By BOULDER, Colo., Jan. 30, 2014 /PRNewswire/ -- Encision Inc. (OTC PINK: ECIA), a medical device company owning patented surgical technology that prevents stray electrosurgical burns in minimally invasive surgery, today announced financial results for its fiscal 2014 third quarter ended December 31, 2013.
The Company posted quarterly revenue of $2.716 million for a quarterly net income of $33 thousand, or $0.00 per share. These results compare to revenue of $3.055 million for a net loss of $82 thousand, or $(0.01) per share, in the year-ago quarter. Gross margin on revenue was 52.4 percent compared to 54.5 percent in the year-ago quarter. The decrease in gross margin from the year-ago quarter was the result of the increase in overhead costs per unit of product due to decreased product revenue. Interest and other expense, net, included $59 thousand for the medical device excise tax that started January 1, 2013.
The Company posted nine months product revenue of $7.852 million and nine months service revenue of $191 thousand for a nine months net loss of $329 thousand, or $(0.04) per share. These results compare to product revenue of $8.566 million and service revenue of $464 thousand for a net loss of $337 thousand, or $(0.04) per share, in the year-ago nine months. Gross margin was 53.3 percent compared to 55.7 percent in the year-ago nine months. Interest and other expense, net, included $179 thousand for the nine months for the medical device excise tax that started January 1, 2013.
"Product revenue for our third quarter of fiscal year 2014 increased two percent sequentially from our second quarter and declined 10.5 percent versus last year's third quarter," said Greg Trudel, President and CEO. "Last April and May, the Company made significant expense reductions which resulted in a $423 thousand decrease in operating expenses in our third quarter versus the year ago quarter. Those expense reductions principally contributed to our operating income of $98 thousand versus last year's third quarter operating loss of $83 thousand."
"I appreciate the confidence that our investors have in our proprietary AEM® Technology and in the future of our Company. In December 2013, we completed a private placement of 2,463,125 shares of our common stock and warrants that may be exercised into 1,231,563 shares of the Company's common stock, which raised approximately $2 million, before fees. After paying off our line of credit, cash and equivalents at quarter end stood at approximately $1.5 million, which will be used for supporting marketing, sales and engineering programs. In addition, in December 2013, we announced that we filed a premarket notification under Section 510(k) with the FDA of our intent to market what had previously been described as an AEM simplification product, now called the AEM EndoShield(TM) Burn Protection System (trademark applied for), which is a major evolution of our AEM monitoring system. We anticipate releasing this product in late Spring of 2014."
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, CO, the company pioneered the development and deployment of Active Electrode Monitoring, AEM Technology, to eliminate dangerous stray energy burns during minimally invasive procedures.
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 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, 2013 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.
Condensed Balance Sheets
(Amounts in thousands)
(Unaudited)
December 31, 2013 March 31, 2013
----------------- --------------
ASSETS
Cash and cash equivalents $1,520 $126
Accounts receivable, net 1,061 986
Inventories, net 2,657 2,929
Prepaid expenses 110 66
--- ---
Total current assets 5,348 4,107
----- -----
Equipment, net 1,818 1,629
Patents, net 250 238
Other assets 13 9
--- ---
Total assets $7,429 $5,983
------ ------
LIABILITIES AND SHAREHOLDERS'
EQUITY
Accounts payable 386 824
Accrued compensation 296 319
Other accrued liabilities 372 446
Lease and deferred rent payable -
short term 91 --
Total current liabilities 1,145 1,589
Lease and deferred rent payable -
long term 211 --
Total liabilities 1,356 1,589
Common stock and additional paid-
in capital 23,577 21,570
Accumulated (deficit) (17,504) (17,176)
------- -------
Total shareholders' equity 6,073 4,394
----- -----
Total liabilities and
shareholders' equity $7,429 $5,983
------ ------
Encision Inc.
Condensed Statements of Operations
(Amounts in thousands, except per share information)
(Unaudited)
Three Months
Ended Nine Months Ended
------------- -----------------
December 31, 2013 December 31, 2012 December
31, 2013 December 31, 2012
----------------- ----------------- -------- -----------------
Net revenue:
Product $2,644 $2,955 $7,852 $8,566
Service 72 100 191 464
--- --- --- ---
Total revenue 2,716 3,055 8,043 9,030
Cost of revenue:
Product 1,245 1,317 3,635 3,692
Service 47 72 119 311
--- --- --- ---
Total cost of revenue 1,292 1,389 3,754 4,003
----- ----- ----- -----
Gross profit 1,424 1,666 4,289 5,027
----- ----- ----- -----
Operating expenses:
Sales and marketing 601 903 2,266 2,716
General and administrative 361 385 1,069 1,352
Research and development 364 461 1,068 1,294
--- --- ----- -----
Total operating expenses 1,326 1,749 4,403 5,362
----- ----- ----- -----
Operating income (loss) 98 (83) (114) (335)
Interest and other
expense, net (65) 1 (215) (2)
--- --- ---- ---
Income (loss) before
provision for income
taxes 33 (82) (329) (337)
Provision for income taxes -- -- -- --
--- --- --- ---
Net income (loss) $33 $(82) $(329) $(337)
=== ==== ===== =====
Net income (loss) per
share-basic and diluted $0.00 $(0.01) $(0.04) $(0.04)
Basic weighted average
number of shares 8,616 8,210 8,346 8,196
Diluted weighted average
number of shares 8,620 8,210 8,346 8,196
SOURCE Encision Inc.
