Encision Reports Third Quarter Fiscal Year 2022 Results
Encision Inc. (OTC PINK:ECIA) reported its fiscal 2022 third quarter financial results on February 10, 2022, revealing net revenue of $1.94 million and a net loss of $16,000, compared to $2.16 million in revenue and a net income of $599,000 in the previous year. Gross margins were 52% this quarter, a slight increase from 51% last year. For the nine months ending December 31, 2021, net revenue totaled $6.07 million with net income of $337,000. The company continues to navigate challenges posed by COVID-19, impacting surgical procedures and revenue. Encision emphasizes its ongoing collaboration with Auris Health for integrating AEM Technology.
- Gross margin improved to 52% in Q3 2022.
- New customers are being acquired for EnTouch 2X Scissors.
- Ongoing collaboration with Auris Health provides potential for future revenue growth.
- Net revenue decreased by 10% compared to Q3 2021.
- Net loss of $16,000 in Q3 2022 versus net income of $599,000 last year.
- Gross margin for nine months fell to 49% due to higher material costs.
BOULDER, CO / ACCESSWIRE / February 10, 2022 / Encision Inc. (OTC PINK:ECIA), a medical device company owning patented Active Electrode Monitoring (AEM®) Technology that prevents dangerous radiant energy burns in minimally invasive surgery, today announced financial results for its fiscal 2022 third quarter that ended December 31, 2021.
The Company posted quarterly net revenue of
The Company posted nine months net revenue of
"Total revenue, which included service revenue, decreased
"Service revenue for our third quarter of fiscal 2022 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."
"In August 2021, we signed a Supply Agreement with Auris Health. During the term of the agreement, Auris has agreed to buy certain AEM® Technology enabled products exclusively from us. We are proud of being awarded this agreement and look forward to our continued relationship with Auris."
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, 2021 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.
Encision Inc.
Unaudited Condensed Statements of Operations
(in thousands, except per share information)
| Three Months Ended | Nine Months Ended | |||||||||||||||
| December 31, 2021 | December 31, 2020 | December 31, 2021 | December 31, 2020 | |||||||||||||
Product revenue | $ | 1,734 | $ | 1,999 | $ | 5,348 | $ | 5,093 | ||||||||
Service revenue | 210 | 164 | 718 | 298 | ||||||||||||
Total revenue | 1,944 | 2,163 | 6,066 | 5,391 | ||||||||||||
Product cost of revenue | 828 | 976 | 2,729 | 2,501 | ||||||||||||
Service cost of revenue | 106 | 81 | 356 | 150 | ||||||||||||
Total cost of revenue | 934 | 1,057 | 3,085 | 2,651 | ||||||||||||
Gross profit | 1,010 | 1,106 | 2,981 | 2,740 | ||||||||||||
Operating expenses: | ||||||||||||||||
Sales and marketing | 505 | 581 | 1,595 | 1,513 | ||||||||||||
General and administrative | 327 | 373 | 994 | 999 | ||||||||||||
Research and development | 194 | 139 | 584 | 443 | ||||||||||||
Total operating expenses | 1,026 | 1,093 | 3,173 | 2,955 | ||||||||||||
Operating (loss) income | (16 | ) | 13 | (192 | ) | (215 | ) | |||||||||
Interest expense, extinguishment of debt income and other income, net | -- | 586 | 529 | 684 | ||||||||||||
(Loss) income before provision for income taxes | (16 | ) | 599 | 337 | 469 | |||||||||||
Provision for income taxes | -- | -- | -- | -- | ||||||||||||
Net (loss) income | $ | (16 | ) | $ | 599 | $ | 337 | $ | 469 | |||||||
Net (loss) income per share-basic and diluted | $ | 0.00 | $ | 0.05 | $ | 0.03 | $ | 0.04 | ||||||||
Weighted average number of basic shares | 11,678 | 11,583 | 11,599 | 11,583 | ||||||||||||
Weighted average number of diluted shares | 11,678 | 11,709 | 12,045 | 11,750 | ||||||||||||
Encision Inc.
Unaudited Condensed Balance Sheets
(in thousands)
| December 31, 2021 | March 31, 2021 | |||||||
ASSETS | ||||||||
Cash | $ | 1,424 | $ | 1,474 | ||||
Accounts receivable, net | 1,029 | 1,024 | ||||||
Inventories, net | 1,406 | 1,446 | ||||||
Prepaid expenses and other assets | 149 | 154 | ||||||
Total current assets | 4,008 | 4,098 | ||||||
Equipment, net | 235 | 266 | ||||||
Right of use asset | 856 | 1,061 | ||||||
Patents, net | 189 | 213 | ||||||
Other assets | 31 | 21 | ||||||
Total assets | $ | 5,319 | $ | 5,659 | ||||
LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||||
Accounts payable | $ | 531 | $ | 390 | ||||
Secured notes | 18 | 20 | ||||||
Accrued compensation | 238 | 182 | ||||||
Other accrued liabilities | 138 | 282 | ||||||
Accrued lease liability | 357 | 303 | ||||||
Total current liabilities | 1,282 | 1,177 | ||||||
Secured notes | 212 | 220 | ||||||
Accrued lease liability | 648 | 927 | ||||||
Unsecured promissory note | -- | 533 | ||||||
Total liabilities | 2,142 | 2,857 | ||||||
Common stock and additional paid-in capital | 24,304 | 24,265 | ||||||
Accumulated (deficit) | (21,127 | ) | (21,463 | ) | ||||
Total shareholders' equity | 3,177 | 2,802 | ||||||
Total liabilities and shareholders' equity | $ | 5,319 | $ | 5,659 | ||||
Encision Inc.
Unaudited Condensed Statements of Cash Flows
(in thousands)
| Nine Months Ended | ||||||||||||
| December 31, 2021 | December 31, 2020 | |||||||||||
Operating activities: | ||||||||||||
Net income | $ | 337 | $ | 469 | ||||||||
Adjustments to reconcile net income to cash (used in) provided by operating activities: | ||||||||||||
Extinguishment of debt income | (533 | ) | (599 | ) | ||||||||
Depreciation and amortization | 86 | 68 | ||||||||||
Share-based compensation expense | 30 | 25 | ||||||||||
Other income from release of accounts payable | -- | (56 | ) | |||||||||
(Recovery from) doubtful accounts, net | (35 | ) | (31 | ) | ||||||||
(Recovery from) provision for inventory obsolescence, net | (28 | ) | 24 | |||||||||
Changes in operating assets and liabilities: | ||||||||||||
Right of use asset, net | (20 | ) | 68 | |||||||||
Accounts receivable | 30 | (130 | ) | |||||||||
Inventories | 67 | 80 | ||||||||||
Prepaid expenses and other assets | (5 | ) | (108 | ) | ||||||||
Accounts payable | 142 | 87 | ||||||||||
Accrued compensation and other accrued liabilities | (88 | ) | 212 | |||||||||
Net cash (used in) provided by operating activities | (17 | ) | 109 | |||||||||
Investing activities: | ||||||||||||
Acquisition of property and equipment | (18 | ) | (4 | ) | ||||||||
Patent costs | (13 | ) | (16 | ) | ||||||||
Net cash (used in) investing activities | (31 | ) | (20 | ) | ||||||||
Financing activities: | ||||||||||||
Net proceeds from options exercised | 8 | -- | ||||||||||
(Paydown of) credit facility, net change | -- | (371 | ) | |||||||||
(Paydown of) secured notes | (10 | ) | -- | |||||||||
EIDL loan | -- | 152 | ||||||||||
Unsecured promissory note | -- | 599 | ||||||||||
| (2 | ) | 380 | ||||||||||
Net (decrease) increase in cash | (50 | ) | 469 | |||||||||
Cash, beginning of period | 1,474 | 385 | ||||||||||
Cash, end of period | $ | 1,424 | $ | 854 | ||||||||
CONTACT:
Mala Ray
Encision Inc.
303-444-2600
mray@encision.com
SOURCE: Encision Inc.
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FAQ
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