Encision Reports Second Quarter Fiscal Year 2014 Results

BOULDER, Colo., Nov. 5, 2013 /PRNewswire/ -- Encision Inc. (ECIA:PK), a medical device company owning patented surgical technology that prevents stray electrosurgical burns in minimally invasive surgery, today announced financial results for its fiscal 2014 second quarter ended September 30, 2013.

The Company posted quarterly revenue of $2.645 million for a quarterly net loss of $50 thousand, or $(0.01) per share. These results compare to revenue of $2.874 million for a net loss of $265 thousand, or $(0.03) per share, in the year-ago quarter. Gross margin on revenue was 53 percent compared to 56 percent in the year-ago quarter. The decrease in gross margin from the year-ago quarter was the result of higher scrap costs from the manufacture of our recently introduced products and the increase in overhead costs per unit of product due to decreased product revenue. Interest and other expense, net, included $59 thousand for the medical device excise tax that started January 1, 2013.

The Company posted six months product revenue of $5.208 million and six months service revenue of $119 thousand for a six months net loss of $361 thousand, or $(0.04) per share. These results compare to product revenue of $5.611 million and service revenue of $364 thousand for a net loss of $254 thousand, or $(0.03) per share, in the year-ago six months. Gross margin was 53.8 percent compared to 56.3 percent in the year-ago six months. The six months ended September 30, 2013 includes an error correction for $71 thousand of additional expense to cost of revenue that related to the quarter ended June 30, 2013. Interest and other expense, net, included $120 thousand for the six months for the medical device excise tax that started January 1, 2013.

"Product revenue for our second quarter of fiscal year 2014 declined one percent sequentially from our first quarter and declined eight percent versus last year's second quarter," said Patrick Pace M.D., Executive Chairman. "In April and May, we made material expense reductions across all departments within our Company in order to align expenses with revenues, resulting in a $491 thousand decrease in operating expenses in our second quarter versus the year ago quarter. Those expense reductions contributed to reducing our net loss from last year's second quarter."

"We have had a great start to our search for a CEO. We will provide additional updates when appropriate. Additionally, we remain on track to introduce our AEM simplification product by mid-2014. Our next milestone is an FDA 510k filing, which we expect to complete by December 31, in line with prior guidance. Procedure volumes that included AEM in the second quarter were 26,000 versus 28,000 in last year's second quarter."

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 September 31, 2013 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: Mala Ray, Encision Inc., 303-444-2600, mray@encision.com


Encision Inc.

Condensed Balance Sheets

(Amounts in thousands)

(Unaudited)




September 30, 2013


March 31, 2013

ASSETS





Cash and cash equivalents


$     51


$    126

Accounts receivable, net


1,031


986

Inventories, net


2,791


2,929

Prepaid expenses


133


66

    Total current assets


4,006


4,107

Equipment, net


1,699


1,629

Patents, net


254


238

Other assets


12


9

    Total assets


$ 5,971


$ 5,983

LIABILITIES AND SHAREHOLDERS' EQUITY





Line of credit


$    534


$      ––

Accounts payable


612


824

Accrued compensation


233


319

Other accrued liabilities


379


446

Lease payable – short term


63


––

    Total current liabilities


1,821


1,589

Lease payable – long term


89


––

    Total liabilities


1,910


1,589

Common stock and additional paid-in capital


21,598


21,570

Accumulated (deficit)


(17,537)


(17,176)

    Total shareholders' equity


4,061


4,394

    Total liabilities and shareholders' equity


$ 5,971


$  5,983

 

Encision Inc.

Condensed Statements of Operations

(Amounts in thousands, except per share information)

(Unaudited)




Three Months Ended

Six Months Ended



September 30, 2013


September 30, 2012


September 30, 2013


September 30, 2012

Net revenue:









    Product


$ 2,589


$ 2,806


$5,208


$5,611

    Service


56


68


119


364

        Total revenue


2,645


2,874


5,327


5,975

Cost of revenue:









    Product


1,216


1,202


2,390


2,406

    Service


22


60


72


208

        Total cost of revenue


1,238


1,262


2,462


2,614

Gross profit


1,407


1,612


2,865


3,361

Operating expenses:









    Sales and marketing


714


945


1,665


1,812

    General and administrative


355


452


708


980

    Research and development


315


478


704


820

        Total operating expenses


1,384


1,875


3,077


3,612

Operating income (loss)


23


(263)


(212)


(252)

Interest and other expense, net


(73)


(2)


(149)


(2)

Loss before provision for income taxes


(50)


(265)


(361)


(254)

Provision for income taxes


––


––


––


––

Net loss


$  (50)


$ (265)


$   (361)


$ (254)

Net loss per share—basic and diluted


$ (0.01)


$ (0.03)


$   (0.04)


$ (0.03)

Basic and diluted weighted average number of shares


8,210


8,210


8,210


8,189











SOURCE Encision Inc.



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http://www.encision.com

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