EXHIBIT 99.1
PRESS RELEASE
ESCALON(R) MEDICAL CORP. REPORTS RECORD REVENUES
AND NET INCOME FOR FISCAL 2003
Fiscal 2003 Net Income Rose 75% on 11% Increase in Revenues
WAYNE, PA - SEPTEMBER 26, 2003 -- Escalon Medical Corp. (Nasdaq Small Cap: ESMC)
today announced results for its fiscal fourth quarter and year ended June 30,
2003. For fiscal 2003, Escalon Medical reported a 74.9% gain in net income to
$1,712,377, or $0.479 per diluted share, from net income of $978,857, or $0.291
per diluted share, in fiscal 2002. Net revenue for fiscal 2003 was $13,366,030
compared to $12,073,932 in the prior year period, a 10.7% gain. Product revenue
increased by 8.7% during the year to $11,191,493.
For the fourth quarter of fiscal 2003, Escalon Medical reported net income of
$650,414, or $0.170 per diluted share, a 208% gain over net income of $211,140,
or $0.063 per diluted share, in the fourth quarter of fiscal 2002. Net revenues
for the fourth quarter of fiscal 2003 increased 21.0% to $3,703,622 compared to
$3,060,408 in the fourth quarter of fiscal 2002. Product revenue increased 22.6%
to $3,152,192 in the quarter.
For the fourth quarter, revenue from Sonomed increased 32.2% to $1,855,000
compared to $1,403,000 in the prior year period. Strong gains in the domestic
market more than offset declines in Latin America, Africa and Asia. Revenue in
the Vascular business increased 1.6% to $730,000 in the fourth quarter of fiscal
2003 compared to $719,000 in the year ago period. Product revenue in the
Company's Medical / Trek business increased 39.1% to $445,000 in the quarter
from $320,000 in the fourth quarter of fiscal 2002 driven by gains in OEM
business. Revenue in the EMI business unit was $121,000 for the quarter compared
to $131,000 in the fourth quarter of 2002. Royalty revenue was $552,000 in the
quarter compared to $488,000 in the year ago period. Additional royalty revenue,
which is largely based upon future sales of Silicone Oil by Bausch & Lomb, is
expected to continue through fiscal 2005. In addition to Silicone Oil, the
Company also receives royalty payments related to the licensing of its
intellectual laser properties. The Company's two royalty revenue streams will
fluctuate depending on the demand of the underlying products.
The gross margin as a percent of product revenue was 56.9% in the current
quarter compared to 56.4% in the year ago period. Marketing, general and
administrative expenses declined to 33.7% of net revenues in
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Escalon Medical Corp.
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the fourth quarter from 44.0% of sales in the year ago period, despite increases
in selling expenses. Research and development spending increased to $201,996
from $155,017 in the year ago quarter. For fiscal 2003, the gross margin as a
percent of product revenue was 56.3% compared to 54.9% in 2002. Marketing,
general and administrative expenses declined to 37.7% of net revenues in 2003
compared to 42.2% in 2002. Research and development spending increased to
$780,333 compared to $554,760 in 2002.
"We ended fiscal 2003 on a high note, with another record in terms of net
revenues and net income and full year EBITDA of over $2.8 million. We have been
particularly pleased with the performance in our Sonomed, Vascular and Trek
businesses. Importantly, our strong financial results have enabled us to
continue to pay down debt and reinvest in our technologies, which should
position us well for the future," commented Richard J. DePiano, Chairman and
Chief Executive Officer.
Mr. DePiano continued, "At Sonomed, our domestic business continued to exhibit
strength, with solid demand for our pachymeter, a device becoming popular with
optometrists for use in glaucoma screening. Internationally, while economies
remain soft, we see opportunities to expand further into Latin America, Africa
and Asia. In addition, recent management changes in Europe should help the
business there gain traction going forward. We continue to invest in R&D at
Sonomed and our newly introduced B-Scan, the E-Z Scan(TM), which has been well
received in Europe and the U.S., began limited shipments recently."
"Our Vascular segment performed solidly in the quarter with continued growth in
our PD Access(TM) and Smart Needle(TM) business. We are also in the process of
making enhancements to our Doppler Guided IV Needle as a result of user feedback
from our test markets. We continue to add to our sales team and will be ready to
take advantage of the opportunity we see in the oncology and anesthesia markets
when the product is rolled out more widely."
Mr. DePiano concluded, "Management's focus on generating cash has led to
significant improvements to our balance sheet in fiscal 2003. Total debt
declined by nearly $2.0 million and shareholders' equity increased by over $1.7
million to $8.9 million at June 30, 2003. We also continue to make progress
operationally in our niche markets and look forward to taking advantage of our
targeted growth opportunities in the year ahead."
Founded in 1987, Escalon develops, markets and distributes ophthalmic
diagnostic, surgical and pharmaceutical products as well as vascular access
devices. The Company seeks to utilize strategic partnerships to help finance its
development programs and is also seeking acquisitions to further diversify its
product line to achieve critical mass in sales and take better advantage of the
Company's distribution capabilities. Escalon has headquarters in Wayne,
Pennsylvania and manufacturing operations in Long Island, New York and New
Berlin, Wisconsin.
Note: 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. They 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 improve upon the operations of the Company's business units,
generate cash and identify, finance and enter into business relationships and
acquisitions, 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, third party
reimbursement and physician training as well as 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, and its other filings with the
Securities and Exchange Commission, all of which are available from the
Commission as well as other sources.
--FINANCIAL TABLES FOLLOW--
Escalon Medical Corp.
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ESCALON MEDICAL CORP. and SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
THREE MONTHS ENDED YEAR ENDED
JUNE 30, JUNE 30,
2003 2002 2003 2002
----------- ----------- ------------ ------------
Product revenue $ 3,152,192 $ 2,572,035 $ 11,191,493 $ 10,293,051
Other revenue 551,430 488,373 2,174,537 1,780,881
----------- ----------- ------------ ------------
Revenues, net 3,703,622 3,060,408 13,366,030 12,073,932
Costs and expenses:
Cost of goods sold 1,359,234 1,120,875 4,895,574 4,640,325
Research and development 201,996 155,017 780,333 554,760
Marketing, general and administrative 1,247,704 1,345,997 5,033,852 5,096,994
Write-down of Povidone Iodine license and
distribution rights -- -- 195,950 --
----------- ----------- ------------ ------------
Total costs and expenses 2,808,934 2,621,889 10,905,709 10,292,079
----------- ----------- ------------ ------------
Income from operations 894,688 438,519 2,460,321 1,781,853
Other income and (expenses):
Loss from termination of joint venture -- (23,434) -- (23,434)
Equity in income (loss) of unconsolidated
joint venture -- -- -- 8,848
Interest income 726 542 2,813 2,347
Interest expense (132,588) (204,487) (638,345) (790,757)
----------- ----------- ------------ ------------
Total other income and (expense) (131,862) (227,379) (635,532) (802,996)
----------- ----------- ------------ ------------
Income before income taxes 762,826 211,140 1,824,789 978,857
Income taxes 112,412 -- 112,412 --
----------- ----------- ------------ ------------
Net income $ 650,414 $ 211,140 $ 1,712,377 $ 978,857
=========== =========== ============ ============
Basic net income per share $ 0.193 $ 0.063 $ 0.509 $ 0.293
=========== =========== ============ ============
Diluted net income per share $ 0.170 $ 0.063 $ 0.479 $ 0.291
=========== =========== ============ ============
Weighted average shares - basic 3,365,359 3,345,851 3,365,359 3,345,851
Weighted average shares - diluted 3,573,192 3,360,492 3,573,192 3,360,492
SELECTED BALANCE SHEET DATA: June 30, June 30,
2003 2002
----------- -----------
(audited) (audited)
Cash, cash equivalents and investments $ 298,390 $ 220,826
Total current assets 4,758,660 4,287,590
Total assets 16,890,231 16,912,441
Current liabilities 3,870,322 4,527,697
Long-term debt 4,080,461 5,191,393
Total shareholders' equity 8,939,448 7,193,351
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