Escalon Medical reports net loss of $458,959 for first quarter of fiscal 2015

Escalon Medical Corp. (Nasdaq: ESMC) today announced its operating results for its fiscal 2015 first quarter ended September 30, 2014.

For the quarter ended September 30, 2014, the Company reported a net loss of $458,959 and a net loss from continuing operations of $440,196, or $0.06 per share. This compares to net income of $13,241 for the first quarter of fiscal 2014 and net income from continuing operations of $38,846.

For the first quarter of fiscal 2015, consolidated product revenue declined to $2.6 million from $3.1 million in the year ago period primarily as a result of declines in sales of the Company's Sonomed Escalon Ultrasound and Digital products. Product sales have fluctuated as the Company updates its product offering. In addition, the Company noted that the first quarter of last year was a particularly strong quarter for sales.

For the first quarter of fiscal 2015, margins decreased to 48.0% from 50.3% in the prior year period due to lower revenue and decreased margin in ultrasound products due to reduced pricing on older products in anticipation of the transition to new of higher margin products. Marketing, general and administrative expenses increased by 13.6% in the quarter primarily due to increased expenditures on upcoming sales campaigns to support new and updated products as well as added sales people and production and product quality management. Research and development expenses for the first quarter of fiscal 2015 were relatively flat at $324,277 compared to $323,190 in the prior year period.

At September 30, 2014, the Company had $1.5 million of cash and no long-term debt. Inventory stood at $2.8 million at September 30, 2014.

"While fiscal 2015 is off to a slow start, the first quarter is typically our weakest," commented Chief Executive Officer, Richard J. DePiano, Jr. "Sales and margins continued to be hampered by the transition to new products, which involved the discounting of our older product inventory as well as the distribution of demonstration devices to our distributors."

"Looking ahead, we believe we have effective plans in place to drive top-line growth. We remain focused on improved organizational efficiency and are also in the process of revitalizing our sales organization. We have recently brought on a Director of Domestic Sales and will add to our internal sales team to help leverage our US distribution network. Our extensive European distribution channels also now have access to our new products, including the VuPad™ and VuMAX® HD."

Mr. DePiano concluded, "We are confident that our investment in our ophthalmic diagnostics instrumentation and ultrasound solutions will begin to yield results in the months to come. New products were well received at the recent American Academy of Ophthalmology Annual Meeting in Chicago, and we saw sales accelerate in October. We will continue to invest in research and development as well as sales and marketing and believe this will lead to improved growth in fiscal 2015 and increased shareholder value long term."

SOURCE Escalon Medical Corp.