Business Editors & Health/Medical Writers
FARMINGDALE, N.Y.--(BW HealthWire)--May 14, 2001--Misonix
Incorporated (Nasdaq:MSON) today reported financial results for the
three and nine months ended March 31, 2001. Highlights of the fiscal
2001 third quarter and recent weeks include:
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| -- | Enrolling 66 patients, which is the minimum number that must
be treated successfully to support a premarket approval (PMA)
application in the Focus Surgery clinical study through high
intensity focused ultrasound (HIFU) using the Sonoblate(TM)
for treating Benign Prostatic Hyperplasia (BPH);
|
| -- | Acquiring rights to the HIFU technology for the treatment of
kidney cancer;
|
| -- | Receiving 510(k) approval from the FDA for the
SONOReal(TM) three-dimensional ultrasonic probe; and
|
| -- | Completing the acquisition of FibraSonics, a manufacturer of
ultrasonic medical products in the areas of urology, neurology
and cosmetic surgery.
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Anticipated near-term milestones for the Company include:
-- Filing a PMA application with the FDA for treating BPH with
the Sonoblate(TM);
-- Filing a 510(k) application with the FDA for Hearing
Innovation's tinnitus device;
-- Starting Phase I studies using the Sonoblate(TM) for the
treatment of prostate cancer;
-- Completing a distribution agreement for the Company's
Ultrasonic Bone Cutter along with completing clinical studies
for spinal applications utilizing the Ultrasonic Bone Cutter.
Financial Results
Revenues for the three months ended March 31, 2001, increased 9%
to $7.4 million from $6.8 million for the comparable prior-year
period. Higher revenues largely were due to an increase in sales of
medical products from Sonora and FibraSonics and increased Industrial
Product sales from Mystaire wet scrubbers, partially offset by lower
Industrial sales from Sonicators and Fume Enclosures.
As a result of an award to Mentor Corporation on an appeal in a
patent infringement lawsuit related to our soft tissue aspirator
product in the amount of $5.4 million, the Company incurred a net loss
for the fiscal 2001 third quarter of $2.9 million, or $0.48 per share,
compared with net income of $569,000, or $0.09 per diluted share, for
the same period in fiscal 2000. Excluding the effect of the litigation
settlement expenses of $5.4 million and related tax benefit of $2.1
million, net income would have been $432,000, or $0.07 per share.
Third quarter results also include approximately $175,000 of
non-recurring fixed expenses related to FibraSonics facility move from
Chicago to New York which is expected to be completed by mid-May 2001.
Revenues for the nine months ended March 31, 2001, were $21.8
million, up 6% from $20.6 million for the same period the previous
year. Net income for the first nine months of 2001 was $177,000, or
$0.03 per diluted share. Excluding the effects of the litigation
settlement expenses of $5.4 million and related tax benefit of $2.1
million, and the first quarter income tax benefit of $1.6 million,
nine-month net income was $1.9 million or $0.29 per diluted share,
compared with net income of $1.9 million, or $0.29 per share, for the
first nine months of fiscal 2000.
The backlog of unfilled orders as of March 31, 2001, was $10.6
million, compared with $9.2 million as of March 31, 2000.
"While the one-time charge from the Appellate Court decision
impacted fiscal third quarter results, we intend to resume stated
earnings growth of 10-20% starting in our fourth fiscal quarter ending
June 30, 2001. We have made tremendous progress in moving our medical
devices along the regulatory and commercial pathways this past
quarter, and are a much stronger company than two years ago,"
commented Michael McManus, chief executive officer. "Although
financial results reflect a softening in demand in the industrial
products sector largely driven by a slowing economy, this business
continues to generate cash and we are confident in our ability to grow
this business. The results were also negatively impacted by the lack
of sales from our soft tissue aspirator product."
HIFU Technology Update
High Intensity Focused Ultrasound (HIFU) is being used in a number
of potential medical applications. The Company recently announced that
Focus Surgery, its 20%-owned development partner, had treated 66
patients for BPH in a pivotal Phase III study of the Sonoblate(TM).
The FDA protocol calls for treating 66 patients successfully out of a
total 80-patient population. The Company plans to file a PMA once the
statistical review has been completed. Thomas A. Gardner, M.D., one of
the Principal Investigators, will present interim data from this
multi-center study at the American Urology Association (AUA) meeting
in Anaheim, Calif. on June 6, 2001.
The Company expects to begin Phase I studies of the Sonoblate(TM)
for the treatment of prostate cancer by July 2001. Dr. Uchida will
provide an update on the continuing Japanese prostate cancer studies
at the AUA conference.
Misonix recently acquired rights to the use of HIFU in the
laparoscopic treatment of kidney tissue. The Company is working with
Focus Surgery to develop plans to file an Investigational Device
Exemption (IDE) with the FDA to begin its kidney studies.
Sonora Medical
"During the quarter, our Sonora Medical subsidiary received 510(k)
approval for the SONOReal(TM), a plug-and-play device that can turn
virtually any diagnostic ultrasound unit into an advanced 3-D imaging
system," continued McManus. "We also are very excited about the First
Call 2000 market introduction. Revenues for this product have started
in the third fiscal quarter 2001, and we have high expectations for
this probe tester in the marketplace."
FibraSonics
The Company completed its acquisition of FibraSonics in February,
and the manufacturing of these products are currently moving to our
Misonix Farmingdale, N.Y. facility from Chicago, Ill. The Company
expects integration to be completed during its fourth fiscal quarter
of 2001. FibraSonics is a manufacturer of ultrasonic medical products
in the areas of urology, neurology and cosmetic surgery.
Hearing Innovations
Hearing Innovations expects to file a 510(k) application with the
FDA for a device to treat tinnitus, or "ringing in the ears."
Additional information was requested and we expect to submit our
application to the FDA in the fourth fiscal quarter of 2001. In
addition, the HiSonic(R), a product for the profoundly deaf, is a
minimally invasive alternative to a cochlear implant and has been
approved. The Company is in discussions with potential distribution
partners for this product. In addition to manufacturing rights to its
products, Misonix holds a 7% equity ownership in Hearing Innovations,
with options and rights to purchase additional equity.
Industrial Products
As of May 7, Bernie Berger has become the Vice President of
Industrial Products. He brings six years of experience as a worldwide
head of sales in the area of ultrasonic industrial and medical
products.
Misonix recently developed and introduced a new sonicator product,
which incorporates new features such as auto tuning, temperature
control and monitoring, and is fully microprocessor controlled.
The introduction of our ductless bench top fuming chamber is a
fully automated latent fingerprint development chamber with complete
protection from hazardous cyanoacrylate fumes with the complete
portability of our ductless system.
Misonix Inc. designs, manufactures and markets ultrasonic medical
devices. The Company also develops and markets scientific and
industrial ultrasonic and air pollution systems.
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 510(k) filings.
MISONIX, INC.
CONSOLIDATED BALANCE SHEETS
March 31, June 30,
2001 2000
(UNAUDITED)
Assets
Current assets:
Cash and cash equivalents $ 3,106,695 $ 7,069,502
Investments held to maturity 1,987,854 3,021,268
Accounts receivable, net of
allowance for doubtful
accounts of $195,024 and
$200,429, respectively 7,504,445 7,277,242
Notes Receivable 203,651 111,867
Inventories 8,722,983 4,273,223
Deferred income taxes 249,298 167,238
Prepaid expenses and
other current assets 2,416,801 682,606
--------------- -------------
Total current assets 24,191,727 22,602,946
Property, plant and equipment, net 3,091,817 3,111,112
Deferred income taxes 1,806,000 286,297
Goodwill, less accumulated
amortization of $504,675 and
$211,516, respectively 3,567,843 2,007,151
Investment in Focus Surgery, Inc. and
Hearing Innovations, Inc. less
accumulated Amortization of
$406,626 and $233,450 and
cumulative equity in losses
of $819,938 and $531,014,
respectively 2,629,527 3,069,536
Convertible Debentures -
Hearing Innovations, Inc. 311,375 --
Convertible Debentures -
Focus Surgery, Inc. 305,166 --
Other assets 164,794 86,580
--------------- -------------
Total assets $ 36,068,249 $ 31,163,622
Liabilities and stockholders' equity
Current liabilities:
Notes payable $ 495,286 $ 473,050
Accounts payable 2,816,352 2,053,192
Accrued expenses and
other current liabilities 1,280,406 1,323,114
Litigation settlement liabilities 5,450,000 --
Income taxes payable -- 1,283,554
Current maturities of long-term debt
and capital lease obligations 214,130 189,632
--------------- -------------
Total current liabilities 10,256,174 5,322,542
Long-term debt and capital
lease obligations 1,072,863 1,274,738
Deferred income 548,729 395,060
Minority interest 268,888 289,094
Stockholders' equity:
Common stock, $.01 par value-shares
authorized 10,000,000; 6,121,915
and 5,967,817 issued, respectively 61,219 59,678
Additional paid-in capital 21,924,987 21,801,969
Retained earnings 2,471,246 2,294,570
Treasury stock, 42,900 shares (219,006) (219,006)
Accumulated other
comprehensive loss (316,851) (55,023)
--------------- -------------
Total stockholders' equity 23,921,595 23,882,188
--------------- -------------
Total liabilities and
stockholders' equity $ 36,068,249 $ 31,163,622
MISONIX, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
For the nine months ended
March 31,
2001 2000
Net sales $21,812,405 $20,587,326
Cost of goods sold 10,385,568 10,989,538
----------- -----------
Gross profit 11,426,837 9,597,788
Operating expenses:
Selling expenses 2,904,166 2,281,753
General and administrative expenses 4,571,949 3,777,363
Research and development expenses 1,376,016 1,071,764
Bad debt expense (recovery) 6,730 (401,846)
Litigation settlement expenses 5,450,000 --
----------- -----------
Total operating expenses 14,308,861 6,729,034
----------- -----------
(Loss) income from operations (2,882,024) 2,868,754
Other income (expense):
Interest income 446,032 488,089
Interest expense (111,850) (116,989)
License fees 18,235 18,234
Royalty income 515,902 460,837
Amortization of investments (173,175) (150,308)
Foreign exchange gain (loss) 384 (2,950)
Miscellaneous income 720 6,033
----------- -----------
(Loss) income before equity
in loss of Focus Surgery, Inc.,
equity in loss of Hearing
Innovations, Inc., minority
interest and income taxes (2,185,776) 3,571,700
Equity in loss of Focus Surgery, Inc. (256,780) (305,928)
Equity in loss of Hearing
Innovations, Inc. (32,144) (33,548)
Minority interest in net loss (income)
of consolidated subsidiaries 20,206 (33,977)
----------- -----------
(Loss) income before income taxes (2,454,494) 3,198,247
Income tax benefit (provision) 2,631,169 (1,312,930)
Net income $ 176,675 $ 1,885,317
Net income per share
- Basic $ .03 $ .32
Net income per share
- Diluted $ .03 $ .29
Weighted average common shares
outstanding - Basic 5,991,087 5,942,538
Weighted average common shares
outstanding - Diluted 6,549,124 6,494,533
MISONIX, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
For the three months ended
March 31,
2001 2000
Net sales $ 7,404,556 $ 6,820,221
Cost of goods sold 3,529,115 3,540,543
------------ ------------
Gross profit 3,875,441 3,279,678
Operating expenses:
Selling expenses 1,121,859 868,670
General and administrative expenses 1,514,818 1,428,107
Research and development expenses 552,499 479,260
Bad debt expense (recovery) 19,303 (441,941)
Litigation settlement expenses 5,450,000 --
------------ ------------
Total operating expenses 8,658,479 2,334,096
------------ ------------
(Loss) income from operations (4,783,038) 945,582
Other income (expense):
Interest income 116,248 159,551
Interest expense (36,996) (39,276)
License fees 6,079 6,078
Royalty income 108,222 150,540
Amortization of investments (57,725) (57,725)
Foreign exchange loss (2,928) (1,272)
------------ ------------
(Loss) income before equity in
loss of Focus Surgery, Inc., equity
in loss of Hearing Innovations, Inc.,
Minority interest and income taxes (4,650,138) 1,163,478
Equity in loss of Focus Surgery, Inc. (85,593) (104,000)
Equity in loss of Hearing
Innovations, Inc. (10,558) (16,774)
Minority interest in net (income) loss
of consolidated subsidiaries (6,037) 7,289
------------ ------------
(Loss) income before income taxes (4,752,326) 1,049,993
Income tax benefit (provision) 1,832,997 (480,578)
Net (loss) income $(2,919,329) $ 569,415
Net (loss) income per share
- Basic $ (.48) $ .10
Net (loss) income per share
- Diluted $ (.48) $ .09
Weighted average common shares
outstanding - Basic 6,079,002 5,918,271
Weighted average common shares
outstanding - Diluted 6,079,002 6,545,527
CONTACT:
Misonix Inc.
Michael A. McManus, Jr., 631/694-9555
www.misonix.com
or
Lippert/Heilshorn & Associates, Inc.
Kim Sutton Golodetz (kgolodetz@lhai.com)
212/838-3777
Bruce Voss (bvoss@lhai.com)
310/691-7100
www.lhai.com
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