Encision Reports Third Quarter Fiscal Year 2020 Results
BOULDER, Colo., Feb. 6, 2020 /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 2020 third quarter that ended December 31, 2019.
The Company posted quarterly net revenue of $2.04 million for a quarterly net income of $70 thousand, or $0.01 per diluted share. These results compare to net revenue of $2.12 million for a quarterly net loss of $84 thousand, or $(0.01) per diluted share, in the year-ago quarter. Gross margin on net revenue was 53% in the fiscal 2019 and 50% in the fiscal 2018 third quarters. Gross margin on net revenue was higher in this year's third quarter than last year's third quarter principally as a result of lower labor costs, per unit of inventory.
The Company posted nine months net revenue of $5.89 million for a nine months net loss of $82 thousand, or $(0.01) per diluted share. These results compare to net revenue of $6.72 million for a nine months net loss of $53 thousand, or $0.00 per diluted share, in the year-ago nine months. Gross margin on net revenue was 52% in the fiscal 2019 nine months and 53% in the fiscal 2018 nine months. Gross margin on net revenue was lower in the fiscal 2019 nine months as compared to the fiscal 2018 nine months primarily as a result of higher material costs, especially as a result of tariffs on our material costs and higher labor and overhead costs, per unit of inventory.
"We look forward to the fourth fiscal quarter and next fiscal year," said Greg Trudel, President and CEO of Encision Inc. "We are presently in discussions with a major healthcare company regarding collaboration on an engineering project that would incorporate our AEM(®) Technology as well as offer the potential for a long-term partnership. We are also looking forward to a new product introduction in the next fiscal year that will open new account opportunities, enable customers to reduce per procedure costs, and drive revenue growth for Encision."
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, 2019 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 Nine Months Ended
December 31,
December 31,
December 31,
December 31,
2019 2018 2019 2018
Net revenue $2,039 $2,117 $5,892 $6,718
Cost of revenue 956 1,055 2,827 3,149
Gross profit 1,083 1,062 3,065 3,569
Operating expenses:
Sales and marketing 544 645 1,612 2,077
General and administrative 294 312 943 954
Research and development 159 189 568 543
Total operating expenses 997 1,146 3,123 3,574
Operating income (loss) 86 (84) (58) (5)
Interest expense and other expense, net (16)
-- (24) (48)
Income (loss) before provision for income 70 (84) (82) (53)
taxes
Provision for income taxes
--
--
--
--
Net income (loss) $70 $(84) $(82) $(53)
Net income (loss) per share-basic and $0.01 $(0.01) $(0.01) $0.00
diluted
Weighted average number of shares-
basic
11,578 10,799 11,565 10,722
Weighted average number of shares-
diluted
11,631 10,799 11,565 10,722
Encision Inc.
Unaudited Condensed Balance Sheets
(in thousands)
December 31, March 31,
2019 2019
ASSETS
Cash and cash
equivalents $195 $273
Restricted cash
-- 25
Accounts receivable,
net 1,059 1,009
Inventories, net 1,360 1,473
Prepaid expenses 119 130
Total current assets 2,733 2,910
Equipment, net 211 250
Patents, net 234 249
Right of use asset 1,383
--
Other assets 19 19
Total assets $4,580 $3,428
LIABILITIES AND
SHAREHOLDERS' EQUITY
Accounts payable $510 $579
Accrued compensation 190 296
Other accrued
liabilities 101 126
Accrued lease liability 271
--
Total current
liabilities 1,072 1,001
Accrued lease liability 1,216
--
Deferred rent
-- 75
Total liabilities 2,288 1,076
Common stock and
additional paid-in
capital 24,224 24,202
Accumulated (deficit) (21,932) (21,850)
Total shareholders'
equity 2,292 2,352
Total liabilities and
shareholders' equity $4,580 $3,428
Encision Inc.
Unaudited Condensed Statements of Cash Flows
(in thousands)
Nine Months Ended
December 31, December 31,
2019 2018
Operating activities:
Net (loss) $(82) $(53)
Adjustments to reconcile net income (loss) to cash
generated by (used in) operating activities:
Depreciation and amortization 112 141
Share-based compensation expense 22 37
(Recovery from) provision for doubtful accounts, net 10 (1)
(Recovery from) provision for inventory obsolescence, net (9) 24
Changes in operating assets and liabilities:
Right of use asset, net 30
--
Accounts receivable (59) (61)
Inventories 121 22
Prepaid expenses and other assets 11 (55)
Accounts payable (69) 224
Accrued compensation and other accrued liabilities (132) (150)
Net cash generated by (used in) operating activities (45) 128
Investing activities:
Acquisition of property and equipment (53) (10)
Patent costs (5) (5)
Net cash (used in) investing activities (58) (15)
Financing activities:
Proceeds from the issuance of common stock
-- 350
Net cash generated by financing activities
-- 350
Net increase (decrease) in cash, cash equivalents and (103) 463
restricted cash
Cash, cash equivalents and restricted cash, beginning of 298 139
period
Cash, cash equivalents and restricted cash, end of period $195 $602
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SOURCE Encision Inc.
