Biomerica Reports Second Quarter Fiscal 2025 Financial Results

Rhea-AI Summary

Biomerica (NASDAQ: BMRA) reported Q2 fiscal 2025 results showing a 5% year-over-year revenue growth to $1.64 million. The company achieved significant improvements in financial metrics, including gross margin expansion from 21% to 27% and a 26% reduction in operating expenses to $1.43 million.

Key developments include the direct-to-consumer launch of inFoods® IBS Test and securing three patents for inFoods® technology covering GERD, Crohn's Disease, and Ulcerative Colitis in multiple European countries. The company's cost-saving initiatives delivered approximately $670,000 in savings, targeting annual reductions of $1.0-1.4 million.

Operating losses decreased by 39% to $990,000, while net losses reduced by 37% to $950,000. Cash position stood at $2.37 million at quarter-end, down from $2.82 million in Q1.

Positive

• Revenue increased 5% YoY to $1.64 million
• Gross margin improved from 21% to 27%
• Operating expenses reduced by 26% to $1.43 million
• Operating loss decreased by 39% to $990,000
• Cost-saving initiatives delivered $670,000 in savings
• Secured three key patents for inFoods® technology in European markets

Negative

• Company still operating at a net loss of $950,000
• Cash position decreased from $2.82M to $2.37M quarter-over-quarter

Insights

Financial Analyst

BMRA's Q2 FY2025 results showcase a mixed financial picture. While the 5% revenue growth to $1.64 million and improved gross margins (from 21% to 27%) are positive indicators, the company continues to operate at a loss. The reduction in operating expenses by 26% to $1.43 million through strategic cost-cutting is promising, leading to a narrower net loss of $950,000.

The cash position decline to $2.37 million from $2.82 million raises some concerns about burn rate. At the current pace, without additional funding or significant revenue growth, the company has roughly 6-8 quarters of runway. The projected annual cost savings of $1.0-1.4 million could help extend this timeline, but achieving cash flow break-even remains crucial.

The inFoods® IBS direct-to-consumer launch and new patent portfolio targeting multi-billion dollar markets present significant revenue potential, but monetization timeline and market penetration rates will be critical factors to watch.

Market Research Analyst

The strategic positioning in three substantial markets - GERD ($4.0+ billion), Crohn's Disease ($2.5+ billion) and Ulcerative Colitis ($1.9+ billion) - through patent protection in major European markets represents a compelling opportunity. The direct-to-consumer approach for inFoods® IBS eliminates traditional barriers to market entry and could accelerate adoption rates.

However, market penetration in the diagnostic space requires significant marketing investment and healthcare provider buy-in. The company's cash reserves may constrain its ability to execute aggressive market expansion strategies. The ongoing discussions with potential distribution partners could be transformative if materialized, potentially providing both capital and market access without substantial direct investment.

Medical Research Analyst

The expansion of inFoods® technology beyond IBS into GERD, Crohn's Disease and Ulcerative Colitis represents a significant scientific advancement in personalized medicine for gastrointestinal disorders. The finger-prick blood test approach offers a compelling value proposition compared to traditional diagnostic methods, potentially improving patient compliance and early intervention rates.

The direct-to-consumer model, while innovative, will need to demonstrate clinical validity and reliability to gain widespread acceptance in the medical community. The physician oversight component helps address regulatory concerns but may impact scalability. Success will largely depend on clinical validation data and real-world evidence supporting the test's efficacy in improving patient outcomes.

- Total Revenue Increases 5% Year-Over-Year

- Achieves Sustained Revenue Growth, Improved Gross Margins, and Significant Cost Savings

IRVINE, Calif., Jan. 15, 2025 (GLOBE NEWSWIRE) -- Biomerica, Inc. (Nasdaq: BMRA), (the “Company”) a global provider of advanced medical diagnostic and therapeutic products today reported financial results for the second quarter of fiscal 2025 ended November 30, 2024.

Key Highlights:

1. Direct-to-Consumer Launch of inFoods^® IBS Test
   Patients can now order the inFoods^® IBS test directly from www.infoodsIBS.com without the need for a doctor’s visit. With a simple, at-home finger-prick blood sample, this non-invasive and personalized test identifies trigger foods that cause IBS symptoms such as bloating and gastrointestinal discomfort. Physician oversight ensures a safe and convenient path to symptom relief, helping patients regain control of their lives.
2. Three Key Patents Secured for inFoods^® Technology
   Biomerica received notices of allowance for patents addressing Gastroesophageal Reflux Disease (GERD), Crohn’s Disease, and Ulcerative Colitis. These patents cover markets under the European Patent Organization (EPO), including Germany, the UK, France, Italy, and Spain, as well as over 30 additional countries. Together, these address multi-billion-dollar market opportunities: GERD ($4.0 billion+), Crohn’s Disease ($2.5 billion+), and Ulcerative Colitis ($1.9 billion+).
3. Expanding Distribution Partnerships
   Biomerica is in discussions with multiple potential distribution partners in the U.S. and internationally to broaden the availability of inFoods^® IBS and expand its market reach.

Financial Highlights for the Second Quarter of Fiscal 2025
Biomerica continued to deliver improved financial performance, demonstrating revenue growth, disciplined cost management, and progress toward profitability.

Revenue and Sales Performance: For the fiscal second quarter of 2025, Biomerica reported net sales of $1.64 million, a 5% increase from the $1.57 million recorded in the same quarter of the previous year. This growth in sales, driven by sustained demand from both new and existing customers, underscores the appeal of Biomerica’s diverse product range.

Cost Management and Margin Enhancement: Biomerica continued to make significant progress with its cost-saving initiatives, targeting an annual expense reduction of 16% to 23%. To date, these efforts have delivered savings of approximately $670 thousand, keeping the Company on track to achieve its projected annual savings of $1.0 million to $1.4 million.

During the same quarter, gross margins improved from 21% in Q2FY2024 to 27%, reflecting a favorable shift in the sales mix toward the Over-the-Counter (OTC) and Contract Manufacturing sectors and reduced direct labor costs due to strategic workforce reductions. Operating expenses saw a substantial decrease, dropping 26% year-over-year to $1.43 million in the quarter, down from $1.93 million, largely due to efficiencies from workforce reductions and streamlined operations.

Reduced Operating and Net Losses: The Company also experienced notable progress in reducing operating and net losses for the fiscal second quarter of 2025, with the operating loss decreasing by 39% to $990,000 from $1.6 million, and the net loss reducing by 37% to $950,000 from $1.5 million, driven by strategic cost savings and operational enhancements.

Liquidity and Capital Resources: Cash and cash equivalents decreased from $2.82 million at the end of the first quarter to $2.37 million at the end of the second quarter, allowing financial flexibility to execute strategic initiatives.

“Our fiscal second quarter results demonstrate meaningful progress in aligning our operations with our strategic priorities,” said Zack Irani, CEO of Biomerica. “We remain focused on achieving cash flow break-even and are actively pursuing several near-term opportunities that could make this a reality.”

Selected Financial Results	Three Months Ended		Three Months Ended
	November 30, 2024		November 30, 2023
($ in millions, except percentages)
Revenue	$1.64		$1.57
Gross margin	27	%	21	%
Operating expenses	$1.43		$1.93
Operating loss	($0.99	)	($1.61	)
Net Loss	($0.95	)	($1.51	)

About Biomerica (NASDAQ: BMRA)

Biomerica, Inc. (www.biomerica.com ) is a global biomedical technology company that develops, patents, manufactures and markets advanced diagnostic and therapeutic products used at the point-of-care (in home and in physicians' offices) and in hospital/clinical laboratories for detection and/or treatment of medical conditions and diseases. The Company's products are designed to enhance the health and well-being of people, while reducing total healthcare costs. Biomerica primarily focuses on gastrointestinal and inflammatory diseases where the Company has multiple diagnostic and therapeutic products in development.

About inFoods^®
The inFoods IBS test involves a simple blood collection procedure and is designed to assess a patient’s above normal immunoreactivity to specific foods. Instead of difficult to manage broad dietary restrictions, physicians can now use the inFoods IBS information to make targeted, patient-specific recommendations about specific foods that, when removed from the diet, may alleviate IBS symptoms such as pain, bloating, diarrhea and constipation. Further information about Biomerica’s patented inFoods^® Technology Platform can be found at: www.infoodsibs.com. The inFoods IBS clinical study was performed at several prominent centers including Mayo Clinic, Beth Israel Deaconess Medical Center Inc. - a Harvard Medical School Teaching Hospital, Houston Methodist Hospital, and the University of Michigan. The clinical results for improvement in the Abdominal Pain Intensity (API) responder endpoint of >30%, for IBS patients in the treatment diet arm had a statistically significant improvement over patients in the placebo diet arm (p-value of 0.0246). The improvement for patients in the treatment arm versus the placebo arm is considered clinically significant and is similar and, in some cases, better than the current drugs in the market.

The Private Securities Litigation Reform Act of 1995 provides a "safe harbor" for forward-looking statements. Certain information included in this press release contains statements that are forward-looking, such as statements relating to the Company’s current and future cash position, balance sheet, cost savings, cash flow break even, sales, revenues, overhead, expenses, cost of goods, operations, and earnings; the Company's need for raising additional capital; the Company's expected sales growth for the Company's inFoods IBS product, Hp Detect product and other existing products; and diversification of the Company's revenue streams. Such forward-looking information is based upon the current beliefs and expectations of management and involves important risks and uncertainties that could significantly affect anticipated results. In addition, these forward-looking statements are subject to assumptions with respect to future business strategies and decisions that are subject to change. Accordingly, such results may differ materially from those expressed in any forward-looking statements made by or on behalf of Biomerica. Factors that could cause actual results to differ from those expressed in the forward-looking statements are discussed in the "Risk Factors" section of the Company's Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and other reports filed with the SEC, and available on the SEC's website (www.sec.gov). The Company is under no obligation to update any forward-looking statements after the date of this release.

Corporate Contact:

Zack Irani
949-645-2111
investors@biomerica.com

Source: Biomerica, Inc.

FAQ

What was Biomerica's (BMRA) revenue growth in Q2 2025?

Biomerica reported a 5% year-over-year revenue growth, reaching $1.64 million in Q2 fiscal 2025 compared to $1.57 million in the same quarter last year.

How much did BMRA reduce its operating expenses in Q2 2025?

Biomerica reduced its operating expenses by 26% year-over-year, from $1.93 million to $1.43 million in Q2 fiscal 2025.

What are the target markets for BMRA's newly patented inFoods® technology?

The patents cover GERD ($4.0B+ market), Crohn's Disease ($2.5B+ market), and Ulcerative Colitis ($1.9B+ market) in European countries including Germany, UK, France, Italy, and Spain.

How much cost savings did BMRA achieve in Q2 2025?

Biomerica achieved approximately $670,000 in cost savings and is on track to reach its projected annual savings of $1.0 million to $1.4 million.

What was BMRA's gross margin improvement in Q2 2025?

Biomerica's gross margin improved from 21% in Q2 FY2024 to 27% in Q2 FY2025, driven by favorable sales mix and reduced labor costs.