PETALUMA — Oculus Innovative Sciences, Inc. (Nasdaq:OCLS) on Thursday reported fiscal first-quarter revenue eked upward by 1 percent over 12 months but cut its quarterly net loss by 95 percent during that time, thanks to stock warrant adjustments.
For the quarter ended June 30, total revenue was $3.39 million.That’s 0.6 percent higher than the consensus among stock analysts.
Total product revenue also was up 1 percent, with increases in Europe, Mexico, the Middle East, India and Singapore, offset by decreases in the United States and China.
“We are disappointed with a mere 1 percent increase in revenues over the previous year,” said Jim Schutz, CEO. “To accelerate our growth this year and beyond, the team is preparing to launch five new products in the United States and an additional four new products in Mexico, Europe and the rest of the world. In addition, we are in active discussions with multiple animal healthcare companies that are interested in taking our best-in-class Microcyn-based animal health care products forward.”
Quarterly revenue in Mexico increased $46,000, or 3 percent, with a 9 percent increase in units sold. Additionally, $375,000 was recognized in the past two fiscal first quarters for the amortization of upfront license fees paid by More Pharma, Oculus’ Latin American sales partner.
Revenue for the quarter in Europe and elsewhere increased $265,000, or 65 percent, with increases in Europe, the Middle East and Singapore, partially offset by slight declines in China and India. The increases are largely the result of multiple new advanced wound care products, including Oculus’ first European gel product, as well as the addition of new European distributors.
Product revenue in the U.S. for the quarter, was down 22 percent, with lower sales in animal health care and dermatology, partially offset by increased sales of advanced wound care products used in hospitals.
Oculus recorded revenue in the amounts of $528,000 and $741,000, for the three months ended June 30, 2014 and 2013, respectively, from Oculus’ veterinary care partner, Innovacyn. The decrease was caused by a reduction in average selling price and unit volume, the result of increased competition and the partial transition to a new supplier. The sales in the dermatology market were lower than the same period last year due to the discontinuance of a distributor, while sales to Oculus’ primary distributor were up from the same period last year.
Oculus reported quarterly gross profit related to product sales of $1.8 million, or 58 percent of product revenues, 2014, as compared to a gross profit of $2.1 million, or 68 percent of those revenues. Gross margins were down due to the decline of margins in the U.S. from decreases in U.S. sales related to animal health care and human dermatology.
Total operating expenses increased by $94,000, or 3 percent, to $3.4 million for the three months ended June 30, 2014, as compared to the same period in the prior year. Operating expenses minus non-cash expenses during the first quarter of fiscal 2015 were $3.0 million, up $46,000, when compared to the same period in the prior year. The increase in operating expenses, minus non-cash expenses, was due to higher sales, marketing and administrative expenses in U.S., Mexico and Europe, partially offset by lower expenses related to the company’s subsidiary, Ruthigen.
Research and development expenses were $439,000 for the three months ended June 30, 2014, down $68,000 from the same period last year, due to lower expenses of $175,000 incurred by Ruthigen. Selling, general and administrative expense of $3.0 million for the three months ended June 30, 2014 increased $162,000 over the same period last year, or 6 percent, largely related to an increase in sales, marketing and administrative expenses in the U.S, Mexico and Europe.
Loss from operations minus noncash expenses of $1.0 million for the quarter increased by $286,000, which was mostly due to the aforementioned higher operating expenses, the company said.
Net loss for fiscal first quarter was $70,000, or 1 cent a share, a reduction of $1.6 million, from $1.7 million a year before. The decrease was due to the mark-to-market adjustment of derivative liabilities related to outstanding common stock purchase warrants, the company said. Stock-based compensation charges were $451,000 and $347,000 in the past two fiscal first quarters, respectively.
Stock analysts had expected the quarterly net loss to be 17 cents a share.
At the end of the fiscal first quarter this year, Oculus had unrestricted cash and cash equivalents of $5.0 million, up from $5.5 million on March 31.
Oculus’ stock price at the close of trading Thursday had slipped 1 cent to $2.61 a share. The company reported results after the market session.
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