Encision Reports Fourth Quarter Fiscal Year 2021 Results

Rhea-AI Summary

Encision Inc. (PK: ECIA) reported its fiscal 2021 fourth quarter results with net revenue of $2.15 million, a significant increase from $1.78 million year-over-year, and net income of $116 thousand compared to a loss of $116 thousand last year. Yearly net revenue was $7.54 million with a net income of $585 thousand. Gross margin improved slightly to 54%. The company also highlighted a successful launch of its new AEM 2X enTouch Scissors, aimed at enhancing surgical performance and reducing costs. Encision expects to qualify for forgiveness of a $533,118 PPP loan.

Positive

• Quarterly net revenue increased by 21% year-over-year.
• Net income for the quarter was $116,000, a turnaround from a loss.
• Launch of AEM 2X enTouch Scissors expected to impact market positively.

Negative

• Annual net revenue showed a slight decline from $7.67 million to $7.54 million.

BOULDER, Colo., May 19, 2021 /PRNewswire/ -- Encision Inc. (PK: ECIA), a medical device company owning patented Active Electrode Monitoring (AEM®) Technology that prevents dangerous stray electrosurgical burns in minimally invasive surgery, today announced financial results for its fiscal 2021 fourth quarter that ended March 31, 2021.

The Company posted quarterly net revenue of $2.15 million for a quarterly net income of $116 thousand, or $0.01 per diluted share. These results compare to net revenue of $1.78 million for a quarterly net loss of $116 thousand, or $(0.01) per diluted share, in the year-ago quarter. Gross margin on net revenue was 54% in the fiscal 2021 fourth quarter and 53% in the fiscal 2020 fourth quarter.

The Company posted twelve months net revenue of $7.54 million for a twelve months net income of $585 thousand, or $0.05 per diluted share. Net income included $599 thousand of extinguishment of debt income. These results compare to net revenue of $7.67 million for a twelve months net loss of $198 thousand, or $(0.02) per diluted share, in the year-ago twelve months. Gross margin on net revenue was 52% in the fiscal 2021 and fiscal 2020 twelve months.

"Product revenue for our fourth quarter of fiscal 2021 had almost rebounded from pre-COVID surgical procedures levels and increased 8% from our fourth quarter of last year. Total revenue, which included service revenue, increased 21% from our fourth quarter of last year," said Gregory Trudel, President and CEO of Encision Inc. "We continue to be positive as we assess how surgery rebounds from the pandemic. We continue to flex our channel strategy and tactics as we encounter varying degrees of access to our customers."

"Service revenue for our fourth quarter of fiscal 2021 resulted from services performed under a Master Services Agreement with Auris Health, Inc. ("Auris Health"), a part of the Johnson & Johnson family of companies. Under the agreement, we are collaborating on the integration of AEM Technology into monopolar instrumentation produced by Auris Health for advanced surgical applications. This work is ongoing and is reported separately, as service revenue, in our Statement of Operations."

"During the fiscal year, we began selling our AEM 2X enTouch® Scissors ("2X Scissors"). 2X Scissors bring new levels of performance and value to the surgical scissor market by combining the best in class performance of our enTouch Disposable Scissors with the economy of a multi-use device. 2X Scissors are a game-changing product that will have a significant impact on the disposable laparoscopic scissor market. Our enTouch Disposable Scissors have long been the surgeon preferred product because of their sharpness and micro-serrations. Our new 2X Scissors provide all those benefits at half the cost per use and reduce hospital waste and the impact on the environment as well. The new thermochromic technology integrated into 2X Scissors lets a hospital know when to replace the scissors with new ones and makes tracking their use simple and easy. Superior performance, superior value, easy to use, and easy on the environment – that's what customers want in a disposable scissor. 2X Scissors work perfectly with hot AEM dissection and are also priced to be used for cold dissection. 2X Scissors will open new use segments for us and create an opportunity for customers to standardize on our entire portfolio of Active Electrode Monitoring (AEM®) products."

"In February, we entered into an unsecured promissory note under the Paycheck Protection Program ("PPP") for a principal amount of $533,118. Under the terms of the CARES Act, a PPP loan recipient may apply for, and be granted, forgiveness for all or a portion of loans granted under the PPP. Such forgiveness will be determined based upon the use of loan proceeds for payroll costs, rent and utility costs, and the maintenance of employee and compensation levels. We expect that we will achieve the requirements for forgiveness of that note."

Encision Inc. designs and markets a portfolio of high-performance surgical instrumentation that delivers advances in patient safety with AEM technology, surgical performance, and value to hospitals across a broad range of minimally invasive surgical procedures. Based in Boulder, Colorado, the company pioneered the development and deployment of Active Electrode Monitoring, AEM technology, to eliminate dangerous stray energy burns during minimally invasive procedures. For additional information about all our products, please visit www.encision.com.

In accordance with the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, the Company notes that statements in this press release and elsewhere that look forward in time, which include everything other than historical information, involve risks and uncertainties that may cause actual results to differ materially from those indicated by the forward-looking statements. Factors that could cause the Company's actual results to differ materially include, among others, its ability to develop new or enhanced products and have such products accepted in the market, its ability to increase net sales through the Company's distribution channels, its ability to compete successfully against other manufacturers of surgical instruments, insufficient quantity of new account conversions, insufficient cash to fund operations, delay in developing new products and receiving FDA approval for such new products and other factors discussed in the Company's filings with the Securities and Exchange Commission. Readers are encouraged to review the risk factors and other disclosures appearing in the Company's Annual Report on Form 10-K for the year ended March 31, 2020 and subsequent filings with the Securities and Exchange Commission. We do not undertake any obligation to update publicly any forward-looking statements, whether as a result of the receipt of new information, future events, or otherwise.

CONTACT:            Mala Ray, Encision Inc., 303-444-2600, mray@encision.com

Encision Inc.
Unaudited Condensed Statements of Operations
(in thousands, except per share information)
		Three Months Ended			Years Ended
		March 31, 2021		March 31, 2020		March 31, 2021		March 31, 2020
Product revenue		$1,918		$1,778		$7,011		$7,670
Service revenue		231		––		527		––
Total revenue		2,149		1,778		7,538		7,670
Product cost of revenue		874		840		3,375		3,666
Service cost of revenue		108		––		258		––
Total cost of revenue		982		840		3,633		3,666
Gross profit		1,167		938		3,905		4,004
Operating expenses:
Sales and marketing		507		482		2,020		2,094
General and administrative		380		373		1,377		1,318
Research and development		126		181		569		748
Total operating expenses		1,013		1,036		3,966		4,160
Operating income (loss)		154		(98)		(61)		(156)
Interest expense, extinguishment of debt       income and other income, net		(38)		(18)		646		(42)
Income (loss) before provision for income       taxes		116		(116)		585		(198)
Provision for income taxes		––		––		––		––
Net income (loss)		$ 116		$(116)		$585		$ (198)
Net income (loss) per share—basic and       diluted		$ 0.01		$ (0.01)		$0.05		$ (0.02)
Weighted average number of basic shares		11,583		11,583		11,583		11,573
Weighted average number of diluted       shares		11,832		11,583		11,768		11,573

 

Encision Inc.
Unaudited Condensed Balance Sheets
(in thousands)
		March 31, 2021		March 31, 2020
ASSETS
Cash		$1,474		$    385
Accounts receivable, net		1,024		881
Inventories, net		1,446		1,626
Prepaid expenses and other assets		154		73
Total current assets		4,098		2,965
Equipment, net		266		207
Patents, net		213		228
Right of use asset		1,061		1,317
Other assets		21		20
Total assets		$ 5,659		$ 4,737
LIABILITIES AND SHAREHOLDERS'       EQUITY
Accounts payable		$   390		$   445
Line of credit		––		370
Secured notes		20		––
Accrued compensation		182		219
Other accrued liabilities		282		96
Accrued lease liability		303		278
Total current liabilities		1,177		1,408
Secured notes		220		––
Accrued lease liability		927		1,145
Unsecured promissory note		533		––
Total liabilities		2,857		2,553
Common stock and additional paid-in capital		24,265		24,232
Accumulated (deficit)		(21,463)		(22,048)
Total shareholders' equity		2,802		2,184
Total liabilities and shareholders' equity		$ 5,659		$ 4,737

 

Encision Inc.
Unaudited Condensed Statements of Cash Flows
(in thousands)
		Years Ended
		March 31, 2021		March 31, 2020
Operating activities:
Net income (loss)		$ 585		$ (198)
Extinguishment of debt income		(599)		––
Adjustments to reconcile net loss to cash         (used in) operating activities:
Depreciation and amortization		89		138
Share-based compensation expense		33		31
(Recovery from) provision for doubtful accounts, net		(23)		32
Provision for (recovery from) inventory obsolescence, net		31		(11)
Other income from release of accounts payable		(56)		––
Changes in operating assets and liabilities:
Right of use asset, net		63		31
Accounts receivable		(120)		96
Inventories		150		(142)
Prepaid expenses and other assets		(83)		36
Accounts payable		1		(134)
Accrued compensation and other accrued liabilities		149		(108)
Net cash provided by (used in) operating activities		220		(229)
Investing activities:
Acquisition of property and equipment		(30)		(48)
Patent costs		(15)		(6)
Net cash (used in) investing activities		(45)		(54)
Financing activities:
Paydown of credit facility, net change		(371)		370
Proceeds from secured  notes		153		––
Proceeds from PPP loans		1,132		––
Net cash generated by financing activities		914		370
Net increase in cash		1,089		87
Cash, beginning of period		385		298
Cash, end of period		$1,474		$ 385

 

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SOURCE Encision Inc.

FAQ

What were Encision's financial results for Q4 2021?

Encision reported Q4 2021 net revenue of $2.15 million and a net income of $116,000.

How much was Encision's net income for the fiscal year 2021?

Encision's net income for the fiscal year 2021 was $585,000.

What is the significance of AEM 2X enTouch Scissors?

The AEM 2X enTouch Scissors offer better performance at lower costs, potentially transforming the surgical scissor market.

Did Encision qualify for PPP loan forgiveness?

Encision expects to meet the requirements for forgiveness of the $533,118 PPP loan.