News Releases
Three Months Ended | Year Ended | ||||||||||||||
June 30 | June 30 | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
(unaudited) | (unaudited) | (unaudited) | |||||||||||||
Revenue: | |||||||||||||||
Product revenue | $ | 9,754,284 | $ | 8,636,126 | $ | 38,848,491 | $ | 32,669,826 | |||||||
Total revenue | $ | 9,754,284 | $ | 8,636,126 | $ | 38,848,491 | $ | 36,679,826 | |||||||
Gross Profit | $ | 6,786,138 | $ | 6,116,302 | $ | 27,280,152 | $ | 26,884,928 | |||||||
GP Percentage - product revenue | 69.6 | % | 70.8 | % | 70.2 | % | 70.0 | % | |||||||
Pretax loss | $ | (2,317,250 | ) | $ | (1,800,445 | ) | $ | (7,358,250 | ) | $ | (2,386,906 | ) | |||
Net loss | $ | (2,345,797 | ) | $ | (1,782,552 | ) | $ | (7,386,797 | ) | $ | (7,612,435 | ) | |||
EBITDA (1) | $ | (1,833,685 | ) | $ | (1,228,614 | ) | $ | (5,694,479 | ) | $ | (768,564 | ) | |||
Adjusted EBITDA (1) | $ | 228,112 | $ | (269,495 | ) | $ | 132,783 | $ | 4,169,471 | ||||||
June 30, | June 30, | ||||||||||||||
2019 | 2018 | ||||||||||||||
(unaudited) | |||||||||||||||
Long Term Debt | $ | - | $ | - | |||||||||||
Cash and cash equivalents | $ | 7,842,403 | $ | 10,979,455 | |||||||||||
- Definitions and disclosures regarding non-GAAP financial information including reconciliations are included at the end of this press release.
Fourth Quarter and Full Year 2019 Highlights:
- Fiscal fourth quarter 2019 revenue increased approximately 12.9% to
$9.8 million , compared to$8.6 million in fiscal fourth quarter 2018. Total fiscal Q4 2019 product revenue growth reflects a 23.3% increase in consumables revenue and a 12.8% decline in equipment revenue as compared to fiscal Q4 2018.
- Fiscal fourth quarter 2019 domestic product revenue increased 22.0% to
$6.1 million , including a 16.4% increase in recurring consumables revenue and a 97.0% rise in equipment revenue.
- Fiscal fourth quarter 2019 international product revenue increased 0.6% to
$3.7 million , reflecting a 44.6% increase in consumables, partially offset by a 30.8% decrease in equipment revenue related to approximately$800,000 of orders placed by customers but unfilled byMisonix as of quarter end.
- Fiscal fourth quarter 2019 domestic product revenue increased 22.0% to
- Full fiscal year 2019 revenue increased approximately 5.9% to 38.8 million, comprising a product revenue increase of approximately 18.9% to
$38.8 million , compared to$32.7 million in fiscal 2018, offset by no license revenue in fiscal 2019 compared with$4 million in fiscal 2018. Total fiscal 2019 product revenue growth reflects a 20.2% increase in consumables revenue and a 15.5% rise in equipment revenue. Full year consumables revenue growth was in line with expectations, while equipment revenue growth was slightly impacted by previously disclosed supply disruptions related to critical parts for BoneScalpel consoles.
- Fiscal 2019 domestic product revenue increased 14.6% to
$23.0 million , including a 15.9% increase in recurring consumables revenue and a 4.6% rise in equipment revenue.
- Fiscal 2019 international product revenue increased 25.7% to
$15.9 million , reflecting a 33.3% increase in consumables and a 19.2% rise in equipment revenue.
- Fiscal 2019 domestic product revenue increased 14.6% to
- In
May 2019 ,Misonix announced it has entered into a definitive agreement to acquireSolsys Medical, LLC (“Solsys”), a privately held regenerative medical company, in an all-stock transaction valued at approximately$97 million .
- The planned acquisition of Solsys substantially broadens Misonix’s addressable market through wound care solutions that are complementary to its existing products.
- The combined company anticipates top line revenue growth in excess of 25% per annum over the next several years.
- On
August 13, 2019 , the Company’s S-4 registration statement with theU.S. Securities and Exchange Commission (“SEC”) relating to the Solsys acquisition was declared effective. A meeting of Misonix’s shareholders to vote on the transaction, among other related matters, has been set forSeptember 26, 2019 at10:00 a.m. at the Company’s headquarters.
- The planned acquisition of Solsys substantially broadens Misonix’s addressable market through wound care solutions that are complementary to its existing products.
- In
June 2019 ,Misonix announced that it had received 510(k) clearance by theU.S. Food and Drug Administration (FDA ) for Nexus, its new revolutionary ultrasonic surgical platform. The Company has launched Nexus in a limited market release inthe United States .
- In
June 2019 , the Company received notice from theSEC that it had concluded its investigation regarding Misonix’s potential breaches of the Foreign Corrupt Practices Act that the Company had self-reported to theSEC andU.S. Department of Justice . TheSEC stated that, based on the information it had as of the date of the letter, it did not intend to recommend an enforcement action by theSEC against the Company.
- In
July 2019 , the Company favorably settled its shareholder derivative litigation brought in connection with alleged violations by the Company of the Foreign Corrupt Practices Act. Under the terms of the settlement, the Company agreed to enact a six-year plan to implement certain corporate governance measures and pay$500,000 of legal fees, which was paid by the Company’s insurance carrier.
“Of course, none of this would be possible without having both great products and great people. While the demonstrated clinical benefits of Misonix’s ultrasonic surgical devices are clear, the opportunity ahead of us as we look to grow our business across both applications and markets is largely based on the evolution of our product offering. To that end, we have continued to invest in R&D to support the development of new ultrasonic surgical solutions and products, including our next generation Nexus platform. We are energized by our success to bring Nexus to market. The time, effort and knowhow that was involved in this achievement was significant and we are very pleased with the outcome as well as the enthusiastic market reception we have received. We have begun a controlled market launch of Nexus and have begun to transition our business to this unique and extremely capable platform.
“We are equally excited about our planned acquisition of Solsys and the opportunities that the combination will create by bringing together a direct sales team of over 80 professionals on wound and 55 on the surgical side. We are confident this will help drive increased sales productivity and broaden the market penetration of the combined company’s wound and surgical products in operating rooms and hospital outpatient facilities. Together, we plan to combine our expertise and customer relationships with demonstrated clinical benefits and improving patient outcomes to drive sales.”
“With the positive operating momentum across our business,
Sales Performance Supplemental Data (unaudited)
For the three months ended | For the year ended | ||||||||||||||||||||||
June 30, | Net change | June 30, | Net change | ||||||||||||||||||||
2019 | 2018 | $ | % | 2019 | 2018 | $ | % | ||||||||||||||||
Total | |||||||||||||||||||||||
Consumables | $ | 7,591,616 | $ | 6,155,886 | $ | 1,435,730 | 23.3 | % | $ | 28,371,517 | $ | 23,596,476 | $ | 4,775,041 | 20.2 | % | |||||||
Equipment | 2,162,668 | 2,480,240 | (317,572 | ) | -12.8 | % | 10,476,974 | 9,073,350 | 1,403,624 | 15.5 | % | ||||||||||||
Total Product | 9,754,284 | 8,636,126 | 1,118,158 | 12.9 | % | 38,848,491 | 32,669,826 | 6,178,665 | 18.9 | % | |||||||||||||
License | - | - | - | - | - | 4,010,000 | (4,010,000 | ) | -100.0 | % | |||||||||||||
Total | $ | 9,754,284 | $ | 8,636,126 | $ | 1,118,158 | 12.9 | % | $ | 38,848,491 | $ | 36,679,826 | $ | 2,168,665 | 5.9 | % | |||||||
Domestic: | |||||||||||||||||||||||
Consumables | $ | 5,395,371 | $ | 4,636,527 | $ | 758,844 | 16.4 | % | $ | 20,561,273 | $ | 17,735,749 | $ | 2,825,524 | 15.9 | % | |||||||
Equipment | 687,487 | 349,043 | 338,444 | 97.0 | % | 2,414,435 | 2,308,614 | 105,821 | 4.6 | % | |||||||||||||
Total | $ | 6,082,858 | $ | 4,985,570 | $ | 1,097,288 | 22.0 | % | $ | 22,975,708 | $ | 20,044,363 | $ | 2,931,345 | 14.6 | % | |||||||
International: | |||||||||||||||||||||||
Consumables | $ | 2,196,245 | $ | 1,519,359 | $ | 676,886 | 44.6 | % | $ | 7,810,244 | $ | 5,860,727 | $ | 1,949,517 | 33.3 | % | |||||||
Equipment | 1,475,181 | 2,131,197 | (656,016 | ) | -30.8 | % | 8,062,539 | 6,764,736 | 1,297,803 | 19.2 | % | ||||||||||||
Total | $ | 3,671,426 | $ | 3,650,556 | $ | 20,870 | 0.6 | % | $ | 15,872,783 | $ | 12,625,463 | $ | 3,247,320 | 25.7 | % | |||||||
License | $ | - | $ | - | $ | - | - | $ | - | $ | 4,010,000 | $ | (4,010,000 | ) | 100.0 | % | |||||||
“Fourth quarter operating expenses of
“Looking ahead to fiscal 2020, we expect double-digit product revenue growth in excess of 20% and gross profit margins of approximately 70%. We estimate that the first half of fiscal 2020 will encompass approximately 47% of total annual revenue, with the remainder being generated in the second half of fiscal 2020. On a standalone basis without Solsys, we expect that adjusted EBITDA will be breakeven. Assuming the successful completion of the Solsys transaction as of the beginning of our second quarter, we will add the Soslys revenue stream, which generated
Fiscal Fourth Quarter 2019 Conference Call
About
Forward Looking Statements
With 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 include statements regarding future operating results, future operating metrics and the effect and completion of the transactions (the “Transactions”) with
Important Additional Information Filed With The
In connection with the proposed Transactions,
Participants in the Solicitation
Non-Solicitation
This communication shall not constitute an offer to sell or the solicitation of an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. No offer of securities shall be made except by means of a prospectus meeting the requirements of the Securities Act of 1933, as amended.
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 Subsidiaries | ||||||||||||||
Consolidated Statements of Operations | ||||||||||||||
For the three months ended | For the year ended | |||||||||||||
June 30, | June 30, | |||||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||||
(unaudited) | (unaudited) | (unaudited) | ||||||||||||
Revenues | ||||||||||||||
Product | $ | 9,754,284 | $ | 8,636,126 | $ | 38,848,491 | $ | 32,669,826 | ||||||
License | - | - | - | 4,010,000 | ||||||||||
Total revenue | 9,754,284 | 8,636,126 | 38,848,491 | 36,679,826 | ||||||||||
Cost of goods sold | 2,968,146 | 2,519,824 | 11,568,339 | 9,794,898 | ||||||||||
Gross profit | 6,786,138 | 6,116,302 | 27,280,152 | 26,884,928 | ||||||||||
Operating expenses: | ||||||||||||||
Selling expenses | 4,393,479 | 4,430,732 | 18,343,837 | 16,368,381 | ||||||||||
General and administrative expenses | 3,835,131 | 2,184,062 | 11,878,209 | 9,063,139 | ||||||||||
Research and development expenses | 897,501 | 1,335,776 | 4,467,969 | 4,394,149 | ||||||||||
Total operating expenses | 9,126,111 | 7,950,570 | 34,690,015 | 29,825,669 | ||||||||||
(Loss) income from operations | (2,339,973 | ) | (1,834,268 | ) | (7,409,863 | ) | (2,940,741 | ) | ||||||
Other income (expense): | ||||||||||||||
Interest income | 30,148 | 16,991 | 89,856 | 26,123 | ||||||||||
Royalty income | - | 1 | - | 525,438 | ||||||||||
Other | (7,425 | ) | 16,831 | (38,243 | ) | 2,274 | ||||||||
Total other income | 22,723 | 33,823 | 51,613 | 553,835 | ||||||||||
(Loss) income from continuing operations before income taxes | (2,317,250 | ) | (1,800,445 | ) | (7,358,250 | ) | (2,386,906 | ) | ||||||
Income tax expense (benefit) | 28,547 | 173,224 | 28,547 | 5,416,646 | ||||||||||
Net loss from continuing operations | (2,345,797 | ) | (1,973,669 | ) | (7,386,797 | ) | (7,803,552 | ) | ||||||
Discontinued operations: | ||||||||||||||
Gain from sale of discontinued operations net of tax of $58,883 | - | 191,117 | - | 191,117 | ||||||||||
Net income from discontinued operations | - | 191,117 | - | 191,117 | ||||||||||
Net (loss) | $ | (2,345,797 | ) | $ | (1,782,552 | ) | $ | (7,386,797 | ) | $ | (7,612,435 | ) | ||
Net income (loss) per share: | ||||||||||||||
Continuing operations: | ||||||||||||||
Basic | $ | (0.25 | ) | $ | (0.22 | ) | $ | (0.79 | ) | $ | (0.87 | ) | ||
Diluted | $ | (0.25 | ) | $ | (0.22 | ) | $ | (0.79 | ) | $ | (0.87 | ) | ||
Discontinued operations | ||||||||||||||
Basic | $ | - | $ | 0.02 | $ | - | $ | 0.02 | ||||||
Diluted | $ | - | $ | 0.02 | $ | - | $ | 0.02 | ||||||
Combined | ||||||||||||||
Basic | $ | (0.25 | ) | $ | (0.20 | ) | $ | (0.79 | ) | $ | (0.85 | ) | ||
Diluted | $ | (0.25 | ) | $ | (0.20 | ) | $ | (0.79 | ) | $ | (0.85 | ) | ||
Weighted average shares - Basic | 9,428,938 | 9,037,046 | 9,333,117 | 9,009,189 | ||||||||||
Weighted average shares - Diluted | 9,428,938 | 9,037,046 | 9,333,117 | 9,009,189 | ||||||||||
Misonix, Inc. and Subsidiaries | |||||||
Consolidated Balance Sheets | |||||||
June 30, | June 30, | ||||||
2019 | 2018 | ||||||
(unaudited) | |||||||
Assets | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 7,842,403 | $ | 10,979,455 | |||
Accounts receivable, less allowance for doubtful accounts of $100,000 and $200,000, respectively | 5,360,454 | 5,245,549 | |||||
Inventories, net | 7,353,562 | 5,019,886 | |||||
Prepaid expenses and other current assets | 835,044 | 611,647 | |||||
Total current assets | 21,391,463 | 21,856,537 | |||||
Property, plant and equipment, net of accumulated amortization and depreciation of $10,546,810 and $9,023,235, respectively | 4,198,721 | 4,188,378 | |||||
Patents, net of accumulated amortization of $1,204,589 and $1,063,393, respectively | 779,100 | 757,447 | |||||
Goodwill | 1,701,094 | 1,701,094 | |||||
Contract assets | 960,000 | - | |||||
Intangible and other assets | 381,921 | 517,295 | |||||
Total assets | $ | 29,412,299 | $ | 29,020,751 | |||
Liabilities and shareholders' equity | |||||||
Current liabilities: | |||||||
Accounts payable | $ | 4,818,736 | $ | 1,794,098 | |||
Accrued expenses and other current liabilities | 2,488,514 | 2,812,172 | |||||
Total current liabilities | 7,307,250 | 4,606,270 | |||||
Non current liabilities | 401,000 | 13,303 | |||||
Total liabilities | 7,708,250 | 4,619,573 | |||||
Commitments and contingencies | |||||||
Shareholders' equity: | |||||||
Common stock, $.01 par value-shares authorized 40,000,000; 9,646,728 and 9,430,466 shares issued and outstanding in each period | 96,468 | 94,305 | |||||
Additional paid-in capital | 43,500,478 | 39,772,973 | |||||
Accumulated deficit | (21,892,897 | ) | (15,466,100 | ) | |||
Total shareholders' equity | 21,704,049 | 24,401,178 | |||||
Total liabilities and shareholders' equity | $ | 29,412,299 | $ | 29,020,751 | |||
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 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 transaction costs, and engineering costs associated with its development of its next generation platform, which will not be a future on-going cost as the project was completed.
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) | |||||||||||||
Three Months Ended | Year Ended | ||||||||||||
June 30 | June 30 | ||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||
EBITDA: | |||||||||||||
Net (loss) income | $ | (2,345,797 | ) | $ | (1,782,552 | ) | $ | (7,386,797 | ) | $ | (7,612,435 | ) | |
Depreciation and amortization | 483,565 | 380,714 | 1,663,771 | 1,427,225 | |||||||||
Income tax expense | 28,547 | 173,224 | 28,547 | 5,416,646 | |||||||||
EBITDA | (1,833,685 | ) | (1,228,614 | ) | (5,694,479 | ) | (768,564 | ) | |||||
Non-cash stock compensation | 446,965 | 547,807 | 2,336,139 | 2,628,828 | |||||||||
M&A transaction fees | 1,298,459 | - | 1,396,459 | - | |||||||||
Nexus next generation engineering | 316,373 | 411,312 | 2,094,664 | 2,309,207 | |||||||||
Adjusted EBITDA | $ | 228,112 | $ | (269,495 | ) | $ | 132,783 | $ | 4,169,471 | ||||