Encision Reports Fourth Quarter and Fiscal Year 2012 Results Fourth Quarter Revenue Increases 15% Year-over-Year

BOULDER, Colo., May 14, 2012 /PRNewswire/ -- Encision Inc. (ECIA:PK), a medical device company owning patented surgical technology that is emerging as a standard of care in minimally-invasive surgery, today announced financial results for its fiscal 2012 fourth quarter and fiscal year ended March 31, 2012. 

The Company posted quarterly revenue of $3.370 million and quarterly net profit of $40 thousand, or $0.01 per diluted share. These results compare to revenue of $2.921 million and net profit of $35 thousand, or $0.01 per diluted share, in the year-ago quarter. Gross margin was 57.5 percent compared to 58.7 percent in the year-ago quarter. Gross margin decreased from the year-ago due to higher labor costs on service revenue, which was offset slightly by lower unit overhead costs as a result of higher product revenue volume.

The Company posted fiscal year revenue of $12.989 million and fiscal year net loss of $531 thousand, or $(0.08) per diluted share. These results compare to revenue of $11.617 million and net profit of $5 thousand, or $0.00 per diluted share, in the year-ago fiscal year. Gross margin was 54.1 percent compared to 62.1 percent in the year-ago fiscal year. Gross margin decreased from the year-ago due to higher material costs, higher unit overhead costs as a result of lower product revenue volume, and a one-time charge of $430,000, which occurred in the second quarter ended September 30, 2011, for a voluntary recall of certain electrode product, and higher labor costs on service revenue.

"Our fourth quarter net profit was a result of increased revenue and selected expense reductions," said Fred Perner, President and CEO. "On March 30 and April 16, 2012, we completed a private placement of 1,755,000 shares of our common stock at $1.00 a share and raised $1,755,000, before costs. The net proceeds from the sale of the shares were partially used to pay down our line of credit, and, as we announced previously, will be used for sales, marketing and quality programs and needed product development to enable us to execute our business plan and grow revenues and profitability in the future. However, in the short-term, as we aggressively implement the plan and spend resources for these initiatives, we expect that, at least for the first and second quarters of the current fiscal year, we will not be profitable."

Encision Inc. designs, develops, manufactures and markets innovative surgical devices that allow surgeons to optimize technique and patient safety during a broad range of surgical procedures. Based in Boulder, Colorado, the Company pioneered the development of patented AEM® Laparoscopic Instruments to improve electrosurgery and reduce the chance for patient injury in minimally invasive surgery.

In accordance with the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, the Company notes that statements in this press release and elsewhere that look forward in time, which include everything other than historical information, involve risks and uncertainties that may cause actual results to differ materially from those indicated by the forward-looking statements. Factors that could cause the Company's actual results to differ materially include, among others, its ability to increase net sales through the Company's distribution channels, its ability to compete successfully against other manufacturers of surgical instruments, insufficient quantity of new account conversions, insufficient cash to fund operations, delay in developing new products and receiving FDA approval for such new products and other factors discussed in the Company's filings with the Securities and Exchange Commission. Readers are encouraged to review the risk factors and other disclosures appearing in the Company's Annual Report on Form 10-K for the year ended March 31, 2011 and subsequent filings with the Securities and Exchange Commission. We do not undertake any obligation to update publicly any forward-looking statements, whether as a result of the receipt of new information, future events, or otherwise.

CONTACT:            Marcia McHaffie, Encision Inc., 303-444-2600, mmchaffie@encision.com

 

Encision Inc.

Condensed Balance Sheets

(Amounts in thousands)

(Unaudited)




      March 31,

 2012


March 31,

2011

ASSETS





Cash and cash equivalents


$     565


$    120

Accounts receivable, net


1,428


1,160

Inventories, net


2,489


2,604

Prepaid expenses


28


74

    Total current assets


4,510


3,958

Equipment, net


1,619


1,169

Patents, net


273


260

Other assets


7


24

    Total assets


$ 6,409


$ 5,411

LIABILITIES AND SHAREHOLDERS' EQUITY





Accounts payable


$  1,040


$    674

Accrued compensation


283


261

Other accrued liabilities


349


287

Line of credit


--


435

    Total current liabilities


1,672


1,657

Common stock and additional paid-in capital


21,297


19,783

Accumulated (deficit)


(16,560)


(16,029)

    Total shareholders' equity


4,737


3,754

    Total liabilities and shareholders' equity


$ 6,409


$  5,411

 

Encision Inc.

Condensed Statements of Operations

(Amounts in thousands, except per share information)

(Unaudited)




Three Months Ended

Fiscal Years Ended



March 31, 2012


March 31, 2011


March 31, 2012


March 31, 2011

Net revenue:









    Product


$ 2,873


$ 2,720


$11,226


$ 11,367

    Service


497


201


1,763


250

        Total revenue


3,370


2,921


12,989


11,617

Cost of revenue:









    Product


1,167


1,156


5,148


4,307

    Service


265


51


816


97

        Total cost of revenue


1,432


1,207


5,964


4,404

Gross profit


1,938


1,714


7,025


7,213

Operating expenses:









    Sales and marketing


1,020


1,017


4,329


4,242

    General and administrative


531


324


1,819


1,457

    Research and development


338


328


1,349


1,464

        Total operating expenses


1,889


1,669


7,497


7,163

Operating income (loss)


49


45


(472)


50

Interest and other income (expense), net


(9)


(10)


(59)


(45)

Income (loss) before provision for income taxes


40


35


(531)


5

Provision for income taxes


––


––


––


––

Net income (loss)


$    40


$     35


$     (531)


$       5

Net income (loss) per share—basic and diluted


$ 0.01


$ 0.01


$   (0.08)


$ 0.00

Basic weighted average number of shares


6,488


6,455


6,463


6,455

Diluted weighted average number of shares


6,490


6,464


6,463


6,465

SOURCE Encision Inc.



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