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 email@example.com
BSD Medical Announces Third Quarter Fiscal 2014 Financial Results
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