Encision Reports Fourth Quarter Fiscal Year 2019 Results

BOULDER, Colo., May 14, 2019 /PRNewswire/ -- Encision Inc. (PK:ECIA), a medical device company owning patented Active Electrode Monitoring (AEM®) Technology that prevents dangerous stray electrosurgical burns in minimally invasive surgery, today announced financial results for its fiscal 2019 fourth quarter that ended March 31, 2019.

The Company posted quarterly net revenue of $2.09 million for a quarterly net loss of $183 thousand, or $(0.02) per diluted share. These results compare to net revenue of $2.04 million for a quarterly net loss of $18 thousand, or $0.00 per diluted share, in the year-ago quarter. Net revenue for last year's quarter included net revenue of $68.3 thousand from an order for non-AEM product. Gross margin on net revenue was 53% in the fiscal 2019 fourth quarter and 57% in the fiscal 2018 fourth quarter. Gross margin on net revenue was lower in the current quarter primarily as a result of significantly higher material costs, especially as a result of tariffs on our steel costs and, to a lesser extent, product mix.

The Company posted twelve months net revenue of $8.80 million for a twelve months net loss of $236 thousand, or $(0.02) per diluted share. These results compare to net revenue of $8.75 million for a twelve months net income of $336 thousand, or $0.03 per diluted share, in the year-ago twelve months. Net revenue for last year's twelve months included net revenue of $492 thousand from an order for non-AEM product. Gross margin on net revenue was 53% in the fiscal 2019 twelve months and 57% in the fiscal 2018 twelve months. Gross margin on net revenue was lower in the current twelve months as a result of higher material costs and product mix.

"Core AEM® Technology sales are increasing. For this fiscal year's twelve months, net revenue on AEM products resulted in a 7% rate of growth," said Gregory Trudel, President and CEO of Encision Inc. "We continue to open up new market opportunities. During the quarter ended March 31, 2019, our proprietary patient safety technology was recognized by the U.S. Department of Veterans Affairs and provides us with the opportunity to market our instruments and monitors into VA Medical Centers. The VA is the largest medical system in the U.S. providing service to more than nine million veterans across more than 1,200 facilities. Also, during the quarter, Encision was awarded a prestigious Vizient Innovative Technology Contract for monopolar surgical instruments and monitors. This contract will enable us to expand the use of our technology and to provide savings opportunities into thousands of new hospital accounts. Vizient represents a diverse membership base that includes academic medical centers, pediatric facilities, community hospitals, integrated health delivery networks and non-acute health care providers and represents approximately $100 billion in annual purchasing volume. We appreciate the VA's and Vizient's recognition and look forward to driving top line growth in FY2020."

Encision Inc. designs and markets a portfolio of high performance surgical instrumentation that delivers advances in patient safety with AEM technology, surgical performance, and value to hospitals across a broad range of minimally invasive surgical procedures. Based in Boulder, Colorado, the company pioneered the development and deployment of Active Electrode Monitoring, AEM technology, to eliminate dangerous stray energy burns during minimally invasive procedures. For additional information about all our products, please visit www.encision.com.

In accordance with the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, the Company notes that statements in this press release and elsewhere that look forward in time, which include everything other than historical information, involve risks and uncertainties that may cause actual results to differ materially from those indicated by the forward-looking statements. Factors that could cause the Company's actual results to differ materially include, among others, its ability to develop new or enhanced products and have such products accepted in the market, its ability to increase net sales through the Company's distribution channels, its ability to compete successfully against other manufacturers of surgical instruments, insufficient quantity of new account conversions, insufficient cash to fund operations, delay in developing new products and receiving FDA approval for such new products and other factors discussed in the Company's filings with the Securities and Exchange Commission. Readers are encouraged to review the risk factors and other disclosures appearing in the Company's Annual Report on Form 10-K for the year ended March 31, 2018 and subsequent filings with the Securities and Exchange Commission. We do not undertake any obligation to update publicly any forward-looking statements, whether as a result of the receipt of new information, future events, or otherwise.

CONTACT: Mala Ray, Encision Inc., 303-444-2600, mray@encision.com

                                                                
            
              Encision Inc.


                                                       
     
              Unaudited Condensed Statements of Operations


                                                       
     
              (in thousands, except per share information)




                                  Three Months Ended 
     
       Years Ended



                              
     
       March 31, 2019                            
            
              March 31, 2018    
     
     March 31, 2019     
     
     March 31, 2018

                                                                                                                                                            ---

      Net revenue                             $2,085                                                         $2,038                 $8,803                  $8,754


      Cost of revenue                            982                                                            867                  4,131                   3,747



      Gross profit                             1,103                                                          1,171                  4,672                   5,007




     Operating expenses:


          Sales and marketing                    686                                                            567                  2,763                   2,312


          General and
           administrative                        361                                                            399                  1,315                   1,457


          Research and
           development                           237                                                            207                    780                     842



              Total operating
               expenses                        1,284                                                          1,173                  4,858                   4,611



      Operating income
       (loss)                                  (181)                                                           (2)                 (186)                    396


      Interest expense
       and other expense,
       net                               
            --                                                          (16)                  (50)                   (60)

                                                                                                                                                            ---

      Income (loss)
       before provision
       for income taxes                          (2)                                                          (18)                 (236)                    336


      Provision for
       income taxes                      
            --                                                   
            --           
            --            
            --

                                                                                                                                                            ---

      Net income (loss)                       $(183)                                                         $(18)                $(236)                   $336



      Net income (loss)
       per share-basic
       and diluted                           $(0.02)                                                         $0.00                $(0.02)                  $0.03


      Weighted average
       number of shares-
       basic                                  11,558                                                         10,683                 10,933                  10,683


      Weighted average
       number of shares-
        diluted                               11,558                                                         10,683                 10,933                  10,707

                                                        
      
                Encision Inc.


                                                     
      
        Unaudited Condensed Balance Sheets


                                                       
      
                (in thousands)




                                                                              
              
          March 31, 2019 
     
     March 31, 2018




     ASSETS



     Cash and cash equivalents                                                                           $273                 $115



     Restricted cash                                                                                       25                   25



     Accounts receivable, net                                                                           1,009                  962



     Inventories, net                                                                                   1,473                1,437



     Prepaid expenses                                                                                     130                   75




         Total current assets                                                                           2,910                2,614




     Equipment, net                                                                                       250                  349



     Patents, net                                                                                         249                  270



     Other assets                                                                                          19                   19




         Total assets                                                                                  $3,428               $3,252




     LIABILITIES AND SHAREHOLDERS' EQUITY



     Accounts payable                                                                                    $579                 $466



     Accrued compensation                                                                                 296                  257



     Other accrued liabilities                                                                            126                  285



     Deferred rent                                                                                         10                   30



         Total current liabilities                                                                      1,011                1,038



     Deferred rent                                                                                         65                   10



         Total liabilities                                                                              1,076                1,048



     Common stock and additional paid-in capital                                                       24,202               23,818



     Accumulated (deficit)                                                                           (21,850)            (21,614)




         Total shareholders' equity                                                                     2,352                2,204




         Total liabilities and shareholders' equity                                                    $3,428               $3,252


                                                                      
              
                Encision Inc.


                                                      
              
                Unaudited Condensed Statements of Cash Flows


                                                                     
              
                (in thousands)




                                                                                                                                 Years Ended



                                                                                                                           
     
     March 31, 2019 March 31, 2018



     Operating activities:



         Net income (loss)                                                                                                            $(236)           $336



         Adjustments to reconcile net income (loss) to cash generated by operating activities:



         Depreciation and amortization                                                                                                   182             203



         Share-based compensation expense                                                                                                 37              66



         (Recovery from) provision for doubtful accounts, net                                                                              6            (13)



         (Recovery from) inventory obsolescence, net                                                                                      29            (29)



         Changes in operating assets and liabilities:



             Accounts receivable                                                                                                        (52)             92



             Inventories                                                                                                                (64)          (280)



             Prepaid expenses and other assets                                                                                          (56)           (15)



             Accounts payable                                                                                                            111              64



             Accrued compensation and other accrued liabilities                                                                         (85)            (4)




                 Net cash generated by operating activities                                                                            (128)            420






     Investing activities:



         Acquisition of property and equipment                                                                                          (55)           (57)



         Patent costs                                                                                                                    (6)           (43)




                 Net cash (used in) investing activities                                                                                (61)          (100)






     Financing activities:



         Paydown of credit facility, net change                                                                                
              --          (275)



         Net  proceeds from the issuance of common stock                                                                                 347              25



                 Net cash generated by (used in) financing activities                                                                    347           (250)






     Net increase in cash, cash equivalents and restricted cash                                                                          158              70



     Cash, cash equivalents and restricted cash, beginning of period                                                                     140              45




     Cash, cash equivalents and restricted cash, end of period                                                                          $298            $115

                                                                                                                                                         ===

View original content:http://www.prnewswire.com/news-releases/encision-reports-fourth-quarter-fiscal-year-2019-results-300849349.html

SOURCE Encision Inc.