BSD Medical Announces Third Quarter Fiscal 2014 Financial Results

  BSD Medical Announces Third Quarter Fiscal 2014 Financial Results

 Total Revenues Increased 53% with 50% Increase in Disposable Antennae Sales
                      for the First Nine Months of 2014;

   Company to Hold Investment Community Conference Call Today at 2:00 p.m.
                                   Eastern

Business Wire

SALT LAKE CITY -- July 10, 2014

BSD Medical Corporation (NASDAQ: BSDM) (Company or BSD) (www.BSDMedical.com),
a leading provider of medical systems that treat cancer and benign diseases
using heat therapy, today reported financial results for the three and nine
months ended May 31, 2014.

Third Quarter of Fiscal 2014 Highlights (all comparisons with the third
quarter of fiscal 2013)

  *Total revenues of $1.3 million decreased 5% as a result of large, initial
    orders from Terumo Europe NV (Terumo) in the prior year
  *Operating expenses declined 3% to $2.5 million
  *Net loss remained relatively unchanged at $2.0 million

Year to Date Fiscal 2014 Highlights (all comparisons with the first nine
months of fiscal 2013)

  *Total revenues increased 53% to $4.3 million
  *Gross margin improved to 46% from 42%
  *Operating expenses declined 4% to $6.9 million
  *Net loss improved to $5.0 million from a net loss of $6.0 million
  *Current total sales backlog stands at approximately $917,500

BSD reported cash and equivalents of $5.2 million and no long-term debt at May
31, 2014. Subsequently, the Company raised approximately $5.2 million in gross
proceeds in a registered direct offering, which was completed July 1, 2014,
strengthening the balance sheet.

Management Commentary

“Our healthy growth in revenues for the first nine months of this year has
been driven by the strategic roll-out of our microwave ablation MicroThermX®
system by Terumo and increasing sales of our SynchroWave disposable antennas.
Revenues were slightly lower in the third quarter due to the large number of
MTX systems shipped in the same quarter last year following the signing of our
distribution agreement with Terumo; however, we continue to see robust
interest and adoption from our partnership, as evidenced by the 50% growth in
total antennae sales through the first nine months of the year,” said Harold
Wolcott, President of BSD Medical. “In addition, year-to-date we’ve sold a
total of six hyperthermia systems, including three to our distributor in
Taiwan with the anticipated sale of a fourth system to that distributor in the
current quarter.

“While growing revenues we have kept tight control over operating expenses and
reduced our year-to-date net loss by more than $1 million. With our costs in
check and recently strengthened cash position, we are well positioned for
continued growth,” added Mr. Wolcott. “Terumo is an excellent distribution
partner for the MTX product line, with exclusive license to sell in more than
100 countries in the greater Europe area, and we are seeing growing interest
in that part of the world. There is an emerging body of evidence and
acceptance of the use of microwave ablation technology in the treatment of
cancer, both domestically and abroad, which bodes well for BSD’s future.”

Third Quarter and Year to Date Fiscal 2014 Operating Summary

BSD reported total revenues of $1,253,189 for the third quarter of fiscal
2014, a decrease of 5% from $1,316,713 for the third quarter of fiscal year
2013. This decline was due primarily to the large number of MTX systems
shipped in the prior year three month period following the signing of our MTX
distribution partner in Europe, and was largely offset by the sale of two
hyperthermia systems compared with one in the prior year period. The Company
has a current sales backlog of $917,500.

Gross margin was $505,270, or 40% of total revenues, for the third quarter of
fiscal 2014, compared with $600,302, or 46% of total revenues, for the same
period last year. Lower gross margin as a percent of revenues resulted from
the effect of the sale of one hyperthermia system with a lower than normal
gross margin.

Operating expenses declined 3% to $2.5 million for the third quarter of fiscal
2014 from $2.6 million for the comparable period last year. Research and
development expenses declined 8% to $559,568 for the third quarter of fiscal
2014, from $607,960 for the third quarter of fiscal 2013. Selling, general and
administrative expenses declined 2% to $1.9 million from $2.0 million for the
third quarter of fiscal 2013.

The Company reported a net loss of $2.0 million, or $0.06 per share, for the
third quarter of fiscal 2014, essentially flat with the third quarter of
fiscal 2013.

Total revenues for the first nine months of fiscal 2014 increased 53% to $4.3
million, from $2.8 million for the first nine months of 2013. Gross margin was
$2.0 million, or 46% of total revenues, for the nine months ended May 31,
2014, compared with $1.2 million, or 42% of total revenues, for the nine
months ended May 31, 2013. Operating expenses decreased 4% to $6.9 million
from $7.3 million in the prior year period. Net loss for the first nine months
of fiscal 2014 declined to under $5.0 million dollars, or $0.15 per share, for
the nine months of fiscal 2014, from a net loss of over $6.0 million, or $0.20
per share, for the nine months of fiscal 2013.

Conference Call

Management will hold a conference call today at 2:00 p.m. Eastern time/12:00
p.m. Mountain time to discuss financial results and provide a business update.
Individuals interested in participating in the conference call may do so by
visiting the Investor Relations section of the Company's website at
www.BSDMedical.com or by dialing 800.860.2442 from the United States, or
412.858.4600 from outside the United States, and referencing “BSD Medical.” A
telephone replay will be available through July 18, 2014, by dialing
877.344.7529 from the United States, or 412.317.0088 from outside the United
States, and entering conference ID 10048867.

About BSD Medical Corporation

BSD Medical Corporation develops, manufactures, markets and services systems
to treat cancer and benign diseases using heat therapy, which is delivered
using focused radiofrequency (RF) and microwave energy. BSD’s product lines
include both hyperthermia and ablation treatment systems. BSD’s MicroThermX
microwave ablation system has been developed as a stand-alone therapy to
employ precision-guided microwave energy to ablate (destroy) soft tissue. The
Company has developed extensive intellectual property, multiple products in
the market and established distribution in the United States, Europe and Asia.
Certain of the Company’s products have received regulatory approvals and
clearances in the United States, Europe and China. For further information
visit BSD Medical's website atwww.BSDMedical.com.

This press release may be deemed to contain forward-looking statements, which
are subject to the safe harbor provisions of the Private Securities Litigation
Reform Act of 1995. Readers are cautioned that these forward-looking
statements are only predictions and may differ materially from actual future
events or results due to a variety of factors, including, among other things,
the demand for the Company’s products, the ability of the Company to produce
the products to meet the demand, global economic conditions and uncertainties
in the geopolitical environment and other risk factors set forth in the
Company’s most recent reports on Form 10-K and Form 10-Q. Any forward-looking
statements in this release are based on limited information currently
available to the Company, which is subject to change, and the Company will not
necessarily update the information.

                                                                             
BSD MEDICAL CORPORATION
Condensed Balance Sheets
(Unaudited)
ASSETS                                     May 31,          August 31,
                                             2014              2013
Current assets:
Cash and cash equivalents                    $ 5,174,602       $ 9,450,528
Accounts receivable, net of allowance          404,991           899,969
for doubtful accounts of $20,000
Related party trade accounts receivable        221,170           24,201
Inventories, net                               2,242,985         2,445,770
Other current assets                          193,266          200,028
Total current assets                           8,237,014         13,020,496
                                                                             
Property and equipment, net                   1,292,214        1,319,880
                                                                             
                                             $ 9,529,228       $ 14,340,376
                                                                             
LIABILITIES AND STOCKHOLDERS’ EQUITY
                                                                             
Current liabilities:
Accounts payable                             $ 499,739         $ 521,417
Accrued liabilities                            431,685           573,880
Note payable                                   57,852            -
Customer deposits                              99,650            317,480
Deferred revenue – current portion            453,047          730,593
Total current liabilities                      1,541,973         2,143,370
                                                                             
Deferred revenue – net of current             -                53,115
portion
                                                                             
Total liabilities                              1,541,973         2,196,485
                                                                             
Commitments and contingencies
                                                                             
Stockholders’ equity:
Preferred stock, $.001 par value;
10,000,000 shares authorized, no shares        -                 -
issued and outstanding
Common stock, $.001 par value,
80,000,000 shares authorized, 34,199,463       34,200            34,007
and 34,006,202 shares issued,
respectively
Additional paid-in capital                     58,561,526        57,739,056
Stock subscriptions receivable                 (7,485      )     -
Treasury stock, 24,331 shares at cost          (234        )     (234        )
Accumulated deficit                           (50,600,752 )    (45,628,938 )
Total stockholders’ equity                    7,987,255        12,143,891
                                                                             
                                             $ 9,529,228       $ 14,340,376
                                                                             


BSD MEDICAL CORPORATION
Condensed Statements of Comprehensive Loss
(Unaudited)
                 Three Months Ended               Nine Months Ended
                   May 31,                           May 31,
                   2014            2013             2014            2013
Revenues:
Sales              $ 764,044        $ 1,256,583      $ 3,611,679      $ 2,540,281
Sales to
related              376,245          230              394,679          76,776
parties
Equipment           112,900         59,900          268,200         178,700
rental
                                                                                   
Total revenues      1,253,189       1,316,713       4,274,558       2,795,757
                                                                                   
Cost of
Revenues:
Cost of sales        456,832          713,383          2,003,969        1,533,618
Cost of
related party        288,140          81               296,053          66,527
sales
Cost of
equipment           2,947           2,947           8,841           8,841
rental
                                                                                   
Total cost of       747,919         716,411         2,308,863       1,608,986
revenues
                                                                                   
Gross margin        505,270         600,302         1,965,695       1,186,771
                                                                                   
Operating
expenses:
Research and         559,568          607,690          1,621,612        1,693,648
development
Selling,
general and         1,934,277       1,967,082       5,321,309       5,562,013
administrative
                                                                                   
Total
operating           2,493,845       2,574,772       6,942,921       7,255,661
expenses
                                                                                   
Loss from           (1,988,575 )    (1,974,470 )    (4,977,226 )    (6,068,890 )
operations
                                                                                   
Other income
(expense):
Interest             3,623            7,708            15,050           24,374
income
Other expense       (3,898     )    (2,984     )    (9,638     )    (5,291     )
                                                                                   
Total other         (275       )    4,724           5,412           19,083
income
                                                                                   
Loss before          (1,988,850 )     (1,969,746 )     (4,971,814 )     (6,049,807 )
income taxes
                                                                                   
Provision for       -               -               -               -
income taxes
                                                                                   
Net loss and
comprehensive      $ (1,988,850 )   $ (1,969,746 )   $ (4,971,814 )   $ (6,049,807 )
loss
                                                                                   
Net loss per
common share:
Basic              $ (0.06      )   $ (0.06      )   $ (0.15      )   $ (0.20      )
Diluted            $ (0.06      )   $ (0.06      )   $ (0.15      )   $ (0.20      )
                                                                                   
Weighted
average number
of shares
outstanding:
Basic                34,040,000       32,042,000       34,002,000       30,541,000
Diluted              34,040,000       32,042,000       34,002,000       30,541,000
                                                                                   

                                            
BSD MEDICAL CORPORATION
Condensed Statements of Cash Flows
(Unaudited)
                                               Nine Months Ended
                                               May 31,
                                               2014            2013
Cash flows from operating activities:
Net loss                                       $ (4,971,814 )   $ (6,049,807 )
Adjustments to reconcile net loss to net
cash used in operating activities:
Depreciation and amortization                    93,322           101,454
Stock-based compensation                         634,859          862,514
Stock issued for services                        180,000          180,001
                                                                             
Loss on disposition of property and              (30        )     -
equipment
Decrease (increase) in:
Receivables                                      298,009          (901,822   )
Inventories                                      202,785          94,658
Other current assets                             80,814           (81,540    )
Increase (decrease) in:
Accounts payable                                 (21,678    )     189,580
Accrued liabilities                              (142,195   )     (1,279     )
Customer deposits                                (217,830   )     851,250
Deferred revenue                                (330,661   )    (30,760    )
                                                                             
Net cash used in operating activities           (4,194,419 )    (4,785,751 )
                                                                             
Cash flows from investing activities:
Purchase of property and equipment               (67,651    )     (18,072    )
Proceeds from disposition of property and       2,025           -
equipment
                                                               
Net cash used in investing activities           (65,626    )    (18,072    )
                                                                             
Cash flows from financing activities:
Net proceeds from sale of common stock           319              -
Payments on note payable                        (16,200    )    4,583,437
                                                               
Net cash used in or provided by financing       (15,881    )    4,583,437
activities
                                                                             
Net decrease in cash and cash equivalents        (4,275,926 )     (220,386   )
Cash and cash equivalents, beginning of         9,450,528       11,102,508
the period
                                                                             
Cash and cash equivalents, end of the          $ 5,174,602      $ 10,882,122
period
                                                                             

Contact:

Investors:
Financial Profiles
Tricia Ross, 310-622-8226
tross@finprofiles.com
 
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