NEWTON, Mass., Nov. 15, 2010 /PRNewswire-FirstCall/ --
Microfluidics International Corporation (OTC Bulletin Board: MFLU),
today reported unaudited financial results for the third quarter
ended September 30, 2010.
(Logo: http://photos.prnewswire.com/prnh/20090811/NE59652LOGO
)
(Logo: http://www.newscom.com/cgi-bin/prnh/20090811/NE59652LOGO
)
Third Quarter Financial Highlights:
- Reported revenues of $4.1 million
for the three months ended September 30,
2010, a decrease of $0.4
million, or 9%, as compared to revenues of $4.5 million for the same period in 2009.
Excluding $1.3 million in 2009
revenue directly related to machine production in response to the
global pandemic H1N1 crisis, revenues grew by 29% in the third
quarter of 2010 as compared to the third quarter of 2009
- Achieved gross margin target of 60% for the fifth consecutive
quarter in the third quarter of 2010
- Increased unit sales to 144 units compared to 127 units for the
same period in 2009
Nine Month Financial Highlights:
- Grew revenues by 12% to $12.9
million, an increase of $1.4
million, for the nine months ended September 30, 2010
as compared to revenues of $11.5
million for the same period in 2009
- Delivered an EBITDA of $769,000 for the nine months ended
September 30, 2010 compared with an EBITDA of $227,000 for the same period in 2009
"Our third quarter 2010 results were affected by the absence of
significant revenue directly related to increased machine
production in response to the 2009 global pandemic flu crisis,"
said Michael C. Ferrara, President
and Chief Executive Officer. "We anticipated this trend by
increasing our presence and growing consecutive quarter-to-quarter
revenues across a number of key markets in the biopharmaceutical
space and returning adjacent markets, including chemical,
cosmetics, food and nutraceuticals. The core competencies of MFLU
that delivered four consecutive quarters of net income
profitability prior to the third quarter of 2010 and our strategic
decision to expand our efforts to adjacent markets enabled us to
offset a measure of variability inherent in the business which we
experienced in the third quarter of 2010. Our nine month financials
are strong and we remain focused on successfully moving forward and
driving year-over-year growth as we look to the end of 2010."
"We continue to improve the financial stability of the Company
as our nine month results demonstrate," said Peter Byczko, Vice President of Finance and
Chief Accounting Officer. "This performance directly supported our
ability in October to obtain a one-year extension on our
$1 million secured revolving credit
line with Webster Bank. This line of
credit coupled with our $2 million
cash position at the end of the third quarter provides the Company
with important flexibility as we continue to focus on growing our
business."
Third Quarter Financial Results:
Revenues for the three months ended September 30, 2010 were $4.1 million, a decrease of $0.4 million, or 9%, as compared to revenues of
$4.5 million for the three months
ended September 30, 2009. North American revenues were
$2.8 million, a decrease of 14%, as
compared to $3.2 million in the third
quarter of 2009. Foreign revenues increased 5.5% to $1.3 million in the third quarter of 2010 in
comparison to the third quarter of 2009. The overall decrease in
revenues was principally attributable to a decrease in the sale of
production machines driven by $1.3
million in North American 2009 revenues directly related to
machine production in response to the global pandemic H1N1 crisis
and a decrease in service revenue, primarily related to orders for
spare parts. Gross margin was 60% for the third quarter of 2010
down from 66% in the third quarter of 2009 due to an expedite fee
paid last year with no associated cost. The Company reported a net
loss of $243,000, or $0.02 per diluted share, for the three months
ended September 30, 2010 as compared to a net income of
$425,000, or $0.04 per diluted share, for the same period in
2009.
EBITDA was $7,000 for the three
months ended September 30, 2010 as compared with an EBITDA of
$647,000 for the same period in 2009.
EBITDA is not a financial measure calculated in accordance with
generally accepted accounting principles (GAAP). A reconciliation
of GAAP net income to Non-GAAP EBITDA is provided in the financial
tables that accompany this release and is discussed under the
section below titled "Non-GAAP Financial Measures."
Nine Month Financial Results:
Revenues for the nine months ended September 30, 2010 were
$12.9 million, an increase of
$1.4 million, or 12%, as compared to
revenues of $11.5 million for the
nine months ended September 30, 2009. Net income was
$6,000 for the nine months ended
September 30, 2010 as compared to a $442,000 net loss, or $0.04 per diluted share, for the same period in
2009.
EBITDA was $769,000 for the
nine months ended September 30, 2010 compared with a
$227,000 EBITDA for the same
period in 2009.
Live Webcast:
Microfluidics International Corporation will host a webcast on
Tuesday, November 16, 2010 at
8:30 a.m. Eastern Time. Participants are invited to attend the
call by visiting www.microfluidicscorp.com/investors and clicking
the webcast link or by dialing 1-800-591-6945 (within the United States) or 1 617-614-4911 (outside
the United States). The pass code
for participants is 16352701.
A replay will be available for one week beginning approximately
two hours after the live call through November 23, 2010. To access the replay, dial
1-888-286-8010 (within the United
States) or 1 617-801-6888 (outside the United States). The pass code for
participants is 87175046.
About Microfluidics International Corporation:
Microfluidics International Corporation designs, manufactures
and distributes patented and proprietary high performance
Microfluidizer® materials processing and formulation equipment to
the biotechnology, pharmaceutical, chemical, cosmetics,
nutraceutical/food, energy and academic industries. The Company
applies its 20 plus years of high pressure processing experience to
produce the most uniform and smallest liquid and suspended solid
particles available and has provided manufacturing systems for
nanoparticle products for more than 15 years.
Microfluidics is a leader in advanced materials processing
equipment for laboratory, pilot scale and manufacturing
applications, offering innovative technology and comprehensive
solutions for nanoparticle and other materials processing and
production.
Non-GAAP Financial Measures:
In addition to the results reported in accordance with GAAP
within this release, the Company may reference certain information
that is considered a non-GAAP financial measure, including EBITDA,
which is defined as earnings before interest, taxes, depreciation
and amortization. Management believes these measures are
useful and relevant to management for operational planning and
decision making purposes, and informative to investors in their
analysis of the Company's underlying business and operating
performance. Non-GAAP financial measures should not be considered a
substitute for any GAAP measures. Additionally, non-GAAP measures
as presented by the Company may not be comparable to similarly
titled measures reported by other companies. A reconciliation of
GAAP to non-GAAP financial information discussed in this release is
contained in the attached exhibits.
Safe Harbor for Forward-Looking Statements:
This press release contains forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of 1995
as contained in Section 27A of the Securities Act of 1933 and
Section 21E of the Securities Exchange Act of 1934. You can
identify these statements by the fact that they use words such as
"anticipate," "believe," "estimate," "expect," "intend," "project,"
"plan," "outlook," and other words and terms of similar meaning.
These statements involve a number of risks and uncertainties that
could cause actual results to differ materially from the potential
results discussed in the forward-looking statements. Among the
factors that could cause actual results and outcomes to differ
materially from those contained in such forward-looking statements
are the following: our ability to access sufficient working
capital, including from our revolving line of credit; our continued
compliance with the representations, warranties and covenants under
our existing convertible debenture and revolving line of credit;
our history of losses, which includes net losses in four of the
last five fiscal years; the timing and size of customer orders for
our products; the adoption, timing and performance of new
technology and products developed by us; changes and advances in
technology that may make our products obsolete or reduce demand for
our products; our ability to protect and maintain the
confidentiality of our intellectual property; our ability to retain
key members of our management team; risks related to the
biotechnology and pharmaceutical industries due to the substantial
portion of our income derived from these industries, including
health care regulation, industry consolidation, uncertainty in
technology changes and patent expirations, and reductions and
delays in expenditures in research and development; changes in
governmental rules and regulations, including health care and
those regulating the exportation of goods; and general economic and
business conditions, including those adversely effecting the
pharmaceutical and biotechnology industries. For a more detailed
discussion of risks and uncertainties which could cause actual
results to differ from those contained in our forward-looking
statements, see Item 1A, "Risk Factors" in our annual report on
Form 10-K for the fiscal year ended December 31, 2009 and
our other periodic reports filed with the SEC. You should not place
undue reliance on our forward-looking statements, which speak only
as of the date they are made. We are providing this information as
of this date, and we do not undertake to update the information
included in this presentation, whether as a result of new
information, future events or otherwise.
-Financial
Charts to Follow-
|
|
|
|
MICROFLUIDICS INTERNATIONAL
CORPORATION
Condensed
Consolidated Statements of Operations
(Unaudited -
in thousands, except share and per share amounts)
|
|
|
|
|
|
For The Three Months Ended
September 30,
|
|
For The Nine Months Ended
September 30,
|
|
|
|
|
2010
|
|
2009
|
|
2010
|
|
2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
$
|
4,077
|
|
$
|
4,462
|
|
$
|
12,904
|
|
$
|
11,490
|
|
|
Cost of sales
|
|
1,644
|
|
1,533
|
|
5,002
|
|
4,679
|
|
|
Gross profit
|
|
2,433
|
|
2,929
|
|
7,902
|
|
6,811
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
Research and
development
|
|
468
|
|
433
|
|
1,444
|
|
1,301
|
|
|
Selling
|
|
1,093
|
|
1,007
|
|
3,224
|
|
3,154
|
|
|
General and
administrative
|
|
939
|
|
920
|
|
2,688
|
|
2,375
|
|
|
Total operating
expenses
|
|
2,500
|
|
2,360
|
|
7,356
|
|
6,830
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from
operations
|
|
(67)
|
|
569
|
|
546
|
|
(19)
|
|
|
Interest expense
|
|
(176)
|
|
(144)
|
|
(540)
|
|
(425)
|
|
|
Interest income
|
|
-
|
|
-
|
|
-
|
|
2
|
|
|
Net income (loss)
|
|
$
|
(243)
|
|
$
|
425
|
|
$
|
6
|
|
$
|
(442)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) per common
share:
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
(0.02)
|
|
$
|
0.04
|
|
$
|
-
|
|
$
|
(0.04)
|
|
|
Diluted
|
|
$
|
(0.02)
|
|
$
|
0.04
|
|
$
|
-
|
|
$
|
(0.04)
|
|
|
Weighted average number of
common and common equivalent shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
10,422,525
|
|
10,387,282
|
|
10,412,252
|
|
10,376,949
|
|
|
Diluted
|
|
10,422,525
|
|
10,474,532
|
|
10,613,592
|
|
10,376,949
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
MICROFLUIDICS INTERNATIONAL
CORPORATION
Condensed
Consolidated Balance Sheets
(Unaudited -
in thousands, except share and per share amounts)
|
|
|
|
|
|
September 30,
|
|
December 31,
|
|
|
|
|
2010
|
|
2009
|
|
|
ASSETS
|
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
1,980
|
|
$
|
2,185
|
|
|
Accounts receivable, net
of allowance of $39 and $44 on September 30, 2010 and
December 31, 2009, respectively
|
|
2,861
|
|
2,571
|
|
|
Inventories
|
|
2,675
|
|
2,916
|
|
|
Prepaid and other current
assets
|
|
281
|
|
280
|
|
|
Total current
assets
|
|
7,797
|
|
7,952
|
|
|
|
|
|
|
|
|
|
Property and equipment,
net
|
|
684
|
|
891
|
|
|
Other non-current
assets
|
|
396
|
|
535
|
|
|
|
|
|
|
|
|
|
Total assets
|
|
$
|
8,877
|
|
$
|
9,378
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS'
EQUITY
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
|
Accounts
payable
|
|
$
|
1,009
|
|
$
|
545
|
|
|
Accrued
expenses
|
|
1,265
|
|
1,727
|
|
|
Customer
advances
|
|
390
|
|
1,137
|
|
|
Total current
liabilities
|
|
2,664
|
|
3,409
|
|
|
|
|
|
|
|
|
|
Long-term
liabilities:
|
|
|
|
|
|
|
Convertible
debt
|
|
4,720
|
|
4,679
|
|
|
Total
liabilities
|
|
7,384
|
|
8,088
|
|
|
|
|
|
|
|
|
|
Stockholders' equity:
|
|
|
|
|
|
|
Common stock; $.01 par
value; 30,000,000 and $30,000,000 shares authorized; 10,662,093 and
10,630,228 shares issued; 10,426,647 and 10,394,782 shares
outstanding as of September 30, 2010 and December 31, 2009,
respectively
|
|
107
|
|
106
|
|
|
Additional paid-in
capital
|
|
18,450
|
|
18,254
|
|
|
Accumulated
deficit
|
|
(16,395)
|
|
(16,401)
|
|
|
Treasury stock, 235,446
shares, at cost, as of September 30, 2010 and
December 31, 2009
|
|
(669)
|
|
(669)
|
|
|
Total stockholders'
equity
|
|
1,493
|
|
1,290
|
|
|
Total liabilities and
stockholders' equity
|
|
$
|
8,877
|
|
$
|
9,378
|
|
|
|
|
|
|
|
|
|
|
|
|
MICROFLUIDICS INTERNATIONAL
CORPORATION
U.S. GAAP to
Non-GAAP Measure Reconciliations and
Earnings
Before Interest, Taxes, Depreciation and Amortization
(EBITDA)
(In
thousands, except share and per share
amounts)
|
|
|
|
|
|
For the
Three Months Ended
September 30,
|
|
For the
Nine Months Ended
September 30,
|
|
|
Description
|
|
2010
|
|
2009
|
|
2010
|
|
2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
|
|
$
|
(243)
|
|
$
|
425
|
|
$
|
6
|
|
$
|
(442)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest expense
|
|
176
|
|
144
|
|
540
|
|
423
|
|
|
Depreciation and
amortization
|
|
74
|
|
78
|
|
223
|
|
246
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA (Non-GAAP
Measure)
|
|
$
|
7
|
|
$
|
647
|
|
$
|
769
|
|
$
|
227
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SOURCE Microfluidics International Corporation