Total Revenues Increased 53% with 50%
Increase in Disposable Antennae Sales for the First Nine Months of
2014;
Company to Hold Investment Community
Conference Call Today at 2:00 p.m. Eastern
BSD Medical Corporation (NASDAQ: BSDM) (Company or BSD)
(www.BSDMedical.com), a leading provider of medical systems that
treat cancer and benign diseases using heat therapy, today reported
financial results for the three and nine months ended May 31,
2014.
Third Quarter of Fiscal 2014 Highlights (all comparisons
with the third quarter of fiscal 2013)
- Total revenues of $1.3 million
decreased 5% as a result of large, initial orders from Terumo
Europe NV (Terumo) in the prior year
- Operating expenses declined 3% to $2.5
million
- Net loss remained relatively unchanged
at $2.0 million
Year to Date Fiscal 2014 Highlights (all comparisons with
the first nine months of fiscal 2013)
- Total revenues increased 53% to $4.3
million
- Gross margin improved to 46% from
42%
- Operating expenses declined 4% to $6.9
million
- Net loss improved to $5.0 million from
a net loss of $6.0 million
- Current total sales backlog stands at
approximately $917,500
BSD reported cash and equivalents of $5.2 million and no
long-term debt at May 31, 2014. Subsequently, the Company raised
approximately $5.2 million in gross proceeds in a registered direct
offering, which was completed July 1, 2014, strengthening the
balance sheet.
Management Commentary
“Our healthy growth in revenues for the first nine months of
this year has been driven by the strategic roll-out of our
microwave ablation MicroThermX® system by Terumo and increasing
sales of our SynchroWave disposable antennas. Revenues were
slightly lower in the third quarter due to the large number of MTX
systems shipped in the same quarter last year following the signing
of our distribution agreement with Terumo; however, we continue to
see robust interest and adoption from our partnership, as evidenced
by the 50% growth in total antennae sales through the first nine
months of the year,” said Harold Wolcott, President of BSD Medical.
“In addition, year-to-date we’ve sold a total of six hyperthermia
systems, including three to our distributor in Taiwan with the
anticipated sale of a fourth system to that distributor in the
current quarter.
“While growing revenues we have kept tight control over
operating expenses and reduced our year-to-date net loss by more
than $1 million. With our costs in check and recently strengthened
cash position, we are well positioned for continued growth,” added
Mr. Wolcott. “Terumo is an excellent distribution partner for the
MTX product line, with exclusive license to sell in more than 100
countries in the greater Europe area, and we are seeing growing
interest in that part of the world. There is an emerging body of
evidence and acceptance of the use of microwave ablation technology
in the treatment of cancer, both domestically and abroad, which
bodes well for BSD’s future.”
Third Quarter and Year to Date Fiscal 2014 Operating
Summary
BSD reported total revenues of $1,253,189 for the third quarter
of fiscal 2014, a decrease of 5% from $1,316,713 for the third
quarter of fiscal year 2013. This decline was due primarily to the
large number of MTX systems shipped in the prior year three month
period following the signing of our MTX distribution partner in
Europe, and was largely offset by the sale of two hyperthermia
systems compared with one in the prior year period. The Company has
a current sales backlog of $917,500.
Gross margin was $505,270, or 40% of total revenues, for the
third quarter of fiscal 2014, compared with $600,302, or 46% of
total revenues, for the same period last year. Lower gross margin
as a percent of revenues resulted from the effect of the sale of
one hyperthermia system with a lower than normal gross margin.
Operating expenses declined 3% to $2.5 million for the third
quarter of fiscal 2014 from $2.6 million for the comparable period
last year. Research and development expenses declined 8% to
$559,568 for the third quarter of fiscal 2014, from $607,960 for
the third quarter of fiscal 2013. Selling, general and
administrative expenses declined 2% to $1.9 million from $2.0
million for the third quarter of fiscal 2013.
The Company reported a net loss of $2.0 million, or $0.06 per
share, for the third quarter of fiscal 2014, essentially flat with
the third quarter of fiscal 2013.
Total revenues for the first nine months of fiscal 2014
increased 53% to $4.3 million, from $2.8 million for the first nine
months of 2013. Gross margin was $2.0 million, or 46% of total
revenues, for the nine months ended May 31, 2014, compared with
$1.2 million, or 42% of total revenues, for the nine months ended
May 31, 2013. Operating expenses decreased 4% to $6.9 million from
$7.3 million in the prior year period. Net loss for the first nine
months of fiscal 2014 declined to under $5.0 million dollars, or
$0.15 per share, for the nine months of fiscal 2014, from a net
loss of over $6.0 million, or $0.20 per share, for the nine months
of fiscal 2013.
Conference Call
Management will hold a conference call today at 2:00 p.m.
Eastern time/12:00 p.m. Mountain time to discuss financial results
and provide a business update. Individuals interested in
participating in the conference call may do so by visiting the
Investor Relations section of the Company's website at
www.BSDMedical.com or by dialing 800.860.2442 from the United
States, or 412.858.4600 from outside the United States, and
referencing “BSD Medical.” A telephone replay will be available
through July 18, 2014, by dialing 877.344.7529 from the United
States, or 412.317.0088 from outside the United States, and
entering conference ID 10048867.
About BSD Medical Corporation
BSD Medical Corporation develops, manufactures, markets and
services systems to treat cancer and benign diseases using heat
therapy, which is delivered using focused radiofrequency (RF) and
microwave energy. BSD’s product lines include both hyperthermia and
ablation treatment systems. BSD’s MicroThermX microwave ablation
system has been developed as a stand-alone therapy to employ
precision-guided microwave energy to ablate (destroy) soft tissue.
The Company has developed extensive intellectual property, multiple
products in the market and established distribution in the United
States, Europe and Asia. Certain of the Company’s products have
received regulatory approvals and clearances in the United States,
Europe and China. For further information visit BSD Medical's
website at www.BSDMedical.com.
This press release may be deemed to contain forward-looking
statements, which are subject to the safe harbor provisions of the
Private Securities Litigation Reform Act of 1995. Readers are
cautioned that these forward-looking statements are only
predictions and may differ materially from actual future events or
results due to a variety of factors, including, among other things,
the demand for the Company’s products, the ability of the Company
to produce the products to meet the demand, global economic
conditions and uncertainties in the geopolitical environment and
other risk factors set forth in the Company’s most recent reports
on Form 10-K and Form 10-Q. Any forward-looking statements in this
release are based on limited information currently available to the
Company, which is subject to change, and the Company will not
necessarily update the information.
BSD MEDICAL CORPORATION Condensed Balance
Sheets (Unaudited)
ASSETS
May 31,2014
August 31,2013
Current assets: Cash and cash equivalents $ 5,174,602 $ 9,450,528
Accounts receivable, net of allowance for doubtful accounts of
$20,000 404,991 899,969 Related party trade accounts receivable
221,170 24,201 Inventories, net 2,242,985 2,445,770 Other current
assets 193,266 200,028 Total current assets 8,237,014
13,020,496 Property and equipment, net 1,292,214
1,319,880 $ 9,529,228 $ 14,340,376
LIABILITIES AND STOCKHOLDERS’
EQUITY
Current liabilities: Accounts payable $ 499,739 $ 521,417
Accrued liabilities 431,685 573,880 Note payable 57,852 - Customer
deposits 99,650 317,480 Deferred revenue – current portion
453,047 730,593 Total current liabilities 1,541,973
2,143,370 Deferred revenue – net of current portion -
53,115 Total liabilities 1,541,973 2,196,485
Commitments and contingencies Stockholders’ equity:
Preferred stock, $.001 par value; 10,000,000 shares authorized, no
shares issued and outstanding - - Common stock, $.001 par value,
80,000,000 shares authorized, 34,199,463 and 34,006,202 shares
issued, respectively 34,200 34,007 Additional paid-in capital
58,561,526 57,739,056 Stock subscriptions receivable (7,485 ) -
Treasury stock, 24,331 shares at cost (234 ) (234 ) Accumulated
deficit (50,600,752 ) (45,628,938 ) Total
stockholders’ equity 7,987,255 12,143,891 $
9,529,228 $ 14,340,376
BSD MEDICAL CORPORATION
Condensed Statements of Comprehensive Loss
(Unaudited)
Three Months EndedMay
31,
Nine Months EndedMay 31,
2014 2013 2014 2013
Revenues:
Sales
$ 764,044 $ 1,256,583 $ 3,611,679 $ 2,540,281 Sales to related
parties 376,245 230 394,679 76,776 Equipment rental 112,900
59,900 268,200 178,700 Total revenues
1,253,189 1,316,713 4,274,558 2,795,757
Cost of Revenues: Cost of sales 456,832 713,383 2,003,969
1,533,618 Cost of related party sales 288,140 81 296,053 66,527
Cost of equipment rental 2,947 2,947 8,841
8,841 Total cost of revenues 747,919
716,411 2,308,863 1,608,986 Gross margin
505,270 600,302 1,965,695 1,186,771
Operating expenses: Research and development 559,568 607,690
1,621,612 1,693,648 Selling, general and administrative
1,934,277 1,967,082 5,321,309 5,562,013
Total operating expenses 2,493,845 2,574,772
6,942,921 7,255,661 Loss from operations
(1,988,575 ) (1,974,470 ) (4,977,226 )
(6,068,890 ) Other income (expense): Interest income 3,623
7,708 15,050 24,374 Other expense (3,898 ) (2,984 )
(9,638 ) (5,291 ) Total other income
(275 ) 4,724 5,412 19,083 Loss before
income taxes (1,988,850 ) (1,969,746 ) (4,971,814 ) (6,049,807 )
Provision for income taxes - - -
- Net loss and comprehensive loss $ (1,988,850 ) $
(1,969,746 ) $ (4,971,814 ) $ (6,049,807 ) Net loss per
common share: Basic $ (0.06 ) $ (0.06 ) $ (0.15 ) $ (0.20 ) Diluted
$ (0.06 ) $ (0.06 ) $ (0.15 ) $ (0.20 ) Weighted average
number of shares outstanding: Basic 34,040,000 32,042,000
34,002,000 30,541,000 Diluted 34,040,000 32,042,000 34,002,000
30,541,000
BSD MEDICAL CORPORATION
Condensed Statements of Cash Flows (Unaudited)
Nine Months EndedMay 31,
2014 2013 Cash flows from operating
activities: Net loss $ (4,971,814 ) $ (6,049,807 ) Adjustments to
reconcile net loss to net cash used in operating activities:
Depreciation and amortization 93,322 101,454 Stock-based
compensation 634,859 862,514 Stock issued for services 180,000
180,001 Loss on disposition of property and equipment (30 )
- Decrease (increase) in: Receivables 298,009 (901,822 )
Inventories 202,785 94,658 Other current assets 80,814 (81,540 )
Increase (decrease) in: Accounts payable (21,678 ) 189,580 Accrued
liabilities (142,195 ) (1,279 ) Customer deposits (217,830 )
851,250 Deferred revenue (330,661 ) (30,760 )
Net cash used in operating activities (4,194,419 )
(4,785,751 ) Cash flows from investing activities: Purchase
of property and equipment (67,651 ) (18,072 ) Proceeds from
disposition of property and equipment 2,025 -
Net cash used in investing activities
(65,626 ) (18,072 ) Cash flows from financing
activities: Net proceeds from sale of common stock 319 - Payments
on note payable (16,200 ) 4,583,437
Net cash used in or provided by financing activities
(15,881 ) 4,583,437 Net decrease in cash and
cash equivalents (4,275,926 ) (220,386 ) Cash and cash equivalents,
beginning of the period 9,450,528 11,102,508
Cash and cash equivalents, end of the period $ 5,174,602 $
10,882,122
Investors:Financial ProfilesTricia Ross,
310-622-8226tross@finprofiles.com