Encision Reports First Quarter Fiscal Year 2022 Results

Rhea-AI Summary

Encision Inc. (PK:ECIA) reported financial results for Q1 of fiscal 2022, showing a net revenue of $2.01 million and a net loss of $7,000 or $0.00 per diluted share. This marks a significant increase from the previous year, where net revenue was $1.35 million with a loss of $139,000. Gross margin improved to 51% from 48% as product volumes rebounded post-COVID. The company is optimistic about its collaboration with Auris Health for service revenue and is applying for forgiveness of a $533,118 PPP loan, which it expects to qualify for.

Positive

• 49% increase in total revenue from the previous year due to improved market conditions.
• Gross margin improved to 51% from 48% year-over-year.
• Ongoing collaboration with Auris Health for advanced surgical applications using AEM technology.

Negative

• Net loss of $7,000 despite revenue growth, indicating potential ongoing financial challenges.
• -

BOULDER, Colo., Aug. 9, 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 2022 first quarter that ended June 30, 2021.

The Company posted quarterly net revenue of $2.01 million for a quarterly net loss of $7 thousand, or $0.00 per diluted share. These results compare to net revenue of $1.35 million for a quarterly net loss of $139 thousand, or $(0.01) per diluted share, in the year-ago quarter. Gross margin on net revenue was 51% in the fiscal 2022 first quarter and 48% in the fiscal 2021 first quarter. Gross margin in the fiscal 2021 first quarter was lower due to reduced product volume that resulted in higher costs of unit produced.

"Total revenue, which included service revenue, increased 49% from our COVID impacted first quarter revenue of last year," said Gregory Trudel, President and CEO of Encision Inc. "We continue to be positive as we assess and react to how surgery rebounds from the pandemic. We have learned to flex our sales tactics as the market reacts to waves of COVID and we encounter varying degrees of direct access to our customers.

"Service revenue for our first 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 February 2021, 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, and have applied 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, 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.

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
		June 30, 2021		June 30, 2020
Product revenue		$1,718		$1,348
Service revenue		290		––
Total revenue		2,008		1,348
Product cost of revenue		838		701
Service cost of revenue		143		––
Total cost of revenue		981		701
Gross profit		1,027		647
Operating expenses:
Sales and marketing		528		368
General and administrative		327		287
Research and development		177		141
Total operating expenses		1,032		796
Operating (loss)		(5)		(149)
Interest expense and other income (expense), net		(2)		10
(Loss) before provision for income taxes		(7)		(139)
Provision for income taxes		––		––
Net (loss)		$     (7)		$(139)
Net (loss) per share—basic and diluted		$ 0.00		$ (0.01)
Weighted average number of basic and diluted shares		11,583		11,583

 

Encision Inc.
Unaudited Condensed Balance Sheets
(in thousands)
		June 30, 2021		March 31, 2021
ASSETS
Cash		$1,329		$1,474
Accounts receivable, net		1,141		1,024
Inventories, net		1,591		1,446
Prepaid expenses and other assets		104		154
Total current assets		4,165		4,098
Equipment, net		258		266
Patents, net		209		213
Right of use asset		994		1,061
Other assets		26		21
Total assets		$ 5,652		$ 5,659
LIABILITIES AND SHAREHOLDERS' EQUITY
Accounts payable		$   521		$   390
Secured notes		21		20
Accrued compensation		216		182
Other accrued liabilities		183		282
Accrued lease liability		310		303
Total current liabilities		1,251		1,177
Secured notes		216		220
Accrued lease liability		848		927
Unsecured promissory note		533		533
Total liabilities		2,848		2,857
Common stock and additional paid-in capital		24,274		24,265
Accumulated (deficit)		(21,470)		(21,463)
Total shareholders' equity		2,804		2,802
Total liabilities and shareholders' equity		$ 5,652		$ 5,659

 

Encision Inc.
Unaudited Condensed Statements of Cash Flows
(in thousands)
		Years Ended
		June 30, 2021		June 30, 2020
Operating activities:
Net (loss)		$  (7)		$ (139)
Adjustments to reconcile net (loss) to cash         (used in) operating activities:
Depreciation and amortization		27		26
Share-based compensation expense		8		8
(Recovery from) provision for doubtful accounts, net		(25)		(13)
Provision for (recovery from) inventory obsolescence, net		(49)		14
Changes in operating assets and liabilities:
Right of use asset, net		(5)		20
Accounts receivable		(91)		97
Inventories		(97)		(96)
Prepaid expenses and other assets		44		(40)
Accounts payable		132		(52)
Accrued compensation and other accrued liabilities		(65)		10
Net cash (used in) operating activities		(128)		(165)
Investing activities:
Acquisition of property and equipment		(7)		––
Patent costs		(7)		(4)
Net cash (used in) investing activities		(14)		(4)
Financing activities:
(Paydown of) credit facility, net change		––		(187)
(Paydown of) secured  notes		(3)		––
Unsecured promissory note		––		599
Net cash (used in) generated by financing activities		(3)		412
Net (decrease) increase in cash		(145)		243
Cash, beginning of period		1,474		385
Cash, end of period		$1,329		$ 628

 

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SOURCE Encision Inc.

FAQ

What were Encision Inc.'s financial results for Q1 fiscal 2022?

Encision Inc. reported a net revenue of $2.01 million with a net loss of $7,000, or $0.00 per diluted share.

How much did Encision Inc.'s revenue increase compared to the previous year?

Total revenue increased by 49% compared to the same quarter last year.

What improvements did Encision Inc. see in gross margin?

Gross margin improved to 51% in Q1 fiscal 2022, up from 48% in Q1 fiscal 2021.

Is Encision Inc. applying for PPP loan forgiveness?

Yes, Encision Inc. is applying for forgiveness of a $533,118 PPP loan, expecting to meet the requirements.