Misonix, Inc. (Nasdaq: MSON) (“Misonix” or the “Company”), a
provider of minimally invasive therapeutic ultrasonic medical
devices and regenerative products that enhance clinical outcomes,
today reported financial results for the fiscal 2020 first quarter
ended September 30, 2019 as summarized below:
|
|
|
Three Months
Ended |
|
September 30, |
|
|
2019 |
|
|
|
2018 |
|
|
|
(unaudited) |
|
|
|
(unaudited) |
|
Revenue: |
|
|
Product revenue |
$ |
11,145,922 |
|
|
$ |
9,361,164 |
|
Total
revenue |
$ |
11,145,922 |
|
|
$ |
9,361,164 |
|
Gross
Profit |
$ |
7,909,275 |
|
|
$ |
6,610,621 |
|
GP
Percentage - product revenue |
|
71.0 |
% |
|
|
70.6 |
% |
Pretax
loss |
$ |
(2,288,508 |
) |
|
$ |
(2,610,986 |
) |
Income tax
benefit |
$ |
4,085,000 |
|
|
$ |
- |
|
Net income
(loss) |
$ |
1,796,492 |
|
|
$ |
(2,610,986 |
) |
|
|
|
EBITDA
(1) |
$ |
(1,792,115 |
) |
|
$ |
(2,244,398 |
) |
Adjusted
EBITDA (1) |
$ |
307,444 |
|
|
$ |
(644,377 |
) |
|
|
|
|
September 30 |
June 30, |
|
|
2019 |
|
|
|
2019 |
|
|
|
(unaudited) |
|
|
|
Long Term
Debt |
$ |
29,050,722 |
|
|
$ |
- |
|
Cash and
cash equivalents |
$ |
12,860,578 |
|
|
$ |
7,842,403 |
|
(1) Definitions and disclosures regarding non-GAAP financial
information including reconciliations are included at the end of
this press release.
On September 27, 2019, Misonix acquired
privately held Solsys Medical, LLC (“Solsys”). The results
presented herein reflect the Company’s legacy Misonix operations as
well as two days of revenue and four days of expenses from the
acquired Solsys operations. In addition, beginning with the fiscal
first quarter of 2020, Misonix adopted certain changes in the
quarterly financial results related to the presentation of its
sales performance supplemental data to more accurately reflect the
Company’s two separate sales channels - its surgical and wound
product divisions. Going forward, the Company will present total,
domestic and international sales performance supplemental data for
its surgical and wound divisions. As a result, the Company will no
longer present total, domestic and international sales performance
supplemental data based on its consumables and equipment
products.
First Quarter Fiscal Year 2020 Highlights:
- Fiscal first quarter 2020 revenue
increased approximately 19.1% to $11.1 million, compared to $9.4
million in fiscal first quarter 2019. Total fiscal Q1 2020 product
revenue growth reflects a 18.1% increase in surgical revenue and a
25.7% increase in wound revenue as compared to fiscal Q1 2019.--
Fiscal first quarter 2020 domestic product revenue increased 21.1%
to $6.5 million, including a 20.6% increase in surgical and a 22.9%
rise in wound.-- Fiscal first quarter 2020 international product
revenue increased 16.3% to $4.6 million, including a 15.3% increase
in surgical and an 81.5% rise in wound.-- In fiscal first quarter
2020, Misonix implemented a limited market release of the Nexus
platform.
- Fiscal first quarter 2020 gross
profit increased 19.6% to $7.9 million from the prior year period
of $6.6 million, due principally to higher revenue and improved
year-over-year gross profit margin.
- Net income was approximately $1.8
million in the fiscal first quarter, or $0.17 per diluted share,
compared to a net loss of approximately $2.6 million, or $0.29 per
share, in the prior year. The year-over-year improvement was
attributable to a $4.1 million income tax benefit relating to the
acquisition of Solsys.
- On September 27, 2019, Misonix
completed its previously announced acquisition of privately held
Solsys, in an all-stock transaction valued at approximately $109
million, consisting of the issuance by Misonix of approximately 5.7
million common shares to Solsys unitholders.-- The acquisition of
Solsys substantially broadens Misonix’s addressable market through
wound care solutions that are complementary to its existing
products, primarily SonicOne.-- The combined company anticipates
top line revenue growth in excess of 20% per annum.
Stavros Vizirgianakis, President and Chief
Executive Officer of Misonix stated, “Our strong operating and
financial momentum continues in fiscal 2020 as Misonix generated
another period of double-digit revenue growth with record quarterly
product revenue of $11.1 million, reflecting an 18.1% increase in
surgical revenue and a 25.7% increase in wound revenue. Our top
line growth, combined with the ongoing success of our initiatives
focused on driving sales, productivity and efficiency across our
wound and surgical divisions, resulted in a $1.3 million, or 19.6%,
year-over-year increase in gross profit to $7.9 million along with
strong gross margin of 71%.
“In early June, Misonix received 510(k)
clearance from the U.S. Food and Drug Administration for Nexus, our
revolutionary ultrasonic surgical platform, and in the 2020 fiscal
first quarter, we received Conformité Européene Mark approval. With
both regulatory authorizations completed, we began our limited
release of Nexus to select customers across our domestic and
European markets. We are extremely pleased with the initial results
and the feedback we have received from physicians and hospitals
regarding Nexus and remain confident in its ability to generate
significant and profitable growth. Nexus will be the solution we
focus on, particularly in the US, as we seek to expand our
addressable market share across neuro, spine, ortho, wound and
general surgery. We expect the rollout of Nexus to accelerate over
the coming quarters as we meet a growing pipeline of demand.
“Late in the fiscal first quarter, we completed
the acquisition of privately held Solsys Medical, doubling the size
of the Company from a revenue and operating perspective, while
almost tripling the sales force and strategically creating two
separate sales channels to better support each of our two
divisions, surgical and wound. Solsys’ leading cellular and
tissue-based wound treatment, TheraSkin, is highly complementary to
Misonix’s cutting-edge ultrasonic wound debridement solution,
SonicOne. The addition of Solsys to our growing platform provides
Misonix with a large direct advanced wound care channel-to-market
that will enable the company to expand SonicOne sales, and together
with TheraSkin, establish a new standard of care in the growing
chronic wound care market. With revenues growing in excess of 20%,
we expect to realize the operating and financial benefits of the
Solsys transaction over the remainder of fiscal 2020 and
beyond.
“In the coming quarters, we will continue to
diligently work with the Solsys team to ensure a smooth integration
while simultaneously delivering the top-quality products and
services to which our growing base of customers has become
accustomed. Our team is highly enthusiastic about our growth
prospects. We remain committed to actively managing our business to
best position Misonix for the future, with a goal of growing
revenue in a prudent and profitable manner and we remain committed
to actively managing our business to best position Misonix for the
future with the goal of delivering world-class solutions clinically
proven to improve patient outcomes, while creating new value for
our healthcare partners and shareholders.”
Sales Performance Supplemental
Data
|
|
For the three months
ended |
|
|
|
|
|
September 30, |
Net change |
|
|
|
2019 |
|
|
2018 |
|
$ |
% |
Total |
|
|
|
|
|
|
|
Surgical |
|
$ |
9,611,298 |
|
$ |
8,140,395 |
|
$ |
1,470,903 |
18.1 |
% |
Wound |
|
|
1,534,624 |
|
|
1,220,769 |
|
|
313,855 |
25.7 |
% |
Total |
|
$ |
11,145,922 |
|
$ |
9,361,164 |
|
$ |
1,784,758 |
19.1 |
% |
|
|
|
|
|
|
|
|
Domestic: |
|
|
|
|
|
|
|
Surgical |
|
$ |
5,115,022 |
|
$ |
4,241,463 |
|
$ |
873,559 |
20.6 |
% |
Wound |
|
|
1,429,886 |
|
|
1,163,055 |
|
|
266,831 |
22.9 |
% |
Total |
|
$ |
6,544,908 |
|
$ |
5,404,518 |
|
$ |
1,140,390 |
21.1 |
% |
|
|
|
|
|
|
|
|
International: |
|
|
|
|
|
|
|
Surgical |
|
$ |
4,496,276 |
|
$ |
3,898,932 |
|
$ |
597,344 |
15.3 |
% |
Wound |
|
|
104,738 |
|
|
57,714 |
|
|
47,024 |
81.5 |
% |
Total |
|
$ |
4,601,014 |
|
$ |
3,956,646 |
|
$ |
644,368 |
16.3 |
% |
|
|
|
|
|
|
|
|
Joe Dwyer, Chief Financial Officer, added,
“Misonix’s fiscal 2020 first quarter performance demonstrates the
ongoing success of our disciplined approach to scaling our leading
ultrasonic surgical and wound treatment product divisions. Total
combined revenue across our surgical and wound divisions reflects a
continuation in growth trends across our recurring consumables and
equipment products that we experienced in the prior year period,
with additional uplift from the limited release of our Nexus
platform. In addition, we ended the quarter with a healthy balance
sheet and $12.9 million in cash, giving us the financial
flexibility to support our continued growth.
“Total operating expenses increased 10.4% to
$10.2 million, compared to $9.2 million in the prior year period,
reflecting a $1.0 million increase in general and administrative
expense. The year-over-year rise in general and administrative
expense is fully attributable to $1.8 million in Solsys transaction
related expenses, including legal and banking fees, and lower
non-cash stock compensation expense. Excluding non-recurring and
non-cash expenses, total operating expenses for the quarter would
have increased by 6.0% or $0.5 million, principally related to the
growth of our sales force.
“The initiatives we have undertaken to meet
growing demand for our products and to reduce inefficiencies in our
procurement and supply chain are becoming more visible as we move
through fiscal 2020. In this regard, the new processes and
procedures that we implemented over the past few quarters to ensure
we have optimal inventory levels to match customer demand are now
driving improved productivity and a significant reduction in total
outstanding backlog orders.
“In summary, we are successfully executing on
our integration and operating strategies and will continue to
follow the approach we have deployed to grow both the top and
bottom line, while preserving a healthy balance sheet and capital
structure. We believe that this momentum will continue and result
in enhanced long-term shareholder value as we move through the
remainder of fiscal 2020 and beyond. Given our high level of
confidence in our outlook we reiterate our guidance for product
revenue growth that exceeds 20%, along with gross profit margins of
approximately 70%.”
Fiscal First Quarter 2020 Conference
CallMisonix will host a conference call and webcast today,
Thursday, November 7, 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
888-208-1711 (domestic) or 323-794-2577 (international), conference
ID 5526893. 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 minimally
invasive ultrasonic medical devices used for precise bone
sculpting, removal of soft and hard tumors and tissue debridement,
primarily in the areas of neurosurgery, orthopedic surgery, plastic
surgery, wound care and maxillo-facial surgery. The Company
combined its SonicOne wound debridement application with the
recently acquired TheraSkin product, a leading cellular skin
substitute indicated for all wound treatments. The Company’s sales
force operates as two divisions, Surgical (Neuro and Spine
Applications) and Wound. 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
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, access to capital, and other
factors discussed in the Company’s Annual Report on Form 10-K for
the fiscal year ended June 30, 2019, 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 Dwyer |
Norberto Aja, Jennifer Neuman |
Chief Financial Officer |
JCIR |
Misonix, Inc. |
212-835-8500 or mson@jcir.com |
631-694-9555 |
|
|
|
Misonix, Inc. and
SubsidiariesCondensed Consolidated Statements of
Operations(Unaudited)
|
|
For the three months
ended |
|
|
September 30, |
|
|
|
2019 |
|
|
|
2018 |
|
Revenues |
|
|
|
|
Product |
|
$ |
11,145,922 |
|
|
$ |
9,361,164 |
|
Total
revenue |
|
|
11,145,922 |
|
|
|
9,361,164 |
|
|
|
|
|
|
Cost of
revenue |
|
|
3,236,647 |
|
|
|
2,750,543 |
|
Gross
profit |
|
|
7,909,275 |
|
|
|
6,610,621 |
|
|
|
|
|
|
Operating
expenses: |
|
|
|
|
Selling expenses |
|
|
5,200,582 |
|
|
|
4,735,005 |
|
General and administrative expenses |
|
|
4,207,807 |
|
|
|
3,183,384 |
|
Research and development expenses |
|
|
771,411 |
|
|
|
1,304,766 |
|
Total
operating expenses |
|
|
10,179,800 |
|
|
|
9,223,155 |
|
Loss from
operations |
|
|
(2,270,525 |
) |
|
|
(2,612,534 |
) |
|
|
|
|
|
Other income
(expense): |
|
|
|
|
Interest income |
|
|
18,877 |
|
|
|
19,813 |
|
Interest expense |
|
|
(36,097 |
) |
|
|
- |
|
Other |
|
|
(763 |
) |
|
|
(18,265 |
) |
Total other
income |
|
|
(17,983 |
) |
|
|
1,548 |
|
|
|
|
|
|
Loss from
operations before income taxes |
|
|
(2,288,508 |
) |
|
|
(2,610,986 |
) |
|
|
|
|
|
Income tax
benefit |
|
|
4,085,000 |
|
|
|
- |
|
|
|
|
|
|
Net income
(loss) |
|
$ |
1,796,492 |
|
|
$ |
(2,610,986 |
) |
|
|
|
|
|
Net income
(loss) per share: |
|
|
|
|
Basic |
|
$ |
0.18 |
|
|
$ |
(0.29 |
) |
Diluted |
|
$ |
0.17 |
|
|
$ |
(0.29 |
) |
|
|
|
|
|
Weighted
average shares - Basic |
|
|
9,686,402 |
|
|
|
9,100,123 |
|
Weighted
average shares - Diluted |
|
|
10,213,085 |
|
|
|
9,100,123 |
|
|
|
|
|
|
Misonix, Inc. and
SubsidiariesCondensed Consolidated Balance
Sheets
|
|
September 30, |
|
June 30, |
|
|
|
|
2019 |
|
|
|
2019 |
|
|
|
|
(Unaudited) |
|
|
|
Assets |
|
|
|
|
|
Current
assets: |
|
|
|
|
|
Cash and
cash equivalents |
|
$ |
12,860,578 |
|
|
$ |
7,842,403 |
|
|
Accounts
receivable, less allowance for doubtful accounts of $100,000 and
$100,000, respectively |
|
|
12,727,152 |
|
|
|
5,360,454 |
|
|
Inventories,
net |
|
|
8,907,354 |
|
|
|
7,353,562 |
|
|
Prepaid
expenses and other current assets |
|
|
999,710 |
|
|
|
835,044 |
|
|
Total
current assets |
|
|
35,494,794 |
|
|
|
21,391,463 |
|
|
|
|
|
|
|
|
Property,
plant and equipment, net of accumulated amortization and
depreciation of $10,973,868 and $10,545,810, respectively |
|
|
5,316,691 |
|
|
|
4,198,721 |
|
|
Patents, net
of accumulated amortization of $1,236,829 and $1,204,589,
respectively |
|
|
774,010 |
|
|
|
779,100 |
|
|
Goodwill |
|
|
110,787,776 |
|
|
|
1,701,094 |
|
|
Contract
assets |
|
|
960,000 |
|
|
|
960,000 |
|
|
Intangible
assets |
|
|
20,400,000 |
|
|
|
- |
|
|
Lease right
of use and other assets |
|
|
1,669,775 |
|
|
|
920,921 |
|
|
Total
assets |
|
$ |
175,403,046 |
|
|
$ |
29,951,299 |
|
|
|
|
|
|
|
|
Liabilities and shareholders' equity |
|
|
|
|
|
Current
liabilities: |
|
|
|
|
|
Accounts
payable |
|
$ |
8,596,981 |
|
|
$ |
5,357,736 |
|
|
Accrued
expenses and other current liabilities |
|
|
4,820,229 |
|
|
|
2,488,514 |
|
|
Current
portion of lease liabilities |
|
|
448,158 |
|
|
|
- |
|
|
Total
current liabilities |
|
|
13,865,368 |
|
|
|
7,846,250 |
|
|
|
|
|
|
|
|
Non current
liabilities: |
|
|
|
|
|
Notes
payable |
|
|
29,050,722 |
|
|
|
- |
|
|
Lease right
of use liabilities |
|
|
872,341 |
|
|
|
- |
|
|
Other
non-current liabilities |
|
|
401,000 |
|
|
|
401,000 |
|
|
Total
liabilities |
|
|
44,189,431 |
|
|
|
8,247,250 |
|
|
|
|
|
|
|
|
Commitments
and contingencies |
|
|
|
|
|
|
|
|
|
|
|
Shareholders' equity: |
|
|
|
|
|
Common
stock, $.0001 and $.01 par value-shares authorized 40,000,000;
15,353,185 and 9,646,728 shares issued and outstanding in each
period |
|
|
1,535 |
|
|
|
96,468 |
|
|
Additional
paid-in capital |
|
|
151,308,485 |
|
|
|
43,500,478 |
|
|
Accumulated
deficit |
|
|
(20,096,405 |
) |
|
|
(21,892,897 |
) |
|
Total
shareholders' equity |
|
|
131,213,615 |
|
|
|
21,704,049 |
|
|
|
|
|
|
|
|
Total
liabilities and shareholders' equity |
|
$ |
175,403,046 |
|
|
$ |
29,951,299 |
|
|
|
|
|
|
|
|
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, merger and acquisition fees and engineering costs
associated with its development of Nexus, its next generation
platform.
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 |
|
September 30, |
|
|
2019 |
|
|
|
2018 |
|
|
|
|
EBITDA: |
|
|
Net income
(loss) |
$ |
1,796,492 |
|
|
$ |
(2,610,986 |
) |
Income tax
benefit |
|
(4,085,000 |
) |
|
|
- |
|
Depreciation
and amortization |
|
460,296 |
|
|
|
366,588 |
|
Interest
expense |
|
36,097 |
|
|
|
- |
|
EBITDA |
|
(1,792,115 |
) |
|
|
(2,244,398 |
) |
|
|
|
Non-cash
stock compensation |
|
345,084 |
|
|
|
1,004,498 |
|
M&A
transaction fees |
|
1,754,475 |
|
|
|
- |
|
Nexus next
generation engineering |
|
- |
|
|
|
595,523 |
|
Adjusted
EBITDA |
$ |
307,444 |
|
|
$ |
(644,377 |
) |
|
|
|
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