[MISONIX LOGO]
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@DarrowIR.com
MISONIX REPORTS INCREASE IN REVENUES FOR FISCAL 2007 THIRD QUARTER
FINANCIAL RESULTS
FARMINGDALE, N.Y. - MAY 10, 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 third
quarter ended March 31, 2007. Highlights of the third quarter of fiscal 2007 and
other Company initiatives include:
o Increased Third Quarter Revenues Year-over-year
o Increased Sales of Medical Devices
o Increased Revenue Lines for the Sonablate(R) 500 ("SB500") using HIFU
for Treating Prostate Cancer in Europe
o Increased Distribution of the SB500 in 16 Countries Throughout Europe
o Hemiablation Prostate Studies Supported by Major UK Cancer Research
Organizations
o Established First Global HIFU Prostate Cancer Treatment Clinical
Registry
o First Successful Sonatherm Procedures for Human Kidney Cancer
o Marketing Efforts Stepped Up for Ultrasonic Wound Care System/Sonic
One
o Received 15 Orders for Labcaire Endoscopic Disinfectant Unit "ISIS"
Fiscal 2007 Third Quarter Results
Revenues for the three months ended March 31, 2007 were $10.6 million, a 4.1%
increase when compared with revenues of $10.2 million for the same period in
fiscal 2006. The increase in revenues is due to an increase in sales of medical
devices of $949,000, or 19%, to $6.0 million, partially offset by a decrease in
laboratory and scientific product revenues of $535,000 to $4.6 million. Medical
devices represented 57% of total third quarter 2007 revenues compared with 50%
of revenues for the same period in fiscal 2006.
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The increase in revenues of medical devices is due to a $654,000 increase in
revenues of therapeutic medical devices and an increase of $295,000 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 primarily due
to a decrease in wet scrubber revenues of $385,000, a decrease in ultrasonic
laboratory products of $85,000 and a decrease in Labcaire revenues of $54,000.
The decrease in wet scrubber revenues is due to the Company being extremely
selective in the opportunities it pursues, which has proven to be a successful
strategy implemented earlier in the fiscal year with sales trends improving from
the second quarter.
The Company recorded a net loss for the fiscal 2007 third quarter of $529,000,
or $.08 loss per fully diluted share, compared with a net loss of $829,000, or
$.12 loss per fully diluted share, for the same period in fiscal 2006.
The Company reported a backlog of unfilled orders as of March 31, 2007 of $8.2
million. Medical device products backlog was $4.4 million and laboratory and
scientific products backlog was $3.8 million.
Fiscal 2007 Nine Months Results
Revenues for the nine months ended March 31, 2007 were $30.9 million, a 4.5%
increase when compared with revenues of $29.5 million for the same period in
fiscal 2006. Medical device products revenues increased 10% to $17.1 million and
laboratory and scientific products revenues decreased 1.7% to $13.8 million. The
Company recorded a net loss for the nine months ended March 31, 2007 of $1.0
million, or $.15 loss per fully diluted share, compared with a net loss of $2.6
million, or $.39 loss per fully diluted share, 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 making
good progress in our overall plan to grow our business and accomplish our five
goals for fiscal year 2007. For the third consecutive quarter our revenues have
increased from the respective prior year periods. Earnings and revenues in our
third quarter reflect, among other things, the fact that we only sold one SB500
for prostate cancer in the quarter. We have discussed the strategy of growing a
fee-per-use business to generate a form of recurring revenue as well as selling
SB500 capital equipment which have longer sales cycles and deliver only one-time
contributions to revenue.
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"To grow the recurring revenue business for longer-term, higher margin benefits,
we have entered into fee-per-use agreements in France and Portugal. We also are
working on a fee-per-use business in Germany. As we build the fee-per-use model,
we accept a lower price for the SB500 and receive typically a 60%-40%
participation, in our favor, to share fee-per-use procedure revenues. As we work
through this model, our revenues and earnings will be affected by lower revenues
and margin on each fee-per-use SB500 unit placed in the market in the early
years but we will be paid an annuity on our share of the procedure income in the
future. We have been using this model successfully in the U.K. and believe it is
in our Company's interest to find opportunities to open similar businesses
throughout the regions in which we market the SB500.
"A principal driver of our five pronged strategy for 2007 is the market's
increasing acceptance of ultrasonic medical devices. From our proprietary
innovations to specialized high intensity focused ultrasound ("HIFU") processes,
we are experiencing heightened interest from medical professionals, health care
administrators and patients around the world. At the annual conference of the
European Association of Urology in Germany, the SB500 was selected as a featured
minimally invasive HIFU technology, where over 200 urologists and related
medical professionals from throughout Europe attended, on-site or via
teleconference, a live procedure using our medical device to treat prostate
cancer.
"Some of Misonix's most promising medical devices involve less invasive
treatment of soft tissue, including treatment of the prostrate, kidney and
liver. This course of treatment enables substantial quality of life benefits and
reduces patient risk as well as ongoing healthcare costs. For example, the use
of our SB500 for prostate cancer may eliminate the need for radiation treatment
or a radical prostatectomy, which according to sources have resulted in patient
erectile dysfunction of between 20%-90% and incontinence of 20%-30%. Radiation
and traditional surgical options present significant shortcomings for patients,
which has opened the door for new technologies such as ultrasound.
"The SB500, for prostate cancer, is continuing to increase its acceptance by
both doctors and patients. Over the past twelve months the number of certified
doctors has gone from 9 to 25 with the total procedures increasing to 127 from
83, a 53% increase. Patients in 16 European countries are benefiting from our
superior HIFU treatment for prostate cancer.
"Another recent advancement for the SB500 that we announced during the third
quarter was the results from the first hemiablation procedures for prostate
cancer treatments performed in the United Kingdom. The results show that the
hemiablation procedures were successfully completed with positive ablation of
cancerous tissue in the effected area of the prostate gland, and patients showed
100% continence and 100% potency in follow-up examinations. Unlike many of the
traditional prostate cancer surgeries which treat or remove the entire gland,
HIFU hemiablation using the SB500 involves ablation of cancer in patients who
have had biopsy-proven prostate cancer limited to one lobe of the prostate.
"Current and future surgeons relying on the SB500 for the most effective
prostate cancer therapy will be able to access a newly created Global HIFU
Clinical Registry. The registry will provide important medical information
relating to completed patient procedures. As a repository for data
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from all SB500 users from centers around the world, more comprehensive
information will be available for research and analysis. This data will be used
for the production of reports for publication in medical journals and for use in
other mediums to promote the SB500 as the most efficacious and patient-friendly
prostate cancer treatment. At our annual SB500 user meeting in Europe, which was
attended by a record number of medical professionals, the registry was applauded
as essential for optimizing prostate cancer treatment.
"Among other noteworthy HIFU developments, we announced the results from our
first human kidney cancer treatments using the Sonatherm 600. Procedures were
successfully completed with positive ablation effect noted on cancer cells in
tumors within human kidneys. The ability of this device to laparoscopically
treat cancerous cells in the kidney effectively and safely has the potential to
eliminate the need for nephrectomies, which may jeopardize patients' health and
are costly. Treating the cancer cells while keeping the kidney in place and
without penetration of the organ is considered a breakthrough process.
"Success on other fronts was achieved as we commenced an international expansion
of our ultrasonic neuroaspirator product line into Eastern and Central Europe.
Demonstrating the depth of our portfolio of ultrasonic medical devices, the
neuroaspirator product line allows surgeons to precisely remove both soft and
hard tissue such as brain and spinal tumors. During the quarter we added three
new distributors in Europe.
"We have been ramping up the marketing of the SonicOne Ultrasonic Wound Care
System with Medline in the United States. Sales of this product have contributed
to our third quarter revenue, and we look forward to introducing the product
internationally.
"Last quarter we announced the receipt of our first orders for our Labcaire
Endoscopic Disinfectant Unit "ISIS", which is part of our laboratory and
scientific products segment. The ISIS seems to be exactly what the market is
seeking as orders have exceeded our expectations. With an average selling price
of approximately $100,000, we'll be recognizing the revenue for the 15 units
that have been ordered to date beginning in our fourth fiscal quarter. We remain
very excited about the opportunities for this product.
"We continue to see promising results from all of our primary business lines.
Misonix, with what management believes is the most impressive platform of
ultrasonic medical devices available today, clearly is taking center stage as an
innovator in the health care industry. We believe Misonix possesses the most
advanced HIFU platform of minimally invasive medical devices for the treatment
of cancer. Our HIFU technology, which many are considering the most important
trend for the treatment of prostate cancer in Europe as well as around the
world, is proving, we believe, to be the modality of choice. It is our intent to
capitalize on the impressive progress made in the third quarter toward bridging
the gap between an emerging trend and mass adoption for all of our therapeutic
medical devices."
Investor Conference Call and Web Cast
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As previously announced, the Company has scheduled a conference call and web
cast to discuss its third quarter fiscal year 2007 financial results today. The
conference call will be broadcast live on the Internet via the Investor
Relations section of the Company's Website at www.misonix.com. Alternatively,
participants may join the conference call by dialing 800-591-6944 (domestic) or
617-614-4910 (international) and entering the reservation code 85243514.
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 Website 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' 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' 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 Website 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 Nine Months Ended
March 31, March 31,
2007 2006 2007 2006
----------- ----------- ------------ ------------
Net sales $10,583,924 $10,169,778 $ 30,865,888 $ 29,549,736
Cost of goods sold 6,123,927 6,216,776 17,687,270 18,296,682
----------- ----------- ------------ ------------
Gross profit 4,459,997 3,953,002 13,178,618 11,253,054
Selling expenses 2,003,430 1,765,639 5,524,786 5,014,110
General and administrative expenses 2,614,237 2,502,626 7,321,668 7,528,168
Research and development expenses 735,518 975,307 2,383,903 2,739,043
----------- ----------- ------------ ------------
Total operating expenses 5,353,185 5,243,572 15,230,357 15,281,321
----------- ----------- ------------ ------------
Loss from operations (893,188) (1,290,570) (2,051,739) (4,028,267)
Total other income 81,267 144,143 356,342 458,334
----------- ----------- ------------ ------------
Loss before minority interest and
income taxes (811,921) (1,146,427) (1,695,397) (3,569,933)
Minority interest in net (loss) income of
consolidated subsidiaries (38,318) (6,465) (12,819) 12,659
----------- ----------- ------------ ------------
Loss before income taxes (773,603) (1,139,962) (1,682,578) (3,582,592)
Income tax benefit (244,567) (310,844) (634,680) (941,006)
----------- ----------- ------------ ------------
Net loss ($529,036) ($829,118) ($1,047,898) ($2,641,586)
=========== =========== ============ ============
Net loss per share-basic ($0.08) ($0.12) ($0.15) ($0.39)
=========== =========== ============ ============
Net loss per share-diluted ($0.08) ($0.12) ($0.15) ($0.39)
=========== =========== ============ ============
Weighted average common shares-basic 6,962,802 6,884,169 6,923,044 6,857,924
=========== =========== ============ ============
Weighted average common shares-diluted 6,962,802 6,884,169 6,923,044 6,857,924
=========== =========== ============ ============
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MISONIX, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
DERIVED FROM AUDITED
UNAUDITED FINANCIAL STATEMENTS
MARCH 31, 2007 JUNE 30, 2006
-------------- --------------------
ASSETS
Current assets:
Cash $ 866,998 $ 675,400
Accounts receivable, net of allowance
for doubtful accounts of $297,068 and
$256,309, respectively 8,026,369 6,530,598
Inventories, net 12,202,456 11,307,226
Income tax receivable 0 786,654
Deferred income taxes 1,346,654 1,419,949
Prepaid expenses and other current assets 1,318,341 1,070,903
----------- -----------
Total current assets 23,760,818 21,790,730
Property, plant and equipment, net 6,204,878 6,495,854
Deferred income taxes 1,859,431 1,039,824
Goodwill 4,718,689 4,673,713
Other assets 1,222,216 512,444
----------- -----------
Total assets $37,766,032 $34,512,565
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Revolving credit facilities and note payable $ 5,034,828 $ 1,572,042
Accounts payable 4,774,760 4,784,102
Accrued expenses and other current liabilities 3,325,190 2,963,762
Current maturities of long-term debt and capital lease obligations 341,207 367,823
Foreign income tax payable 78,635 0
----------- -----------
Total current liabilities 13,554,620 9,687,729
Long-term debt and capital lease obligations 1,104,613 1,145,279
Deferred income taxes 282,455 282,455
Deferred income 347,622 422,634
Deferred lease liability 395,822 378,031
----------- -----------
Total liabilities 15,685,132 11,916,128
Commitments and contingencies
Minority interest 330,906 341,631
Stockholders' equity:
Capital stock, $0.01 par - shares authorized 10,000,000; 7,079,169
and 6,978,169 issued and 7,001,369 and 6,900,369 outstanding, respectively 70,792 69,782
Additional paid-in capital 24,822,437 24,548,536
Accumulated deficit (3,206,169) (2,158,271)
Accumulated other comprehensive income 475,358 207,183
Treasury stock, 77,800 shares (412,424) (412,424)
----------- -----------
Total stockholders' equity 21,749,994 22,254,806
----------- -----------
Total liabilities and stockholders' equity $37,766,032 $34,512,565
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