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 Increase in Medical Device Revenues in Fiscal 2007 Second
Quarter Financial Results
FARMINGDALE, N.Y. -- February 12, 2007 -- Misonix, Inc. (NASDAQ: MSON), a
developer of ultrasonic medical device technology for the treatment of cancer
and other chronic health conditions, today reported financial results for the
fiscal second quarter ended December 31, 2006. Highlights of the second quarter
of fiscal 2007 and other Company initiatives include:
o Increased Earnings for the Second Quarter 2007
o Increased Second Quarter Revenues Year-over-year and Sequentially
o Increased Sales of Medical Devices
o Increased Revenue Lines for the Sonablate(R) 500 ("SB500") using HIFU
for Prostate Cancer in Europe
o Increased Fee-per-use Sites and Procedures for the SB500
o Increased Distribution of the SB500 in 11 Countries Throughout Europe
o Sales Increase for Ultrasonic Wound Care System/Sonic One
o Entered China Kidney Cancer Market with HIFU Sonatherm Device
o Medical Device Outlook Improving with Total Company Backlog Up by 16%
o Received orders for Labcaire Endoscopic Disinfectant Unit "ISIS"
Fiscal 2007 Second Quarter Results
Revenues for the three months ended December 31, 2006 were $10.6 million, a 3.6%
increase when compared with revenues of $10.3 million for the same period in
fiscal 2006. The increase in revenues is due to an increase in sales of medical
devices of $751,000 to $6.2 million, partially offset by a decrease in
laboratory and scientific product revenues of $380,000 to $4.4 million.
The increase in revenues of medical devices is due to a $682,000 increase in
revenues of therapeutic medical devices and an increase of $69,000 in revenues
of diagnostic medical devices. The increase in revenues of therapeutic medical
devices was primarily due to increased capital equipment unit sales and
fee-per-use revenues in Europe for the Sonablate 500 for prostate cancer
treatment. The increase in revenues of diagnostic medical devices was not
attributable to a single customer, distributor or any other specific factor, but
rather was the result of an increase in demand for all products.
The decrease in revenues of laboratory and scientific products is due to a
decrease in wet scrubber revenues of $464,000, partially offset by an increase
in ultrasonic laboratory products of $64,000, an increase in ductless fume
enclosures and related product revenues of $5,000 and an increase in Labcaire
revenues of $14,000. The decrease in wet
1
scrubber revenues is due to the Company being extremely selective in the
opportunities it pursues.
The Company recorded net income for the fiscal 2007 second quarter of $24,000
compared with a net loss of $507,000 for the same period in fiscal 2006.
The Company reported a backlog of unfilled orders as of December 31, 2006 of
$9.7 million, an 18% increase when compared with $8.2 million as of September
30, 2006. Medical device products backlog was $7.4 million and laboratory and
scientific products backlog was $2.3 million.
In December 2006, the Company entered into a credit and security agreement with
Wells Fargo Business Credit for a revolving credit facility up to $8 million.
The Wells Fargo revolving credit facility replaced the Company's $2 million
revolving credit facility with Bank of America.
Fiscal 2007 First Half Results
Revenues for the six months ended December 31, 2006 were $20.3 million, a 4.7%
increase when compared with revenues of $19.4 million for the same period in
fiscal 2006. Medical device products revenues increased 5.8% to $11.1 million
and laboratory and scientific products revenues increased 3.3% to $9.2 million.
The Company recorded a net loss for the six months ended December 31, 2006 of
$519,000 compared with a net loss of $1.8 million for the same period in fiscal
2006.
Management's Comments
Commenting on the Company's financial results and recent developments, Michael
A. McManus Jr., President and Chief Executive Officer, said, "We are pleased
with the progress we have reported today. For the second consecutive quarter,
our revenues have increased sequentially as well as from the respective prior
year periods. This top line performance along with our previously commenced
expense management initiatives have enabled Misonix to improve from merely
reducing our net loss to reporting positive net income in the second quarter.
"The growth in our medical device revenues reflect the progress being made with
our five-point strategy for 2007. We committed to continue to grow our high
intensity focused ultrasound ("HIFU") product for the treatment of prostate
cancer in Europe. Over the past twelve months the number of distributors selling
this product for us in Europe has gone from 4 to 13, and the number of
procedures successfully completed has grown from 267 to 460, an increase of more
than 70%. While Portugal and Hungary are among the latest countries where we are
distributing the SB500, patients in 11 European countries in total are
benefiting from our superior HIFU treatment for prostate cancer.
"Another of our five key areas also is based on proprietary HIFU technology. To
this end, we are very pleased with the progress being made to define Misonix as
a leading global player for minimally invasive HIFU. Our second HIFU product,
the Sonatherm 600, is used for the treatment of soft tissue, including tumors in
the kidney. Clinicals are being conducted in the United Kingdom and Austria.
Late in the fiscal second quarter we announced plans to bring this product into
China. As part of our entry into the world's most populous country, a
distribution agreement was signed with China-based Acton Medical Device Corp.
("Acton"). Acton, with a sales team of 156 people covering over
2
20 provinces, will be responsible for conducting clinical procedures and
acquiring all necessary government approvals for the sale of the Sonatherm in
the Peoples Republic of China. Acton is starting a process of regulatory
approval prior to selling of units.
"The other key focus areas for 2007 all made steady progress in the fiscal
second quarter. Our ultrasonic bone shaver product was commercialized and is
being sold with our neuroaspirator. As planned, sales are increasing and we are
already seeing an expansion in market share. Meanwhile, our launch in the US
with Medline of the SonicOne Ultrasonic Wound Care System appears to be very
promising. Doctors and clinics are making purchases with gratifying feedback. In
terms of our long term growth strategy, we look to the SonicOne for meaningful
contribution. Another goal was to complete the work on our ultrasonic bone
cutter (osteotome). We are on schedule with this unique product that will add
value to the billion dollar spinal laminectomy market. We continue our meetings
with prospective distribution partners.
"Also contributing to the growth in medical device revenues is the performance
at our Sonora Medical unit. This unit has proven to be a critical success for
Misonix and our overarching strategy focused on ultrasound technology. A
recipient of industry accolades, Sonora has numerous patents for its products
that test and repair ultrasound systems and parts from all manufacturers of
ultrasound medical devices. Sonora recently began to repair and refurbish MRI
equipment as well. In this way, we are going beyond our role of leading the
industry with the largest platform of ultrasonic medical devices to capitalize
on the servicing of products being developed by an expanding array of companies
around the world.
"We also have received our first orders for our Labcaire Endoscopic Disinfectant
Unit "ISIS". This unit is compliant with UK regulations and has a shorter cycle
time which will increase the number of patients that are treated. We are very
excited about the opportunities for this product.
"All of our business lines are progressing and clearly bringing advantages to
the global healthcare community, which is just one of our goals as a developer
of medical devices. Providing us additional validation that our strategies are
intact, we are pleased to have ended the quarter with a significant jump in our
backlog, driven by the demand for our unique platform of ultrasonic medical
devices. We believe that the continuation of our progress and the development of
additional new products will add considerably to shareholder value, which is
another important goal at Misonix."
Investor Conference Call and Web Cast
As previously announced, the Company has scheduled a conference call and web
cast to discuss its second quarter fiscal year 2007 financial results today,
February 12, 2007, 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 800-659-2056 (domestic) or 617-614-2714
(international) and entering the reservation code 96991268. 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
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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, Inc. (NASDAQ: MSON) designs, develops, manufactures, and markets
medical, scientific, and industrial ultrasonic equipment, laboratory safety
equipment, and air pollution control products. 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.
# # #
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. 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. AND SUBSIDIARIES
Consolidated Statements of Operations
Unaudited
Three Months Ended Six Months Ended
December 31, December 31,
------------------------- --------------------------
2006 2005 2006 2005
----------- ----------- ----------- ------------
Net sales $10,639,086 $10,268,386 $20,281,964 $ 19,379,958
Cost of goods sold 5,852,331 6,404,865 11,563,343 12,079,906
----------- ----------- ----------- ------------
Gross profit 4,786,755 3,863,521 8,718,621 7,300,052
Selling expenses 1,924,117 1,686,837 3,521,356 3,248,471
General and administrative expenses 2,303,148 2,290,680 4,707,431 5,025,542
Research and development expenses 828,168 846,996 1,648,385 1,763,736
----------- ----------- ----------- ------------
Total operating expenses 5,055,433 4,824,513 9,877,172 10,037,749
----------- ----------- ----------- ------------
Loss from operations (268,678) (960,992) (1,158,551) (2,737,697)
Total other income 141,417 139,332 275,075 314,191
----------- ----------- ----------- ------------
Loss before minority interest and
income taxes (127,261) (821,660) (883,476) (2,423,506)
Minority interest in net (loss) income of
consolidated subsidiaries (5,840) 2,785 25,499 19,124
----------- ----------- ----------- ------------
Loss before income taxes (121,421) (824,445) (908,975) (2,442,630)
Income tax benefit (144,975) (317,340) (390,113) (630,162)
----------- ----------- ----------- ------------
Net income (loss) $ 23,554 ($507,105) ($518,862) ($1,812,468)
=========== =========== =========== ============
Net loss per share-basic $ 0.00 ($0.07) ($0.08) ($0.26)
=========== =========== =========== ============
Net loss per share-diluted $ 0.00 ($0.07) ($0.08) ($0.26)
=========== =========== =========== ============
Weighted average common shares-basic 6,905,960 6,856,981 6,903,165 6,844,802
=========== =========== =========== ============
Weighted average common shares-diluted 6,962,811 6,856,981 6,903,165 6,844,802
=========== =========== =========== ============
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MISONIX, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
DERIVED FROM AUDITED
UNAUDITED FINANCIAL STATEMENTS
DECEMBER 31, 2006 JUNE 30, 2006
----------------- --------------------
ASSETS
Current Assets:
Cash $ 1,238,021 $ 675,400
Accounts receivable, net of allowance
for doubtful accounts of $282,051 and
$256,309, respectively 7,809,065 6,530,598
Inventories, net 11,386,002 11,307,226
Income tax receivable 784,993 786,654
Deferred income taxes 1,700,129 1,419,949
Prepaid expenses and other current assets 822,246 1,070,903
----------- -----------
Total current assets 23,740,456 21,790,730
Property, plant and equipment, net 6,187,035 6,495,854
Deferred income taxes 1,229,811 1,039,824
Goodwill 4,710,446 4,673,713
Other assets 1,181,137 512,444
----------- -----------
Total assets $37,048,885 $34,512,565
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Revolving credit facilities and note payable $ 4,521,709 $ 1,572,042
Accounts payable 4,256,326 4,784,102
Accrued expenses and other current liabilities 3,116,544 2,963,762
Current maturities of long-term debt and capital lease obligations 351,432 367,823
Foreign income tax payable 122,493 0
----------- -----------
Total current liabilities 12,368,504 9,687,729
Long-term debt and capital lease obligations 1,119,406 1,145,279
Deferred income taxes 225,471 282,455
Deferred income 389,998 422,634
Deferred lease liability 389,892 378,031
----------- -----------
Total liabilities 14,493,271 11,916,128
Commitments and contingencies
Minority interest 371,060 341,631
Stockholders' equity:
Capital stock, $0.01 par - shares authorized 10,000,000; 6,998,169 and
6,978,169 issued and 6,920,369 and 6,900,369 outstanding, respectively 69,982 69,782
Additional paid-in capital 24,709,906 24,548,536
Accumulated deficit (2,677,133) (2,158,271)
Accumulated other comprehensive income 494,223 207,183
Treasury stock, 77,800 shares (412,424) (412,424)
----------- -----------
Total stockholders' equity 22,184,554 22,254,806
----------- -----------
Total liabilities and stockholders' equity $37,048,885 $34,512,565
=========== ===========
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