[GRAPHIC OMITED]
Company Contact Investor Relations Contacts
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Michael A. McManus, Jr. Lippert/Heilshorn & Associates, Inc.
President and CEO Kim Sutton Golodetz
Misonix, Inc. (kgolodetz@lhai.com) (212) 838-3777
(631) 694-9555 Bruce Voss
www.misonix.com (bvoss@lhai.com) (310) 691-7100
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www.lhai.com
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MISONIX REPORTS RECORD REVENUES AND INCREASED EARNINGS FOR FISCAL YEAR ENDED
JUNE 30, 2003
FARMINGDALE, NY, AUGUST 26, 2003 - MISONIX, INC. (NASDAQ:MSON) today reported
fiscal results for the three and twelve months ended June 30, 2003. Highlights
for the fiscal year ended June 30, 2003 are as follows:
- - Revenues for the fiscal year ended June 30, 2003 increased 18% to a record
$34.9 million from $29.6 million in fiscal 2002.
- - Net income for the fiscal year ended June 30, 2003 increased 448% to
$968,000, or $0.15 per fully diluted share from $177,000, or $0.03 per
fully diluted share.
- - Operating income for the fiscal year ended June 30, 2003 increased 219%
from $496,000 in the prior fiscal year to $1.6 million.
- - Gross Margin rose to 41.6% as a percentage of sales in fiscal 2003, from
39.4% in the prior fiscal year.
- - Focus Surgery's SB-500 has successfully treated over 200 patients in Japan
for prostate cancer and 106 in Europe.
- - Misonix and Focus Surgery continue to ship the SB-500 product to Europe and
Asia for the treatment of enlarged prostate and prostate cancer.
- - Misonix and Hearing Innovations continue to explore opportunities to treat
tinnitus and profound deafness.
Revenues for the fiscal 2003 fourth quarter ended June 30, 2003 were $10.9
million, a 38% increase over $7.9 million for the same period in the prior
fiscal year. The Company recorded net income for the fourth quarter of fiscal
year ended June 30, 2003
of $559,000, or $0.08 per fully diluted share, compared to net income of
$170,000, or $0.03 per fully diluted share, for the same period in fiscal 2002.
Medical device revenues increased 61% to $5.7 million and industrial product
revenues increased 20% to $5.2 million. The increase in medical device revenues
was attributed to a 41% increase in diagnostic medical device revenues to $2.8
million and an 87% increase in therapeutic medical device revenues to $2.9
million. The industrial product revenue increase was mainly attributed to a 25%
increase from Labcaire's endoscopic cleaning and disinfectant units, a 32%
increase in industrial ultrasonic laboratory equipment, and a 29% increase in
wet scrubber sales.
Gross profit was favorably impacted during the fourth quarter of fiscal 2003 by
a combination of volume efficiencies derived from increased sales as compared to
the same period in the prior year and cost reductions implemented during the
2003 fiscal year. The Company continued to invest during the fourth quarter of
fiscal 2003 in Hearing Innovations, Inc. in the form of secured notes in the
aggregate amount of $66,000. The notes have been fully reserved for and have
been accounted for consistently with the prior fiscal period.
Revenues for the twelve months ended June 30, 2003 were $34.9 million, an 18%
increase when compared to $29.6 million for the same period in the prior fiscal
year. The Company recorded net income of $968,000, or $0.15 per fully diluted
share, compared to $177,000, or $.03 diluted earnings per share, for the same
period in fiscal 2002. Medical device revenues increased 50% to $17.5 million,
partially offset by a 3% reduction in industrial product sales to $17.4 million.
Gross profit was favorably impacted during the twelve months ended June 30,
2003, as the Company was able to take advantage of volume efficiencies and the
results of cost reduction efforts, which
have been implemented during the entire fiscal year 2003. The Company continued
to invest in Hearing Innovations for the twelve months ended June 30, 2003 in
the form of secured notes in the aggregate amount of $312,000. The notes have
been fully reserved for and have been accounted for consistently with the prior
fiscal period.
At June 30, 2003, the backlog of unfilled orders was $5.6 million, compared with
$5.1 million for the same period in fiscal 2002. Medical device products backlog
was $3.0 million, a 7.4% increase over the prior year predominately due to
increased neuroaspirator orders and industrial product backlog increased 13.4%
to $2.6 million over the prior year predominately due to increased orders for
the Labcaire Guardian product.
Michael A. McManus, Jr., President and Chief Executive Office commented, "We are
pleased by the growth in our medical businesses and the overall growth in
revenues and income. As you know, we realized record revenues. We believe
Misonix has turned the corner to a continued growth in revenues and increase in
earnings. Shareholders who have been with us for a number of years will remember
that we have worked through a number of adverse events: the loss of a $5.0
million product line (Lysonix); the substantial drop in revenues from our
laproscopic product in part as a result of corporate reorganization; the
Appellate Court decision against us in the Mentor matter; and the write down of
our equity investments. There are no excuses for these issues or our resulting
performance. However, we believe that it is important to note that in the face
of these adverse events, we were still able to expand our offerings from one
medical product to nine medical products and are successfully growing this
business, as you should expect. This expanded product line, and the sales they
are generating, leaves us comfortable with our expectations for continued growth
in both revenues and income."
Mr. McManus continued, "We are disappointed with the progress we have made to
date in Hearing Innovations and Focus Surgery. The regulatory issues and time to
market are more than we anticipated. We continue to see Focus Surgery sell the
SB-500 outside the U.S. The results on men with prostate cancer continue to be
impressive. The number of men treated successfully in Japan exceeds more than
180 patients. We have completed the first half of Phase I clinical trials in the
U.S. on men who had not previously been treated for cancer. We have treated four
patients who are recurrent cancer patients. At the same time, Misonix has begun
to develop products for kidney and liver using high intensity ultrasound (HIFU)
under our license agreements with Focus Surgery. Hearing Innovations continues
to develop patient studies on both the HiSonic and the TRD for tinnitus. Sales
have been slow in our test market and we are working on resolving any issues. We
will be discussing our results on both products with strategic partners. These
meetings are a continuation of earlier meetings with these potential partners."
"We continue to believe that both of these investments will deliver future
incremental income. Both will require more money and time. We have renewed our
efforts to assist Hearing Innovations and Focus Surgery in raising more money
from strategic partners and investors."
Mr. McManus continued, "We are pleased with the performance of Sonora and
Fibra-Sonics, both fairly recent acquisitions. Sonora revenues have more than
tripled and Fibra Sonics revenues have more than doubled since we acquired them.
Our continued investment in people and research has also resulted in a two-fold
increase in Labcaire revenues. However, despite a pickup in Labcaire revenues,
the other products in our
industrial business segment have been affected by the weakness in the overall
economy and the resulting slow down in purchasing. We continue to believe these
businesses will improve in fiscal 2004."
"We will continue to grow your company through both internal and external
development. Our goal for fiscal 2004 is to increase revenue by 7% to 10% over
fiscal 2003 results and annual earning increase to approximately $0.20 to $0.22
per diluted share. We will also look at strategic transactions and partnerships
as ways to enhance shareholder value," Mr. McManus concluded.
As previously announced, the Company has scheduled a conference call to discuss
this announcement beginning at 4:30 p.m., Eastern Time today. To participate in
the call, a few minutes prior to the start time, please dial (888) 803-7638 in
the U.S. or (706) 634-1218 for international callers. Those unable to
participate are invited to listen to a recording of the call and question and
answer session immediately following the conclusion of the call and the two days
following until August 28, 2003 at 11:59 p.m. by dialing (800) 642-1687 in the
U.S. or (706) 645-9291 for international callers, and entering reservation code
2454394. Alternatively, individuals may listen to the call by visiting the
investor relations section of the Company's website at www.misonix.com. To
listen to the live call, please go to the website 15 minutes prior to its start
to register, download, and install the necessary audio software. A recording of
the call will be available for 14 days on the site beginning on August 26, 2003.
Misonix develops, manufactures, and/or markets medical, scientific and
industrial ultrasonic and air pollution control systems and maintains minority
equity positions in
both Focus Surgery and Hearing Innovations as its exclusive manufacturer of the
Sonoblate 500, HiSonic and HiSonic TRD devices.
Forward Looking Statements: Statements in this news release looking forward in
time are made pursuant to the Safe Harbor Provisions of the Private Securities
Litigation Reform Act of 1995. Investors are cautioned that forward-looking
statements involve risks and uncertainties, including 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, and
regulatory risks including approval of pending and/or contemplated 510K filings.
(Tables to follow)
MISONIX, INC.
CONSOLIDATED BALANCE SHEETS
JUNE 30, 2003 JUNE 30, 2002
Audited Audited
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ASSETS
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Current Assets:
Cash and cash equivalents $ 2,279,869 $ 1,065,465
Accounts receivable, net of allowance
for doubtful accounts of $644,157 and
$223,413, respectively 7,844,399 6,656,932
Inventories 8,979,472 7,170,844
Prepaid income taxes 0 1,391,978
Deferred income taxes 477,580 388,027
Prepaid expenses and other current assets 983,523 715,367
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Total current assets 20,564,843 17,388,613
Property, plant and equipment, net 3,574,207 3,151,909
Deferred income taxes 862,690 1,757,937
Goodwill 4,473,713 4,241,319
Other assets 319,136 424,674
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Total assets $ 29,794,589 $ 26,964,452
================================
LIABILITIES AND STOCKHOLDERS' EQUITY
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Current liabilities:
Revolving credit facilities 704,669 730,092
Accounts payable 3,563,208 3,072,234
Accrued expenses and other current liabilities 2,002,154 1,304,824
Income tax payable 47,453 0
Litigation settlement liabilities 0 174,332
Current maturities of long-term debt and capital
lease obligations 279,554 252,850
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Total current liabilities 6,597,038 5,534,332
Long-term debt and capital lease obligations 1,235,362 1,050,254
Deferred income 356,076 451,073
Minority interest 263,450 239,965
Stockholders' equity:
Capital stock, $0.01 par - shares authorized 10,000,000; 6,733,665 and
6,180,165 issued and 6,655,865 and 6,105,865 outstanding, respectively 67,337 61,802
Additional paid-in capital 22,712,511 22,313,991
Retained deficit (1,053,484) (2,021,059)
Treasury stock, 77,800 and 74,300 shares, respectively (412,424) (401,974)
Accumulated other comprehensive income (loss) 28,723 (263,932)
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Total stockholders' equity 21,342,663 19,688,828
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Total liabilities and stockholders' equity $ 29,794,589 $ 26,964,452
=============== ===============
MISONIX, INC.
Consolidated Statements of Operations
Audited
Three Months Ended Twelve Months Ended
June 30, June 30,
2003 2002 2003 2002
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Net sales $10,926,239 $ 7,893,175 $34,858,751 $29,590,453
Cost of goods sold 6,623,440 5,793,071 20,354,558 17,931,874
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Gross profit 4,302,799 2,100,104 14,504,193 11,658,579
Selling expenses 1,008,852 1,280,398 4,132,077 4,502,173
General and administrative expenses 2,056,388 1,912,755 7,023,088 6,469,704
Research and development expenses 509,546 492,396 2,109,312 2,103,701
Litigation (recovery) settlement expenses (143,329) (1,912,959) (344,435) (1,912,959)
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Total operating expenses 3,431,457 1,772,590 12,920,042 11,162,619
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Income from operations 871,342 327,514 1,584,151 495,960
Total other income 218,927 36,402 292,701 47,317
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Income before minority interest and
income taxes 1,090,269 363,916 1,876,852 543,277
Minority interest in the net (income) loss of
consolidated subsidiaries (27,693) (8,066) (23,485) 17,565
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Income before income taxes 1,062,576 355,850 1,853,367 560,842
Income tax expense 503,634 185,982 885,792 384,181
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Net income $ 558,942 $ 169,868 $ 967,575 $ 176,661
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Net income per share-basic $ 0.08 0.03 $ 0.15 $ 0.03
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Net income per share-diluted $ 0.08 0.03 $ 0.15 $ 0.03
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Weighted average common shares-basic 6,652,198 6,105,365 6,478,138 6,077,546
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Weighted average common shares-diluted 6,699,147 6,664,902 6,623,743 6,648,761
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