Oculus Innovative Sciences Reports Revenues of $15.5 Million for Fiscal Year 2013, Product Revenue Up 23 Percent *EBITDAS for Fiscal 2013 Improved by $1.8 Million to ($1.5) Million Including $410,000 of One-Time Severance Costs Related to the More Pharma Transaction and $457,000 Expenses Related to Ruthigen *Cash Position of $7.9 Million at March 31, 2013, Up $3.2 Million From March 31, 2012 *Revenue for Fourth Quarter of Fiscal 2013 of $3.3 Million *Oculus' Wholly Owned Subsidiary, Ruthigen, Files Confidential Registration Statement on Form S-1 on May 24, 2013 Conference Call Begins at 4:30 p.m. (EDT) Today PETALUMA, Calif., June 13, 2013 (GLOBE NEWSWIRE) -- Oculus Innovative Sciences, Inc. (Nasdaq:OCLS) today announced financial results for the fourth quarter of fiscal year 2013, ended March 31, 2013. Total revenues were $3.3 million for the fourth quarter ended March 31, 2013, compared to $3.4 million for the same period in the prior year. Product revenues, including product licensing fees, were flat for the fourth quarter ended March 31, 2013, as compared to the same period in the prior year, with increases inEurope, China, India and Singapore offset by declines in the United States and Mexico. The flat quarterly revenue growth was the result of two factors: 1) the More Pharma transaction reduced Oculus' short-term revenue growth despite a 49% increase in unit volume sales, while improving operating profitability and long-term revenue growth prospects, and 2) the delayed seasonal purchasing in the ranch and farm animal market of the Vetericyn™ animal healthcare products due to late winter storms. "Our most important near term goal is to support our wholly owned subsidiary, Ruthigen, in its intended initial public offering. We believe Ruthigen will enable us to develop our next-generation technology as a drug designed for use in the surgical suite," said Jim Schutz, Oculus CEO. "Further, we believe the separation of Ruthigen from our company will create additional value for our respective shareholders – ours and theirs – while offering healthcare providers a new tool in the fight to reduce infection and enabling Oculus to reduce its operating expenses while targeting EBITDASbreakeven. Specific to Oculus' continued growth, we anticipateour More Pharma partnership south of the border will continue to increase our operating profitability while providing strong long-term growthprospects with continued highunitgrowth, although initially reducing short-term top line growth.We predict additional growth for Oculus will also be generated by new products, newpartners and new territories in the United States and abroad." Product revenue in the United States for the three months ended March 31, 2013, decreased $167,000, or 12%, due to a decline in sales of Oculus' animal healthcare products, partially offset by increases in sales of dermatology and wound care products. The company recorded revenue in the amounts of $658,000 and $957,000, for the three months ended March 31, 2013, and 2012, respectively, from Oculus' animal healthcare partner, Innovacyn. Late winter storms in the East and Midwest delayed spring sales in the farm and ranch animal sectors.Revenue growth attributed to Oculus' dermatology partners reflected strong unit growth as three new product lines were launched over the past year. Revenue in Mexico for the three months ended March 31, 2013, decreased $48,000, or 4%, when compared to the same period in the prior year caused by the lower sales price per unit sold to Oculus' partner, More Pharma. The number of units sold by More Pharma increased 49% compared to the same period last year. In addition, Oculus recognized $370,000 related to the amortization of upfront product licensing fees paid by More Pharma, Oculus' new exclusive distributor in Mexico and Latin America. The increase in units sold and the amortization was offset by about a 54% reduction in the overall average sales price per unit. Also, due to the transfer of the sales function of Oculus' products in Mexico to More Pharma, Oculus reduced or transferred the cost of the salespeople and promotions thereby eliminating those operating costs, thus improving the company's operating profitability in Mexico. Revenue in Europe and Rest of World for the three months ended March 31, 2013, increased $205,000, or 52%, as compared to the same period in the prior year, primarily as the result of increases in sales in Europe, China, India and Singapore. Oculus reported gross profit related to sales of Microcyn®-based products of approximately $2.2 million, or 69% of product revenues, during the three months ended March 31, 2013, compared to a gross profit of $2.1 million, or 67% of product revenues, for the same period in the prior year. The slightly higher gross profitability is primarily the result of improved product mix in the United States, partially offset by lowergross margins in Mexico as a result of the reduction in the unit pricing in connection with the More Pharma transaction. Total operating expenses decreased by $30,000, or 1%, to $3.6 million for the three months ended March 31, 2013. Operating expenses minus non-cash expenses during the three months ended March 31, 2013 were $3.4 million, up from $3.1 million for the same period in the prior year.Research and development expenses were $669,000 for the three months ended March 31, 2013, up $193,000 due to higher preclinical expenses related to Ruthigen.Selling, general and administrative expense decreased $223,000, or 7%, to $2.9 million during the three months ended March 31, 2013, as compared to $3.1 million for the same period in the prior year. The decrease for the three months ended March 31, 2013 was primarily due to lower selling expenses in Mexico, partially offset by higher expenses related to Ruthigen, compensation and investor-related costs in the United States. Loss from operations minus non-cash expenses for the three months ended March 31, 2013, was $1.1 million, compared to $924,000 for the same period in the prior year. Net loss for the three months ended March 31, 2013, was $2.4 million, an increase of $677,000 from a net loss of $1.8 million for the same period in the prior year. Stock-based compensation charges were $204,000 and $460,000 for the quarters ended March 31, 2013, and 2012, respectively. As of March 31, 2013, Oculus had unrestricted cash and cash equivalents of $7.9 million, compared with $3.4 million as of March 31, 2012. Results for Fiscal Year 2013 Total revenue was $15.5 million for the twelve months ended March 31, 2013, compared to $12.7 million for the same period in the prior year. Product revenues, including product licensing fees received, for the twelve months ended March 31, 2013, increased $2.7 million, or 23%, to $14.6 million, as compared to $11.9 million for the same period in the prior year, with revenue increases in the United States, Mexico, China and Singapore, partially offset by a decline in Europe, Middle East and India. Oculus reported gross profit related to sales of Microcyn®-based products of $10.6 million, or 73% of product revenues, for the twelve months ended March 31, 2013, compared to a gross profit of $8.6 million, or 73% of product revenues, for the same period in the prior year. Total operating expenses minus non-cash expenses increased $236,000, for the twelve months compared to the same period in the prior year. Operating loss minus non-cash expenses (EBITDAS) for the twelve months was $1.5 million, including $410,000 of one-time severance charges related to the More Pharma transaction in Mexico, down $1.8 million, compared to $3.3 million in the same period in the prior year. Conference Call Oculus management will hold a conference call today to discuss fourth quarter fiscal 2013 results and to 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 74134211. 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 Science is a global healthcare company that designs, manufactures and marketsprescription and non-prescription products in over 20 countries. The company's products are used to treat patients in surgical/advanced wound management, dermatology, women's health and animal health markets; addressing the unmet medical needs of these markets, while raising the standard ofpatient care and lowering overall healthcare costs. The company's headquarters are in Petaluma, California, with manufacturing operations in the United States and Latin America. More information can be found atwww.oculusis.com Forward-Looking Statements Except 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 futurefinancial performance of Oculus Innovative Sciences, Inc. and its subsidiaries (the "Company"). These forward-looking statements are identified by the use of words such as "anticipates," "believes," "expects," "may," "plans," and "will," 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, includingsuchrisks thatregulatory 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 bythe Company'spatents and patent applications may be challenged, invalidated or circumvented by its competitors,the available market fortheCompany'sproducts will not be as large as expected,the Company'sproducts 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 itsfuture 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, the uncertainties associated with an initial public offering of a separate public company, and the discretion of the Company's Board of Directors to delay or cancel the spinoff prior to execution, 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 theyear ended March 31, 2012. The Company disclaims any obligation to update these forward-looking statements, except as required by law. Oculus, Microcyn® Technology, and Ruthigen 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 Consolidated Balance Sheets (In thousands, except share and per share amounts) (Unaudited, except for the Year Ended March 31, 2012) March31, 2013 2012 ASSETS Current assets: Cash and cash equivalents $7,900 $3,351 Accounts receivable, net 1,707 2,151 Inventories, net 992 953 Prepaid expenses and other current assets 935 505 Total current assets 11,534 6,960 Property and equipment, net 800 806 Deferred offering costs 44 — Other assets 187 72 Total assets $12,565 $7,838 LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIENCY) Current liabilities: Accounts payable $808 $816 Accrued expenses and other current liabilities 703 844 Current portion of cash settlement liability 37 — Deferred revenue 2,320 1,619 Current portion of long-term debt, net of debt discount of $521 and $624 at March 31, 2013 and March 31, 2012, 1,259 1,415 respectively Derivative liability — 55 Total current liabilities 5,127 4,749 Deferred revenue, less current portion 2,619 133 Long-term debt, net of debt discount of $248 and $769 at March 31, 2013 and March 31, 2012, respectively, less 676 1,824 current portion Cash settlement liability, less current portion 62 2,000 Total liabilities 8,484 8,706 Commitments and Contingencies: Stockholders' Equity (Deficiency) Convertible preferred stock, $0.0001par value; 5,000,000shares authorized, none issued and outstanding — at March 31, 2013 and 2012,respectively Common stock, $0.0001par value; 14,285,715shares authorized, 6,583,150 and 4,144,206shares issued and 1 — outstanding at March 31, 2013 and 2012, respectively Additional paid-in capital 144,816 134,499 Accumulated other comprehensive loss (2,991) (3,053) Accumulated deficit (137,745) (132,314) Total stockholders' equity (deficiency) 4,081 (868) Total liabilities and stockholders' equity (deficiency) $12,565 $7,838 OCULUS INNOVATIVE SCIENCES, INC. AND SUBSIDIARIES Consolidated Statements of Comprehensive Loss (In thousands, except per share amounts) (Unaudited, except for the Year Ended March 31, 2012) ThreeMonthsEnded YearEnded March 31, March 31, 2013 2012 2013 2012 Revenues Product $2,571 $3,116 $12,897 $11,494 Product licensing fees 575 40 1,686 359 Service 189 195 869 891 Total revenues 3,335 3,351 15,452 12,744 Cost of revenues Product 990 1,039 3,976 3,254 Service 157 177 733 776 Total cost of revenues 1,147 1,216 4,709 4,030 Gross profit 2,188 2,135 10,743 8,714 Operating expenses Research and development 669 476 2,223 1,981 Selling, general and administrative 2,901 3,124 11,894 13,200 Total operating expenses 3,570 3,600 14,117 15,181 Loss from operations (1,382) (1,465) (3,374) (6,467) Interest expense (264) (279) (1,107) (931) Interest income 4 1 7 4 Loss due to change in fair value of (735) – (1,599) – common stock (Loss) gain due to change in fair – (22) 767 282 value of derivative liabilities Other expense, net (68) (3) (125) (217) Net loss (2,445) (1,768) (5,431) (7,329) Preferred stock deemed dividend – – (1,062) – Net loss available to common $(2,445) $(1,768) $(6,493) $(7,329) shareholders Net loss per common share: basic and $(0.44) $(0.43) $(1.30) $(1.85) diluted Weighted-average number of shares used in per common share calculations: Basic and diluted 5,604 4,134 4,977 3,912 Other comprehensive loss, net of tax Net loss $(2,445) $(1,768) $(5,431) $(7,329) Foreign currency translation 79 109 62 (152) adjustments Other comprehensive loss $(2,366) $(1,659) $(5,369) $(7,481) OCULUS INNOVATIVE SCIENCES, INC. AND SUBSIDIARIES Reconciliation of GAAP Measures to Non-GAAP Measures (In thousands) (Unaudited) Three Months Ended Year Ended March 31, March 31, 2013 2012 2013 2012 (1) Loss from operations minus non-cash expenses (EBITDAS): GAAP loss from $(1,382) $(1,465) $(3,374) $(6,467) operations as reported Non-cash adjustments: Stock-based 204 460 1,601 2,799 compensation Depreciation and 71 81 268 326 amortization Non-GAAP loss from operations minus $(1,107) $(924) $(1,505) $(3,342) non-cash expenses (EBITDAS) (2) Net loss minus non-cash expenses: GAAP net loss as (2,445) (1,768) (5,431) (7,329) reported Non-cash adjustments: Stock-based 204 460 1,601 2,799 compensation Depreciation and 71 81 268 326 amortization Loss due to change in fair value of common 734 – 1,599 – stock Loss (gain) due to change in fair value – 22 (767) (282) of derivative instruments Non-cash interest 163 145 624 448 expense Non-GAAP net loss minus non-cash $(1,273) $(1,060) $(2,106) $(4,038) expenses (3) Operating expenses minus non-cash expenses: GAAP operating $3,570 $3,600 $14,117 $15,181 expenses as reported Non-cash adjustments: Stock-based (175) (426) (1,469) (2,686) compensation Depreciation and (28) (43) (127) (175) amortization Non-GAAP operating expenses minus $3,367 $3,131 $12,521 $12,320 non-cash expenses Generally, a non-GAAP financial measure is a numerical measure of a company's performance, financial position or cash flow that either excludes or includes amounts that are not normally excluded or included in the most directly comparable measure calculated and presented in accordance with GAAP. (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 income (loss) minus non-cash expenses is a non-GAAP financial measure. The Company defines net income (loss) minus non-cash expenses as GAAP reported net loss minus depreciation and amortization, stock-based compensation, a change in the fair value of derivative instruments, and non-cash interest. 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. CONTACT: Media and Investor Contact: Oculus Innovative Sciences, Inc. Dan McFadden VP of Public and Investor Relations (425) 753-2105 firstname.lastname@example.org
Oculus Innovative Sciences Reports Revenues of $15.5 Million for Fiscal Year 2013, Product Revenue Up 23 Percent
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