[GRAPHIC OMITTED] MISONIX
FOR IMMEDIATE RELEASE
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
MISONIX REPORTS FISCAL 2006 SECOND QUARTER RESULTS
FARMINGDALE, NY -- February 14, 2006 -- Misonix, Inc. (Nasdaq: MSON), a
developer of ultrasonic medical device technology for the treatment of cancer
and other health conditions, today announced the results of the Company's second
quarter and six months ended December 31, 2005. Highlights for the quarter
include:
o Received 510(k) clearance from the Food and Drug Administration ("FDA")
for the Sonatherm 600 system for soft tissue ablation using High
Intensity Focused Ultrasound ("HIFU")
o Strengthened European operations with key sales force additions
o Signed agreements for distribution of the SB500(R) in Germany, Austria,
Switzerland and Hungary
o Successfully treated 38 patients in our multi-site European clinical
study with the SB500(R)
o Successfully completed our first human procedure with the ultrasonic
bone cutter at the University of Pittsburgh
o Sonora Medical successfully introduced another new product for the
diagnosis and testing of ultrasonic probes
Fiscal 2006 Second Quarter Results
- ----------------------------------
Revenues for the three months ended December 31, 2005 were $10.3 million, a 3%
decrease when compared with revenues of $10.6 million for the same period in
fiscal 2005. Medical device products revenues decreased 4% to $5.5 million and
laboratory and scientific products revenues decreased 2% to $4.8 million. The
decrease in medical device products revenues was attributable to a 17% decrease
in therapeutic medical device products revenues to $2.6 million, partially
offset by an 11% increase in diagnostic medical device products revenues to $2.9
million. The decrease in laboratory and scientific products revenues was mainly
attributable to a 43% reduction in sales of ductless fume enclosures and related
products, and a 14% reduction in wet scrubber products, partially offset by a
24% increase in sales of laboratory ultrasonic products and
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a 10% increase in sales of Labcaire products, primarily endoscope cleaning and
disinfecting units.
The Company recorded a net loss for the second fiscal quarter 2006 of $507,000,
or $.07 loss per fully diluted share, compared with net income of $178,000, or
$.03 per fully diluted share for the same period in fiscal 2005.
The Company reported a backlog of unfilled orders as of December 31, 2005 of
$8.9 million, a 13% increase when compared with $7.9 million as of June 30,
2005. Medical device products backlog was $7.1 million and laboratory and
scientific products backlog was $1.8 million.
Fiscal 2006 First Half Results
- ------------------------------
Revenues for the six months ended December 31, 2005 were $19.4 million, an 8%
reduction when compared with revenues of $21.1 million for the same period in
fiscal 2005. Medical device products revenues decreased 10% to $10.4 million and
laboratory and scientific products revenues decreased 6% to $8.9 million. The
Company recorded a net loss for the six months ended December 3, 2005 of $1.8
million, or $.26 loss per fully diluted share, compared with net income of
$595,000, or $.09 per fully diluted share, for the same period in fiscal 2005.
Commenting on the fiscal 2006 second quarter results, Michael A. McManus, Jr.,
President and CEO of Misonix, said, "Sales of our medical device products
continue to be lower than expected. Our major distributors experienced slower
sales in the period from July thru December. Indications from our distributors
are that they expect sales to pick up over the next six months. We continue to
work with these distributors on product development and strategies to increase
market share.
"We previously announced our notice from the FDA of 510(k) clearance for the
laproscopic use of HIFU for treatment of soft tissue. This is an important
milestone for Misonix as it marks the first product approved for laproscopic
HIFU treatment in the United States. This approval is an example of our
investment strategy to bring unique products to market. This truly is a
groundbreaking event for Misonix.
"Our development of the European market for the SB500 for prostate cancer
treatment continues as we added new distributors. We are also making progress on
the completion of the first multi-center study of the application of HIFU for
the treatment of prostate cancer. We continue to teach and train doctors in the
use of HIFU and we will be participating in the European Urology Association
meeting as well as the American Urology Association Meeting in Atlanta this
spring.
"We continued to perform clinical treatments of wounds with our ultrasonic wound
debrider and accelerated discussions toward a distribution agreement with
several large potential partners. With a backdrop of success for all debridement
treatments and a good response from patients to date, we are focusing our
efforts on structuring the best deal with the right partner. We are very pleased
with our progress to date.
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"We continue to evaluate strategic alternatives for our Laboratory and
Scientific businesses. We have received several bids to date and will continue
to review our options. We will be thoughtful and patient in this process as
there is no need to sell these businesses.
"It is important to reiterate that our primary focus is to build our presence in
the medical device field. We believe that we have unique ultrasound technology
and have successfully delivered this technology to the market. We have a
pipeline of new and approved products that are expected to be brought to market
in the near future. These new products for wound debridement and bone cutting
should create incremental sales in markets that are considerably larger than
those we are currently in. These are in addition to the exciting HIFU
opportunities we have in the kidney, liver and breast markets. As we have
expressed before, there are very promising studies from all over the world that
support the unique benefits of HIFU and our goal is to be a major participant in
this market, both in the United States and internationally.
"While we remain comfortable with sales of medical devices improving over the
next six months, the result of our second quarter suggests that we should not
continue to give guidance for our expected results for fiscal 2006."
Conference Call and Web Cast
- ----------------------------
As previously announced, the Company has scheduled a conference call and Web
cast to discuss the Company's second quarter fiscal year 2006 financial results
today, February 14, 2006, 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 800-329-9097 (domestic) or 617-614-4929
(international) and entering the reservation code 63753637. Participants should
use these access methods about 10 minutes prior to the start time.
For those unable to attend the live results 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.
About Misonix
Misonix develops, manufactures, and markets medical, scientific, and industrial
ultrasonic and air pollution systems. 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
technology to destroy deep-seated cancerous tissues without affecting
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.
# # #
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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)
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MISONIX, INC.
Consolidated Statements of Operations
Unaudited
Three Months Ended Six Months Ended
December 31, December 31,
2005 2004 2005 2004
--------------------------- ----------------------------
Net sales $10,268,386 $10,637,212 $19,379,958 $21,137,278
Cost of goods sold 6,404,865 6,190,554 12,079,906 12,279,880
--------------------------- ----------------------------
Gross profit 3,863,521 4,446,658 7,300,052 8,857,398
Selling expenses 1,686,837 1,491,506 3,248,471 2,931,315
General and administrative expenses 2,290,680 2,001,231 5,025,542 3,742,125
Research and development expenses 846,996 880,190 1,763,736 1,621,958
--------------------------- ----------------------------
Total operating expenses 4,824,513 4,372,927 10,037,749 8,295,398
--------------------------- ----------------------------
(Loss) income from operations (960,992) 73,731 (2,737,697) 562,000
Total other income 139,332 150,554 314,191 353,893
--------------------------- ----------------------------
(Loss) income before minority interest
and income taxes (821,660) 224,285 (2,423,506) 915,893
Minority interest in net income of
consolidated subsidiaries 2,785 11,807 19,124 27,246
--------------------------- ----------------------------
(Loss) income before income taxes (824,445) 212,478 (2,442,630) 888,647
Income tax (benefit) expense (317,340) 34,142 (630,162) 294,044
--------------------------- ----------------------------
Net (loss) income ($507,105) $178,336 ($1,812,468) $594,603
=========================== ============================
Net (loss) income per share-basic ($0.07) $0.03 ($0.26) $0.09
=========================== ============================
Net loss) income per share-diluted ($0.07) $0.03 ($0.26) $0.09
=========================== ============================
Weighted average common shares-basic 6,856,981 6,773,953 6,844,802 6,757,870
=========================== ============================
Weighted average common shares-diluted 6,856,981 6,948,470 6,844,802 6,954,005
=========================== ============================
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MISONIX, INC.
CONSOLIDATED BALANCE SHEETS
UNAUDITED AUDITED
DEC. 31, 2005 JUNE 30, 2005
------------- --------------
ASSETS
Current Assets:
Cash and cash equivalents $ 2,718,435 $ 2,484,534
Accounts receivable, net of allowance
for doubtful accounts of $544,368 and $405,998, respectively 7,419,824 11,757,827
Inventories 11,414,570 9,780,501
Income tax receivable 754,031 224,734
Deferred income taxes 1,072,514 964,426
Prepaid expenses and other current assets 729,795 1,336,104
------------- --------------
Total current assets 24,109,169 26,548,126
Property, plant and equipment, net 6,101,123 6,409,835
Deferred income taxes 26,304 244,769
Goodwill 4,473,713 4,473,713
Other assets 443,399 409,493
------------- --------------
Total assets $ 35,153,708 $ 38,085,936
============= ==============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Revolving credit facilities 1,989,205 1,883,193
Accounts payable 5,072,975 5,482,313
Accrued expenses and other current liabilities 2,006,255 2,901,247
Current maturities of long-term debt and capital lease obligations 389,398 376,148
------------- --------------
Total current liabilities 9,457,833 10,642,901
Long-term debt and capital lease obligations 1,139,094 1,240,324
Deferred income taxes 0 270,884
Deferred income 456,500 508,582
Minority interest 348,209 329,085
Stockholders' equity:
Capital stock, $0.01 par - shares authorized 10,000,000; 6,935,319 and
6,902,752 issued and 6,857,519 and 6,824,952 outstanding, respectively 69,353 69,028
Additional paid-in capital 24,177,665 23,619,281
Retained (deficit) earnings (211,302) 1,601,166
Treasury stock, 77,800 shares (412,424) (412,424)
Accumulated other comprehensive income 128,780 217,109
------------- --------------
Total stockholders' equity 23,752,072 25,094,160
------------- --------------
Total liabilities and stockholders' equity $ 35,153,708 $ 38,085,936
============= ==============
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