BSD Medical Announces Fiscal Year 2014 Financial Results

SALT LAKE CITY--(BUSINESS WIRE)--

BSD Medical Corporation BSDM (Company or BSD) (www.BSDMedical.com), a provider of medical systems that treat cancer and benign diseases using heat therapy, today reported financial results for its fiscal year ended August 31, 2014.

Financial Highlights for Fiscal Year 2014

• Total revenues of $5.3 million, a $1.6 million increase from $3.7 million for fiscal year 2013
• Total stockholders' equity of $10.7 million
• Net loss of $7.1 million compared to $8.3 million for fiscal year 2013
• Solid balance sheet; cash and cash equivalents of $8.1 million and no long-term debt

Management Commentary

“Revenue grew by 45% in the 2014 fiscal year compared to the prior year, driven by increased sales of disposable microwave ablation antennas in Europe, fees from the MicroThermX^® generator rental program, and sales of hyperthermia systems,” said Clint Carnell, CEO of BSD Medical. “BSD also achieved a number of important operational milestones this year, including obtaining regulatory import approval in China and Taiwan for the BSD-2000 and introducing MicroThermX products into several key European countries in collaboration with Terumo Europe N.V.”

“I am excited about the opportunity to expand sales of MicroThermX through a well-executed commercialization effort that will begin with building stronger awareness among patients, physicians and the healthcare system of the benefits of our microwave ablation system. There is significant opportunity to penetrate the U.S. market, where cancer remains the second-leading cause of death. I believe we have the right product to disrupt the current standard of care for diseased soft-tissue and can capitalize on developing trends in the healthcare system by providing cost-effective, less-invasive treatment options with MicroThermX. I look forward to sharing more specific details of our plans to capture market share in the coming months,” concluded Mr. Carnell.

Fiscal 2014 Financial Highlights

Revenues for the fiscal year ended August 31, 2014 increased $1.6 million, or 45%, to $5.3 million, compared with the fiscal year ended August 31, 2013. This increase was primarily due to increases in sales of our disposable SynchroWave antennas, increased revenue from our fee-per-use rental program for MicroThermX generators, and increases in shipments of our hyperthermia systems and was partially offset by slower sales of MicroThermX generators.

Gross margin was $2.4 million or 45% of revenues for fiscal 2014, and compared with $1.4 million, or 38% of revenues for fiscal 2013. The improvement in gross margin and gross margin as a percentage of sales resulted from increasing MicroThermX sales, particularly sales of consumable devices and equipment rentals as well as increased sales of our higher margin hyperthermia products.

Operating expenses of $9.5 million for the year ended August 31, 2014 decreased by 2% compared with the year ended August 31, 2013. Total cost of sales for fiscal 2014 was $2.9 million compared with $2.3 million for fiscal 2013, with the increase resulting primarily from increasing hyperthermia and MicroThermX antenna sales. Research and development expenses for fiscal 2014 of $2.2 million declined 2% from $2.3 million for fiscal 2013. Selling, general and administrative expenses were $7.3 million for fiscal 2014 compared with $7.4 million for fiscal 2013. While these total expenses were relatively constant from year to year, we continued to expand our MicroThermX sales and marketing activities, support personnel and related operating expenses in the current year.

The Company reported a net loss of $7.1 million, or $0.20 per share, for fiscal 2014, compared with a net loss of $8.3 million, or $0.26 per share, for fiscal 2013, an improvement of $1.2 million, or $0.06 per share.

About BSD Medical Corporation

BSD Medical Corporation develops, manufactures, markets and services systems to treat cancer and benign diseases using heat therapy delivered using focused microwave energy and radiofrequency (RF). BSD's product lines include ablation and hyperthermia treatment systems. BSD's microwave ablation system has been developed as a stand-alone therapy to ablate and destroy soft tissue. The Company has developed extensive intellectual property, multiple products in the market, and well established distribution in the United States, Europe and Asia. BSD's hyperthermia cancer treatment systems, which have been in use for several years in the United States, Europe and Asia, are used to treat certain tumors with heat (hyperthermia) while increasing the effectiveness of other therapies such as radiation therapy. Certain of the Company's products have received regulatory approvals in the United States, Europe and China. For further information visit BSD Medical's website at www.BSDMedical.com.

Forward-Looking Statements

Statements contained in this press release that are not historical facts, including statements relating to our 2014 and 2015 plans, are forward-looking statements, as defined in the Private Securities Litigation Reform Act of 1995. All forward-looking statements are subject to risks and uncertainties detailed in the Company's filings with the Securities and Exchange Commission, including the market demand for our MicroThermX^® products and the regulatory requirements we face. These forward-looking statements speak only as of the date on which such statements are made, and the Company undertakes no obligation to update such statements to reflect events or circumstances arising after such date, except as required by law.

BSD MEDICAL CORPORATION
Balance Sheets
					August 31,
ASSETS					2014					2013
Current assets:
Cash and cash equivalents					$	8,130,416				$	9,450,528
Accounts receivable, net of allowance for doubtful accounts of $20,000						366,887					899,969
Related party trade accounts receivable						8,322					24,201
Inventories, net						2,329,189					2,445,770
Other current assets						146,319					200,028
Total current assets						10,981,133					13,020,496
Property and equipment, net						1,267,661					1,319,880
Total assets					$	12,248,794				$	14,340,376
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable					$	548,897				$	521,417
Accrued liabilities						866,528					573,880
Note payable						33,279					-
Customer deposits						41,781					317,480
Deferred revenue – current portion						96,043					730,593
Total current liabilities						1,586,528					2,143,370
Deferred revenue – net of current portion						-					53,115
Total liabilities						1,586,528					2,196,485
Commitments and contingencies
Stockholders' equity:
Preferred stock, $.001 par value; 10,000,000 shares authorized, no shares issued and outstanding						-					-
Common stock, $.001 par value, 80,000,000 shares authorized, 39,713,540 and 34,006,202 shares issued, respectively						39,714					34,007
Additional paid-in capital						63,394,556					57,739,056
Treasury stock, 24,331 shares at cost						(234	)				(234	)
Accumulated deficit						(52,771,770	)				(45,628,938	)
Total stockholders' equity						10,662,266					12,143,891
Total liabilities and stockholders' equity					$	12,248,794				$	14,340,376

BSD MEDICAL CORPORATION
Statements of Comprehensive Loss
			Years Ended August 31,
			2014					2013					2012
Revenues:
Sales			$	4,544,204				$	3,274,796				$	1,608,179
Sales to related parties				419,549					99,896					333,663
Equipment rental				364,600					298,600					129,350
Total revenues				5,328,353					3,673,292					2,071,192
Cost of revenues:
Cost of sales				2,613,921					2,161,967					1,244,290
Cost of related party sales				313,156					87,694					260,553
Cost of equipment rental				11,788					11,788					11,788
Total cost of revenues				2,938,865					2,261,449					1,516,631
Gross margin				2,389,488					1,411,843					554,561
Operating costs and expenses:
Research and development				2,229,043					2,281,854					2,364,608
Selling, general and administrative				7,308,643					7,403,273					6,203,200
Total operating costs and expenses				9,537,686					9,685,127					8,567,808
Loss from operations				(7,148,198	)				(8,273,284	)				(8,013,247	)
Other income (expense):
Interest income				22,491					32,225					59,783
Other expense				(15,125	)				(8,694	)				(6,208	)
Total other income (expense)				7,366					23,531					53,575
Loss before income taxes				(7,140,832	)				(8,249,753	)				(7,959,672	)
Income tax provision				(2,000	)				(1,938	)				(988	)
Net loss and comprehensive loss			$	(7,142,832	)			$	(8,251,691	)			$	(7,960,660	)
Loss per common share:
Basic			$	(0.20	)			$	(0.26	)			$	(0.27	)
Diluted			$	(0.20	)			$	(0.26	)			$	(0.27	)
Weighted average number of shares outstanding:
Basic				34,967,000					31,414,000					29,717,000
Diluted				34,967,000					31,414,000					29,717,000

BSD MEDICAL CORPORATION
Statements of Cash Flows
			Years Ended August 31,
			2014					2013					2012
Cash flows from operating activities:
Net loss			$	(7,142,832	)			$	(8,251,691	)			$	(7,960,660	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization				125,824					132,153					151,721
Stock issued for services				180,000					180,002					180,000
Stock-based compensation				844,628					1,134,811					1,206,398
Loss (gain) on disposition of property and equipment				(30	)				-					118
Decrease (increase) in:
Receivables				548,961					(601,326	)				482,743
Inventories				116,581					(41,813	)				2,257
Other current assets				53,709					(79,959	)				1,079
Increase (decrease) in:
Accounts payable				27,480					325,663					(106,182	)
Accrued liabilities				292,648					149,182					92,694
Customer deposits				(275,699	)				292,500					24,980
Deferred revenue				(687,665	)				560,423					(11,087	)
Net cash used in operating activities				(5,916,395	)				(6,200,055	)				(5,935,939	)
Cash flows from investing activities:
Purchase of property and equipment				(75,599	)				(35,562	)				(97,521	)
Proceeds from disposition of property and equipment				2,025					-					-
Net cash used in investing activities				(73,574	)				(35,362	)				(97,521	)
Cash flows from financing activities:
Net proceeds from the sale of common stock				4,636,579					4,583,437					-
Proceeds from note payable				74,052					-					-
Payments on note payable				(40,774	)				-					-
Net cash provided by financing activities				4,669,857					4,583,437					-
Net increase (decrease) in cash and cash equivalents				(1,320,112	)				(1,651,980	)				(6,033,460	)
Cash and cash equivalents, beginning of year				9,450,528					11,102,508					17,135,968
Cash and cash equivalents, end of year			$	8,130,416				$	9,450,528				$	11,102,508