On September 5, 2018, Misonix, Inc. (Nasdaq: MSON) (“Misonix” or
the “Company”), issued a press release announcing financial results
of its fourth fiscal quarter and fiscal year ended June 30, 2018.
The sales performance supplemental data table in that release
included a classification error between international consumables
and equipment revenue for the three and twelve months ended June
30, 2018. Total, domestic and international revenue was reported
correctly in all periods. A corrected supplemental data table and
updated percentages within the text of the press release are
included herein. Please note these changes when referencing the
transcript of the quarterly results review conference call the
Company held on September 5, 2018.
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 2018 fourth quarter and year ended
June 30, 2018 as summarized below:
|
|
|
|
|
|
($ in millions) |
Three Months Ended |
|
Year Ended |
|
June 30, |
|
June 30, |
|
|
2018 |
|
|
2017 |
|
|
|
2018 |
|
|
2017 |
|
|
|
|
|
|
|
Revenue |
$ |
8.6 |
|
$ |
7.9 |
|
|
$ |
36.7 |
|
$ |
27.3 |
|
Gross Profit |
$ |
6.1 |
|
$ |
5.5 |
|
|
$ |
26.9 |
|
$ |
19.1 |
|
GP Percentage - product
revenue |
|
70.8% |
|
|
69.9% |
|
|
|
70.0% |
|
|
69.9% |
|
Pretax loss from
continuing operations |
$ |
(1.8) |
|
$ |
(1.1) |
|
|
$ |
(2.4) |
|
$ |
(2.9) |
|
Net loss |
$ |
(1.8) |
|
$ |
(0.4) |
|
|
$ |
(7.6) |
|
$ |
(1.7) |
|
|
|
|
|
|
|
EBITDA (1) |
$ |
(1.1) |
|
$ |
(0.9) |
|
|
$ |
(0.8) |
|
$ |
(1.6) |
|
Adjusted EBITDA
(1) |
$ |
(0.2) |
|
$ |
(0.3) |
|
|
$ |
4.2 |
|
$ |
(0.5) |
|
|
|
|
|
|
|
|
June 30, |
|
|
June 30, |
|
|
|
2018 |
|
|
|
|
2017 |
|
|
Long Term Debt |
$ |
- |
|
|
|
$ |
- |
|
|
Cash |
$ |
11.0 |
|
|
|
$ |
11.6 |
|
|
|
|
|
|
|
|
- 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, “Our fourth quarter and fiscal
2018 top-line financial results mark the conclusion of another year
of significant company-wide improvements and growth for Misonix.
The ongoing and successful execution of our strategies to
aggressively expand our leading ultrasonic medical device platform
resulted in a 35% rise in annual revenues to a record $36.7
million, exceeding the high-end of our fiscal 2018 guidance. Record
top-line growth drove a 41% increase in annual gross profit, while
maintaining our healthy gross margin on product sales of 70%. The
significant improvement in our fiscal 2018 top- and bottom-line
financial performance reflects the added value we are generating
from our growth investments and our continued progress in
positioning Misonix for ongoing sustainable growth and future
profitability. With the positive operating momentum across our
business and a strong balance sheet, Misonix has a solid foundation
to continue pursuing a range of near- and long-term growth
opportunities that we are confident will deliver enhanced returns
for our shareholders.
“The demonstrated clinical benefits of Misonix’s
ultrasonic surgical devices are a key driver behind the strong
demand for our products and improved competitive position across
our domestic and international markets. Robust growth in both
consumables and equipment sales drove a 20% increase in product
revenue for fiscal 2018. We are also very pleased to see continued
double-digit revenue growth in our consumables business, a
high-margin recurring revenue stream that brings added
predictability to our results. Excluding license revenue,
consumables accounted for 71% of total sales for the fiscal fourth
quarter and 72% of sales for the full year. And, with over 62,000
surgical procedures performed with Misonix consumables, we exceeded
our goal for fiscal 2018 and remain on track to meet or exceed our
goal of 100,000 annual procedures world-wide within three
years.
“In line with our commitment to radically
improve patient outcomes through medical technology innovation, we
continued to invest in R&D to support the development of new
ultrasonic surgical solutions and products, including our next
generation Nexus platform product. We have received an
overwhelmingly positive response from physicians who tested early
prototypes and have incorporated their feedback to make further
enhancements to the Nexus product line, which will be unveiled at
the NASS conference in September. Nexus presents a compelling value
proposition to hospitals and physicians, allowing Misonix to
further penetrate operating rooms by expanding our addressable
markets.
“As we pursue the next phase of growth for
Misonix, we will continue to focus on actively managing our capital
structure, driving sales, improving productivity and increasing
efficiencies. We are confident that the direction we are headed in
will enable us to meet our goal of enhancing long-term shareholder
value as we move through fiscal 2019 and beyond.”
Sales Performance Supplemental
Data
|
For the Quarter Ended |
|
|
|
|
For the Year Ended |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30, |
|
Net Change |
|
June 30, |
|
Net Change |
|
|
|
2018 |
|
2017 |
|
$ |
% |
|
|
2018 |
|
2017 |
|
$ |
% |
|
Total |
|
|
|
|
|
|
|
|
|
|
|
|
Consumables |
$ |
6,155,886 |
$ |
5,594,142 |
|
$ |
561,744 |
|
|
10.0 |
% |
|
$ |
23,596,476 |
$ |
20,328,676 |
|
$ |
3,267,800 |
16.1 |
% |
|
Equipment |
|
2,480,240 |
|
2,296,053 |
|
|
184,187 |
|
|
8.0 |
% |
|
|
9,073,350 |
|
6,941,287 |
|
|
2,132,063 |
30.7 |
% |
|
License |
|
- |
|
- |
|
|
- |
|
|
- |
|
|
|
4,010,000 |
|
- |
|
|
4,010,000 |
100.0 |
% |
|
Total |
$ |
8,636,126 |
$ |
7,890,195 |
|
$ |
745,931 |
|
|
9.5 |
% |
|
$ |
36,679,826 |
$ |
27,269,963 |
|
$ |
9,409,863 |
34.5 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Domestic |
|
|
|
|
|
|
|
|
|
|
|
|
Consumables |
$ |
4,636,527 |
$ |
3,967,274 |
|
$ |
669,253 |
|
|
16.9 |
% |
|
$ |
17,735,749 |
$ |
14,866,772 |
|
$ |
2,868,977 |
19.3 |
% |
|
Equipment |
|
349,043 |
|
474,394 |
|
|
(125,351 |
) |
|
-26.4 |
% |
|
|
2,308,614 |
|
1,593,999 |
|
|
714,615 |
44.8 |
% |
|
Total |
$ |
4,985,570 |
$ |
4,441,668 |
|
$ |
543,902 |
|
|
12.2 |
% |
|
$ |
20,044,363 |
$ |
16,460,771 |
|
$ |
3,583,592 |
21.8 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
International |
|
|
|
|
|
|
|
|
|
|
|
|
Consumables |
$ |
1,519,359 |
$ |
1,626,868 |
|
$ |
(107,509 |
) |
|
-6.6 |
% |
|
$ |
5,860,727 |
$ |
5,461,904 |
|
$ |
398,823 |
7.3 |
% |
|
Equipment |
|
2,131,197 |
|
1,821,659 |
|
|
309,538 |
|
|
17.0 |
% |
|
|
6,764,736 |
|
5,347,288 |
|
|
1,417,448 |
26.5 |
% |
|
Total |
$ |
3,650,556 |
$ |
3,448,527 |
|
$ |
202,029 |
|
|
5.9 |
% |
|
$ |
12,625,463 |
$ |
10,809,192 |
|
$ |
1,816,271 |
16.8 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
License |
$ |
- |
$ |
- |
|
$ |
- |
|
$ |
- |
|
|
$ |
4,010,000 |
$ |
- |
|
$ |
4,010,000 |
100.0 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Joe Dwyer, Chief Financial Officer, added, “Our strong fourth
quarter and fiscal 2018 financial performance marked continued
progress against our strategic initiatives, which led to record
revenue as well as positive adjusted EBITDA and cash generated from
operations. As a result, we ended the quarter with $11 million in
cash while continuing to operate debt free. We remain focused on
preserving our strong liquidity position and remain committed to
profitably growing the business through investments in organic
growth initiatives and select accretive acquisitions that bring
complementary capabilities to our product portfolio and generate
strong returns for our shareholders.”
“Looking ahead, we expect double-digit top-line
growth to continue in fiscal 2019 as we continue to follow the
approach we’ve successfully deployed to build the top line,
maintain close control of fixed and variable costs and optimize the
balance sheet and capital structure. As it relates to revenue
guidance, we anticipate product revenue growth in fiscal 2019 to
exceed 20%, with gross profit margins of approximately 70%.”
Fiscal Fourth Quarter 2018 Conference
CallMisonix will host a conference call at 4:30 p.m. ET
today, Wednesday, September 5, 2018. Senior management will
discuss the financial results and host a question and answer
session. The dial in number for the audio conference call is
888-204-4368 (domestic) or 323-794-2423 (international), conference
ID 3913387. Participants may also listen to a live webcast of the
call through the “Events and Presentations” section under “Investor
Relations” on Misonix’s website at www.misonix.com. A webcast
replay will be available for 30 days following the live event at
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 StatementWith 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, 2017, 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 NeumanJCIR212-835-8500 or
mson@jcir.com |
Misonix, Inc. and
Subsidiaries |
Consolidated Statements of
Operations |
|
|
|
For the years ended |
|
|
June 30, |
|
|
|
2018 |
|
|
2017 |
|
|
2016 |
|
|
|
|
|
|
Revenues |
|
|
|
|
Product |
|
$ |
32,669,826 |
|
$ |
27,269,963 |
|
$ |
23,113,194 |
|
License |
|
|
4,010,000 |
|
$ |
- |
|
$ |
- |
|
Total revenue |
|
$ |
36,679,826 |
|
$ |
27,269,963 |
|
$ |
23,113,194 |
|
|
|
|
|
|
Cost of goods sold |
|
|
9,794,898 |
|
|
8,217,439 |
|
|
7,640,626 |
|
Gross profit |
|
|
26,884,928 |
|
|
19,052,524 |
|
|
15,472,568 |
|
|
|
|
|
|
Operating
expenses: |
|
|
|
|
Selling
expenses |
|
|
16,368,381 |
|
|
14,220,907 |
|
|
12,632,961 |
|
General
and administrative expenses |
|
|
9,063,139 |
|
|
9,595,206 |
|
|
6,829,516 |
|
Research
and development expenses |
|
|
4,394,149 |
|
|
1,837,497 |
|
|
1,839,479 |
|
Total
operating expenses |
|
|
29,825,669 |
|
|
25,653,610 |
|
|
21,301,956 |
|
Loss from
operations |
|
|
(2,940,741 |
) |
|
(6,601,086 |
) |
|
(5,829,388 |
) |
|
|
|
|
|
Other income
(expense): |
|
|
|
|
Interest
income |
|
|
26,123 |
|
|
75 |
|
|
81 |
|
Royalty
income and license fees |
|
|
525,438 |
|
|
3,771,610 |
|
|
3,948,757 |
|
Other |
|
|
2,274 |
|
|
(36,211 |
) |
|
(21,878 |
) |
Total other income |
|
|
553,835 |
|
|
3,735,474 |
|
|
3,926,960 |
|
|
|
|
|
|
(Loss) from continuing
operations before income taxes |
|
|
(2,386,906 |
) |
|
(2,865,612 |
) |
|
(1,902,428 |
) |
|
|
|
|
|
Income tax expense
(benefit) |
|
|
5,416,646 |
|
|
(1,022,808 |
) |
|
(573,351 |
) |
|
|
|
|
|
Net (loss) from
continuing operations |
|
|
(7,803,552 |
) |
|
(1,842,804 |
) |
|
(1,329,077 |
) |
Discontinued
operations: |
|
|
|
|
Gain from
sale of discontinued operations net of tax of |
|
|
|
|
$58,883,
$88,375 and $93,069, respectively |
|
|
191,117 |
|
|
161,625 |
|
|
156,931 |
|
Net income from
discontinued operations |
|
|
191,117 |
|
|
161,625 |
|
|
156,931 |
|
Net (loss) |
|
$ |
(7,612,435 |
) |
$ |
(1,681,179 |
) |
$ |
(1,172,146 |
) |
|
|
|
|
|
Net income (loss) per
share: |
|
|
|
|
Continuing
operations: |
|
|
|
|
Basic |
|
$ |
(0.87 |
) |
$ |
(0.22 |
) |
$ |
(0.17 |
) |
Diluted |
|
$ |
(0.87 |
) |
$ |
(0.22 |
) |
$ |
(0.17 |
) |
|
|
|
|
|
Discontinued
operations |
|
|
|
|
Basic |
|
$ |
0.02 |
|
$ |
0.02 |
|
$ |
0.02 |
|
Diluted |
|
$ |
0.02 |
|
$ |
0.02 |
|
$ |
0.02 |
|
|
|
|
|
|
Combined |
|
|
|
|
Basic |
|
$ |
(0.85 |
) |
$ |
(0.20 |
) |
$ |
(0.15 |
) |
Diluted |
|
$ |
(0.85 |
) |
$ |
(0.20 |
) |
$ |
(0.15 |
) |
|
|
|
|
|
Weighted average shares
- Basic |
|
|
9,009,189 |
|
|
8,398,778 |
|
|
7,776,949 |
|
Weighted average shares
- Diluted |
|
|
9,009,189 |
|
|
8,398,778 |
|
|
7,776,949 |
|
|
|
|
|
|
Misonix, Inc. and
Subsidiaries |
Consolidated Balance Sheets |
|
|
|
|
|
|
|
June 30, |
|
June 30, |
|
|
|
2018 |
|
|
|
2017 |
|
|
|
|
|
|
Assets |
|
|
|
|
Current assets: |
|
|
|
|
Cash and cash
equivalents |
|
$ |
10,979,455 |
|
|
$ |
11,557,071 |
|
Accounts receivable,
less allowance for doubtful accounts of $200,000 and $96,868,
respectively |
|
|
5,245,549 |
|
|
|
5,133,389 |
|
Inventories, net |
|
|
5,019,886 |
|
|
|
4,992,434 |
|
Prepaid expenses and
other current assets |
|
|
611,647 |
|
|
|
918,899 |
|
Total current
assets |
|
|
21,856,537 |
|
|
|
22,601,793 |
|
|
|
|
|
|
Property, plant and
equipment, net of accumulated amortization and depreciation of
$9,023,235 and $6,976,282, respectively |
|
|
4,188,378 |
|
|
|
3,730,203 |
|
Patents, net of
accumulated amortization of $1,063,393 and $885,394,
respectively |
|
|
757,447 |
|
|
|
719,136 |
|
Goodwill |
|
|
1,701,094 |
|
|
|
1,701,094 |
|
Intangible and other
assets |
|
|
517,295 |
|
|
|
282,876 |
|
Deferred income
tax |
|
|
- |
|
|
|
4,334,547 |
|
Total assets |
|
$ |
29,020,751 |
|
|
$ |
33,369,649 |
|
|
|
|
|
|
Liabilities and
shareholders' equity |
|
|
|
|
Current
liabilities: |
|
|
|
|
Accounts payable |
|
$ |
1,794,098 |
|
|
$ |
1,861,228 |
|
Accrued expenses and
other current liabilities |
|
|
2,812,172 |
|
|
|
3,346,138 |
|
Total current
liabilities |
|
|
4,606,270 |
|
|
|
5,207,366 |
|
|
|
|
|
|
Deferred lease
liability |
|
|
- |
|
|
|
9,354 |
|
Deferred income |
|
|
13,303 |
|
|
|
13,087 |
|
Total liabilities |
|
|
4,619,573 |
|
|
|
5,229,807 |
|
|
|
|
|
|
Commitments and
contingencies |
|
|
|
|
|
|
|
|
|
Shareholders'
equity: |
|
|
|
|
Common stock, $.01 par
value-shares authorized 40,000,000; 9,430,466 and 9,357,166 shares
issued and outstanding in each period |
|
|
94,305 |
|
|
|
93,572 |
|
Additional paid-in
capital |
|
|
39,772,973 |
|
|
|
36,808,810 |
|
Accumulated
deficit |
|
|
(15,466,100 |
) |
|
|
(8,762,540 |
) |
Total shareholders'
equity |
|
|
24,401,178 |
|
|
|
28,139,842 |
|
Total liabilities and
shareholders' equity |
|
$ |
29,020,751 |
|
|
$ |
33,369,649 |
|
|
|
|
|
|
Use of Non-GAAP Financial MeasuresThe 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 its next generation
platform, which will not be a recurring cost when the project is
completed in late 2018.
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.
Misonix, Inc. and Subsidiaries |
Reconciliation of GAAP Results to Non-GAAP
Measures |
(unaudited) |
|
|
|
|
|
|
(in
millions) |
Three Months Ended |
|
Year Ended |
|
June 30, |
|
June 30, |
|
|
2018 |
|
|
2017 |
|
|
|
2018 |
|
|
2017 |
|
|
|
|
|
|
|
EBITDA: |
|
|
|
|
|
Net income (loss) |
$ |
(1.8 |
) |
$ |
(0.4 |
) |
|
$ |
(7.6 |
) |
$ |
(1.7 |
) |
Depreciation and
amortization |
|
0.4 |
|
|
0.3 |
|
|
|
1.4 |
|
|
1.1 |
|
Income taxes |
|
0.3 |
|
|
(0.8 |
) |
|
|
5.4 |
|
|
(1.0 |
) |
EBITDA |
|
(1.1 |
) |
|
(0.9 |
) |
|
$ |
(0.8 |
) |
|
(1.6 |
) |
|
|
|
|
|
|
Non-cash
compensation |
|
0.5 |
|
|
0.5 |
|
|
|
2.7 |
|
|
1.0 |
|
Next generation
engineering |
|
0.4 |
|
|
0.1 |
|
|
|
2.3 |
|
|
0.1 |
|
Adjusted EBITDA |
$ |
(0.2 |
) |
$ |
(0.3 |
) |
|
$ |
4.2 |
|
$ |
(0.5 |
) |
|
|
|
|
|
|
Misonix (NASDAQ:MSON)
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