Encision Inc. (Pink Sheets: ECIA), a medical device company owning patented surgical technology that is emerging as a standard of care in minimally-invasive surgery, reported profitable financial results for its fourth fiscal quarter ended March 31, 2011.
The Company recorded net income of $35,000 or $0.01 per share for the fourth quarter of fiscal year 2011 on net sales of $2.921 million, representing an 8% decrease from net sales of $3.186 million for the fourth quarter of fiscal year 2010. The Company's net income compared favorably to the $94,000 net loss, or $(0.01) per share for the fourth quarter of fiscal year 2010.
Gross profit margin for the fourth quarter of fiscal year 2011 was 58.7% as compared to 59% for the fourth quarter of fiscal year 2010. In the fourth quarter of fiscal year 2010, the gross profit margin decreased 3% as a result of an inventory reserve increase of $96,000 relating to the removal of product from inventory. Therefore, on a comparable adjusted basis, the gross profit margin for the fourth quarter of fiscal year 2011 decreased from the fourth quarter of fiscal year 2010. Principally, this was a result of a planned manufacturing slowdown that resulted in higher product unit costs.
"We are disappointed in the reduced sales for the fiscal year. However, even with our reduced sales, we managed to have a small net income for our fiscal year 2011 due to the $269 thousand of net income that we recorded in the second half of the fiscal year," said Jack Serino, President and CEO of Encision Inc.
"In fiscal year 2012, we will release new products for broader market access, focus on regrowing our AEM® franchise through a social media campaign to increase the discussion about stray energy burns during laparoscopy and our unique solution, especially during single or reduced port surgery, and accelerate a medico-legal initiative with healthcare facilities' insurance stakeholders. In addition, prior years' efforts in vertical integration have given us three recognized core competencies – electrosurgery, instrument design, and manufacturing – which we expect will allow us to increase sales from our strategic partnership initiatives."
Net sales for the fiscal year ended March 31, 2011 totaled $11.617 million, representing a 9.5% decrease from net sales of $12.836 million for the fiscal year ended March 31, 2010. The Company recorded net income of $5,000 or $0.00 per share for the fiscal year ended March 31, 2011 compared to net income of $265,000 or $0.04 per share for the fiscal year ended March 31, 2010. Gross profit margin for the fiscal year ended March 31, 2011 was 62.1% as compared to 61.3% for the fiscal year ended March 31, 2010. The higher gross profit margin in the fiscal year ended March 31, 2011 as compared to the gross profit margin in the fiscal year ended March 31, 2010 was due to a decrease of 0.8% of gross profit in the fiscal year ended March 31, 2010 as a result of an inventory reserve increase, as explained above. Therefore, on an adjusted basis, the gross profit margins were comparable for both fiscal years.
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