FARMINGDALE, N.Y., Sept. 8 - Misonix, Inc. (Nasdaq: MSON), a developer of ultrasonic medical device technology for the treatment of cancer and other healthcare purposes, today reported financial results for the fourth quarter and fiscal year ended June 30, 2005. Highlights of fiscal year 2005 and other company initiatives to date include:
* Management outlines strategic direction that focuses on its Medical
Devices business and hires key executive; Company seeking alternatives
for its Laboratory and Scientific divisions
* Medical device product revenues grew 16% for the 12 months ended June
30, 2005 as compared with the same period in fiscal 2004
* Revenues for the 12 months of fiscal 2005 increased 18% over the same
period in fiscal 2004
* The Company's Sonora Medical unit introduced a unique and advanced
Acoustic Measurement System for measuring and analyzing the various
acoustic properties of diagnostic ultrasound equipment and related
transducers
* Received FDA 510(k) clearance to market Ultrasonic Wound Debridement
System in the U.S.
* Received a Canadian Device License for its Ultrasonic Wound Debridement
System
* Continued clinical work for Ultrasonic Osteotome device on animal
laminectomies
Fiscal 2005 Fourth Quarter Results
Revenues for the three months ended June 30, 2005 were $13.9 million, a 29% increase compared with revenues of $10.8 million for the same period in fiscal 2004. Medical device product revenues increased 34% to $7.5 million and laboratory and scientific product revenues increased 22% to $6.4 million. The increase in medical device product revenues was attributable to a 39% increase in therapeutic medical device product revenues, including those products treating cancer, to $4.5 million, and a 30% increase in diagnostic medical device product revenues to $3.0 million. The increase in laboratory and scientific product revenues was mainly attributable to a 15% increase in ultrasonic laboratory product revenues, a 20% increase in ductless fume enclosure and related product revenues and a 230% increase in sales of wet scrubber products.
Income from operations for the three months ended June 30, 2005 was $552,000, excluding the litigation expenses of $419,000, a 42% increase as compared with income from operations for the three months ended June 30, 2004 of $389,000. This was a result of an increase in gross margin, which was partially offset by a 31% increase in research and development expenses, a 23% increase in sales and marketing expenses, and a 26% increase in general and administrative expenses. The increase in research and development expenses is a result of increased development efforts for liver and kidney cancer treatments using High Intensity Focused Ultrasound (HIFU) and the digital upgrade project on all of our ultrasonic platform technology. The increase in sales and marketing expenses were a result of continued investment in the European business sales and marketing efforts for the SB500 prostate cancer product. The increase in general and administrative expenses was primarily the result of increased audit and insurance costs, administrative support for Sonora Medical and Labcaire, which are delivering significant order growth, and the legal fees surrounding the judgment against Sonora.
The Company recorded net income for the three months ended June 30, 2005 of $338,000, or $.05 per fully diluted share, as compared with $548,000, or $.08 per fully diluted share, for the same period in fiscal 2004. The results for the three months ended June 30, 2005 included a charge of $419,000, or approximately $.06 per fully diluted share, for the judgment against Sonora Medical Systems for present and future royalties owed on the recoating process of transesophageal probes.
The Company's backlog of unfilled orders as of June 30, 2005 was $7.9 million. Medical device product backlog was $4.8 million and laboratory and scientific product backlog was $3.1 million.
Fiscal 2005 Twelve Months Results
Revenues for the twelve months ended June 30, 2005 were $45.9 million, an 18% increase when compared with revenues of $39.1 million for the same period in fiscal 2004. Medical device product revenues increased 16% to $24.8 million and laboratory and scientific product revenues increased 19% to $21.1 million. The Company recorded net income for the twelve months ended June 30, 2005 of $936,000, or $.13 per fully diluted share, compared with net income of $1.7 million, or $.25 per fully diluted share. The results for the twelve months ended June 30, 2005 included a charge of $419,000 for the judgment against Sonora Medical Systems for present and future royalties owed on the recoating prices of transesophageal probes.
Commenting on Misonix's financial and operating results, Michael A. McManus, Jr., President and Chief Executive Officer, said, "We are pleased to see continued revenue growth across all of our operations. Our medical device product revenues increased 16%. The sale of Focus Surgery's Sonablate 500, used primarily to treat prostate cancer, have increased together with growing indications of interest from the medical community. We have previously discussed our successful conferences with prominent European doctors and we will continue with these efforts. We are extremely pleased with the participation of many prominent prostate and urology specialists which continues to support our belief in the importance of our technology. Our clinicals with our product utilizing HIFU for kidney cancer will continue in Europe while we work on our submission for 510(k) approval in the U.S. We continue to believe in the Hearing Innovation technology and will start some early stage clinicals this year. Studies in Virginia and Japan appear to confirm the benefits of the HiSonic for the profoundly deaf."
Mr. McManus continued, "We are very pleased to have received clearance based upon our 510(k) application with the U.S. Food and Drug Administration for the Company's product for wound debridement. Wound debridement is a necessary course of therapy to remove necrotic tissue or foreign material from a wound by a granulation process to expose healthy tissue. Unlike other forms of debridement, physicians can easily distinguish tissue types and stop debridement when the viable tissue bed is reached. While details will be announced upon completion, we are working toward finalizing an agreement with a distribution partner for our Ultrasonic Wound Debridement System, which is intended to target a market estimated to be in excess of $2 billion annually.
"Our Ultrasonic Osteotome device has had encouraging results based upon the animal laminectomies at the University of Pittsburgh Medical Center. We look forward to completing the development of this product and anticipate its commercial launch in 2006.
"As you know, we have announced our strategy to look for strategic alternatives for our Laboratory and Scientific businesses. This process is ongoing and we anticipate having the process completed in the first half of calendar 2006. We believe the decision to become a more focused medical device company will be a direction that through internal and external growth will enhance shareholders value."
Conference Call and Web Cast Information
As previously announced, the Company has scheduled a conference call and web cast to discuss its fourth quarter and fiscal year 2005 financial results today, September 8, 2005, 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 http://www.misonix.com. Alternatively, participants may join the conference call by dialing 866-700-6067 (domestic) or 617-213-8834 (international) and entering the reservation code 69267955. 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 Web site following the conclusion of the live broadcasts. There is no charge for participants to access the live broadcasts or replays.
Misonix develops, manufactures, and markets medical, scientific, and industrial ultrasonic and air pollution systems. The Company has been at the forefront of ultrasonic technology for over 50 years. 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 ("HIFU") technology to destroy deep-seated cancerous tissues without effecting 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 http://www.misonix.com.
Forward Looking Statements for Misonix, Inc.: 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.
MISONIX, INC.
Consolidated Statements of Operations
Audited
Three Months Ended Twelve Months Ended
June 30, June 30,
2005 2004 2005 2004
Net sales $13,889,699 $10,796,810 $45,906,584 $39,059,066
Cost of goods sold 8,258,899 6,378,309 26,869,236 22,542,463
Gross profit 5,630,800 4,418,501 19,037,348 16,516,603
Selling expenses 1,703,165 1,379,694 6,110,716 4,662,006
General and administrative
expenses 2,429,468 1,930,290 8,462,228 7,633,930
Research and development
expenses 945,993 719,874 3,486,063 2,437,752
Litigation expenses 419,000 - 419,000 -
Total operating expenses 5,497,626 4,029,858 18,478,007 14,733,688
Income from operations 133,174 388,643 559,341 1,782,915
Total other income 127,381 296,947 682,233 1,057,191
Income before minority
interest and income taxes 260,555 685,590 1,241,574 2,840,106
Minority interest in net
(loss) income of
consolidated subsidiaries (43,200) 16,564 13,130 52,505
Income before income taxes 303,755 669,026 1,228,444 2,787,601
Income tax (benefit) expense (33,988) 121,158 292,739 1,068,656
Net income $337,743 $547,868 $935,705 $1,718,945
Net income per share-basic $0.05 $0.08 $0.14 $0.26
Net income per share-diluted $0.05 $0.08 $0.13 $0.25
Weighted average common
shares-basic 6,824,952 6,702,864 6,788,341 6,667,615
Weighted average common
shares-diluted 6,989,285 7,166,757 6,983,699 6,849,845
MISONIX, INC.
Consolidated Balance Sheets
Audited
June 30, June 30,
2005 2004
Assets
Current Assets:
Cash and cash equivalents $2,484,534 $4,839,866
Accounts receivable, net of allowance
for doubtful accounts of $405,998 and
$457,016, respectively 11,757,827 7,601,693
Inventories 9,780,501 9,594,487
Deferred income taxes 964,426 645,381
Income tax receivable 224,734 -
Prepaid expenses and other current assets 1,336,104 1,114,546
Total current assets 26,548,126 23,795,973
Property, plant and equipment, net 6,409,835 5,243,005
Deferred income taxes 244,769 412,201
Goodwill 4,473,713 4,473,713
Other assets 409,493 316,220
Total assets $38,085,936 $34,241,112
Liabilities and stockholders' equity
Current liabilities:
Revolving credit facilities 1,883,193 1,373,681
Accounts payable 5,482,312 4,507,476
Accrued expenses and other current
liabilities 2,901,247 1,857,097
Income tax payable - 107,282
Current maturities of long-term debt and
capital lease obligations 376,148 302,932
Total current liabilities 10,642,900 8,148,468
Long-term debt and capital lease obligations 1,240,324 1,264,480
Deferred income taxes 270,884
Deferred income 508,582 769,033
Minority interest 329,086 315,955
Stockholders' equity:
Capital stock, $0.01 par - shares authorized
10,000,000; 6,902,752 and 6,816,253 issued
and 6,824,952 and 6,738,453 outstanding,
respectively 69,028 68,163
Additional paid-in capital 23,619,283 23,116,602
Retained earnings 1,601,164 665,461
Treasury stock, 77,800 shares (412,424) (412,424)
Accumulated other comprehensive income 217,109 305,374
Total stockholders' equity 25,094,160 23,743,176
Total liabilities and stockholders' equity $38,085,936 $34,241,112
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
