Escalon® Medical Corp. Reports Fiscal 2015 Results

Sep 28, 2015, 17:37 ET from Escalon Medical Corp.

WAYNE, Pa., Sept. 28, 2015 /PRNewswire/ -- Escalon Medical Corp. (NASDAQ: ESMC) today announced financial results for its fiscal year ended June 30, 2015.  

Consolidated product revenue increased 6.3% to $13.1 million for the fiscal year ended June 30, 2015 from $12.4 million in fiscal 2014 primarily as a result of an increase in sales of the Company's Sonomed Ultrasound products as well as an increase in the sales of its Escalon Digital Imaging and Trek products. 

Throughout fiscal 2015, margins were pressured as the Company transitioned to newer products, which involved the discounting of older products.  In addition, a material reduction in the exchange rate between the Euro and the US Dollar led to a reduction in pricing by certain international competitors.  Aggressive pricing from other competitors also led to further margin pressure.  As a result, gross margins decreased by 240 basis points to 46.7%.  Marketing, general and administrative expenses increased by 15.0% in fiscal 2015 primarily due to increased stock option, commission expense as well as added sales personnel.  As a percentage of sales, marketing, general and administrative expenses increased to 44.8% from 41.4% in fiscal 2014.  Research and development expenses for fiscal 2015 were relatively flat at $1.3 million and were associated with the focused introduction of new and enhanced products. 

For the year ended June 30, 2015, the Company reported a net loss of $541,245 and a net loss from continuing operations of $1.1 million, or $0.14 per share.  The 2015 net loss benefitted from the reversal of an accrued liability related to a lease termination.  This compares to the fiscal 2014 net loss of $381,883 and a net loss from continuing operations of $349,532, or $0.05 per share. 

At June 30, 2015, the Company had $1.5 million of cash and no long-term debt.  Inventory stood at $2.2 million, down from $2.9 million as inventory of older products was reduced.

"Our 2015 financial results did not meet our expectations as the transition to new products such as the VuPad is taking longer than anticipated and regulatory approvals in international markets continue to have significantly longer timetables," commented Chief Executive Officer, Richard J. DePiano, Jr.  "While we continue to believe margins will improve as new, higher margin ultrasound sales increase, we are committed to a systematic review of the overall business to evaluate our product mix, sales function and distribution network to reduce expenses." 

"During the next several months, we expect to supplement our ophthalmic portfolio with new private label products that we plan to market under the Sonomed Escalon brand.  This should serve to leverage our research and development while making it possible to have a continued flow of new products for our salesforce and distribution network.  We continue to have work ahead of us to round out our product portfolio and further educate the market about Sonomed Escalon's ophthalmic solutions in order to grow market share.  We are committed to driving improved financial results as we move through fiscal 2016."

About Escalon Medical  
Founded in 1987, Escalon Medical Corp. (NASDAQ: ESMC) specializes in the development, marketing and distribution of ophthalmic diagnostic imaging and surgical products branded under the Sonomed Escalon name. Products include a variety of ophthalmic ultrasound, digital imaging and photography, and image management systems as well as surgical products including intraocular gases, fiber optic light guides and sources, and other surgical vitreoretinal instruments. The Company seeks to grow its ophthalmic business by further developing and diversifying its product offering through internal development programs, strategic partnerships, and the acquisition of technology so as to best leverage the Company's distribution capabilities. The Company has headquarters in Wayne, Pennsylvania and research and development, manufacturing and distribution operations in Lake Success, New York, New Berlin, Wisconsin and Stoneham, Massachusetts. For additional information visit www.escalonmed.com and www.sonomedescalon.com.

Forward Looking Statements  
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. These statements 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: develop, obtain regulatory clearance of and launch new products, market new products, implement its growth and marketing strategies; improve upon the operations of the Company including the ability to make acquisitions and the integration of any acquisitions it may undertake, if any, of which there can be no assurance; grow our remaining ophthalmic business unit; improve our financial position; grow market share; improve organizational efficiency; enhance the Company's sales organization and distribution channels, implement cost reductions; generate cash; and identify, finance and enter into business relationships and acquisitions, although no acquisitions are currently contemplated.  Other factors include uncertainties and risks related to: new product development, commercialization, manufacturing and market acceptance of new products; marketing acceptance of existing products in new markets; achieving a continued flow of new products for our salesforce and distribution network; achievement of improved margins as older products are discontinued and newer products with enhanced technology are accepted by the market and sold; 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; ability to reduce staffing and other costs and retain benefit of prior reductions; third party reimbursement and physician training, and 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 for year ended June 30, 2015, and its other filings with the Securities and Exchange Commission, all of which are available from the Securities and Exchange Commission as well as other sources.

--financial tables to follow--

                                                                          

ESCALON MEDICAL CORP. AND SUBSIDIARY

Unaudited Condensed Consolidated Statements of Operations







 Year Ended






June 30, 






2015


2014









Revenues, net





$  13,136,203


$  12,353,796









Costs and expenses:








    Cost of goods sold





7,006,770


6,291,611

    Marketing, general and administrative





5,879,852


5,113,312

    Research and development





1,301,782


1,306,387

       Total costs and expenses





14,188,404


12,711,310









Loss from operations





(1,052,201)


(357,514)

Other income








     Other income





--


7,776

     Interest income





105


206

         Total other income





105


7,982

Net loss from continuing operations





(1,052,096)


(349,532)

Net income (loss) from discontinued operations





510,851


(32,351)

Net loss 





$  (541,245)


$   (381,883)

Basic and Diluted Net loss  per share








     Continuing operations





$      (0.14)


$         (0.05)

     Discontinued operations





-


-

      Net loss





$     (0.14)


$      (0.05)

Weighted Average Shares - basic





7,526,430


7,526,430

Weighted average shares –  diluted





7,526,430


7,526,430

 

 

Selected Balance Sheet Data (Unaudited)



June 30, 2015

June 30, 2014

Cash and Cash Equivalents

$1,516,761

$2,009,554

Inventory

2,219,615

2,910,727

Working Capital

3,006,130

3,546,233

Total Assets

6,549,070

7,656,274

Total Liabilities

3,559,125

4,192,451

Stockholders' Equity

2,989,945

3,463,823

 

 

SOURCE Escalon Medical Corp.



RELATED LINKS

http://www.escalonmed.com
http://www.escalonmed.com