Q1 FY13, mainly due to lower gross margin for the Company's IVP product line as a result of our distribution activities in Japan for the Nobori stents, coupled with the consolidation of the Company's newly-acquired Cardiac Diagnostic business which has a lower gross margin.
Total operating expense as a percentage of product revenue for the quarter was 64%, compared to 57% in Q1 FY13.
In detail, the quarter's sales and marketing ("S&M") expense was US$26.6 million; general and administrative ("G&A") expense was US$9.3 million; research and development ("R&D") expense, which included costs for new product development and testing, clinical trials, patent registration and regulatory approval, was US$6.1 million.
Net profit for Q1 FY14 was US$12.1 million or basic earnings per share ("basic EPS") of 0.70 US cents and diluted earnings per share ("diluted EPS") of 0.69 US cents, with no exceptional items for this quarter. This compares to a net profit of US$28.3 million or basic EPS of 1.65 US cents and diluted EPS of 1.62 US cents, for Q1 FY13 after excluding the exceptional items of fair value adjustments for warrants and provisions for restructuring expenses. Including exceptional items, net profit for Q1 FY13 was US$32.6 million or basic EPS of 1.90 US cents and diluted EPS of 1.86 US cents.
Financial Guidance for FY14
For the fiscal year ending 31 March 2014 (FY14), management maintains its previous guidance and continues to expect total revenue to grow by around 15% over FY13. This guidance is driven primarily by continued product revenue growth in the EMEA and APAC regions, as well as the expectation that China sales will recover following the inventory adjustment in Q1 FY14. New revenues are also expected from the commercialization of various new products and the newly acquired business of SD. The Company expects its aggregate royalty income to improve over its Q1 FY14 results.
The Company's practice is to provide guidance on a full year basis only. This forecast reflects Biosensors' current and preliminary views, which are subject to change. It also excludes the potential impact from foreign exchange fluctuations, or any exceptional events and unforeseen circumstances that may occur.
"Looking ahead towards the rest of FY14, we maintain our full-year financial guidance and remain committed to achieving our target. Based on our sales strategy in China, we anticipate our China DES sales to improve in the upcoming quarters. We also expect other key regions such as EMEA and APAC to continue to deliver solid results. Considering the strong clinical data profile of our major products, along with our sales and marketing initiatives, we remain confident about our competitive position in the DES market going forward," said Dr. Wang. "We have seen good momentum in our co-promotion partnership with Terumo in Japan. We are hopeful that this collaboration could lead to more stable sales of Nobori in later quarters. On the M&A front, we continue to make good progress in our discussions with several other potential targets. We strongly believe we have the right leadership and resources in place to help us execute our long-term strategies. We remain committed to diversifying our business in order to maximize Biosensors' growth potential."
About Biosensors International Group, Ltd
Biosensors International Group, Ltd. develops, manufactures and markets innovative medical devices, aiming to improve patients' lives through pioneering medical technology that pushes forward the boundaries of innovation. Founded in 1990, we were listed on the Mainboard of the Singapore Stock Exchange in 2005.
The Group currently operates through three business units ("BU"): cardiovascular BU, which includes the BioMatrix™ family of drug-eluting stents and the licensing of its proprietary drug-eluting stent technology; cardiac diagnostic BU, which includes the newly acquired assets of Spectrum Dynamics, offering advanced medical imaging and clinical solutions to help interventional cardiologists determine the most appropriate treatment for patients; and peripheral intervention BU, which includes drug-eluting balloons for the treatment of patients with peripheral arterial disease.
The Group has operations worldwide and is headquartered in Singapore.
For more information, please visit www.biosensors.com.
Certain statements herein include forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements generally can be identified by the use of forward-looking terminology, such as "may," "will," "expect," "intend," "estimate," "anticipate," "believe," "project" or "continue" or the negative thereof or other similar words. All forward looking statements involve risks and uncertainties, including, but not limited to, customer acceptance and market share gains, competition from companies that have greater financial resources; introduction of new products into the marketplace by competitors; successful product development; dependence on significant customers; the ability to recruit and retain quality employees as Biosensors grows; and economic and political conditions globally. Actual results may differ materially from those discussed in, or implied by, the forward-looking statements. The forward-looking statements speak only as of the date of this release and Biosensors assumes no duty to update them to reflect new, changing or unanticipated events or circumstances.
Media/Investor Relations Contact
Wong Teck Yenn
Director, Investor Relations
SOURCE Biosensors International Group, Ltd.