BOULDER, Colo., Feb. 7, 2019 /PRNewswire/ -- Encision Inc. ECIA, a medical device company owning patented Active Electrode Monitoring (AEM®) Technology that prevents dangerous stray electrosurgical burns in minimally invasive surgery, today announced financial results for its fiscal 2019 third quarter that ended December 31, 2018.
The Company posted quarterly net revenue of $2.12 million for a quarterly net loss of $84 thousand, or $(0.01) per diluted share. These results compare to net revenue of $2.19 million for a quarterly net income of $56 thousand, or $0.01 per diluted share, in the year-ago quarter. Net revenue for last year's quarter included net revenue of $94.5 thousand from an order for non-AEM product. Gross margin on net revenue was 50% in the fiscal 2019 third quarter and 56% in the fiscal 2018 third quarter. Gross margin on net revenue was lower in the current quarter primarily as a result of significantly higher material costs, especially as a result of tariffs on our steel costs and, to a lesser extent, inventory reserve expense and product mix.
The Company posted nine months net revenue of $6.72 million for a nine months net loss of $53 thousand, or $0.00 per diluted share. These results compare to net revenue of $6.72 million for a nine months net income of $354 thousand, or $0.03 per diluted share, in the year-ago nine months. Net revenue for last year's nine months included net revenue of $424 thousand from an order for non-AEM product. Gross margin on net revenue was 53% in the fiscal 2019 nine months and 57% in the fiscal 2018 nine months. Gross margin on net revenue was lower in the current nine months as a result of higher material costs and product mix.
"For this fiscal year's nine months, net revenue on AEM product resulted in a 7% rate of growth, said Greg Trudel, President and CEO of Encision Inc. "During the quarter ended December 31, 2018, we issued 875,000 shares of our common stock to CMED Partners LLLP ("CMED") in exchange for $350,000. We appreciate the continued confidence that CMED has placed in us. Net proceeds from the sale of the shares will be used for general business purposes and, in particular, for greater sales, marketing, and research and development presence. While never satisfied with a loss of any magnitude, our confidence in our strategy to drive top line growth through new product introductions and channel expansion is unwavering. We look forward to both a solid close for our FY2019 and to driving top line growth in FY2020."
Encision Inc. designs and markets a portfolio of high performance surgical instrumentation that delivers advances in patient safety with AEM technology, surgical performance, and value to hospitals across a broad range of minimally invasive surgical procedures. Based in Boulder, Colorado, the company pioneered the development and deployment of Active Electrode Monitoring, AEM technology, to eliminate dangerous stray energy burns during minimally invasive procedures. For additional information about all our products, please visit www.encision.com.
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 develop new or enhanced products and have such products accepted in the market, 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 March 31, 2018 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. | ||||||||
Unaudited Condensed Statements of Operations | ||||||||
(in thousands, except per share information) | ||||||||
Three Months Ended | Nine Months Ended | |||||||
December 31, | December 31, | December 31, | December 31, | |||||
Net revenue | $2,117 | $2,190 | $6,718 | $6,716 | ||||
Cost of revenue | 1,055 | 956 | 3,149 | 2,880 | ||||
Gross profit | 1,062 | 1,234 | 3,569 | 3,836 | ||||
Operating expenses: | ||||||||
Sales and marketing | 645 | 570 | 2,077 | 1,745 | ||||
General and administrative | 312 | 369 | 954 | 1,058 | ||||
Research and development | 189 | 224 | 543 | 635 | ||||
Total operating expenses | 1,146 | 1,163 | 3,574 | 3,438 | ||||
Operating income (loss) | (84) | 71 | (5) | 398 | ||||
Interest expense and other expense, net | –– | (15) | (48) | (44) | ||||
Income (loss) before provision for income taxes | (84) | 56 | (53) | 354 | ||||
Provision for income taxes | –– | –– | –– | –– | ||||
Net income (loss) | $ (84) | $ 56 | $ (53) | $ 354 | ||||
Net income (loss) per share—basic and diluted | $(0.01) | $0.01 | $0.00 | $0.03 | ||||
Weighted average number of shares—basic | 10,799 | 10,683 | 10,722 | 10,683 | ||||
Weighted average number of shares—diluted | 10,799 | 10,708 | 10,722 | 10,702 | ||||
Encision Inc. | ||||
Unaudited Condensed Balance Sheets | ||||
(in thousands) | ||||
December 31, | March 31, | |||
ASSETS | ||||
Cash and cash equivalents | $ 577 | $ 114 | ||
Restricted cash | 25 | 25 | ||
Accounts receivable, net | 1,024 | 963 | ||
Inventories, net | 1,391 | 1,437 | ||
Prepaid expenses | 130 | 75 | ||
Total current assets | 3,147 | 2,614 | ||
Equipment, net | 239 | 349 | ||
Patents, net | 254 | 270 | ||
Other assets | 19 | 19 | ||
Total assets | $ 3,659 | $ 3,252 | ||
LIABILITIES AND SHAREHOLDERS' EQUITY | ||||
Accounts payable | $ 690 | $ 466 | ||
Accrued compensation | 258 | 257 | ||
Other accrued liabilities | 100 | 285 | ||
Deferred rent | –– | 30 | ||
Total current liabilities | 1,048 | 1,038 | ||
Deferred rent | 74 | 10 | ||
Total liabilities | 1,122 | 1,048 | ||
Common stock and additional paid-in capital | 24,205 | 23,818 | ||
Accumulated (deficit) | (21,668) | (21,614) | ||
Total shareholders' equity | 2,537 | 2,204 | ||
Total liabilities and shareholders' equity | $ 3,659 | $ 3,252 | ||
Encision Inc. | |||||
Unaudited Condensed Statements of Cash Flows | |||||
(in thousands) | |||||
Nine Months Ended | |||||
December 31, | December 31, | ||||
Operating activities: | |||||
Net income (loss) | $ (53) | $ 354 | |||
Adjustments to reconcile net income (loss) to cash generated by operating activities: | |||||
Depreciation and amortization | 141 | 154 | |||
Share-based compensation expense | 37 | 49 | |||
(Recovery from) provision for doubtful accounts, net | (1) | (19) | |||
(Recovery from) inventory obsolescence, net | 24 | (20) | |||
Changes in operating assets and liabilities: | |||||
Accounts receivable | (61) | 123 | |||
Inventories | 22 | (98) | |||
Prepaid expenses and other assets | (55) | (83) | |||
Accounts payable | 224 | 119 | |||
Accrued compensation and other accrued liabilities | (150) | (85) | |||
Net cash generated by operating activities | 128 | 494 | |||
Investing activities: | |||||
Acquisition of property and equipment | (10) | (41) | |||
Patent costs | (5) | (35) | |||
Net cash (used in) investing activities | (15) | (76) | |||
Financing activities: | |||||
Paydown of credit facility, net change | –– | (275) | |||
Proceeds from the issuance of common stock | 350 | –– | |||
Net cash generated by (used in) financing activities | 350 | (275) | |||
Net increase in cash, cash equivalents, and restricted cash | 463 | 143 | |||
Cash, cash equivalents, and restricted cash, beginning of | 139 | 95 | |||
Cash, cash equivalents, and restricted cash, end of period | $ 602 | $ 238 | |||
View original content:http://www.prnewswire.com/news-releases/encision-reports-third-quarter-fiscal-year-2019-results-300790160.html
SOURCE Encision Inc.
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