ORANGEBURG, N.Y., Feb. 11, 2010 (GLOBE NEWSWIRE) -- Vision-Sciences, Inc., (Nasdaq:VSCI) today announced results for its third quarter and first nine months of fiscal 2010, ended December 31, 2009. For the third quarter of fiscal 2010, revenues were $2.6 million, a decrease of $1.0 million, or 28%, from the third quarter of fiscal 2009, ended December 31, 2008. For the first nine months of fiscal 2010, revenues were $8.8 million, a decrease of $0.3 million, or 3%, from the first nine months of fiscal 2009. Loss from operations in the third quarter of fiscal 2010 was $3.2 million compared to $3.1 million in the third quarter of fiscal 2009, an increase of $0.1 million. Loss from operations in the first nine months of fiscal 2010 was $8.8 million compared to $10.1 million in the first nine months of fiscal 2009, a decrease of $1.3 million.
Abbreviated results (in thousands, except for per share data and percentages) for the third quarter and first nine months of fiscal 2010 and 2009 were as follows:
| Three Months Ended | Nine Months Ended | |||||||
| December 31, | December 31, | |||||||
| 2009 | 2008 | Difference | % | 2009 | 2008 | Difference | % | |
| Net sales | $ 2,600 | $ 3,610 | $ (1,010) | -28% | $ 8,807 | $ 9,091 | $ (284) | -3% |
| Loss from operations | (3,228) | (3,140) | (88) | -3% | (8,847) | (10,119) | 1,272 | 13% |
| Net loss | (3,234) | (3,063) | (171) | -6% | (8,872) | (5,679) | (3,193) | -56% |
| Net loss per share - basic and diluted | $ (0.09) | $ (0.08) | $ (0.01) | -13% | $ (0.24) | $ (0.16) | $ (0.08) | -50% |
Please refer to the attached balance sheet and statement of operations for more detail.
The increase in loss from operations of $0.1 million in the third quarter of fiscal 2010 was primarily attributable to lower gross profit of $0.4 million and one-time termination costs for our former Chief Executive Officer ("CEO") of $0.5 million, offset by a reduction in research and development ("R&D") expenses of $0.8 million. The decrease in loss from operations of $1.3 million in the first nine months of fiscal 2010 was primarily attributable to a reduction in R&D expenses of $1.8 million.
Net loss for the third quarter of fiscal 2010 was $3.2 million, or $0.09 per basic and diluted share, compared to a net loss of $3.1 million, or $0.08 per basic and diluted share, in the third quarter of fiscal 2009. The increase in net loss for the third quarter of fiscal 2010 was primarily attributable to lower gross profit and one-time termination costs of our former CEO, offset by a reduction in R&D expenses, as listed above. Net loss for the first nine months of fiscal 2010 was $8.9 million, or $0.24 per diluted share, compared to a net loss of $5.7 million, or $0.16 per diluted share, in the first nine months of fiscal 2009. The increase in net loss for the first nine months of fiscal 2010 was primarily attributable to the receipt of payments from Medtronic Xomed Inc. ("Medtronic") and recognition of an associated gain of $5.0 million, net of direct costs, in the first nine months of fiscal 2009 for the sale of our ENT (ear-nose-throat) EndoSheath® disposable product line to them in March 2007. The reduction in R&D expenses of $1.8 million in the first nine months of fiscal 2010 partially offsets the favorable impact of the gain on the results for the first nine months of fiscal 2009.
Medical sales decreased from $2.8 million in the third quarter of fiscal 2009 to $1.8 million in the third quarter of fiscal 2010, or by 34%, while industrial sales for the same period remained relatively flat at $0.8 million. Within medical sales:
- ENT and TNE (trans-nasal esophagoscopy) sales decreased from $1.9 million to $0.6 million, or by 71%;
- Urology sales increased from $0.2 million to $0.4 million, or by 87%;
- Bronchoscopy sales were $0.1 million (the video bronchoscope was launched at the end of the first quarter of fiscal 2010);
- We recorded $0.2 million in connection with the milestone achievement for delivery of the first working prototype of the SpineView spinoscope; and,
- Repairs, peripherals, and accessories sales decreased from $0.6 million to $0.5 million, or by 18%.
Medical sales decreased from $6.9 million in the first nine months of fiscal 2009 to $6.7 million in the first nine months of fiscal 2010, or by 3%, and industrial sales for the same period decreased from $2.2 million to $2.1 million, or by 3%. Within medical sales:
- ENT and TNE sales decreased from $3.9 million to $2.7 million, or by 29%;
- Urology sales increased from $1.5 million to $1.7 million, or by 10%;
- Bronchoscopy sales were $0.4 million (the video bronchoscope was launched at the end of the first quarter of fiscal 2010);
- We recorded $0.2 million in connection with the milestone achievement for delivery of the first working prototype of the SpineView spinoscope; and,
- Repairs, peripherals, and accessories sales increased from $1.5 million to $1.6 million, or by 7%.
Net sales detail (in thousands, except for percentages) for the third quarter and first nine months of fiscal 2010 and 2009 were as follows:
| Three Months Ended | Nine Months Ended | ||||||||
| December 31, | December 31, | ||||||||
| Market/Category | 2009 | 2008 | Difference | % | 2009 | 2008 | Difference | % | |
| ENT and TNE | $ 550 | $ 1,894 | $ (1,344) | -71% | $ 2,744 | $ 3,880 | $ (1,136) | -29% | |
| Urology | 444 | 237 | 207 | 87% | 1,702 | 1,543 | 159 | 10% | |
| Bronchoscopy | 94 | -- | 94 | 100% | 426 | -- | 426 | 100% | |
| SpineView milestone | 225 | -- | 225 | 100% | 225 | -- | 225 | 100% | |
| Repairs, peripherals, and accessories | 529 | 645 | (116) | -18% | 1,598 | 1,494 | 104 | 7% | |
| Total medical sales | 1,842 | 2,776 | (934) | -34% | 6,695 | 6,917 | (222) | -3% | |
| Borescopes | 610 | 664 | (54) | -8% | 1,581 | 1,569 | 12 | 1% | |
| Repairs | 148 | 170 | (22) | -13% | 531 | 605 | (74) | -12% | |
| Total industrial sales | 758 | 834 | (76) | -9% | 2,112 | 2,174 | (62) | -3% | |
| Total sales | $ 2,600 | $ 3,610 | $(1,010) | -28% | $ 8,807 | $ 9,091 | $ (284) | -3% | |
Within the ENT area, we manufacture ENT endoscopes and have sold these scopes exclusively to Medtronic for use by ENT physicians. Medtronic will no longer serve as the distributor for our ENT endoscopes. Medtronic and we have agreed to a transition period through April 1, 2010 during which time we will continue to support the Medtronic sales force and Medtronic will assist us in transitioning Medtronic's customer service needs directly to us, among other items. After April 1, 2010, we will sell our ENT endoscopes through our direct sales force in the U.S. and through distributors internationally.
Warren Bielke, our interim Chief Executive Officer stated, "We had a challenging quarter with respect to sales; however, with our strong product portfolio we are positioned to transform Vision-Sciences from an R&D-focused company to a sales and marketing-driven company with revenue growth and improved margins. With the end of the exclusive Medtronic distribution agreement, we will sell our ENT endoscopes directly to end users which should have an additional positive impact on our top- and bottom-line results."
Vision-Sciences will host a conference call to discuss third quarter and first nine month results and provide an update on the company on February 12, 2010 at 8:30 am EST. The dial-in number for the call is 888.352.6803. Please dial in five minutes prior to the call to register. A recording of the call will be available through February 19, 2010. The replay dial-in is 888.203.1112. The replay pass code is 1710643. The call may also be accessed via a live audio webcast available in the investor relations section of Vision-Sciences website at www.visionsciences.com. The audio webcast of the call will be archived and available for replay through the website.
Vision-Sciences, Inc. designs, develops, manufactures and markets unique flexible endoscopic products utilizing sterile disposable sheaths, the Slide-On® EndoSheath® Technology, which provide the users quick, efficient product turnover while ensuring the patient a contaminant-free product.
The Vision-Sciences, Inc. logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=3876
Except for the historical information provided, the matters discussed in this release include forward-looking statements for the purposes of the safe harbor protections under The Private Securities Litigation Reform Act of 1995. These forward-looking statements generally can be identified by phrases such as Vision-Sciences or its management "believes," "expects," "allows," "anticipates," or other words or phrases of similar import. Similarly, statements in this release that describe our business strategy, outlook, objectives, plans, intentions, or goals are also forward-looking statements. All such forward-looking statements are subject to certain risks and uncertainties that could cause our actual results to differ materially from those in forward-looking statements. Other risk factors are detailed in our most recent annual report and other filings with the Securities and Exchange Commission. We do not assume any obligation to update any forward-looking statements as a result of new information or future events or developments.
Vision‑Sciences owns the registered trademarks Vision Sciences®, Slide-On®, EndoSheath® and The Vision System®. Information about Vision-Sciences' products is available at www.visionsciences.com.
VISION-SCIENCES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except per share data)
| December 31, | March 31, | |||
| 2009 | 2009 | |||
| ASSETS | (unaudited) | |||
| Current assets: | ||||
| Cash and cash equivalents | $ 394 | $ 1,975 | ||
| Short-term investments | 2,112 | 7,948 | ||
| Accounts receivable, net of allowance for doubtful accounts of $357 and $283, respectively | 1,244 | 1,818 | ||
| Inventories, net | 5,262 | 5,486 | ||
| Prepaid expenses and other current assets | 634 | 397 | ||
| Current assets of discontinued operations | -- | 9 | ||
| Total current assets | 9,646 | 17,633 | ||
| Property and equipment, at cost: | ||||
| Machinery and equipment | 3,389 | 3,069 | ||
| Furniture and fixtures | 225 | 132 | ||
| Leasehold improvements | 351 | 163 | ||
| 3,965 | 3,364 | |||
| Less—accumulated depreciation and amortization | 2,065 | 1,576 | ||
| Total property and equipment, net | 1,900 | 1,788 | ||
| Other assets, net of accumulated amortization of $82 and $76, respectively | 84 | 65 | ||
| Deferred debt cost, net | 209 | -- | ||
| Total assets | $ 11,839 | $ 19,486 | ||
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||||
| Current liabilities: | ||||
| Capital lease obligations | $ 39 | $ 61 | ||
| Accounts payable | 720 | 1,014 | ||
| Accrued expenses | 2,081 | 1,966 | ||
| Current liabilities of discontinued operations | -- | 6 | ||
| Total current liabilities | 2,840 | 3,047 | ||
| Capital lease obligations, net of current portion | 19 | 28 | ||
| Total liabilities | 2,859 | 3,075 | ||
| Commitments and Contingencies (Note 5) | ||||
| Stockholders' equity: | ||||
| Preferred stock, $0.01 par value— | ||||
| Authorized—5,000,000 shares | ||||
| issued and outstanding—none | -- | -- | ||
| Common stock, $0.01 par value— | ||||
| Authorized—50,000,000 shares | ||||
| issued and outstanding—36,855,776 shares and 36,817,941 shares | ||||
| at December 31, 2009 and March 31, 2009, respectively | 369 | 368 | ||
| Additional paid-in capital | 81,471 | 80,031 | ||
| Accumulated deficit | (72,860) | (63,988) | ||
| Total stockholders' equity | 8,980 | 16,411 | ||
| Total liabilities and stockholders' equity | $ 11,839 | $ 19,486 | ||
VISION-SCIENCES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(Unaudited)
| Three Months Ended | Nine Months Ended | |||||
| December 31, | December 31, | |||||
| 2009 | 2008* | 2009 | 2008* | |||
| Net sales | $ 2,600 | $ 3,610 | $ 8,807 | $ 9,091 | ||
| Cost of sales | 2,250 | 2,845 | 7,204 | 7,452 | ||
| Gross profit | 350 | 765 | 1,603 | 1,639 | ||
| Selling, general, and administrative expenses | 2,919 | 2,427 | 8,108 | 7,693 | ||
| Research and development expenses | 659 | 1,478 | 2,342 | 4,163 | ||
| Restructuring charge reversal | -- | -- | -- | (98) | ||
| Loss from operations | (3,228) | (3,140) | (8,847) | (10,119) | ||
| Interest income | 14 | 85 | 85 | 237 | ||
| Interest expense | (6) | -- | (52) | (16) | ||
| Debt cost expense | (12) | -- | (12) | -- | ||
| Other, net | -- | 12 | (28) | 36 | ||
| Gain on sale of product line, net of direct costs | -- | -- | -- | 4,985 | ||
| Loss before provision for income taxes | (3,232) | (3,043) | (8,854) | (4,877) | ||
| Provision for income taxes | 2 | 10 | 18 | 19 | ||
| Net loss from continuing operations | (3,234) | (3,053) | (8,872) | (4,896) | ||
| Net loss from discontinued operations | -- | (10) | -- | (783) | ||
| Net loss | $ (3,234) | $ (3,063) | $ (8,872) | $ (5,679) | ||
| Net loss per common share - basic and diluted: | ||||||
| Continuing operations | $ (0.09) | $ (0.08) | $ (0.24) | $ (0.14) | ||
| Discontinued operations | -- | -- | -- | (0.02) | ||
| Net loss per common share - basic and diluted | $ (0.09) | $ (0.08) | $ (0.24) | $ (0.16) | ||
| Shares used in computing net loss | ||||||
| per common share | 36,855,429 | 36,754,852 | 36,852,628 | 36,208,808 | ||
| * The condensed consolidated statements of operations for the three and nine months ended December 31, 2008 have been reclassified to reflect discontinued operations of our health services segment. | ||||||