Attached files
file | filename |
---|---|
8-K - Sonoma Pharmaceuticals, Inc. | v209944_8k.htm |
FOR
IMMEDIATE RELEASE
Oculus
Innovative Sciences Reports Record Third Quarter Revenue for Fiscal Year 2011,
Exceeding Guidance
Q3 FY 2011
Results:
·
|
Total
Revenue of $2.3 Million
|
·
|
Product
Revenue Increased 48%
|
·
|
Cash
Position of $4.7 Million
|
Reaffirm
Projections:
·
|
Animal
Healthcare Partner (Innovacyn) Royalties Increase from 20% to 30%
Beginning July 1, 2011 Based on Partner’s GAAP
Revenue
|
·
|
We
Anticipate $45-$60 Million in Annual Revenues in Calendar 2013 with 20%
Operating Profitability
|
·
|
We
Anticipate $3.5 to $4.0 Million in Quarterly Revenue Required to Achieve
Breakeven
|
Near-Term Growth
Opportunities:
·
|
Oculus
Revenue From Innovacyn Increased to $1.4 Million for First Nine Months
Fiscal Year 2011, Compared to $256,000 for Same Period Last
Year
|
·
|
First
Acne Product Launched in Mexico—September
2010
|
·
|
New
Chinese Distributor to Pay $530,000 for Initial Order and Exclusive Rx
Rights to Market Microcyn to Chinese Hospitals for Wound Care—Q1
2011
|
·
|
Microcyn®-Based
Products in FDA Queue: Atopic Dermatitis HydroGel, Scar Treatment
HydroGel, Oral Rinse/Oral Mucositis Formulations, Allergen
Shield
|
·
|
Microcyn
HydroGel Approval/Launch in Additional International
Markets
|
·
|
New
Partners in United States, Europe and
China
|
Conference
Call Begins at 4:30 p.m. (EDT) Today
PETALUMA, Calif. (February 3, 2011) –
Oculus Innovative Sciences, Inc. (Nasdaq: OCLS) today announced financial
and operating results for the third quarter of fiscal year 2011, ended December
31, 2010. Total revenue was $2.3 million in the third quarter of
fiscal 2011, compared to $1.6 million in the third quarter of fiscal
2010. Product revenue was $2.0 million, up 48%, from $1.4 million in
the prior third quarter primarily due to higher sales in the United States,
Mexico, Europe and the Middle East; while partially offset by a slight decline
in India. Operating expenses minus non-cash expenses for the quarter
were $2.8 million, up from $2.4 million in the same period last
year.
Hoji
Alimi, founder and CEO of Oculus said, “We continue to focus on our business
strategy of targeting profitability and increased profit margins via
collaborative partnerships in multiple markets including dermatology, animal
healthcare, oral care and others. As we secure new FDA clearances in
the coming quarters, it is our intent to have partnership discussions in place
so that commercialization quickly follows.”
Product
revenue in the United States increased $170,000, or 55% compared to the same
quarter last year, with growth in animal health care, resulting from national
advertising programs and sales initiatives sponsored by Oculus’ partner,
Innovacyn, as well as an increase in U.S. human wound care sales.
Revenue
in Mexico increased 23% from the prior year period with 41% growth in the
smaller 120-milliliter and 240-milliliter units, partially offset by a 4%
decline in the five-liter units. Due to the higher margins of the
smaller units, Oculus’ sales force has been focused on promoting the growth of
the smaller units sold to the pharmacies and private hospitals. The unit
sales of the 120-milliliter and 240-milliliter presentations, which are
primarily sold to pharmacies in Mexico, increased 33% from the prior year to a
monthly average of 47,000 units compared to 35,000 in the same period last
year.
Europe
and rest-of-world revenue increased $272,000, up 158% over the prior year
period, caused by strong growth in sales to the Middle East and moderate growth
in Europe.
Service
revenue increased $54,000 when compared to the prior year period due to an
increase in the number of tests provided by Oculus’ services
business.
2
Oculus
reported gross profit from the Microcyn-based products business of $1.1 million
or 54% of product revenues, during the three months ended December 31, 2010,
compared to a gross profit of $621,000, or 46% of product revenues, in the prior
year period. The improved gross margins represent higher margins in the United
States, partially offset by lower gross margins in Europe, Mexico and
rest-of-world. The higher margins in the United States are due to higher units
sold and product mix for certain U.S. sales. Margins in Mexico,
excluding export sales, were 71% during the quarter ended December 31, 2010,
compared to 80% in the prior year period, due to lower pricing and volume of the
five-liter product sold to the public hospitals.
Total
operating expenses increased $531,000, or 20%, to $3.2 million for the three
months ended December 31, 2010, compared to $2.7 million in the prior year.
Operating expenses minus non-cash expenses during the quarter were $2.8 million,
up from $2.4 million in the same period last year. Research and development
expense increased $95,000, or 26%, to $467,000 for the three months ended
December 31, 2010, compared to $372,000 in the prior year
period. Most of the increase was due to studies needed for regulatory
approvals and development of manufacturing processes for new
products.
Selling,
general and administrative expense increased $436,000, or 19%, to $2.8 million
during the three months ended December 31, 2010, from $2.3 million during the
three months ended December 31, 2009. This increase was primarily due
to higher sales-related costs in the United Sates and Mexico and higher
compensation costs in the United States. These increases were
partially offset by lower sales and marketing costs in Europe.
Net loss
for the three months ended December 31, 2010 was $2.2 million, up $884,000 from
$1.3 million for the same period in the prior year. Last year, during
the third quarter ending December 31, 2009, Oculus recorded a non-cash gain of
$625,000 due to the change in fair value of its derivative liability, compared
to a $55,000 non-cash loss in this quarter. Stock compensation
expenses for the quarters ended December 2010 and 2009, were $352,000 and
$237,000, respectively.
3
As of
December 31, 2010, Oculus had unrestricted cash and cash equivalents of $4.7
million, compared with $6.2 million as of March 31, 2010 and $5.4 million as of
September 30, 2010.
Outlook
Oculus
expects to continue strong annualized growth of 50% to 100% over the next three
years. The company is targeting a minimum of $45-$60 million in
annual revenues in calendar year 2013 with 20% operating
profitability. The company’s animal healthcare partner, Innovacyn,
had significant sales growth in calendar year 2010 and Oculus expects continued
strong sales growth in 2011. Oculus currently receives approximately
18-20% royalties on these sales with that percentage increasing to approximately
30% effective July 1, 2011.
Conference
Call
Oculus
management will hold a conference call today to discuss third quarter results
and to answer questions, beginning at 4:30 p.m. EDT. Individuals interested in
participating in the conference call may do so by dialing 877-303-7020 for domestic callers or
973-409-9604 for international callers. Those interested in listening
to the conference call live via the Internet may do so at
http://ir.oculusis.com/events.cfm. Please log on approximately 30
minutes prior to the presentation in order to register and download the
appropriate software.
A
telephone replay will be available for 48 hours following the conclusion of the
call by dialing 800-642-1687 for domestic callers, or 706-645-9291 for
international callers, and entering conference code 37947168. A webcast replay
will be available on the site at http://ir.oculusis.com/events.cfm for one year
following the call.
About
Oculus Innovative Sciences
Oculus
Innovative Sciences is a commercial medical technology
company that designs, produces and markets safe and effective tissue care
products based upon the Microcyn® Technology platform, which significantly
reduces the need for antibiotics while reducing infections and accelerating
healing. The Microcyn Technology addresses the need for improved
solutions in multiple markets including dermatology, oral care, cosmeceutical,
wound care and others. It features a biocompatible,
shelf-stable solution that is currently commercialized in the United States,
Europe, India, China and Mexico and select Middle East countries under various
country specific regulatory clearances and approvals. Several solutions derived
from this platform have demonstrated, in a variety of research and
investigational studies, the ability to treat a wide range of pathogens,
including antibiotic-resistant strains of bacteria (including MRSA and VRE),
viruses, fungi and spores; increase blood flow to the wound site; and reduce
both inflammation and pain while assisting in faster wound closure. The
company’s headquarters are in Petaluma, California, with manufacturing
operations in the United States and Latin America. More information can be found
at www.oculusis.com
4
Forward-Looking
Statements
Except
for historical information herein, matters set forth in this press release
are forward-looking within the meaning of the "safe harbor" provisions of the
Private Securities Litigation Reform Act of 1995, including statements about the
Company’s commercial and technology progress and future financial
performance. These forward-looking statements are identified by the use of words
such as "targeting,” “believe,” and “intend,” among others.
Forward-looking statements in this press release are subject to certain risks
and uncertainties inherent in the Company's business that could cause actual
results to vary, including such risks that regulatory clinical
and guideline developments may change, scientific data may not be
sufficient to meet regulatory standards or receipt of required regulatory
clearances or approvals, clinical results may not be replicated in actual
patient settings, protection offered by the Company's patents and
patent applications may be challenged, invalidated or circumvented by its
competitors, the available market for the Company's products
will not be as large as expected, the Company's products will not be
able to penetrate one or more targeted markets, revenues will not be
sufficient to fund further development and clinical studies, the Company may not
meet its future capital needs, and its ability to obtain additional
funding, as well as uncertainties relative to varying product formulations and a
multitude of diverse regulatory and marketing requirements in different
countries and municipalities, and other risks detailed from time to time in the
Company's filings with the Securities and Exchange Commission including the
annual report on Form 10-K for the year ended March 31, 2010. Oculus
Innovative Sciences disclaims any obligation to update these forward-looking
statements except as required by law.
Oculus,
Vetericyn and Microcyn are trademarks or registered trademarks of Oculus
Innovative Sciences, Inc. All other trademarks and service marks are the
property of their respective owners.
Contact:
Oculus
Innovative Sciences, Inc.
Dan
McFadden
Director
of Public and Investor Relations
(425)
753-2105
dmcfadden@oculusis.com
5
OCULUS
INNOVATIVE SCIENCES, INC. AND SUBSIDIARIES
Condensed
Consolidated Balance Sheets
(In
thousands, except share and per share amounts
December
31,
2010
|
March
31,
2010
|
|||||||
(Unaudited)
|
|
|||||||
ASSETS
|
||||||||
Current
assets:
|
||||||||
Cash
and cash equivalents
|
$ | 4,673 | $ | 6,258 | ||||
Accounts
receivable, net
|
1,722 | 1,416 | ||||||
Inventories,
net
|
615 | 565 | ||||||
Prepaid
expenses and other current assets
|
395 | 811 | ||||||
Total
current assets
|
7,405 | 9,050 | ||||||
Property
and equipment, net
|
957 | 1,108 | ||||||
Other
assets
|
51 | 60 | ||||||
Total
assets
|
$ | 8,413 | $ | 10,218 | ||||
LIABILITIES
AND STOCKHOLDERS’ EQUITY
|
||||||||
Current
liabilities:
|
||||||||
Accounts
payable
|
$ | 786 | $ | 981 | ||||
Accrued
expenses and other current liabilities
|
1,186 | 1,078 | ||||||
Current
portion of long-term debt, net of discount
|
674 | 204 | ||||||
Derivative
liability
|
273 | 472 | ||||||
Total
current liabilities
|
2,919 | 2,735 | ||||||
Deferred
revenue
|
167 | 328 | ||||||
Long-term
debt, net of discount, less current portion
|
1,858 | 110 | ||||||
Put
warrant liability
|
750 | — | ||||||
Total
liabilities
|
5,694 | 3,173 | ||||||
Commitments
and Contingencies
|
||||||||
Stockholders’
Equity:
|
||||||||
Convertible
preferred stock, $0.0001 par value; 5,000,000 shares authorized, no shares
issued and outstanding at December 31, 2010 (unaudited) and March 31,
2010
|
— | — | ||||||
Common
stock, $0.0001 par value; 100,000,000 shares authorized, 26,463,726 and
26,161,428 shares issued and outstanding at December 31, 2010 (unaudited)
and March 31, 2010, respectively
|
3 | 3 | ||||||
Additional
paid-in capital
|
128,992 | 127,067 | ||||||
Accumulated
other comprehensive loss
|
(2,985 | ) | (2,988 | ) | ||||
Accumulated
deficit
|
(123,291 | ) | (117,037 | ) | ||||
Total
stockholders’ equity
|
2,719 | 7,045 | ||||||
Total
liabilities and stockholders’ equity
|
$ | 8,413 | $ | 10,218 |
6
OCULUS
INNOVATIVE SCIENCES, INC. AND SUBSIDIARIES
Condensed
Consolidated Statements of Operations
(In
thousands, except per share amounts)
(Unaudited)
Three
Months Ended
December 31,
|
Nine
Months Ended
December 31,
|
|||||||||||||||
2010
|
2009
|
2010
|
2009
|
|||||||||||||
Revenues
|
||||||||||||||||
Product
|
$ | 2,003 | $ | 1,357 | $ | 6,330 | $ | 4,327 | ||||||||
Service
|
310 | 256 | 713 | 805 | ||||||||||||
Total
revenues
|
2,313 | 1,613 | 7,043 | 5,132 | ||||||||||||
Cost
of revenues
|
||||||||||||||||
Product
|
925 | 736 | 2,259 | 1,864 | ||||||||||||
Service
|
239 | 186 | 573 | 659 | ||||||||||||
Total
cost of revenues
|
1,164 | 922 | 2,832 | 2,523 | ||||||||||||
Gross
profit
|
1,149 | 691 | 4,211 | 2,609 | ||||||||||||
Operating
expenses
|
||||||||||||||||
Research
and development
|
467 | 372 | 1,416 | 1,676 | ||||||||||||
Selling,
general and administrative
|
2,760 | 2,324 | 8,914 | 7,494 | ||||||||||||
Total
operating expenses
|
3,227 | 2,696 | 10,330 | 9,170 | ||||||||||||
Loss
from operations
|
(2,078 | ) | (2,005 | ) | (6,119 | ) | (6,561 | ) | ||||||||
Interest
expense
|
(109 | ) | (2 | ) | (256 | ) | (9 | ) | ||||||||
Interest
income
|
2 | — | 3 | 1 | ||||||||||||
Change
in fair value of derivative liability
|
(55 | ) | 625 | 199 | (132 | ) | ||||||||||
Other
expense, net
|
10 | 36 | (81 | ) | (79 | ) | ||||||||||
Net
loss
|
$ | (2,230 | ) | $ | (1,346 | ) | $ | (6,254 | ) | $ | (6,780 | ) | ||||
Net
loss per common share: basic and diluted
|
$ | (0.08 | ) | $ | (0.05 | ) | $ | (0.24 | ) | $ | (0.30 | ) | ||||
Weighted-average
number of shares used in per common share calculations:
|
||||||||||||||||
Basic
and diluted
|
26,431 | 24,647 | 26,323 | 22,272 | ||||||||||||
Other
comprehensive loss, net of tax
|
||||||||||||||||
Net
loss
|
$ | (2,230 | ) | $ | (1,346 | ) | $ | (6,254 | ) | $ | (6,780 | ) | ||||
Foreign
currency translation adjustments
|
(20 | ) | (5 | ) | 3 | 108 | ||||||||||
Other
comprehensive loss
|
$ | (2,250 | ) | $ | (1,351 | ) | $ | (6,251 | ) | $ | (6,672 | ) |
7
OCULUS
INNOVATIVE SCIENCES, INC. AND SUBSIDIARIES
Reconciliation
of GAAP Measures to Non-GAAP Measures
(In
thousands)
(Unaudited)
Three Months Ended
December 31,
|
||||||||
2010
|
2009
|
|||||||
(1) Net
loss minus non-cash expenses:
|
||||||||
GAAP
net loss
|
$ | (2,230 | ) | $ | (1,346 | ) | ||
Non-cash
adjustments:
|
||||||||
Stock
compensation
|
352 | 236 | ||||||
Depreciation
|
94 | 94 | ||||||
Change
in fair value of derivative liability
|
55 | (625 | ) | |||||
Non-cash
interest expense
|
43 | — | ||||||
Non-GAAP
net loss
|
$ | (1,686 | ) | $ | (1,641 | ) | ||
(2) Operating
expenses minus non-cash expenses:
|
||||||||
GAAP
operating expenses
|
3,227 | 2,697 | ||||||
Non-cash
adjustments:
|
||||||||
Stock
compensation
|
(339 | ) | (231 | ) | ||||
Depreciation
|
(45 | ) | (61 | ) | ||||
Non-GAAP
operating expenses
|
$ | 2,843 | $ | 2,405 |
(1)
|
Net
loss minus non-cash expenses is a non-GAAP financial measure. Generally, a
non-GAAP financial measure is a numerical measure of a company's
performance, financial position or cash flow that either excludes or
includes amounts that are not normally excluded or included in the most
directly comparable measure calculated and presented in accordance with
GAAP. The Company defines net loss minus non-cash expenses as GAAP
reported net loss minus depreciation, stock-based compensation, a change
in the fair value of derivative liabilities, and non-cash
interest. The Company uses this measure for the purpose of
modifying the net loss to reflect only those expenses, which do not
reflect a direct cash payment during the measurement
period.
|
(2)
|
Operating
expenses minus non-cash expenses is a non-GAAP financial measure. The
Company defines non-operating expenses minus non-cash expenses as GAAP
reported operating expenses minus depreciation and stock-based
compensation. The Company uses this measure for the purpose of
identifying the total operating expenses, which involve direct cash
payments during the measurement
period.
|
8