- Product Revenue Up 20% Driven by Growth in U.S.
Dermatology
- Dermatology Prescriptions Up 37%, June Quarter over
March 2016 Quarter
Conference Call Begins at 4:30pm EDT
Today
Oculus Innovative Sciences, Inc. (NASDAQ: OCLS, warrants OCLSW), a
specialty pharmaceutical company that develops and markets unique
and effective solutions for the treatment of dermatological
conditions and advanced tissue care, today announced financial
results for the first quarter of fiscal year 2017, ended June 30,
2016.
Total revenue was $3.8 million for the first quarter when
compared to $3.7 million for the same period in 2015. Product
revenues of $3.5 million were up 20% when compared to the same
period last year, driven by strong growth in dermatology and animal
health sales, partly offset by a decrease in revenue for Latin
America due to a 19% decline in the value of the peso, when
compared to the same period last year, and a strong 2016 first
quarter sales in Latin America.
“We have established a strong foundation in dermatology with
over 20 sales people, a product portfolio of seven products, over
44,000 prescriptions filled since late 2014,” said Oculus CEO Jim
Schutz, “and we had our best dermatology quarter to date with
11,700 prescriptions filled, up 37% over the previous quarter
ending March 31, 2016. With this foundation in place, we are
focused on balancing continued strong revenue growth
and the control of expenses to maximize our cash as we
strive towards breakeven.”
Product revenues in the United States for the quarter ended June
30, 2016, of $1.4 million, increased by $586,000, or 74%, when
compared to the same period in the prior year. This increase was
the result of higher sales of the company’s dermatology and animal
health products. Oculus currently has a strong dermatology product
portfolio of seven products for: the treatment of atopic
dermatitis, scar management, surgical procedures, an oral
anti-infective for severe acne and, most recently, Ceramax, which
utilizes a “state of the art” skin repair technology. In fact, the
prescriptions filled for Ceramax during the June quarter, launched
at the end of March, were 1,083, representing the company’s
quickest sales ramp, compared to the other six product launches. In
addition, sales to a new animal health care partner increased
during the quarter compared to last year.
Product revenue in Europe and the rest of the world for the
quarter ended June 30, 2016, of $1.0 million, increased by
$467,000, or 82%, as compared to the same period in the prior year,
with increases in Europe, Asia, the Middle East and India. The
revenue in Europe for the quarter ended June 30, 2016, increased
56% in U.S. dollars, when compared to the same period last
year.
Product revenue in Latin America for the quarter ended June 30,
2016, was $1.1 million, down $460,000 or 30%, when compared to the
same period in the prior year. This decrease was caused by a 19%
decline in the value of the peso from the same period in the prior
year, along with a strong quarter, ended June 30, 2015. The
first quarter of fiscal year 2016 included the continued stocking
by the new Latin American partner, Sanfer, in order to fill its
expansive pharmacy store network.
For the three months ended June 30, 2016 and 2015, product
licensing fees and royalty revenues were $75,000 and $447,000,
respectively. The decrease is primarily related to the lower
amortization of upfront payments from the company’s partner,
Sanfer, in Latin America. This amortization relating to
Sanfer ends in September 30, 2017.
Oculus reported gross profit of $1.9 million, or 50% of revenue,
during the three months ended June 30, 2016, compared to a gross
profit of $1.9 million, or 51% of revenue when compared to the same
period in the prior year. The gross profit percentage was down
compared to last year due to the reduction in higher-margin license
fees and royalty revenue of $372,000, related to Oculus’ agreement
with Sanfer.
Total operating expenses of $4.5 million for the three months
ended June 30, 2016, increased by $306,000, or 7%, as compared to
the same period in the prior year. Operating expenses minus
non-cash expenses during the first quarter of fiscal year 2017 were
$4.1 million, up $431,000, as compared to the same period in the
prior year. The increase in operating expenses, minus
non-cash expenses, was due to mostly higher sales and marketing
expenses in the United States related to the costs of Oculus’
direct sales force in dermatology.
Net loss for the quarter ended June 30, 2016, was $2.6 million,
an increase of $228,000, as compared to net loss of $2.3 million
for the same period in the prior year.
As of June 30, 2016, Oculus had unrestricted cash and cash
equivalents of $5 million, as compared with $7.5 million as of
March 31, 2016. The company has no debt outstanding.
Conference CallOculus’ management will hold a
conference call today to discuss first quarter fiscal year 2017
results and answer questions, beginning at 4:30 p.m. EDT.
Individuals interested in participating in the conference call may
do so by dialing 877-303-7607 for domestic callers or 973-638-3203
for international callers.
Those interested in listening to the conference call live via
the Internet may do so at http://ir.oculusis.com/events.cfm.
Please log on approximately 30 minutes prior to the presentation in
order to register and download the appropriate software.
A telephone replay will be available for seven days following
the conclusion of the call by dialing 855-859-2056 for domestic
callers, or 404-537-3406 for international callers, and entering
conference code 46082115. A webcast replay will be available on the
site at http://ir.oculusis.com/events.cfm for one year following
the call.
About Oculus Innovative Sciences, Inc.Oculus
Innovative Sciences is a specialty pharmaceutical company that
develops and markets unique and effective solutions for the
treatment of dermatological conditions and advanced tissue care.
The company’s products, which are sold throughout the United
States and internationally, have improved outcomes for more than
five million patients globally by reducing infections, itch,
pain, scarring and harmful inflammatory responses. The company's
headquarters are in Petaluma, California, with manufacturing
operations in the United States and Latin America. European
marketing and sales are headquartered in Roermond,
Netherlands. More information can be found at
www.oculusis.com.
Forward-Looking StatementsExcept for historical
information herein, matters set forth in this press release
are forward-looking within the meaning of the “safe harbor”
provisions of the Private Securities Litigation Reform Act of 1995,
including statements about the commercial and technology progress
and future financial performance of Oculus Innovative
Sciences, Inc. and its subsidiaries (the “Company”). These
forward-looking statements are identified by the use of words such
as “balancing,” “control,” and “strive,” among others.
Forward-looking statements in this press release are subject to
certain risks and uncertainties inherent in the Company’s business
that could cause actual results to vary,
including such risks that regulatory clinical and
guideline developments may change, scientific data may not be
sufficient to meet regulatory standards or receipt of required
regulatory clearances or approvals, clinical results may not
be replicated in actual patient settings, protection offered
by the Company’s patents and patent applications may be
challenged, invalidated or circumvented by its
competitors, the available market
for the Company’s products will not be as large as
expected, the Company’s common stock and warrants may be delisted
from NASDAQ, the Company’s products will not be able to
penetrate one or more targeted markets, revenues will not be
sufficient to fund further development and clinical studies, the
Company may not meet its future capital needs, the Company may
not be able to obtain additional funding, as well as uncertainties
relative to varying product formulations and a multitude of diverse
regulatory and marketing requirements in different countries and
municipalities, and other risks detailed from time to time in the
Company’s filings with the Securities and Exchange Commission
including its annual report on Form 10-K for the fiscal year
ended March 31, 2016. The Company disclaims any obligation to
update these forward-looking statements, except as required by
law.
Oculus and Microcyn® Technology are trademarks or registered
trademarks of Oculus Innovative Sciences, Inc. All other trademarks
and service marks are the property of their respective owners.
|
OCULUS INNOVATIVE SCIENCES, INC. AND
SUBSIDIARIES |
Condensed Consolidated Balance
Sheets |
(In thousands, except per share amounts) |
|
|
|
|
|
|
|
|
|
June 30, |
|
|
March 31, |
|
|
|
2016 |
|
|
2016 |
|
|
|
(Unaudited) |
|
|
|
|
|
ASSETS |
|
|
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
|
|
Cash and
cash equivalents |
|
$ |
4,970 |
|
|
$ |
7,469 |
|
Accounts
receivable, net |
|
|
2,593 |
|
|
|
2,274 |
|
Inventories, net |
|
|
1,992 |
|
|
|
1,640 |
|
Prepaid
expenses and other current assets |
|
|
942 |
|
|
|
1,505 |
|
Total
current assets |
|
|
10,497 |
|
|
|
12,888 |
|
Property
and equipment, net |
|
|
764 |
|
|
|
850 |
|
Other
assets |
|
|
59 |
|
|
|
65 |
|
Total
assets |
|
$ |
11,320 |
|
|
$ |
13,803 |
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
|
|
|
|
|
Current
liabilities: |
|
|
|
|
|
|
|
|
Accounts
payable |
|
$ |
1,368 |
|
|
$ |
1,337 |
|
Accrued
expenses and other current liabilities |
|
|
1,442 |
|
|
|
1,526 |
|
Deferred
revenue |
|
|
656 |
|
|
|
574 |
|
Current
portion of long-term debt |
|
|
66 |
|
|
|
114 |
|
Total
current liabilities |
|
|
3,532 |
|
|
|
3,551 |
|
Deferred revenue, less
current portion |
|
|
38 |
|
|
|
112 |
|
Total
liabilities |
|
|
3,570 |
|
|
|
3,663 |
|
Commitments and
Contingencies |
|
|
|
|
|
|
|
|
Stockholders’
Equity |
|
|
|
|
|
|
|
|
Convertible preferred stock, $0.0001 par value; 142,857 shares
authorized, none issued and outstanding at June 30, 2016 and March
31, 2016, respectively |
|
|
– |
|
|
|
– |
|
Common
stock, $0.0001 par value; 12,000,000 shares authorized at June 30,
2016 and March 31, 2016, 4,200,756 and 4,196,659 shares issued and
outstanding at June 30, 2016 and March 31, 2016, respectively |
|
|
1 |
|
|
|
1 |
|
Additional paid-in capital |
|
|
166,779 |
|
|
|
166,368 |
|
Accumulated deficit |
|
|
(154,943 |
) |
|
|
(152,375 |
) |
Accumulated other comprehensive loss |
|
|
(4,087 |
) |
|
|
(3,854 |
) |
Total
stockholders’ equity |
|
|
7,750 |
|
|
|
10,140 |
|
Total
liabilities and stockholders’ equity |
|
$ |
11,320 |
|
|
$ |
13,803 |
|
|
|
|
|
|
|
|
|
|
OCULUS INNOVATIVE SCIENCES, INC. AND
SUBSIDIARIES |
Condensed Consolidated Statements of
Comprehensive Loss |
(In thousands, except per share amounts) |
(Unaudited) |
|
|
|
|
|
|
Three Months Ended June
30, |
|
|
|
2016 |
|
|
2015 |
|
Revenues |
|
|
|
|
|
|
|
|
Product |
|
$ |
3,509 |
|
|
$ |
2,916 |
|
Product
licensing fees and royalties |
|
|
75 |
|
|
|
447 |
|
Service |
|
|
227 |
|
|
|
317 |
|
Total
revenues |
|
|
3,811 |
|
|
|
3,680 |
|
Cost of revenues |
|
|
|
|
|
|
|
|
Product |
|
|
1,707 |
|
|
|
1,516 |
|
Service |
|
|
185 |
|
|
|
291 |
|
Total
cost of revenues |
|
|
1,892 |
|
|
|
1,807 |
|
Gross profit |
|
|
1,919 |
|
|
|
1,873 |
|
Operating expenses |
|
|
|
|
|
|
|
|
Research
and development |
|
|
360 |
|
|
|
467 |
|
Selling,
general and administrative |
|
|
4,130 |
|
|
|
3,717 |
|
Total
operating expenses |
|
|
4,490 |
|
|
|
4,184 |
|
Loss from
operations |
|
|
(2,571 |
) |
|
|
(2,311 |
) |
Interest expense |
|
|
(1 |
) |
|
|
– |
|
Interest income |
|
|
1 |
|
|
|
– |
|
Loss due to change in
fair value of derivative liabilities |
|
|
– |
|
|
|
(59 |
) |
Other income |
|
|
3 |
|
|
|
30 |
|
Net loss |
|
|
(2,568 |
) |
|
|
(2,340 |
) |
Net loss per common
share: basic and diluted |
|
$ |
(0.61 |
) |
|
$ |
(0.77 |
) |
Weighted-average number
of shares used in common share calculations: |
|
|
|
|
|
|
|
|
Basic and
diluted |
|
|
4,198 |
|
|
|
3,034 |
|
Other comprehensive
loss |
|
|
|
|
|
|
|
|
Net
loss |
|
$ |
(2,568 |
) |
|
$ |
(2,340 |
) |
Foreign
currency translation adjustments |
|
|
(233 |
) |
|
|
(71 |
) |
Comprehensive loss |
|
$ |
(2,801 |
) |
|
$ |
(2,411 |
) |
|
|
|
|
|
|
|
|
|
OCULUS INNOVATIVE SCIENCES, INC. AND
SUBSIDIARIES |
Reconciliation of GAAP Measures to Non-GAAP
Measures |
(In thousands) and (Unaudited) |
|
|
|
|
|
|
Three Months Ended June 30, |
|
|
|
2016 |
|
|
2015 |
|
(1) Loss from
operations minus non-cash expenses (EBITDAS): |
|
|
|
|
|
|
|
|
GAAP loss from
operations as reported |
|
$ |
(2,571 |
) |
|
$ |
(2,311 |
) |
Non-cash
adjustments: |
|
|
|
|
|
|
|
|
Stock-based
compensation |
|
|
411 |
|
|
|
412 |
|
Service provider
expenses settled with common stock |
|
|
– |
|
|
|
107 |
|
Depreciation and
amortization |
|
|
61 |
|
|
|
62 |
|
Non-GAAP loss from
operations minus non-cash expenses (EBITDAS) |
|
$ |
(2,099 |
) |
|
$ |
(1,730 |
) |
|
|
|
|
|
|
|
|
|
(2) Net loss
minus non-cash expenses: |
|
|
|
|
|
|
|
|
GAAP net loss as
reported |
|
$ |
(2,568 |
) |
|
$ |
(2,340 |
) |
Non-cash
adjustments: |
|
|
|
|
|
|
|
|
Stock-based
compensation |
|
|
411 |
|
|
|
412 |
|
Service provider
expenses settled with common stock |
|
|
– |
|
|
|
107 |
|
Depreciation and
amortization |
|
|
61 |
|
|
|
62 |
|
Loss due to change in
fair value of derivative instruments |
|
|
– |
|
|
|
59 |
|
Non-GAAP net loss minus
non-cash expenses |
|
$ |
(2,096 |
) |
|
$ |
(1,700 |
) |
|
|
|
|
|
|
|
|
|
(3) Operating
expenses minus non-cash expenses: |
|
|
|
|
|
|
|
|
GAAP operating expenses
as reported |
|
$ |
4,490 |
|
|
$ |
4,184 |
|
Non-cash
adjustments: |
|
|
|
|
|
|
|
|
Stock-based
compensation |
|
|
(343 |
) |
|
|
(357 |
) |
Service provider
expenses settled with common stock |
|
|
– |
|
|
|
(107 |
) |
Depreciation and
amortization |
|
|
(8 |
) |
|
|
(12 |
) |
Non-GAAP operating
expenses minus non-cash expenses |
|
$ |
4,139 |
|
|
$ |
3,708 |
|
|
|
|
|
|
|
|
|
|
(1) Loss from operations minus non-cash expenses (EBITDAS) is a
non-GAAP financial measure. The Company defines operating loss
minus non-cash expenses as GAAP reported operating loss minus
operating depreciation and amortization, and operating stock-based
compensation. The Company uses this measure for the purpose of
modifying the operating loss to reflect direct cash related
transactions during the measurement period.
(2) Net loss minus non-cash expenses is a non-GAAP financial
measure. The Company defines net loss minus non-cash expenses as
GAAP reported net loss minus depreciation and amortization,
stock-based compensation, a change in fair value of common stock, a
change in the fair value of derivative instruments, loss on
impairment of investment, and non-cash interest expense. The
Company uses this measure for the purpose of modifying the net loss
to reflect only those expenses to reflect direct cash transactions
during the measurement period.
(3) Operating expenses minus non-cash expenses is a non-GAAP
financial measure. The Company defines operating expenses minus
non-cash expenses as GAAP reported operating expenses minus
operating depreciation and amortization, and operating stock-based
compensation. The Company uses this measure for the purpose of
identifying total operating expenses involving cash transactions
during the measurement period.
OCULUS INNOVATIVE SCIENCES, INC. AND
SUBSIDIARIESProduct Related Revenue
Schedules(In thousands) and (Unaudited)
The following table shows the company’s product
revenues by geographic region:
|
|
Three Months Ended June 30, |
|
|
|
|
|
|
|
|
|
2016 |
|
|
2015 |
|
|
$ Change |
|
|
% Change |
|
United States |
|
$ |
1,373 |
|
|
$ |
787 |
|
|
$ |
586 |
|
|
|
|
74 |
% |
Latin America |
|
|
1,098 |
|
|
|
1,558 |
|
|
|
(460 |
) |
|
|
|
(30 |
%) |
Europe and Rest of the
World |
|
|
1,038 |
|
|
|
571 |
|
|
|
467 |
|
|
|
|
82 |
% |
|
|
|
3,509 |
|
|
|
2,916 |
|
|
|
593 |
|
|
|
|
20 |
% |
Product license fees
and royalties |
|
|
75 |
|
|
|
447 |
|
|
|
(372 |
) |
|
|
|
(83 |
%) |
Total |
|
$ |
3,584 |
|
|
$ |
3,363 |
|
|
$ |
221 |
|
|
|
|
7 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The following table shows our product license
fees and royalties revenue by partner:
|
|
Three Months Ended June 30, |
|
|
|
|
|
|
|
Product license fees and royalties |
|
2016 |
|
|
2015 |
|
|
$ Change |
|
|
% Change |
|
Exeltis (formerly
Quinnova) |
|
$ |
– |
|
|
$ |
54 |
|
|
$ |
(54 |
) |
|
|
|
(100 |
%) |
Innovacyn |
|
|
– |
|
|
|
20 |
|
|
|
(20 |
) |
|
|
|
(100 |
%) |
Laboratorios Sanfer
(formerly More Pharma) |
|
|
75 |
|
|
|
373 |
|
|
|
(298 |
) |
|
|
|
(80 |
%) |
Total product license
fees and royalties |
|
$ |
75 |
|
|
$ |
447 |
|
|
$ |
(372 |
) |
|
|
|
(83 |
%) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Media and Investor Contact:
Oculus Innovative Sciences, Inc.
Dan McFadden
VP of Public and Investor Relations
(425) 753-2105
dmcfadden@oculusis.com
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