Escalon® Medical Corp. Reports Second Quarter Fiscal 2015 Results

WAYNE, Pa., Feb. 13, 2015 /PRNewswire/ -- Escalon Medical Corp. (NASDAQ: ESMC) today announced financial results for its second quarter of fiscal 2015, ended December 31, 2014.  

For the second quarter of fiscal 2015, consolidated product revenue increased to $3.7 million from $3.1 million in the year ago period primarily as a result of an increase in sales of the Company's Sonomed Escalon Digital Imaging products, Axis management systems as well as an increase in the sales of the Company's Ultrasound and surgical products.

For the second quarter of fiscal 2015, margins decreased to 49.0% from 51.0% in the prior year period due to decreased margin in ultrasound products. Marketing, general and administrative expenses increased by 16% in the quarter primarily due to increased expenditures in advertising and consulting as well as added sales personnel and an increase in sales related activities. Research and development expenses for the second quarter of fiscal 2015 were slightly increased to $383,727 as compared to $377,042 in the prior year period.

For the quarter ended December 31, 2014, the company reported a net loss of $74,089 and a net loss from continuing operations of $76,748 or $0.01 per share. This compares to a net loss of $108,549 for the second quarter of fiscal 2014 and a net loss from continuing operations of $82,715. For the first six months of fiscal 2015, the company reported a net loss of $533,048, or $0.07 per share, and a net loss from continuing operations of $516,944. The net loss from continuing operations was $43,870, or $0.01 per share, for the first six months of the prior fiscal year.

At December 31, 2014, the Company had $1.3 million of cash and no long-term debt. Inventory stood at $2.4 million at December 31, 2014. Due to an increase in consulting expense, executive retirement expense and added quality and management personnel, the consolidated marketing, general and administrative expenses, increased $376,000 or 15.1%, to $2.9 million during the six month period ended December 31, 2014, as compared to the first six months of fiscal 2014.

"The Company delivered an improved performance in the second quarter of fiscal 2015, increasing consolidated revenue by 20%," commented Chief Executive Officer, Richard J. DePiano, Jr.  "The strong revenue increase across our product lines is attributable to both increasing product acceptance and our very strong showing at the recent American Academy of Ophthalmology Annual Meeting. Our transition to new products has continued to adversely impact gross margins.  We believe our initiatives to grow sales and enhance operational efficiencies will yield positive results and lead to improved gross margins over time.

"We have continued the process of refining our internal sales organization and distributor channels in order to accelerate the market penetration of our products.  Looking at the cost side of the business, our focus on improved organizational efficiency is expected to result in significantly lower total operating expenses in the second half of fiscal 2015 and going forward."

Mr. DePiano concluded, "The progress in sales momentum achieved in the second quarter of fiscal 2015 was encouraging, and we look to extend that into the second half. The company maintains a strong cash position of approximately $1.3 million, carries no long-term debt, and continues to fund operations from internally generated cash flow. We look forward to continuing to drive improved operational and financial results throughout the rest of fiscal 2015."

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 make acquisitions and the integration of any acquisitions it may undertake, if any, of which there can be no assurance; grow our remaining ophthalmic business unit; improve our financial position; improve organizational efficiency; implement cost reductions; generate cash; and identify, finance and enter into business relationships and acquisitions, although no acquisitions are currently contemplated.  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; third party reimbursement and physician training, 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, 2014, 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.

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SOURCE Escalon Medical Corp.