Escalon® Medical Corp. Reports Second Quarter Fiscal 2014 Results; New Product Introductions Underway

Escalon® Medical Corp. Reports Second Quarter Fiscal 2014 Results; New Product
                            Introductions Underway

PR Newswire

ARDMORE, Pa., Feb. 14, 2014

ARDMORE, Pa., Feb. 14, 2014 /PRNewswire/ -- Escalon Medical Corp. (Nasdaq:
ESMC) today announced its operating results for the second fiscal quarter and
six months ended December 31, 2013.

For the fiscal second quarter, consolidated product revenue was $3.1 million,
flat with the first fiscal quarter of 2014 but down compared to the $3.6
million in the prior year period. For the six months ended December 31, 2013,
consolidated product revenue increased approximately 5% to $6.2 million from
$5.9 million in the year ago period.

For the fiscal second quarter ended December 31, 2013, the company reported a
net loss of $109,000, or $0.01 per share, and a net loss from continuing
operations of $83,000, or $0.01 per share. This compares to net income of
$4.0 million, or $0.53 per share, for the year ago period, which includes a
net gain of $4.0 million related to the sale of Drew and related debt
settlement. Net income from continuing operations was $126,527, or $0.02 per
share, for the year ago period. For the first six months of fiscal 2014, the
company reported a net loss of $95,000, or $0.01 per share, and a net loss
from continuing operations of $44,000. This compares to net income of $3.6
million, or $0.46 per share, which includes the $4.0 million gain. The net
loss from continuing operations was $497,864, or $0.07 per share, for the
first six months of the prior fiscal year.

Year to date in fiscal 2014, margins remained steady at 50.1% compared to
49.7% in the prior year period. Marketing, general and administrative
expenses decreased by 13.9% primarily due to declines in payroll expenses. As
a result of the planned update of existing products as well as the
introduction of new products, research and development expenses for the first
six months of fiscal 2014 grew by 32.1% to $700,000 from $530,000 in the prior
year period.

At December 31, 2013, the Company had $2.6 million of cash and no long term
debt and its continuing operations were near breakeven on a cash basis with a
net use of cash of $44,433 in the first six months of fiscal 2014.

"We remain committed to reinvesting in our ophthalmic product line to develop
and deliver new best-in-class ophthalmic ultrasound solutions," commented
Chief Executive Officer, Richard J. DePiano, Jr. "We have seen a strong
reception to our first new product, the VuMAX® HD introduced earlier in
calendar 2013, with solid sales both internationally and with several top
institutions in the U.S. Early indications for our next new product, the
VuPad™, which was previewed at the annual meeting of the American Academy of
Ophthalmology in November, are promising. We filed a 510(k) pre-market
clearance application for the VuPad™ with the US FDA in late January and
anticipate clearance in our third fiscal quarter, followed shortly thereafter
by approval from other regulatory bodies."

"While we have considerable work ahead of us, we're pleased to have reported
growth in sales year over year and are further encouraged given the
preliminary market feedback regarding the soon-to-be-released VuPad™ product.
With an improved financial position, we are poised to pursue strategic growth
opportunities to leverage our technology and exciting research and development
programs."

About Escalon Medical
Founded in 1987, Escalon Medical Corp. (NASDAQ: ESMC)  specializes in the
development, marketing and distribution of ophthalmic diagnostic imaging and
surgical products branded under the Sonomed Escalon name. Products include a
variety of ophthalmic ultrasound, digital imaging and photography, and image
management systems as well as surgical products including intraocular gases,
fiber optic light guides and sources, and other surgical vitreoretinal
instruments. The Company seeks to grow its ophthalmic business by further
developing and diversifying its product offering through internal development
programs, strategic partnerships, and the acquisition of technology so as to
best leverage the Company's distribution capabilities. The Company has
headquarters in Ardmore, Pennsylvania and research and development,
manufacturing and distribution operations in Lake Success, New York, New
Berlin, Wisconsin and Stoneham, Massachusetts. For additional information
visit www.escalonmed.com and www.sonomedescalon.com

Forward Looking Statements
This press release contains statements that are considered forward-looking
under the Private Securities Litigation Reform Act of 1995, including
statements about the Company's future prospects. These statements are based on
the Company's current expectations and are subject to a number of
uncertainties and risks, and actual results may differ materially. The
uncertainties and risks include whether the Company is able to: develop,
obtain regulatory clearance of and launch new products, implement its growth
and marketing strategies; improve upon the operations of the Company including
the ability to make acquisitions and the integration of any acquisitions it
may undertake, if any, of which there can be no assurance; grow our remaining
ophthalmic business unit; improve our financial position; implement cost
reductions; generate cash; and identify, finance and enter into business
relationships and acquisitions. Other factors include uncertainties and risks
related to: new product development, commercialization, manufacturing and
market acceptance of new products; marketing acceptance of existing products
in new markets; research and development activities, including failure to
demonstrate clinical efficacy; delays by regulatory authorities, scientific
and technical advances by the Company or third parties; introduction of
competitive products; ability to reduce staffing and other costs and retain
benefit of prior reductions; third party reimbursement and physician training,
and general economic conditions. Further information about these and other
relevant risks and uncertainties may be found in the Company's report on Form
10- K for year ended June 30, 2013, and its other filings with the Securities
and Exchange Commission, all of which are available from the Securities and
Exchange Commission as well as other sources.



--financial tables to follow--


ESCALON MEDICAL CORP. AND SUBSIDIARY
Unaudited Condensed Consolidated Statements of Operations


                       Six Months Ended            Six Months Ended
                       December 30,                December 31
                       2013           2012         2013           2012
Revenues, net          $ 3,078,485   $ 3,640,761  $ 6,208,568   $5,901,338
Costs and expenses:
 Cost of goods sold 1,510,322      1,776,054    3,066,536      2,972,452
 Marketing, general 1,280,427      1,488,915    2,493,390      2,894,501
and administrative
 Research and       377,042        266,169      700,232        530,367
development
 Total costs and 3,167,791      3,531,138    6,260,158      6,397,320
expenses
(Loss) income from     (89,306)       109,623      (51,590)       (486,982)
operations
Other income (expense)
 Other income      6,535          16,842       7,603          81,623
(expense)
 Interest income   56             62           117            91
 Interest expense  --             --           --             (92,596)
 Total other   6,591          16,904       7,720          (10,882)
income (expense)
Net (loss) income from (82,715)       126,527      (43,870)       (497,864)
continuing operations
Net (loss) income from
discontinued
                       (25,834)       3,946,858    (51,439)       4,137,824
 operations,
before tax
Net (loss) income      $  (108,549)  $           $  (95,309)   $ 
                                      3,993,385                   3,559,960
Basic and Diluted Net
(Loss) Income per
Share
 Continuing        $  (0.01)    $   0.02  $        $   (0.07)
operations                                         --
 Discontinued      --             0.51         (0.01)         0.54
operations
 Net income       $  (0.01)     $   0.53  $   (0.01)  $   0.47
(loss)
Weighted Average       7,526,430      7,526,430    7,526,430      7,526,430
Shares - basic
Weighted Average       7,526,430      7,526,430    7,526,430      7,526,430
Shares - diluted



Selected Balance Sheet Data (Unaudited)


                          December 31, 2013 June 30, 2013
Cash and Cash Equivalents $2,565,156        $2,654,701
Inventory                 2,235,488         1,853,686
Working Capital           3,857,328         4,003,293
Total Assets              7,470,302         7,272,165
Total Liabilities         3,732,370         3,443,239
Stockholders' Equity      3,737,932         3,828,926



SOURCE Escalon Medical Corp.

Website: http://www.escalonmed.com
Contact: Richard J. DePiano, Jr, President and CEO, 610-688-6830; or Alison
Ziegler, Cameron Associates, 212-554-5469
 
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