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| 8-K - FORM 8-K - COGENTIX MEDICAL INC /DE/ | visci_8k-013112.htm |
Exhibit 99.1
Vision-Sciences Reports Record Third Quarter Fiscal 2012 Net Sales of $4.3 Million
Third Quarter Highlights
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Third quarter fiscal 2012 net sales increased 59% to $4.3 million from $2.7 million in third quarter fiscal 2011
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Medical segment sales increased 73%, driven by higher urology and pulmonology sales
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Gross profit increased 68% to $1.4 million, driven by favorable business mix
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Orangeburg, NY – January 31, 2012– Vision-Sciences, Inc. (NASDAQ: VSCI), a leading provider of unique flexible endoscopic products utilizing its proprietary sterile disposable EndoSheath® technology, today reported third quarter fiscal 2012 net sales of $4.3 million, an increase of 59% over net sales reported for the same period in fiscal 2011.
“We delivered solid results this past quarter,” commented Cynthia Ansari, Chief Executive Officer of Vision-Sciences, Inc. “Our employees are focused on delivering meaningful innovation to patients in order to address unmet clinical needs, positioning us well for the future.”
Records sales driven by increased penetration in Urology and Pulmonology
Net sales increased $1.6 million, or 59%, to $4.3 million in the third quarter of fiscal 2012, compared to $2.7 million reported during the third quarter of fiscal 2011, as a result of a 73% increase in medical segment sales. Medical segment sales increased to $3.6 million during the period driven by increased demand for endoscopes and EndoSheath disposables in the urology and pulmonology markets.
Urology sales during the quarter increased $1.0 million to $1.8 million. The Company continues to make solid progress with its supply of flexible video and fiber cystoscopes and related EndoSheath disposables to Stryker. Pulmonology sales for the period increased $0.2 million to $0.3 million. The Company continues to increase its customer base and capture increased penetration in the pulmonology market.
Net sales in the Company’s industrial segment improved 15% to $0.7 million, primarily attributable to higher borescope sales.
Sequentially, net sales for the third quarter increased 7% from $4 million reported during the second quarter of fiscal 2012.
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Three Months Ended
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December 31,
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Market/Category
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2011
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2010
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Change
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%
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ENT and TNE
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$ | 840 | $ | 751 | $ | 89 | 12 | % | ||||||||
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Urology
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1,839 | 827 | 1,012 | 122 | % | |||||||||||
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Pulmonology
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254 | 70 | 184 | 263 | % | |||||||||||
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Spine
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186 | - | 186 | n/m | * | |||||||||||
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Repairs, peripherals, and accessories
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449 | 420 | 29 | 7 | % | |||||||||||
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Total medical sales
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3,568 | 2,068 | 1,500 | 73 | % | |||||||||||
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Total industrial sales
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746 | 647 | 99 | 15 | % | |||||||||||
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Net sales
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$ | 4,314 | $ | 2,715 | $ | 1,599 | 59 | % | ||||||||
* not meaningful
Gross margin expansion resulting from favorable sales mix
The Company reported gross profit of $1.4 million for the third quarter of fiscal 2012, which represents an increase of $0.5 million, or 68%, over the same period in fiscal 2011. Gross margin for the period increased 170 basis points to 31%. The expansion of gross margin was primarily attributable to a more favorable mix of higher gross margin product sales and favorable manufacturing variances from manufacturing efficiencies.
Selling, general and administrative expenses (“SG&A”) increased $0.1 million, or 3%, to $2.7 million in the third quarter of fiscal 2012. This slight increase in expense was largely driven by higher stock-based compensation expense, increased spending on sales and marketing consulting activities, and higher sales commissions tied to the overall growth of net sales. As a percentage of sales, SG&A decreased to 62% compared to 96% reported during the same period last year.
Research and development expenses (“R&D”) increased $0.1 million, or 11%, to $0.7 million in the third quarter of fiscal 2012. This slight increase in expense was due to higher development costs associated with next generation products. As a percentage of sales, R&D decreased to 17%, which compares to 24% reported during the same period last year.
The Company’s operating loss decreased 17% to $2 million during the third quarter of fiscal 2012 driven largely by higher gross profit and partially offset by moderate increases in operating expenses.
The Company ended the third quarter of fiscal 2012 with $3.0 million in cash and equivalents and working capital of $6.6 million.
As of December 31, 2011, the Company has drawn a total of $8 million against the aggregate $10 million available under the loan provided by the Company’s Chairman, Lewis C. Pell.
Conference Call
An accompanying conference call hosted by Cynthia Ansari, Chief Executive Officer and Katherine Wolf, Chief Financial Officer and EVP, Corporate Development, to discuss the results will be held at 8:30 a.m. ET, on Wednesday, February 1, 2012.
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Conference dial-in:
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(877) 303-1595 |
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International dial-in:
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(970) 315-0449 |
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Conference ID:
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46468179 |
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Webcast:
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http://ir.visionsciences.com |
An audio replay of the conference call will be available from 11:30 a.m. ET on Wednesday, February 1, 2012, through 11:30 p.m. ET on February 14, 2012 by dialing (855) 859-2056 from the U.S. or (404) 537-3406 from abroad. The audio webcast will also be available in the investor section of the company’s website, www.visionsciences.com.
Forward Looking Statements
Except for the historical information provided, the matters discussed in this release include forward-looking statements for the purposes of the safe harbor protections under The Private Securities Litigation Reform Act of 1995. These forward-looking statements generally can be identified by phrases such as Vision-Sciences or its management “believes,” “expects,” “allows,” “anticipates,” or other words or phrases of similar import. Similarly, statements in this release that describe our business strategy, outlook, objectives, plans, intentions, or goals are also forward-looking statements. All such forward-looking statements are subject to certain risks and uncertainties that could cause our actual results to differ materially from those in forward-looking statements. Other risk factors are detailed in our most recent annual report and other filings with the Securities and Exchange Commission. We do not assume any obligation to update any forward-looking statements as a result of new information or future events or developments.
About Vision-Sciences, Inc.
Vision-Sciences, Inc. designs, develops, manufactures and markets unique flexible endoscopic products utilizing sterile disposable sheaths, the Slide-On EndoSheath Technology, which provide the users quick, efficient product turnover while ensuring the patient a contaminant-free product. Vision‑Sciences owns the registered trademarks Vision Sciences®, Slide-On®, EndoSheath®, EndoWipe® and The Vision System®. Information about Vision-Sciences’ products is available at www.visionsciences.com.
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Vision-Sciences, Inc.
Katherine Wolf
CFO & EVP, Corporate Development
845.365.0600
invest@visionsciences.com
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COCKRELL GROUP
Rich Cockrell
404.942.3369
Investorrelations@thecockrellgroup.com
cockrellgroup.com
@COCKRELLGROUP on Twitter
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Vision-Sciences, Inc. and Subsidiaries
Condensed Consolidated Statements of Operations
(In thousands, except per share amounts)
(Unaudited)
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Three Months Ended
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Nine Months Ended
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December 31,
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December 31,
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2011
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2010
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2011
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2010
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Net sales
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$ | 4,314 | $ | 2,715 | $ | 12,095 | $ | 7,671 | ||||||||
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Cost of sales
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2,957 | 1,906 | 8,213 | 5,532 | ||||||||||||
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Gross profit
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1,357 | 809 | 3,882 | 2,139 | ||||||||||||
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Selling, general, and administrative expenses
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2,665 | 2,599 | 9,054 | 7,872 | ||||||||||||
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Research and development expenses
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730 | 655 | 2,161 | 1,984 | ||||||||||||
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Operating loss
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(2,038 | ) | (2,445 | ) | (7,333 | ) | (7,717 | ) | ||||||||
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Interest income
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2 | 1 | 9 | 4 | ||||||||||||
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Interest expense
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(131 | ) | (91 | ) | (329 | ) | (235 | ) | ||||||||
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Debt cost expense
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(145 | ) | (37 | ) | (229 | ) | (101 | ) | ||||||||
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Other, net
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(32 | ) | - | (43 | ) | (1 | ) | |||||||||
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Loss before provision for income taxes
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(2,344 | ) | (2,572 | ) | (7,925 | ) | (8,050 | ) | ||||||||
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Income tax (benefit) provision
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(2 | ) | 4 | - | 10 | |||||||||||
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Net loss
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$ | (2,342 | ) | $ | (2,576 | ) | $ | (7,925 | ) | $ | (8,060 | ) | ||||
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Net loss per common share -basic and diluted
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$ | (0.05 | ) | $ | (0.07 | ) | $ | (0.18 | ) | $ | (0.22 | ) | ||||
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Weighted average shares used in computing net loss per common share - basic and diluted
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44,258 | 36,955 | 44,164 | 36,904 | ||||||||||||
Vision-Sciences, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(In thousands, except per share amounts)
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December 31,
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March 31,
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2011
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2011
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ASSETS
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(unaudited)
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Current assets:
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Cash and cash equivalents
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$ | 3,017 | $ | 9,180 | ||||
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Accounts receivable, net
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1,555 | 1,592 | ||||||
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Inventories, net
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5,306 | 6,096 | ||||||
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Prepaid expenses and other current assets
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269 | 332 | ||||||
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Total current assets
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10,147 | 17,200 | ||||||
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Machinery and equipment
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3,435 | 3,182 | ||||||
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Demonstration equipment
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1,036 | 1,413 | ||||||
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Furniture and fixtures
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224 | 224 | ||||||
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Leasehold improvements
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372 | 372 | ||||||
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Total property and equipment, at cost
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5,067 | 5,191 | ||||||
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Less—accumulated depreciation and amortization
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2,958 | 2,970 | ||||||
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Total property and equipment, net
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2,109 | 2,221 | ||||||
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Other assets, net
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69 | 73 | ||||||
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Deferred debt cost, net
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1,659 | 272 | ||||||
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Total assets
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$ | 13,984 | $ | 19,766 | ||||
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LIABILITIES AND STOCKHOLDERS' EQUITY
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Current liabilities:
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Capital lease obligations
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$ | 99 | $ | 65 | ||||
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Accounts payable
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403 | 921 | ||||||
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Accrued expenses
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734 | 782 | ||||||
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Accrued compensation
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669 | 706 | ||||||
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Advances from customers
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1,659 | 5,693 | ||||||
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Total current liabilities
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3,564 | 8,167 | ||||||
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Line of credit—related party
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8,000 | 5,000 | ||||||
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Capital lease obligations, net of current portion
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115 | 75 | ||||||
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Total liabilities
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11,679 | 13,242 | ||||||
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Commitments and Contingencies
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- | - | ||||||
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Stockholders’ equity:
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Common stock, $0.01 par value— Authorized—75,000 shares Issued—44,665 shares and 44,025 shares, respectively
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447 | 440 | ||||||
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Additional paid-in capital
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98,049 | 94,339 | ||||||
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Treasury stock at cost, 5 shares of common stock and none, respectively
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(11 | ) | - | |||||
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Accumulated deficit
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(96,180 | ) | (88,255 | ) | ||||
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Total stockholders’ equity
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2,305 | 6,524 | ||||||
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Total liabilities and stockholders’ equity
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$ | 13,984 | $ | 19,766 | ||||
Vision-Sciences, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(In thousands, except per share amounts)
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Nine Months Ended
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December 31,
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2011
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2010
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Cash flows from operating activities:
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Net loss
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$ | (7,925 | ) | $ | (8,060 | ) | ||
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Adjustments to reconcile net loss to net cash used in operating activities:
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Depreciation and amortization
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618 | 559 | ||||||
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Stock-based compensation expense
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1,704 | 1,310 | ||||||
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Issuance of restricted stock awards
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3 | 7 | ||||||
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Provision for (recovery of) bad debt expenses
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1 | (152 | ) | |||||
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Debt cost expense
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229 | 101 | ||||||
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Loss on disposal of fixed assets
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39 | - | ||||||
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Changes in assets and liabilities:
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Accounts receivable
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36 | (348 | ) | |||||
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Inventories
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508 | (2,372 | ) | |||||
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Prepaid expenses and other current assets
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63 | 720 | ||||||
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Accounts payable
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(518 | ) | 1,036 | |||||
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Accrued expenses
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(48 | ) | (168 | ) | ||||
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Accrued compensation
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(37 | ) | (428 | ) | ||||
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Advances from customers
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(4,034 | ) | 3,669 | |||||
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Net cash used in operating activities
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(9,361 | ) | (4,126 | ) | ||||
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Cash flows from investing activities:
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Purchase of property and equipment
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(127 | ) | (220 | ) | ||||
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Purchase of short-term investments
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- | (149 | ) | |||||
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Proceeds from short-term investment sales/maturities
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- | 596 | ||||||
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Proceeds from disposal of fixed assets
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3 | - | ||||||
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Net cash (used in) provided by investing activities
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(124 | ) | 227 | |||||
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Cash flows from financing activities:
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Advance on line of credit—related party
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3,000 | 2,500 | ||||||
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Payments for deferred debt cost
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(5 | ) | - | |||||
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Payments of capital leases
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(61 | ) | (45 | ) | ||||
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Proceeds from exercise of stock options
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399 | 112 | ||||||
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Common stock repurchased
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(11 | ) | - | |||||
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Net cash provided by financing activities
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3,322 | 2,567 | ||||||
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Net decrease in cash and cash equivalents
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(6,163 | ) | (1,332 | ) | ||||
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Cash and cash equivalents at beginning of period
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$ | 9,180 | $ | 2,540 | ||||
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Cash and cash equivalents at end of period
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$ | 3,017 | $ | 1,208 | ||||
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Supplemental disclosure of cash flow information:
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Cash paid during the period for:
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Interest
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$ | 301 | $ | 58 | ||||
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Income taxes
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$ | 4 | $ | 27 | ||||