Escalon® Medical Corp. Reports Second Quarter Fiscal 2016 Results

Feb 16, 2016, 23:02 ET from Escalon Medical Corp.

WAYNE, Pa., Feb. 16, 2016 /PRNewswire/ -- Escalon Medical Corp. (NASDAQ: ESMC) today announced financial results for its second quarter of fiscal 2016, ended December 31, 2015.  

For the second quarter of fiscal 2016, consolidated product revenue decreased to $2,989,000 from $3,700,000 in the year ago period primarily as a result of a decrease of $639,000 in ultrasound products, a decrease of $109,000 in digital imaging and Axis image management systems offset by an increase of $37,000 in surgical products.  The Company encountered supply-chain shortages during the quarter that increased back-logged orders to approximately $680,000.

For the second quarter of fiscal 2016, margins remained steady at 49.0%. Marketing, general and administrative expenses decreased by 9.6% in the quarter primarily due to a reduction in force in October 2015, decreased hiring expense, travel expense, reduced international consulting fees and advertising costs offset by an increase in post-retirement expense.

For the quarter ended December 31, 2015, the Company reported a net loss of $265,000 or $0.04 per share. This compares to a net loss of $74,000 for the second quarter of fiscal 2015 or $0.01 per share. For the first six months of fiscal 2016, the Company reported a net loss of $558,000 or $0.07 per share. This compares to a net loss of $533,000 or $0.07 per share for the first six months of the prior fiscal year.

At December 31, 2015, the Company had $861,000 of cash and no long-term debt. Inventory stood at $2.4 million at December 31, 2015. Consolidated marketing, general and administrative expenses from continuing operations decreased $258,000, or 9% to $2,611,000 during the six months ended December 31, 2015, as compared to the same period of the prior fiscal year.  The decrease is due a reduction in force, decreased hiring expense, reduced executive compensation, business tax, travel expense, reduced international consulting fee and advertising expenses offset by an increase in post-retirement expenses.

"Product revenues were disappointing in the quarter due to the continued issue of unfulfilled sales orders resulting from supply-chain shortages," commented Chief Executive Officer, Richard J. DePiano, Jr.  Management is fully committed to resolving these supply-chain shortages and anticipates resolution in the coming quarter.  We continue to believe our initiatives to grow sales and enhance operational efficiencies will yield positive results and lead to improved gross margins in the coming quarters.  As we continue the refining of our internal sales organization and distributor channels we believe our products will have greater penetration in our existing and new markets.  Examining the cost side of the business, our emphasis on improved organizational efficiency is expected to result in lower total operating expenses in the second half of fiscal 2016."

Mr. DePiano concluded, "The Company maintains a good cash position, carries no long-term debt, and continues to fund operations from internally generated cash flow. We will work tirelessly to continuing to drive improved operational and financial results throughout the balance of 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, implement its growth and marketing strategies; improve upon the operations of the Company including the ability to resolve supply-chain shortages; grow our remaining ophthalmic business unit; improve our financial position; implement cost reductions; generate cash; and identify, finance and enter into business relationships and acquisitions, if any, of which there can be no assurance.  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; 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; ability to refine the Company's internal sales organization and distributor channels; ability to fund operations from internally generated cash flow, 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

Condensed Consolidated Statements of Operations



For Three months Ended


For Six months Ended


December 31, 


December 31,


2015


2014


2015


2014









Revenues, net

$ 2,988,835


$3,699,654


$ 5,770,157


$6,329,974









Costs and expenses:








    Cost of goods sold

1,526,440


1,903,074


2,974,486


3,269,971

    Marketing, general and administrative

1,344,746


1,489,627


2,611,482


2,869,008

    Research and development

382,766


383,727


742,518


708,004

       Total costs and expenses

3,253,952


3,776,428


6,328,486


6,846,983









(Loss) income from operations

(265,117)


(76,774)


(558,329)


(517,009)

Other income
















     Interest income

17


26


37


65

         Total other income

17


26


37


65

Net (loss) income from continuing operations

(265,100)


(76,748)


(558,292)


(516,944)

Net loss from discontinued operations, before tax

--


2,659


--


 

(16,104)

Income tax expense

--


--


--


--

Net loss from discontinued operations, net of tax



2,059


--


(16,104)

Net loss (income)

$   (265,100)


$   (74,089)


$    (558,292)


$   (533,048)

Net (loss) income per share, basic and diluted








     Continuing operations

$        ( 0.04)


$       (0.01)


$        ( 0.07)


(0.07)

     Discontinued operations

--


--


--


--

      Net (loss) income 

$        (0.04)


$        (0.01)


$        (0.07)


$        (0.07)

Weighted average shares – basic

7,526,430


7,526,430


7,526,430


7,526,430

Weighted average shares – 

diluted

7,526,430


7,526,430


7,526,430


7,526,430

 

 

Selected Balance Sheet Data (Unaudited)



December 31, 2015

June 30, 2015

Cash and Cash Equivalents

$860,862

$1,516,761

Inventory

2,444,909

2,219,615

Working Capital

2,455,681

3,006,130

Total Assets

5,770,793

6,549,070

Total Liabilities

3,317,439

3,559,125

Stockholders' Equity

2,453,354

2,989,945

 

SOURCE Escalon Medical Corp.



RELATED LINKS

http://www.escalonmed.com