Misonix revenue increases 19% to $8.0M for six months ended December 31, 2012

Feb 7 2013

Misonix, Inc. (NASDAQ: MSON), a surgical device company that designs, manufactures and markets innovative therapeutic ultrasonic products worldwide for spine surgery, cranial maxillo – facial surgery, neurosurgery,  wound debridement, cosmetic surgery, laparoscopic surgery and other surgical applications, today reported financial results for the six-months and the second quarter of fiscal year 2013, ended December 31, 2012.

Highlights for the quarter and the six-month period include:

• Revenue for the six months increased 19% to $8.0 million compared to $6.8 million in the first six months of 2012. Second quarter revenue was $3.5 million comparable to $3.6 million in the second quarter of 2012.
• Excluding revenue from legacy products, BoneScalpel, SonicOne and SonaStar revenue increased 46% and 12% respectively for the first half and the three months of fiscal 2013, ended December 31, 2012.
• U.S. revenue for the six months increased 9%, International revenue increased 31% compared to the comparable six months of fiscal 2012. U.S. second quarter revenue decreased 12.6%, including a 59% reduction in Lysonix and Autosonix revenue, International second quarter revenue increased 9.6% versus the year ago second quarter.
• BoneScalpel™ revenue increased 99% and 33%, respectively, for the six months and the second quarter versus the comparable periods in 2012.
• SonicOne™ revenue increased 82% and 70%, respectively, for the six months and the second quarter versus the comparable periods in 2012.
• SonaStar™ revenue for the six months was comparable to 2012 six month revenues and decreased 20% in the second quarter of 2013 versus the 2012 second quarter.
• For the six months the Company reported a net loss of $609,000, or $(0.09) per share, compared to net income of $136,000, or $0.02 per share, which included a gain of $712,000 for the sale of the Company's Laboratory and Forensic Safety Products Business in the first half of 2012.
• Cash and cash equivalents totaled $6.9 million at December 31, 2012 with no long-term debt.
• Increased the number of independent representatives from 19 to 42 in neurospine for the three months ended December 31, 2012.
• Increased the number of independent representatives for wound care from 5 to 15 for the three months ended December 31, 2012.
• Terminated the non-exclusive Aesculap Agreement as of December 31, 2012, which among other things should result in increased direct sales to customers at a higher margin.

Q2 2013 Financial Results:

For the second quarter of fiscal 2013, revenue was $3.5 million, comparable to $3.6 million in the second quarter of 2012. BoneScalpel revenues for the quarter increased 33% to $1.6 million compared to $1.2 million in the comparable quarter of fiscal 2012. BoneScalpel units sold/placed for the quarter were 33. SonicOne revenues increased 70% to $528,249 compared to $309,812 in the second quarter last year. SonicOne units sold/placed for the quarter were 16. SonaStar revenues decreased 20% to $1.1 million compared to $1.3 in the second quarter last year. SonaStar units sold/placed for the quarter were 13. The number of BoneScalpel consumables sold increased 119% to 9,041 units for the quarter, SonicOne consumables sold increased 24% to 3,302 units, and SonaStar consumables sold decreased 40% to 1,985 units.

As expected, other revenue, which includes legacy products Autosonix and Lysonix sold by outside distribution partners, decreased 59% as these late stage products approach end-of-life. Excluding all other revenue, BoneScalpel, SonicOne and SonaStar revenue increased 12% for the three months ended December 31, 2012.

For the quarter, royalty income received predominantly from Covidien increased 177% to $502,000.

Gross margin for the second quarter of fiscal 2013 was 53.2%, primarily attributable to an unfavorable mix of low and high margin product deliveries in addition to the $188,000 amount due to Puricore International Limited under the terms of our contract. Operating expenses for the second fiscal quarter increased 16%, as the Company continued to invest in expanding its sales, marketing and customer support capabilities.

For the second quarter of fiscal year 2013, the Company reported a net loss of $(654,000), or $(0.09) per diluted share, compared to net income of $1.0 million, or $0.15 per diluted share, in the second quarter of 2012, which included income from discontinued operations of $792,000 for the sale of the Company's Laboratory and Forensic Safety Products Business in October 2011.

Six Months 2012 Financial Results:

Net sales increased 19% to $8.0 million for the six months ended December 31, 2012 from $6.8 million in the six months ended December 31, 2011. BoneScalpel revenues for the six months increased 99% to $3.7 million compared to $1.9 million in the comparable quarter of fiscal 2012. BoneScalpel units sold/placed for the six months were 90. SonicOne revenues increased 82% to $1.0 million compared to $564,199 in the six-month period of the prior year. SonicOne units sold/placed for the six months were 27. SonaStar revenues were $2.6 million comparable to six-month 2012 revenue. SonaStar units sold/placed for the six-months were 34.The number of BoneScalpel consumables sold increased 110% to 17,818 units for the six months ending December 31, 2012 and SonicOne consumables increased 20.6% to 6,138 units.

As expected, other revenue, which includes legacy products Autosonix and Lysonix sold by outside distribution partners, decreased 60% as these late stage products approach end-of-life. Excluding all other revenue, BoneScalpel, SonicOne and SonaStar revenue increased 46% for the six months ended December 31, 2012.

For the six months, royalty income received predominantly from Covidien increased 128% to $714,000.

Gross margin for the six months ended December 31, 2012 was 56.9%, primarily attributable to an unfavorable mix of low and high margin product deliveries in addition to the $360,000 amount due to Puricore International Limited under the terms of our contract. Operating expenses for the six month period increased 13% as the Company continued to invest in expanding its sales, marketing and customer support capabilities.

For the six months of fiscal year 2013, the Company reported a net loss of $(609,000), or $(0.09) per diluted share, compared to net income of $136,000, or $0.02 per diluted share, in the six months of fiscal 2012, which included income from discontinued operations ofr $712,000 for the sale of the Company's Laboratory and Forensic Safety Products Business in October 2011.

Michael A. McManus Jr., President and Chief Executive Officer of Misonix, commented, "Top-line results for the first half of fiscal 2013 are solid. Revenue for the six months increased 19%. We are particularly pleased with the 31% increase in international revenue for the first half of the year. We achieved strong revenue growth across our major product lines including BoneScalpel revenue that increased 99% and SonicOne revenue that increased 82%. Sales of our SonaStar product in the first half of 2013 were comparable to those of the same period last year. We are very pleased with the continuing acceptance by the surgical community worldwide of our BoneScalpel and SonicOne products. There were four abstracts submitted on the clinical benefits of using the BoneScalpel in spine surgery and three abstracts with regards to the benefits of utilizing our SonicOne product for wound healing during the first half and second fiscal quarter of 2013 respectively. On a cumulative basis, if we exclude declining revenue from our legacy products, BoneScalpel, SonicOne and SonaStar revenue increased 46% for the six months ended December 31, 2012. We are pleased with that performance."

"Bottom-line results were impacted by an unfavorable product mix of low and high margin product deliveries, additional headcount as we continue to invest in our sales and marketing team, and increased selling expenses as more distributors become engaged in selling our products. We expect that these impacts will be offset as we continue to grow revenues in the coming quarters."

Mr. McManus concluded, "The financial base of the Company continues to be strong with $6.9 million in cash and equivalents and zero long-term debt. We continue to make progress in expanding our business both domestically and internationally. While we are still in the early stages of executing on our plan as a focused medical device company, we are pleased with the progress made to date."

SOURCE Misonix, Inc.