BOULDER, CO / ACCESSWIRE / November 15, 2024 / Encision Inc. (OTC PINK:ECIA), a medical device company owning patented Active Electrode Monitoring (AEM®) Technology that prevents dangerous radiant energy burns in minimally invasive surgery, today announced financial results for its fiscal 2025 second quarter that ended September 30, 2024.
The Company posted quarterly product net revenue of $1.65 million and service net revenue of $101 thousand, or total net revenue of $1.75 million for a quarterly net loss of $170 thousand, or $(0.01) per diluted share. These results compare to product net revenue of $1.75 million and service net revenue of $74 thousand, or total net revenue of $1.83 million for a quarterly net loss of $8 thousand, or $(0.00) per diluted share, in the year-ago quarter. Gross margin on product net revenue was 47% in the fiscal 2025 second quarter and 47% in the fiscal 2024 second quarter.
The Company posted six months product net revenue of $3.25 million and service net revenue of $140 thousand, or total net revenue of $3.39 million for a six month net loss of $148 thousand, or $(0.01) per diluted share. These results compare to product net revenue of $3.37 million and service net revenue of $113.8 thousand, or total net revenue of $3.48 million for a six months net loss of $148 thousand, or $(0.01) per diluted share, in the year-ago six months. Gross margin on product net revenue was 52% in the fiscal 2025 six months and 49.3% in the fiscal 2024 six months.
"We were disappointed to finish short of objectives for the second quarter," said Gregory Trudel, President & CEO. "Surgical procedures were down as a ripple effect of the hurricanes that hit the southeast, reduction in Saline availability, and we were unsuccessful in closing several new accounts that we had anticipated. The good news is that our customers affected by the hurricanes are coming back online and we look forward to bringing that new business home this quarter. We continue our internal efforts to drive improved margins and look forward to launching a new product into the ENT market in early fiscal 2026."
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, 2024 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: Brandon Shepard, Encision Inc., 303-444-2600, bshepard@encision.com
Encision Inc.
Unaudited Condensed Statements of Operations
(in thousands, except per share information)
|
| Three Months Ended |
|
| Six Months Ended |
| ||||||||||
|
| September 30, 2024 |
|
| September 30, 2023 |
|
| September 30, 2024 |
|
| September 30, 2023 |
| ||||
NET REVENUE: |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Product |
| $ | 1,653,820 |
|
| $ | 1,752,413 |
|
| $ | 3,245,779 |
|
| $ | 3,365,965 |
|
Service |
|
| 101,568 |
|
|
| 73,978 |
|
|
| 140,539 |
|
|
| 113,809 |
|
Total revenue |
|
| 1,755,388 |
|
|
| 1,826,391 |
|
|
| 3,386,318 |
|
|
| 3,479,774 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
COST OF REVENUE: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Product |
|
| 882,886 |
|
|
| 926,455 |
|
|
| 1,550,520 |
|
|
| 1,696,493 |
|
Service |
|
| 44,020 |
|
|
| 37,327 |
|
|
| 64,653 |
|
|
| 57,947 |
|
Total cost of revenue |
|
| 926,906 |
|
|
| 963,782 |
|
|
| 1,615,173 |
|
|
| 1,754,440 |
|
GROSS PROFIT |
|
| 828,482 |
|
|
| 862,609 |
|
|
| 1,771,145 |
|
|
| 1,725,334 |
|
OPERATING EXPENSES: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales and marketing |
|
| 458,480 |
|
|
| 389,342 |
|
|
| 881,716 |
|
|
| 822,778 |
|
General and administrative |
|
| 373,405 |
|
|
| 366,377 |
|
|
| 725,310 |
|
|
| 755,133 |
|
Research and development |
|
| 155,515 |
|
|
| 100,854 |
|
|
| 294,695 |
|
|
| 269,274 |
|
Total operating expenses |
|
| 987,400 |
|
|
| 856,573 |
|
|
| 1,901,721 |
|
|
| 1,847,185 |
|
OPERATING INCOME (LOSS) |
|
| (158,918 | ) |
|
| 6,036 |
|
|
| (130,576 | ) |
|
| (121,851 | ) |
Interest expense, net |
|
| (10,598 | ) |
|
| (16,851 | ) |
|
| (16,967 | ) |
|
| (31,083 | ) |
Other income (expense), net |
|
| (746 | ) |
|
| 3,286 |
|
|
| (679 | ) |
|
| 4,951 |
|
Interest expense and other income (expense), net |
|
| (11,344 | ) |
|
| (13,565 | ) |
|
| (17,646 | ) |
|
| (26,132 | ) |
(LOSS) BEFORE PROVISION FOR INCOME TAXES |
|
| (170,262 | ) |
|
| (7,529 | ) |
|
| (148,222 | ) |
|
| (147,983 | ) |
Provision for income taxes |
|
| -- |
|
|
| -- |
|
|
| -- |
|
|
| -- |
|
NET (LOSS) |
| $ | (170,262 | ) |
| $ | (7,529 | ) |
| $ | (148,222 | ) |
| $ | (147,983 | ) |
Net (loss) per share-basic and diluted |
| $ | (0.01 | ) |
| $ | 0.00 |
|
| $ | (0.01 | ) |
| $ | (0.01 | ) |
Weighted average shares-basic and diluted |
|
| 11,875,145 |
|
|
| 11,769,543 |
|
|
| 11,875,145 |
|
|
| 11,769,543 |
|
Encision Inc.
Unaudited Condensed Balance Sheets
(in thousands)
| September 30, 2024 Unaudited |
|
| March 31, 2024 Audited |
| |||
ASSETS |
|
|
|
|
|
| ||
Current assets: |
|
|
|
|
|
| ||
Cash |
| $ | 230,014 |
|
| $ | 42,509 |
|
Accounts receivable |
|
| 817,002 |
|
|
| 891,129 |
|
Inventories |
|
| 1,164,666 |
|
|
| 1,402,338 |
|
Prepaid expenses |
|
| 70,628 |
|
|
| 90,298 |
|
Total current assets |
|
| 2,282,310 |
|
|
| 2,426,274 |
|
Equipment: |
|
|
|
|
|
|
|
|
Furniture, fixtures and equipment, at cost |
|
| 2,668,544 |
|
|
| 2,627,726 |
|
Accumulated depreciation |
|
| (2,402,419 | ) |
|
| (2,373,722 | ) |
Equipment, net |
|
| 266,125 |
|
|
| 254,004 |
|
Right of use asset |
|
| 736,850 |
|
|
| 900,787 |
|
Patents, net |
|
| 169,283 |
|
|
| 164,010 |
|
Other assets |
|
| 69,376 |
|
|
| 65,641 |
|
TOTAL ASSETS |
| $ | 3,523,944 |
|
| $ | 3,810,716 |
|
LIABILITIES AND SHAREHOLDERS' EQUITY |
|
|
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
|
|
Accounts payable |
| $ | 319,371 |
|
| $ | 346,049 |
|
Line of credit |
|
| 78,851 |
|
|
| 156,685 |
|
Secured notes |
|
| 43,041 |
|
|
| 42,194 |
|
Accrued compensation |
|
| 192,810 |
|
|
| 184,913 |
|
Other accrued liabilities |
|
| 91,145 |
|
|
| 119,804 |
|
Accrued lease liability |
|
| 414,730 |
|
|
| 370,377 |
|
Total current liabilities |
|
| 1,139,948 |
|
|
| 1,220,022 |
|
Long-term liability: |
|
|
|
|
|
|
|
|
Secured notes |
|
| 200,496 |
|
|
| 67,336 |
|
Accrued lease liability |
|
| 481,411 |
|
|
| 696,610 |
|
Total liabilities |
|
| 1,821,855 |
|
|
| 1,983,968 |
|
Commitments and contingencies (Note 4) |
|
|
|
|
|
|
|
|
Shareholders' equity: |
|
|
|
|
|
|
|
|
Preferred stock, no par value: 10,000,000 shares authorized; none issued and outstanding |
|
| -- |
|
|
| -- |
|
Common stock and additional paid-in capital, no par value: 100,000,000 shares authorized; 11,875,145 and 11,858,627 issued and outstanding at September 30, 2024 and March 31, 2024, respectively |
|
| 24,395,358 |
|
|
| 24,371,795 |
|
Accumulated (deficit) |
|
| (22,693,269 | ) |
|
| (22,545,047 | ) |
Total shareholders' equity |
|
| 1,702,089 |
|
|
| 1,826,748 |
|
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY |
| $ | 3,523,944 |
|
| $ | 3,810,716 |
|
Encision Inc.
Unaudited Condensed Statements of Cash Flows
(in thousands)
Six Months Ended |
| September 30, 2024 |
|
| September 30, 2023 |
| ||
Cash flows (used in) operating activities: |
|
|
|
|
|
| ||
Net (loss) |
| $ | (148,222 | ) |
| $ | (147,983 | ) |
Adjustments to reconcile net (loss) to net cash (used in) operating activities: |
|
|
|
|
|
|
|
|
Depreciation and amortization |
|
| 42,525 |
|
|
| 43,775 |
|
Stock-based compensation expense related to stock options |
|
| 25,011 |
|
|
| 26,149 |
|
Provision for potential inventory obsolescence |
|
| 83,152 |
|
|
| 64,000 |
|
Change in operating assets and liabilities: |
|
|
|
|
|
|
|
|
Right of use asset, net |
|
| (6,909 | ) |
|
| (97,490 | ) |
Accounts receivable |
|
| 74,127 |
|
|
| (103,629 | ) |
Inventories |
|
| 154,520 |
|
|
| 193,079 |
|
Prepaid expenses and other assets |
|
| 15,935 |
|
|
| 54,630 |
|
Accounts payable |
|
| (26,678 | ) |
|
| 47,198 |
|
Accrued compensation and other accrued liabilities |
|
| (20,762 | ) |
|
| (82,732 | ) |
Net cash provided by (used in) operating activities |
|
| 192,699 |
|
|
| (3,003 | ) |
Cash flows (used in) investing activities: |
|
|
|
|
|
|
|
|
Acquisition of property and equipment |
|
| (42,559 | ) |
|
| (122 | ) |
Patent costs |
|
| (17,359 | ) |
|
| (16,727 | ) |
Net cash (used in) investing activities |
|
| (59,918 | ) |
|
| (16,849 | ) |
Cash flows from financing activities: |
|
|
|
|
|
|
|
|
(Paydown) of line of credit |
|
| (77,834 | ) |
|
| -- |
|
(Payments) from options exercised |
|
| (1,449 | ) |
|
| -- |
|
Borrowing from secured notes |
|
| 134,007 |
|
|
| 136,887 |
|
|
| 54,724 |
|
|
| 136,887 |
| |
|
|
|
|
|
|
|
| |
Net increase in cash |
|
| 187,505 |
|
|
| 117,035 |
|
Cash, beginning of fiscal year |
|
| 42,509 |
|
|
| 188,966 |
|
Cash, end of six months |
| $ | 230,014 |
|
| $ | 306,001 |
|
|
|
|
|
|
|
|
| |
Supplemental disclosures of cash flow information: |
|
|
|
|
|
|
|
|
Cash paid during the year for interest |
| $ | 16,967 |
|
| $ | 31,083 |
|
SOURCE: Encision, Inc.
View the original press release on accesswire.com
