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Vision-Sciences Announces Revenue of $4.2 Million for Fourth Quarter and $15.3 Million for Full Year Fiscal 2013



Vision-Sciences Announces Revenue of $4.2 Million for Fourth Quarter and $15.3
Million for Full Year Fiscal 2013

ORANGEBURG, N.Y., April 29, 2013 (GLOBE NEWSWIRE) -- Vision-Sciences, Inc.
(Nasdaq:VSCI), a leading provider of unique flexible endoscopic products
utilizing its proprietary sterile disposable EndoSheath® technology, today
announced financial results for its fourth quarter and fiscal year 2013, ended
March 31, 2013.

Fourth Quarter Fiscal Year 2013 Highlights

  * Net sales were $4.2 million, compared with $4.0 million in the third
    quarter of fiscal 2013 and $4.6 million in the fourth quarter of fiscal
    2012;
  * Operating loss decreased 29% to $2.0 million compared to $2.8 million in
    the same quarter last year; and
  * Net loss improved by 34% to $2.0 million, or ($0.04) per basic and diluted
    share, compared to $3.1 million, or ($0.07) per basic and diluted share,
    in the fourth quarter of fiscal 2012.

Fiscal Year 2013 Highlights

  * Net sales were $15.3 million, compared with $16.7 million in fiscal 2012;
  * Operating loss decreased 17% to $8.4 million compared to $10.1 million
    last year; and
  * Net loss improved by 5% to $10.5 million, or ($0.23) per basic and diluted
    share, compared to $11.0 million, or ($0.25) per basic and diluted share,
    in fiscal 2012.
  * Excluding the loss on extinguishment of debt, non-GAAP net loss for fiscal
    2013 was $9.3 million, or ($0.20) per basic and diluted share, an
    improvement of 16% over fiscal 2012.

"2013 was a rebuilding year for Vision-Sciences and marked the implementation
of our new strategy to focus primarily on the acute-care hospital and
bariatric markets, where our value proposition resonates the most," commented
Cynthia Ansari, President and Chief Executive Officer of Vision-Sciences, Inc.
"Our relevance and acceptance has increased in these markets, our sales
pipeline is robust, and our average selling price continues to grow. This
strong foundation should enable Vision-Sciences' growth in fiscal 2014 and
beyond."

Results of Operations

Fourth Quarter Fiscal Year 2013 versus Fourth Quarter Fiscal Year 2012

Net sales in the fourth quarter of fiscal 2013 decreased 9% to $4.2 million
from $4.6 million in the same period a year ago, primarily due to the absence
of spine system sales to SpineView, Inc. in the fiscal 2013 quarter.
Sequentially, net sales in the fourth quarter increased 6% from $4.0 million
as reported during the third quarter of fiscal 2013.

Net sales detail (in thousands, except for percentages) for the three-month
periods were as follows:

                                       Three Months Ended       
                                       March 31,                
Market/Category                        2013        2012        %
                                       (unaudited) (unaudited)  
Urology                                 $ 2,074     $ 1,916    8%
ENT                                     479         493        -3%
Surgery / GI                            124         186        -33%
Critical Care / Pulmonology             264         331        -20%
Spine                                   --          225        -100%
Repairs, peripherals, and accessories   499         527        -5%
Total net medical sales                 3,440       3,678      -6%
Total net industrial sales              760         913        -17%
Net sales                               $ 4,200     $ 4,591    -9%

Gross profit was $1.2 million in the fourth quarters of fiscal 2013 and 2012.
Gross margin for the period increased 300 basis points to 29% from 26% in the
fourth quarter of fiscal 2012. The gross margin improvement was primarily
attributable to higher domestic average selling prices as evidenced by the
year-over-year increases of 53% and 87% realized for the Company's surgical
and critical care video platforms, respectively.

Selling, general and administrative ("SG&A") expenses were $2.8 million in the
fourth quarter of fiscal 2013, a decrease of $0.2 million, or 8%, over the
same period last year. The decrease was primarily due to lower salaries and
benefits expense ($119 thousand) and a reduction in trade show and convention
costs ($46 thousand). As a percentage of net sales, SG&A was 67% in the fourth
quarter of fiscal 2013, up slightly from the 65% reported in the same period
last year.

Research and development ("R&D") expenses were $0.5 million in the fourth
quarter of fiscal 2013, a decrease of $0.5 million, or 54%, over the same
period last year. The decrease was primarily attributable to lower product
development costs associated with the Company's next generation digital
processing unit, the DPU-7000 ($0.2 million), the flexible ureteroscope for
Stryker ($0.1 million), and the 2.0 mm flexible endoscope for SpineView ($0.1
million). All of these products are now commercially available for sale. As a
percentage of net sales, R&D decreased to 11% from 22% reported during the
same period last year.

The Company's operating loss improved 29% to $2.0 million during the fourth
quarter of fiscal 2013 driven by lower operating expenses of $0.8 million.

Full Year Fiscal 2013 versus Full Year Fiscal 2012

Net sales for the full year fiscal 2013 decreased 8% to $15.3 million from
$16.7 million reported during the full year fiscal 2012. The year-over-year
net sales decline was primarily attributable to lower urology sales to Stryker
($1.2 million) stemming from initial stocking of product in fiscal 2012 to
support their April 2011 launch efforts.

Net sales detail (in thousands, except for percentages) for fiscal years 2013
and 2012 were as follows:

                                       Fiscal Year Ended      
                                       March 31,              
Market/Category                        2013        2012      %
                                       (unaudited) (audited)  
Urology                                 $ 5,439     $ 7,167  -24%
ENT                                     1,896       1,922    -1%
Surgery / GI                            1,019       952      7%
Critical Care / Pulmonology             789         895      -12%
Spine                                   440         837      -47%
Repairs, peripherals, and accessories   2,047       1,962    4%
Total net medical sales                 11,630      13,735   -15%
Total net industrial sales              3,657       2,951    24%
Net sales                               $ 15,287    $ 16,686 -8%

Gross profit for fiscal 2013 decreased 15% to $4.3 million compared to $5.1
million for fiscal 2012. Gross margin for the period decreased approximately
200 basis points to 28% from 30% in fiscal 2012, primarily attributable to a
reduction in the allocation of manufacturing expenses to support research and
development activities (gross margin percentage point impact of 3% in fiscal
2013).

SG&A expenses were $11.0 million for fiscal 2013, a decrease of $1.1 million,
or 9%, compared to fiscal 2012. The decrease was primarily attributable to
lower stock-based compensation expense ($0.5 million), lower vacation pay
expense ($0.3 million), and a reduction in trade show and convention costs
($0.2 million). As a percentage of net sales, SG&A was essentially unchanged
at 72% for fiscal 2013 as compared to the prior year.

R&D expenses were $1.8 million for fiscal 2013, a decrease of $1.3 million, or
42%, compared to fiscal 2012. The decrease was primarily attributable to lower
product development costs associated with the aforementioned products ($0.7
million) and a reduction in manufacturing efforts to support product
development activities ($0.5 million). As a percentage of net sales, R&D
decreased to 12% from 19% as reported in fiscal 2012.

The Company's operating loss improved 17% to $8.4 million in fiscal 2013 from
$10.1 million in fiscal 2012, primarily attributable to a $2.4 million decline
in operating expenses, period to period.

At March 31, 2013, the Company had cash and cash equivalents of $0.8 million
and working capital of $7.0 million, as compared to cash and cash equivalents
of $1.3 million and working capital of $6.6 million at December 31, 2012 and
cash and cash equivalents of $2.7 million and working capital of $6.0 million
at March 31, 2012. The Company presently has $3.0 million of capital available
under a $20.0 million convertible note with Lewis C. Pell, the Company's
Chairman.

Conference Call

Cynthia Ansari, President and Chief Executive Officer, and Keith Darragh, VP,
Finance and Principal Financial and Accounting Officer, will host a conference
call to discuss the fourth quarter and full year fiscal 2013 financial results
at 8:30 a.m. ET, on Tuesday, April 30, 2013.

Conference dial-in:     (877) 303-1595
International dial-in:  (970) 315-0449
Conference ID:          43081267
Webcast:                http://ir.visionsciences.com/

An audio replay of the conference call will be available from 11:30 a.m. ET on
Tuesday, April 30, 2013, through 11:30 p.m. ET on Monday, May 6, 2013 by
dialing (855) 859-2056 from the U.S. or (404) 537-3406 from abroad. The audio
webcast will also be available in the investor section of the Company's
website, www.visionsciences.com.

Use of Non-GAAP Financial Measures

Non-GAAP net loss and non-GAAP net loss per share excludes non-cash or
non-operational activities. As a result, the Company uses these measures to
assess and analyze its operational results and trends and to make financial
and operations decisions. The Company also believes these non-GAAP financial
measures are useful to investors, because they provide greater transparency
regarding the Company's operating performance. These non-GAAP financial
measures should not be considered measures of the Company's liquidity. In
addition, these non-GAAP financial measures are unlikely to be comparable with
non-GAAP information provided by other companies. Reconciliations between
non-GAAP financial measures and GAAP financial measures for net loss and net
loss per share are included in a table accompanying this press release after
the unaudited condensed consolidated financial statements.

About Vision-Sciences, Inc.

Vision-Sciences, Inc. designs, develops, manufactures and markets products for
flexible endoscopy. The company's unique product lines feature a streamlined
visualization system and proprietary sterile disposable microbial barrier,
known as EndoSheath technology, providing users with efficient and cost
effective endoscope turnover while enhancing patient safety. Currently,
Vision-Sciences offers solutions for five main healthcare areas: urology,
pulmonology (critical care), gastroenterology (GI), ENT (ear, nose and throat)
and spine.  Information about Vision-Sciences' products is available at
www.visionsciences.com.

Vision Sciences^®, Slide-On^®, EndoSheath^®, EndoWipe^® and The Vision
System^® are registered trademarks of Vision-Sciences, Inc.

Safe Harbor Statement under the Private Securities Litigation Reform Act of
1995: This press release contains forward-looking statements, which are any
statements that are not historical facts. These forward-looking statements are
based on Vision-Sciences' current expectations, and should not be relied upon
as representing its views as of any subsequent date. Forward-looking
statements are subject to a variety of risks and uncertainties that could
cause the Company's actual results to differ materially from the statements
contained herein; risk factors are detailed in the Company's most recent
annual report and other filings with the U.S. Securities and Exchange
Commission. There is no assurance that any future results or events discussed
in these statements will be achieved. The Company does not assume any
obligation to update any forward-looking statements as a result of new
information or future events or developments, except as may be required by
law.

Vision-Sciences, Inc. and Subsidiaries
Condensed Consolidated Statements of Operations
(In thousands, except per share amounts)
                                                                    
                               Three Months Ended      Fiscal Year Ended
                               March 31,               March 31,
                               2013        2012        2013        2012
                               (unaudited) (unaudited) (unaudited) (audited)
                                                                    
Net sales                       $ 4,200     $ 4,591     $ 15,287    $ 16,686
Cost of sales                   2,972       3,388       10,945      11,601
Gross profit                    1,228       1,203       4,342       5,085
                                                                    
Selling, general, and           2,794       2,991       10,999      12,045
administrative expenses 
Research and development        459         994         1,820       3,155
expenses 
Operating loss                  (2,025)     (2,782)     (8,477)     (10,115)
                                                                    
Interest income                 --          --          4           9
Interest expense                (36)        (160)       (503)       (489)
Debt cost expense               --          (143)       (272)       (372)
Loss on extinguishment of debt  --          --          (1,244)     -- 
Other, net                      (6)         (5)         (53)        (48)
                                (42)        (308)       (2,068)     (900)
Loss before provision for       (2,067)     (3,090)     (10,545)    (11,015)
income taxes 
Income tax provision            2           1           12          1
Net loss                        $ (2,069)   $ (3,091)   $ (10,557)  $ (11,016)
                                                                    
Net loss per common share -     $ (0.04)    $ (0.07)    $ (0.23)    $ (0.25)
basic and diluted 
                                                                    
Weighted average number of
shares outstanding - basic and  46,076      44,496      45,945      44,246
diluted

                                                                      
Vision-Sciences, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(In thousands, except per share amounts)
                                                                      
                                                         March 31,   March 31,
                                                         2013        2012
ASSETS                                                   (unaudited) (audited)
Current assets:                                                       
Cash and cash equivalents                                 $ 788       $ 2,674
Accounts receivable, net                                  3,624       2,132
Inventories, net                                          5,158       3,970
Prepaid expenses and other current assets                 276         197
Total current assets                                      9,846       8,973
                                                                      
Property and equipment, net                               1,454       2,033
Deferred debt cost, net                                   --          1,516
Other assets, net                                         77          77
Total assets                                              $ 11,377    $ 12,599
                                                                      
LIABILITIES AND STOCKHOLDERS' DEFICIT                                 
Current liabilities:                                                  
Accounts payable                                          $ 1,300     $ 587
Accrued compensation                                      656         657
Accrued expenses                                          728         944
Deferred revenue                                          130         -- 
Capital lease obligations                                 75          91
Advances from customers                                   --          672
Total current liabilities                                 2,889       2,951
                                                                      
Convertible debt—related party                            17,000      -- 
Line of credit—related party                              --          10,000
Deferred revenue, net of current portion                  62          -- 
Capital lease obligations, net of current portion         22          97
Total liabilities                                         19,973      13,048
                                                                      
Commitments and Contingencies                                         
Stockholders' deficit:                                                
Preferred stock, $0.01 par value                                      
Authorized—5,000 shares; issued and outstanding—none      --          -- 
Common stock, $0.01 par value                                         
Authorized—75,000 shares; issued—46,249 shares and        463         454
45,396 shares, respectively
Additional paid-in capital                                100,819     98,382
Treasury stock at cost, 34 shares and 7 shares of common  (50)        (14)
stock, respectively
Accumulated deficit                                       (109,828)   (99,271)
Total stockholders' deficit                               (8,596)     (449)
Total liabilities and stockholders' deficit               $ 11,377    $ 12,599

                                                                    
Vision-Sciences, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows 
(In thousands, except per share amounts)
                                                                    
                                                       Fiscal Year Ended
                                                       March 31,
                                                       2013        2012
Cash flows from operating activities:                  (unaudited) (audited)
Net loss                                                $ (10,557)  $ (11,016)
Adjustments to reconcile net loss to net cash used in               
operating activities:
Stock-based compensation expense                        1,469       2,018
Depreciation and amortization                           795         832
Provision for (recovery of) bad debt expenses           5           (1)
Debt cost expense                                       272         372
Loss on extinguishment of debt                          1,244       -- 
Loss on disposal of fixed assets                        58          48
Changes in assets and liabilities:                                  
Accounts receivable                                     (1,497)     (539)
Inventories                                             (1,372)     1,773
Prepaid expenses and other current assets               (79)        135
Other assets                                            --          (9)
Accounts payable                                        713         (334)
Accrued expenses                                        (216)       162
Accrued compensation                                    (1)         (49)
Deferred revenue                                        49          -- 
Advances from customers                                 (529)       (5,021)
Net cash used in operating activities                   (9,646)     (11,629)
Cash flows from investing activities:                               
Purchases of property and equipment                     (95)        (209)
Proceeds from disposal of fixed assets                  5           10
Net cash used in investing activities                   (90)        (199)
Cash flows from financing activities:                               
Proceeds from issuance of convertible debt—related      7,000       -- 
party
Advance on line of credit—related party                 --          5,000
Payment of costs related to line of credit—related      --          (5)
party
Net proceeds from sale of common stock                  878         -- 
Proceeds from exercise of stock options                 99          428
Common stock repurchased                                (36)        (14)
Payments of capital leases                              (91)        (87)
Net cash provided by financing activities               7,850       5,322
Net decrease in cash and cash equivalents               (1,886)     (6,506)
Cash and cash equivalents at beginning of period        $ 2,674     $ 9,180
Cash and cash equivalents at end of period              $ 788       $ 2,674

                                                                           
Vision-Sciences, Inc. and Subsidiaries
Non-GAAP Financial Measures and Reconciliation
(In thousands, except per share amounts)
                                                                           
               Three Months Ended                 Fiscal Year Ended        
               March 31,                          March 31,                
Non-GAAP
Financial      2013        2012        Difference 2013        2012        Difference
Measures and
Reconciliation
               (unaudited) (unaudited)            (unaudited) (audited)    
GAAP net loss   $ (2,069)   $ (3,091)   $ 1,022    $ (10,557)  $ (11,016)  $ 459
Add: loss on
extinguishment  --          --          --         1,244       --          1,244
of debt
Non-GAAP net    $ (2,069)   $ (3,091)   $ 1,022    $ (9,313)   $ (11,016)  $ 1,703
loss
                                                                           
Non-GAAP net
loss per
common share -  $ (0.04)    $ (0.07)               $ (0.20)    $ (0.25)    
basic and
diluted 
                                                                           
Weighted
average number
of shares       46,076      44,496                 45,945      44,246      
outstanding -
basic and
diluted

CONTACT: Keith Darragh
         VP, Finance and Principal Financial and Accounting Officer
         Vision-Sciences, Inc.
         (845) 365-0600
         invest@visionsciences.com
        
         Lisa Wilson
         President
         In-Site Communications, Inc.
         (212) 452-2793
         lwilson@insitecony.com

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