[MISONIX LOGO OMITTED]
FOR IMMEDIATE RELEASE
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Misonix Contact: Investor Relations Contact:
Richard Zaremba Jordan M. Darrow
Chief Financial Officer Darrow Associates, Inc.
631-694-9555 631-367-1866
invest@misonix.com jdarrow@optonline.net
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MISONIX REPORTS FIRST QUARTER RESULTS FOR THE PERIOD ENDED SEPTEMBER 30, 2005
FARMINGDALE, N.Y. -- NOVEMBER 7, 2005 -- Misonix, Inc. (NASDAQ NM: MSON), a
developer of ultrasonic medical device technology for the treatment of cancer
and other healthcare purposes, today reported fiscal results for the three
months ended September 30, 2005.
Revenues for the three months ended September 30, 2005 were $9.1 million, a 13%
reduction when compared to revenues of $10.5 million for the same period in
fiscal 2005. The Company recorded a net loss for the first fiscal quarter 2006
of ($1.3) million, or ($.19) loss per fully diluted share, compared to net
income of $416,000, or $.06 per fully diluted share, for the same period in
fiscal 2005. Medical device product revenues decreased 16% to $5.0 million and
laboratory and scientific product revenues decreased 10% to $4.1 million. The
decrease in medical device product revenues was attributable to a 44% reduction
in therapeutic medical device product revenues to $2.0 million, partially offset
by a 24% increase in diagnostic medical device revenues to $3.0 million.
The backlog of unfilled orders as of September 30, 2005 was $8.4 million;
medical device product backlog was $5.4 million and laboratory and scientific
product backlog was $3.0 million.
Mr. Michael A. McManus Jr., President and Chief Executive Officer, commented,
"We are obviously disappointed with our performance and results in the first
fiscal quarter of 2006. Sales of medical device products to our major
distribution partners were lower than anticipated. According to our
distributors, they experienced a slow down in orders from doctors and hospitals
in the first quarter. This was compounded by a challenging workplace environment
for Misonix resulting from our announcement to explore strategic opportunities
for our Laboratory and Scientific Division. However, after addressing the issues
affecting our first quarter as well as channel checks, we expect product
shipments to increase over the next three quarters.
"The progress we have made with initiatives to deliver future growth, by way of
increased investment in R&D and marketing activities, has been very positive. We
made a key hire in Europe to oversee those operations. At our headquarters, we
added to our
management team a medical doctor with a proven track record of developing and
managing markets for medical devices, who has taken charge of, among other
product lines, our high intensity focused ultrasound (HIFU) medical device
platform.
"We moved closer to completing a five site clinical trial on the use of HIFU for
the treatment of prostate cancer. The results to date have been encouraging and
show a favorable comparison to other treatments in terms of higher success rates
in the treatment of cancer and the reduction in PSA levels. Patient outcomes at
all of our trial sites using the Sonablate 500 also show lower incidences of
impotence and incontinence. An important part of the continued growth of sales
in this market is the continuation and completion of European-based clinicals,
which are preferred by local doctors over studies conducted in other parts of
the world. We believe we have the best doctors working with us in this area. To
support the clinical work, we have also been sponsoring training sessions and
conferences to broaden the base of prominent doctors using HIFU for prostate
cancer. We also believe it is important to participate with our European doctors
in conferences in the U.S. and Europe, as well as having a presence at important
meetings like the American Urology Association. To date, these investments have
resulted in the Sonablate 500 being placed at 6 sites in Europe and treatments
of 490 patients. This fiscal year we expect to sign new distributors and to
increase the number of units sold and patients treated.
"We are also making progress with our product for kidney cancer. The acceptance
by those involved with our clinical trials for this product in Europe has been
encouraging. We expect to commence a clinical study at two sites in the first
quarter of calendar 2006. We have resubmitted our response to the FDA on the
510(k) for HIFU treatment of kidney cancer and look forward to a reply within
the FDA regulated period of 90 days.
"New product development continues to be a priority at Misonix. To this end, our
investments include the completion and FDA clearance for our ultrasonic wound
debrider, which we are anxious to introduce into a $3 billion market. We have
extended the time for the completion of a distribution agreement for the wound
debrider due to the request by two additional companies to participate in this
process. We were gratified by the level of interest expressed by several
respected distributors involved in the wound care market. We believe it is in
the best interest of the Company to allow potential distributors for our product
to demonstrate their capabilities and to optimize deal economics so that we may
pick the strongest partner. We now expect to announce a distribution agreement
in the next few months.
"Another new product, the ultrasonic Osteotome or "bone cutter", has been used
successfully in animal studies at the University of Pittsburgh. The results are
being compiled and a report will soon be issued. We have already started
discussions with several distribution partners and are excited about the
interest shown to date in this product.
"Our strategy to be a focused medical device company is moving forward as
planned. We will continue to manage our expenses in a responsible manner to fund
the most promising growth opportunities. We are building a formidable position
as a provider of medical devices using ultrasonic technology, a platform that we
believe is at the early stage of its potential. At the present time, we believe
continued top line growth of 10% is
achievable, which will be used in part to enable further investment in R&D and
sales and marketing initiatives."
As previously announced, the Company has scheduled a conference call and web
cast to discuss its first quarter fiscal year 2006 financial results today,
November 7, 2005, at 4:30 PM Eastern time. The conference call will be broadcast
live on the Internet via the Investor Relations section of the Company's Web
site at www.misonix.com. Alternatively, participants may join the conference
call by dialing 866-362-4832 (domestic) or 617-597-5364 (international) and
entering the reservation code 50988478. Participants should use these access
methods about 10 minutes prior to the start time.
For those unable to attend the live broadcasts, replays will be available
beginning approximately one hour after the events. Replay information will be
posted on the Misonix Web site following the conclusion of the live broadcasts.
There is no charge for participants to access the live broadcasts or replays.
Misonix develops, manufactures, and markets medical, scientific, and industrial
ultrasonic and air pollution systems. The Company has been at the forefront of
ultrasonic technology for over 50 years. Misonix's ultrasonic platform is the
basis for several innovative medical technologies. Misonix has a minority equity
position in Focus Surgery, Inc., which uses high intensity focused ultrasound
("HIFU") technology to destroy deep-seated cancerous tissues without effecting
surrounding healthy tissue. Addressing a combined market estimated to be in
excess of $3 billion annually, Misonix's proprietary ultrasonic medical devices
are used for wound debridement, cosmetic surgery, neurosurgery, laparoscopic
surgery, and other surgical and medical applications. Additional information is
available on the Company's Web site at www.misonix.com.
# # #
Forward Looking Statements for Misonix, Inc.: With the exception of historical
information contained in this press release, content herein may contain "forward
looking statements" that are made pursuant to the Safe Harbor Provisions of the
Private Securities Litigation Reform Act of 1995. These statements are based on
management's current expectations and are subject to uncertainty and changes in
circumstances. In particular, the Company may not be successful in its efforts
with respect to strategic opportunities for its Laboratory and Scientific
Division and the affect this activity may have on the other businesses within
the Company. Investors are cautioned that forward-looking statements involve
risks and uncertainties that could cause actual results to differ materially
from the statements made. These factors include general economic conditions,
delays and risks associated with the performance of contracts, uncertainties as
a result of research and development, potential acquisitions, consumer and
industry acceptance, litigation and/or court proceedings, including the timing
and monetary requirements of such activities, regulatory risks including
approval of pending and/or contemplated 510(k) filings, the ability to achieve
and maintain profitability in the Company's business lines, and other factors
discussed in the Company's Annual Report on Form 10-K, subsequent Quarterly
Reports on Form 10-Q and current reports on Form 8-K.
* * *
(tables to follow)
MISONIX, INC.
Consolidated Statements of Operations
Unaudited
Three Months Ended
September 30,
2005 2004
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Net sales $9,111,572 $10,500,066
Cost of goods sold 5,675,041 6,089,326
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Gross profit 3,436,531 4,410,740
Selling expenses 1,561,634 1,439,809
General and administrative expenses 2,734,862 1,740,894
Research and development expenses 916,740 741,768
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Total operating expenses 5,213,236 3,922,471
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(Loss) income from operations (1,776,705) 488,269
Total other income 174,859 203,339
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(Loss) income before minority interest and
income taxes (1,601,846) 691,608
Minority interest in net income of
consolidated subsidiaries 16,339 15,439
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(Loss) income before income taxes (1,618,185) 676,169
Income tax (benefit) expense (312,822) 259,902
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Net (loss) income ($1,305,363) $416,267
=========== ===========
Net (loss) income per share-basic ($0.19) $0.06
=========== ===========
Net (loss) income per share-diluted ($0.19) $0.06
=========== ===========
Weighted average common shares-basic 6,832,622 6,741,786
=========== ===========
Weighted average common shares-diluted 6,832,622 6,959,540
=========== ===========
MISONIX, INC.
CONSOLIDATED BALANCE SHEETS
UNAUDITED AUDITED
SEPT. 30, 2005 JUNE 30, 2005
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ASSETS
Current Assets:
Cash and cash equivalents $2,880,703 $2,484,534
Accounts receivable, net of allowance
for doubtful accounts of $454,906 and
$405,998, respectively 8,184,649 11,757,827
Inventories 10,769,271 9,780,501
Deferred income taxes 1,032,644 964,426
Income tax receivable 456,997 224,734
Prepaid expenses and other current assets 1,015,076 1,336,104
----------- -----------
Total current assets 24,339,340 26,548,126
Property, plant and equipment, net 6,217,068 6,409,835
Deferred income taxes 312,734 244,769
Goodwill 4,473,713 4,473,713
Other assets 425,227 409,493
----------- -----------
Total assets $35,768,082 $38,085,936
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Revolving credit facilities 1,364,957 1,883,193
Accounts payable 4,712,569 5,482,313
Accrued expenses and other current liabilities 2,798,991 2,901,247
Current maturities of long-term debt and capital
lease obligations 400,574 376,148
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Total current liabilities 9,277,091 10,642,901
Long-term debt and capital lease obligations 1,204,609 1,240,324
Deferred income taxes 287,419 270,884
Deferred income 501,532 508,582
Minority interest 345,424 329,085
Stockholders' equity:
Capital stock, $0.01 par - shares authorized
10,000,000; 6,925,319 and 6,902,752 issued and
6,847,519 and 6,824,952 outstanding, respectively 69,253 69,028
Additional paid-in capital 24,030,981 23,619,281
Retained earnings 295,803 1,601,166
Treasury stock, 77,800 shares (412,424) (412,424)
Accumulated other comprehensive income 168,394 217,109
----------- -----------
Total stockholders' equity 24,152,007 25,094,160
----------- -----------
Total liabilities and stockholders' equity $35,768,082 $38,085,936
=========== ===========
