Escalon® Medical Corp. Reports Third Quarter Fiscal 2016 Results

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

For the third quarter of fiscal 2016, consolidated product revenue decreased $331,000 to $3,097,000 from $3,428,000 in the year ago period primarily as a result of a decrease of $210,000 in ultrasound products, a decrease of $188,000 in digital imaging and Axis image management systems offset by an increase of $67,000 in surgical products.  

For the third quarter of fiscal 2016, margins remained steady at 49.0%. Marketing, general and administrative expenses decreased by 7.4% 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 March 31, 2016, the Company reported a net loss of $81,000 or $0.01 per share. This compares to net income of $57,000 for the third quarter of fiscal 2015 or $0.01 per share. For the nine months of fiscal 2016, the Company reported a net loss of $640,000 or $0.08 per share. This compares to a net loss of $476,000 or $0.07 per share for the first nine months of the prior fiscal year.

At March 31, 2016, the Company had $619,000 of cash and no long-term debt. Inventory stood at $2.4 million at March 31, 2016. Consolidated marketing, general and administrative expenses from continuing operations decreased $356,000, or 8.5% to $3,837,000 during the nine months ended March 31, 2016, 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 fees and advertising expenses offset by an increase in post-retirement expenses.

"Product revenues were weak in the quarter, in part due to lingering effects on sales orders resulting from last quarter's supply-chain shortages," commented Chief Executive Officer, Richard J. DePiano, Jr.  "Furthermore, several international markets are being affected by challenging economic conditions and expanding regulatory requirements.  Management continues to prioritize its supply-chain management, regulatory affairs and sales strategies, while continuing to review the cost side of the business, striving to reduce operating expenses as we close out fiscal 2016."

About Escalon Medical  

Founded in 1987, Escalon Medical Corp. (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

Unaudited Condensed Consolidated Statements of Operations






Three Months Ended
March 31,


Nine Months Ended
March 31,










2016


2015


2016


2015









Revenues, net

$  3,097,022


$  3,427,564


$  8,867,179


$  9,757,538









Costs and expenses:








    Cost of goods sold

1,579,762


1,806,877


4,554,248


5,076,847

    Marketing, general and administrative

1,225,296


1,323,419


3,836,776


4,192,428

    Research and development

370,178


289,848


1,112,696


997,852

       Total costs and expenses

3,175,236


3,420,144


9,503,720


10,267,127









Income (loss) from operations

(78,214)


7,420


(636,541)


(509,589)

Other income (expense)








     Interest income

51


20


88


85

     Interest expense

(3,103)


--


(3,103)


--

         Total other income (loss)

(3,052)


20


(3,015)


85

Net income (loss) from continuing operations

(81,266)


7,440


(639,556)


(509,504)

Net income (loss) from discontinued operations

---


49,102


---


32,998

Net income (loss) 

$   (81,266)


$   56,542


$  (639,556)


$  (476,506)

Basic and Diluted Net income (loss) per share








     Continuing operations

$       (0.01)


$         --


$      (0.08)


$      (0.07)

     Discontinued operations

---


0.01


---


0.01

      Net income (loss)

$     (0.01)


$     0.01


$     (0.08)


$     (0.06)

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)



March 31, 2016

June 30, 2015

Cash and Cash Equivalents

$618,588

$1,516,761

Inventory

2,364,122

2,219,615

Working Capital

2,404,046

3,006,130

Total Assets

5,640,320

6,549,070

Total Liabilities

3,256,289

3,559,125

Stockholders' Equity

2,384,031

2,989,945

 

To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/escalon-medical-corp-reports-third-quarter-fiscal-2016-results-300269564.html

SOURCE Escalon Medical Corp.

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