Escalon® Medical Corp. Reports Profit in the Third Quarter of Fiscal 2014

  Escalon® Medical Corp. Reports Profit in the Third Quarter of Fiscal 2014

PR Newswire

ARDMORE, Pa., May 14, 2014

ARDMORE, Pa., May 14, 2014 /PRNewswire/ --Escalon Medical Corp. (Nasdaq:
ESMC) today announced its operating results for the third fiscal quarter and
nine months ended March 31, 2014, including an operating profit for the
three-month period.

For the fiscal third quarter ended March 31, 2014, the company reported net
income of $86,084 and net income from continuing operations of $112,354, or
$0.01 per share. This compares to a net loss of $285,000 and a net loss from
continuing operations of $283,761, or $0.04 per share, for the prior year

For the first nine months of fiscal 2014, the company reported a net loss of
$9,223; however net income from continuing operations was a positive $68,426,
or $0.01 per share. This compares to net income of $3.3 million, or $0.44 per
share, in the year ago period, which includes a net gain of $4.1 million
related to the sale of Drew and related debt settlement. The net loss from
continuing operations was $781,424, or $0.10 per share, for the first nine
months of the prior fiscal year.

For the three month period, consolidated product revenue was $3.2 million, an
increase of 15.7% compared to $2.7 million in the prior year period, led by a
gain in sales of the Company's Sonomed Escalon ultrasound products. For the
nine months ended March 31, 2014, consolidated product revenue increased
approximately 8.4% to $9.4 million from $8.6 million in the prior year period.

Year to date in fiscal 2014, margins have improved slightly to 51.5% compared
to 50.1% in the prior year period due to product sales mix. Marketing,
general and administrative expenses decreased by 13.0% 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 nine months of fiscal 2014 grew by 26.5% to $1.0
million from $803,256 in the prior year period.

At March 31, 2014, the Company had $2.4 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 $197,769 in the first nine months of fiscal 2014, primarily
related to an increase in inventory.

"I am pleased we were able to report another quarter of positive financial
results, on top of our continued investment in developing our ophthalmic
product line," commented Chief Executive Officer, Richard J. DePiano, Jr.
"Our latest tablet-based ultrasound system, the VuPad™, recently received
U.S. Food and Drug Administration 510(k) clearance, and we are confident we
will receive CE Marking and clearance by other international regulatory bodies
in the coming months. The VuPad™ has received excellent feedback at recent
ophthalmic meetings and, as manufacturing ramps up, we anticipate sales will

Mr. DePiano added, "We remain committed to continuing to update our ophthalmic
product offerings and are excited by the opportunity surrounding the VuPad™,
the VuMAX® HD and other new products in our pipeline. We will also look at
select opportunities to add best-in-class ophthalmic product solutions to our
distribution network to leverage our experienced sales force and further
demonstrate our ongoing commitment to build on our position as a leader in
ophthalmic diagnostic instrumentation and ultrasound solutions. While planned
increases to research and development expenses as well as increased sales and
marketing costs could pressure financial results in the short term, we believe
the planned increases will lead to sustainable growth and increased
shareholder value longer term."

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 and

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.

Unaudited Condensed Consolidated Statements of Operations
                       Three Months Ended         Nine Months Ended
                       March 31,                  March 31,
                       2014          2013         2014            2013
Revenues, net          $ 3,151,651  $ 2,724,740  $ 9,360,219    $8,635,078
Costs and expenses:
 Cost of goods sold 1,473,334     1,337,442    4,539,870       4,309,894
 Marketing, general 1,250,159     1,409,274    3,743,548       4,303,775
and administrative
 Research and       315,850       272,889      1,016,082       803,256
 Total costs and 3,039,343     3,019,605    9,299,500       9,416,925
Income (loss) from     112,308       (294,865)    60,719          (781,847)
Other income (expense)
 Other income      --            11,033       7,543           79,770
 Interest income   46            71           164             132
 Interest expense  --            --           --              (79,479)
 Total other   46            11,104       7,707           423
income (expense)
Net income (loss) from 112,354       (283,761)    68,426          (781,424)
continuing operations
Net (loss) income from
                       (26,270)      (2,103)      (77,649)        4,135,506
before tax
Income tax expense     --            --           --              (80,000)
Net (loss) income from
                       (26,270)      (2,103)      (77,649)        4,055,506
 operations, net
of tax
Net income (loss)     $  86,084    $           $  (9,223)     $ 
                                     (285,864)                    3,274,082
Basic and Diluted Net
Income (Loss) per
 Continuing        $   0.01   $  (0.04)  $     0.01  $   (0.10)
 Discontinued      --            --           (0.01)          0.54
 Net income       $   0.01    $  (0.04)  $   --       $   0.44
Weighted Average       7,526,430     7,526,430    7,526,430       7,526,430
Shares - basic
                       7,526,430     7,526,430    7,526,430       7,526,430

Selected Balance Sheet Data (Unaudited)
                          March 31, 2014  June 30, 2013
Cash and Cash Equivalents $2,409,396      $2,654,701
Inventory                 2,465,056       1,853,686
Working Capital           3,926,845       4,003,293
Total Assets              7,548,312       7,272,165
Total Liabilities         3,722,137       3,443,239
Stockholders' Equity      3,826,175       3,828,926

SOURCE Escalon Medical Corp.

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