Misonix, Inc. (Nasdaq: MSON) (“Misonix” or the “Company”), a
provider of minimally invasive therapeutic ultrasonic medical
devices that enhance clinical outcomes, today reported financial
results for the fiscal 2019 second quarter ended December 31, 2018
as summarized below:
|
Three Months Ended |
|
Six Months Ended |
|
December 31, |
|
December 31, |
|
|
2018 |
|
|
2017 |
|
|
|
2018 |
|
|
2017 |
|
|
|
|
|
|
|
Revenue |
$ |
10,176,453 |
|
$ |
8,323,845 |
|
|
$ |
19,537,617 |
|
$ |
15,604,568 |
|
Gross Profit |
$ |
7,128,374 |
|
$ |
5,858,019 |
|
|
$ |
13,738,995 |
|
$ |
10,961,387 |
|
GP Percentage - product
revenue |
|
70.0% |
|
|
70.4% |
|
|
|
70.3% |
|
|
70.2% |
|
Pretax loss |
$ |
(840,333 |
) |
$ |
(1,332,352 |
) |
|
$ |
(3,451,317 |
) |
$ |
(2,825,576 |
) |
Net loss |
$ |
(840,333 |
) |
$ |
(6,856,774 |
) |
|
$ |
(3,451,317 |
) |
$ |
(8,068,998 |
) |
|
|
|
|
|
|
EBITDA (1) |
$ |
(439,786 |
) |
$ |
(1,021,648 |
) |
|
$ |
(2,684,182 |
) |
$ |
(2,148,284 |
) |
Adjusted EBITDA
(1) |
$ |
380,909 |
|
$ |
421,578 |
|
|
$ |
(195,682 |
) |
$ |
424,035 |
|
|
|
|
|
|
|
|
December 31, |
June 30, |
|
|
|
|
|
2018 |
|
|
2018 |
|
|
|
|
Long Term Debt |
$ |
- |
|
$ |
- |
|
|
|
|
Cash and cash
equivalents |
$ |
10,173,286 |
|
$ |
10,979,455 |
|
|
|
|
(1) Definitions and disclosures
regarding non-GAAP financial information including reconciliations
are included on page 6 of this press release.
Stavros Vizirgianakis, President and Chief
Executive Officer of Misonix stated, “Misonix’s financial growth
momentum continued in the fiscal second quarter, reflecting the
ongoing successful execution of our go-to-market strategies,
including our direct sales team, which has expanded our domestic
market share. Growing demand for our leading ultrasonic surgical
products resulted in a 22% year-over-year rise in total fiscal
second quarter revenues to a record $10.2 million, including a 23%
increase in consumables revenue and a 21% gain in equipment
revenue. Our ability to generate revenue growth, while maintaining
a healthy gross margin of approximately 70%, is highlighted by the
22% year-over-year increase in second quarter gross profit to a
record $7.1 million. We were able to maintain Misonix’s
double-digit top-line growth trajectory, generating 25%
year-over-year growth in total revenues through the first six
months of fiscal 2019. Importantly, our financial results for the
second quarter and first half of fiscal 2019 confirm the benefits
of our recent investments and accelerating demand for the
demonstrated clinical benefits that our ultrasonic medical devices
deliver to physicians, hospitals and patients.
“During the second quarter, we further developed
our direct commercialization team while training our international
distribution partners. These initiatives will enable Misonix to
further penetrate existing and new markets as we prepare for the
launch of Nexus, our new ultrasonic surgical platform, which we
intend to launch in the second half of fiscal 2019. In addition, we
are already realizing value from the recent systems and
infrastructure enhancements made to support our continued growth
and expect these investments to drive additional operating
efficiencies across the business in the coming quarters.
“Since unveiling Nexus at the 2018 NASS
Conference, we have received overwhelmingly positive feedback from
surgeons and the overall market, which provides us with added
confidence for its potential to serve as a third growth engine for
the Company as we benefit from cross-selling opportunities,
especially through deeper penetration of current customer accounts
and the expansion of our addressable markets to a broader range of
procedures beyond those served by our current products. While
medical professionals are the driving force behind successful
outcomes, Nexus presents surgeons with a powerful tool to remove
hard and soft tissue with greater control, accuracy and efficiency.
By incorporating multiple modalities into one modern platform with
extensive functionalities, we believe Nexus will be a requisite
addition to the operating room as it delivers demonstrated clinical
benefits at a compelling value proposition for hospitals and
outpatient
clinics.
“Looking ahead, we are excited about the opportunities to enhance
shareholder value as we continue pursuing the Company’s next phase
of growth. As we bring the next generation of ultrasonic products
to market and complete our transformation to a direct
commercialization platform, we remain confident in our ability to
generate double-digit top-line growth and improved profitability in
the second half of fiscal 2019.”
Sales Performance Supplemental
Data
|
|
For the three months ended |
|
|
|
|
|
|
December 31, |
|
Net change |
|
|
|
2018 |
|
|
2017 |
|
$ |
|
% |
Total |
|
|
|
|
|
|
|
|
Consumables |
|
$ |
7,570,395 |
|
$ |
6,162,064 |
|
$ |
1,408,331 |
|
|
22.9 |
% |
Equipment |
|
|
2,606,058 |
|
|
2,161,781 |
|
|
444,277 |
|
|
20.6 |
% |
Total |
|
$ |
10,176,453 |
|
$ |
8,323,845 |
|
$ |
1,852,608 |
|
|
22.3 |
% |
|
|
|
|
|
|
|
|
|
Domestic: |
|
|
|
|
|
|
|
|
Consumables |
|
$ |
5,477,995 |
|
$ |
4,623,545 |
|
$ |
854,450 |
|
|
18.5 |
% |
Equipment |
|
|
600,559 |
|
|
776,878 |
|
|
(176,319 |
) |
|
-22.7 |
% |
Total |
|
$ |
6,078,554 |
|
$ |
5,400,423 |
|
$ |
678,131 |
|
|
12.6 |
% |
|
|
|
|
|
|
|
|
|
International: |
|
|
|
|
|
|
|
|
Consumables |
|
$ |
2,092,400 |
|
$ |
1,538,519 |
|
$ |
553,881 |
|
|
36.0 |
% |
Equipment |
|
|
2,005,499 |
|
|
1,384,903 |
|
|
620,596 |
|
|
44.8 |
% |
Total |
|
$ |
4,097,899 |
|
$ |
2,923,422 |
|
$ |
1,174,477 |
|
|
40.2 |
% |
Joe Dwyer, Chief Financial Officer, added, “Our
fiscal 2019 second quarter results marked another outstanding
quarter for Misonix, resulting in continued robust top-line growth,
healthy margins and an improved bottom line, highlighting our
successful execution across multiple fronts.
“During the first half of fiscal 2019, we
undertook a range of initiatives to eliminate inefficiencies in our
procurement and distribution, including bringing new suppliers on
board and diversifying our supply chain. We also fully transitioned
to a significantly more capable ERP system as well as instituted
new policies to ensure optimal inventory levels and fulfillment
outcomes. With these initiatives now largely behind us, we are
confident in our ability to successfully and efficiently meet the
added demand we expect.
“As we enter the second half of fiscal 2019, we
remain well-positioned to continue to invest in our products and
further improve our operations and our position in the market. We
are confident that we have the capital flexibility we need,
including $10.2 million in cash and no debt, to ensure that we
adequately support our growth via both organic and inorganic growth
initiatives and look forward to driving long-term value for our
shareholders as we remain disciplined and focused in generating
attractive rates of returns. Looking ahead to the second half of
fiscal 2019, we reiterate our guidance for product revenue growth
in excess of 20% for fiscal 2019, along with gross profit margins
of approximately 70%.”
Fiscal Second Quarter 2019 Conference
Call Misonix will host a conference call and webcast
today, Wednesday, February 6, 2019, at 4:30 p.m. ET to discuss its
financial results and operations and host a question and answer
session. The dial in number for the audio conference call is
888-599-8686 (domestic) or 323-994-2093 (international), conference
ID 9194323. Participants may also listen to a live webcast of the
call at the Company’s website through the “Events and
Presentations” section under “Investor Relations” at
www.misonix.com. Following its completion, a replay of the
webcast will be available for 30 days on the Company’s website,
www.misonix.com.
About Misonix, Inc. Misonix, Inc. (NASDAQ:
MSON) designs, manufactures and markets ultrasonic medical devices
for the precise removal of hard and soft tissue, including bone
removal, wound debridement and ultrasonic aspiration. Misonix is
focused on leveraging its proprietary ultrasonic technology to
become the standard of care in operating rooms and clinics around
the world. Misonix's proprietary ultrasonic medical devices are
used in a growing number of medical procedures, including spine
surgery, neurosurgery, orthopedic surgery, cosmetic surgery,
laparoscopic surgery, and other surgical and medical applications.
At Misonix, Better Matters to us. That is why throughout the
Company’s history, Misonix has maintained its commitment to medical
technology innovation and the development of ultrasonic surgical
products that radically improve patient outcomes. Additional
information is available on the Company's web site at
www.misonix.com.
Safe Harbor Statement With the exception
of historical information contained in this press release, content
herein may contain “forward looking statements” that are made
pursuant to the Safe Harbor Provisions of the Private Securities
Litigation Reform Act of 1995. These statements are based on
management’s current expectations and are subject to uncertainty
and changes in circumstances. Investors are cautioned that
forward-looking statements involve risks and uncertainties that
could cause actual results to differ materially from the statements
made. These factors include general economic conditions, delays and
risks associated with the performance of contracts, risks
associated with international sales and currency fluctuations,
uncertainties as a result of research and development, acceptable
results from clinical studies, including publication of results and
patient/procedure data with varying levels of statistical
relevancy, risks involved in introducing and marketing new
products, potential acquisitions, consumer and industry acceptance,
litigation and/or court proceedings, including the timing and
monetary requirements of such activities, the timing of finding
strategic partners and implementing such relationships, regulatory
risks including approval of pending and/or contemplated 510(k)
filings, the ability to achieve and maintain profitability in the
Company’s business lines, the impact of the pending investigation
by the Department of Justice and Securities Exchange Commission,
and other factors discussed in the Company’s Annual Report on Form
10-K for the fiscal year ended June 30, 2018, subsequent Quarterly
Reports on Form 10-Q and Current Reports on Form 8-K. The Company
disclaims any obligation to update its forward-looking
statements.
Contact: Joe DwyerChief
Financial OfficerMisonix, Inc. 631-694-9555
Joseph Jaffoni, Norberto Aja, Jennifer Neuman JCIR
212-835-8500 or mson@jcir.com
MISONIX INC. and
Subsidiaries |
|
Consolidated Statements of
Operations |
|
(Unaudited) |
|
|
|
|
|
For the three months ended |
|
|
For the six months ended |
|
|
|
December 31, |
|
|
December 31, |
|
|
|
2018 |
|
2017 |
|
|
2018 |
|
2017 |
|
|
|
|
|
|
|
|
|
|
|
|
Revenues |
|
|
|
|
|
|
|
|
|
|
Product |
|
$ 10,176,453 |
|
$ 8,323,845 |
|
|
$ 19,537,617 |
|
$ 15,604,568 |
|
Total revenue |
|
10,176,453 |
|
8,323,845 |
|
|
19,537,617 |
|
15,604,568 |
|
|
|
|
|
|
|
|
|
|
|
|
Cost of goods sold |
|
3,048,079 |
|
2,465,826 |
|
|
5,798,622 |
|
4,643,181 |
|
Gross profit |
|
7,128,374 |
|
5,858,019 |
|
|
13,738,995 |
|
10,961,387 |
|
Operating
expenses: |
|
|
|
|
|
|
|
|
|
|
Selling
expenses |
|
4,800,643 |
|
3,919,515 |
|
|
9,535,648 |
|
7,490,228 |
|
General
and administrative expenses |
|
2,347,184 |
|
2,380,860 |
|
|
5,530,568 |
|
4,953,991 |
|
Research
and development expenses |
|
839,219 |
|
957,204 |
|
|
2,143,984 |
|
1,858,478 |
|
Total operating
expenses |
|
7,987,046 |
|
7,257,579 |
|
|
17,210,200 |
|
14,302,697 |
|
Loss from
operations |
|
(858,672 |
) |
(1,399,560 |
) |
|
(3,471,205 |
) |
(3,341,310 |
) |
|
|
|
|
|
|
|
|
|
|
|
Other income
(expense): |
|
|
|
|
|
|
|
|
|
|
Interest
income |
|
17,242 |
|
45 |
|
|
37,056 |
|
58 |
|
Royalty
income |
|
1,105 |
|
71,550 |
|
|
1,105 |
|
524,521 |
|
Other |
|
(8 |
) |
(4,387 |
) |
|
(18,273 |
) |
(8,845 |
) |
Total other income |
|
18,339 |
|
67,208 |
|
|
19,888 |
|
515,734 |
|
|
|
|
|
|
|
|
|
|
|
|
Loss from operations
before income taxes |
|
(840,333 |
) |
(1,332,352 |
) |
|
(3,451,317 |
) |
(2,825,576 |
) |
|
|
|
|
|
|
|
|
|
|
|
Income tax expense |
|
- |
|
5,524,422 |
|
|
- |
|
5,243,422 |
|
Net loss |
|
$ (840,333 |
) |
$ (6,856,774 |
) |
|
$ (3,451,317 |
) |
$ (8,068,998 |
) |
|
|
|
|
|
|
|
|
|
|
|
Net loss per
share: |
|
|
|
|
|
|
|
|
|
|
Basic |
|
$ (0.09 |
) |
$ (0.76 |
) |
|
$ (0.37 |
) |
$ (0.90 |
) |
Diluted |
|
$ (0.09 |
) |
$ (0.76 |
) |
|
$ (0.37 |
) |
$ (0.90 |
) |
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares
- Basic |
|
9,322,237 |
|
8,977,984 |
|
|
9,210,031 |
|
8,968,195 |
|
Weighted average shares
- Diluted |
|
9,322,237 |
|
8,977,984 |
|
|
9,210,031 |
|
8,968,195 |
|
|
|
|
|
|
|
|
|
|
|
|
Misonix, Inc. and
SubsidiariesCondensed Consolidated Balance
Sheets |
|
|
|
|
|
|
|
December 31, |
|
June 30, |
|
|
|
2018 |
|
|
|
2018 |
|
|
|
(Unaudited) |
|
|
Assets |
|
|
|
|
Current assets: |
|
|
|
|
Cash and cash
equivalents |
|
$ |
10,173,286 |
|
|
$ |
10,979,455 |
|
Accounts receivable,
less allowance for doubtful accounts of $250,000 and $200,000,
respectively |
|
|
5,709,298 |
|
|
|
5,245,549 |
|
Inventories, net |
|
|
5,711,528 |
|
|
|
5,019,886 |
|
Prepaid expenses and
other current assets |
|
|
601,752 |
|
|
|
611,647 |
|
Total current
assets |
|
|
22,195,864 |
|
|
|
21,856,537 |
|
|
|
|
|
|
Property, plant and
equipment, net of accumulated amortization and depreciation of
$9,720,862 and $9,023,235, respectively |
|
|
4,473,859 |
|
|
|
4,188,378 |
|
Patents, net of
accumulated amortization of $1,132,901 and $1,063,393,
respectively |
|
|
763,044 |
|
|
|
757,447 |
|
Goodwill |
|
|
1,701,094 |
|
|
|
1,701,094 |
|
Contract assets |
|
|
960,000 |
|
|
|
- |
|
Intangible and other
assets |
|
|
451,315 |
|
|
|
517,295 |
|
Total assets |
|
$ |
30,545,176 |
|
|
$ |
29,020,751 |
|
|
|
|
|
|
Liabilities and
shareholders' equity |
|
|
|
|
Current
liabilities: |
|
|
|
|
Accounts payable |
|
$ |
3,592,287 |
|
|
$ |
1,794,098 |
|
Accrued expenses and
other current liabilities |
|
|
2,264,112 |
|
|
|
2,411,172 |
|
Deferred income |
|
|
5,993 |
|
|
|
13,303 |
|
Total current
liabilities |
|
|
5,862,392 |
|
|
|
4,218,573 |
|
|
|
|
|
|
Non current
liabilities |
|
|
401,000 |
|
|
|
401,000 |
|
Total liabilities |
|
$ |
6,263,392 |
|
|
$ |
4,619,573 |
|
|
|
|
|
|
Commitments and
contingencies |
|
|
|
|
|
|
|
|
|
Shareholders'
equity: |
|
|
|
|
Common stock, $.01 par
value-shares authorized 40,000,000; 9,584,178 and 9,430,466 shares
issued and outstanding in each period |
|
|
95,842 |
|
|
|
94,305 |
|
Additional paid-in
capital |
|
|
42,143,359 |
|
|
|
39,772,973 |
|
Accumulated
deficit |
|
|
(17,957,417 |
) |
|
|
(15,466,100 |
) |
Total shareholders'
equity |
|
|
24,281,784 |
|
|
|
24,401,178 |
|
|
|
|
|
|
Total liabilities and
shareholders' equity |
|
$ |
30,545,176 |
|
|
$ |
29,020,751 |
|
|
|
|
|
|
Use of Non-GAAP Financial Measures
The Company has presented the following non-GAAP
financial measures in this press release: EBITDA and Adjusted
EBITDA. The Company defines EBITDA as the net income (loss) as
reported under GAAP, plus depreciation and amortization expense,
interest expense and income tax expense (benefit). The Company
defines Adjusted EBITDA as EBITDA plus non-cash stock compensation
expense and engineering costs associated with its development of
Nexus, its next generation platform, which will not be a recurring
cost when the project is completed in the second half of fiscal
2019.
We present these non-GAAP measures because we
believe these measures are useful indicators of our operating
performance. Our management uses these non-GAAP measures
principally as a measure of our operating performance and believes
that these measures are useful to investors because they are
frequently used by analysts, investors and other interested parties
to evaluate the operating performance of companies in our industry.
We also believe that these measures are useful to our management
and investors as a measure of comparative operating performance
from period to period.
|
|
|
|
|
|
|
Three Months Ended |
|
|
Six Months Ended |
|
|
December 31, |
|
|
December 31, |
|
|
2018 |
|
2017 |
|
|
2018 |
|
2017 |
|
|
|
|
|
|
|
|
|
|
|
EBITDA: |
|
|
|
|
|
|
|
|
|
Net loss |
$ (840,333 |
) |
$ (6,856,774 |
) |
|
$ (3,451,317 |
) |
$ (8,068,998 |
) |
Depreciation and
amortization |
400,547 |
|
310,704 |
|
|
767,135 |
|
677,292 |
|
Income tax
benefits |
- |
|
5,524,422 |
|
|
- |
|
5,243,422 |
|
EBITDA |
(439,786 |
) |
(1,021,648 |
) |
|
(2,684,182 |
) |
(2,148,284 |
) |
|
|
|
|
|
|
|
|
|
|
Non-cash stock
compensation |
500,088 |
|
844,601 |
|
|
1,504,586 |
|
1,469,894 |
|
Nexus next generation
engineering |
320,607 |
|
598,625 |
|
|
983,914 |
|
1,102,425 |
|
Adjusted EBITDA |
$ 380,909 |
|
$ 421,578 |
|
|
$ (195,682 |
) |
$ 424,035 |
|
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