Sonoma Pharmaceuticals reports jump in Q1 revenue, profit
Petaluma-based specialty pharmaceutical company Sonoma Pharmaceuticals Inc. (Nasdaq: SNOA) showed an increase in revenue in the latest quarter ending in June, pulling back into the black from a year before.
The drug maker reported fiscal first-quarter net income of $782,000 at the end of June, up from a net loss of $3.4 million at the end of June 2018. During the three months ending in June, the company reported total revenues of $4.71 million, up 7.8% over 12 months, and total gross profit of $2.4 million, or 50% of total revenue. That's compared with a gross profit of $1.7 million, or 40% of total revenue, in the same period last year.
“We have significantly slowed our cash burn and continue to build a sustainable business,” said Bubba Sandford, CEO of Sonoma Pharmaceuticals. “Our performance in dermatology has improved substantially, resulting in gross margins of 50% of total revenues compared to 40% a year ago, and our efforts to grow revenues while containing expenses resulted in one of our strongest quarters to date.”
He added that while the company’s most recent results were impacted by the sale of its animal-products rights in Asia, revenue growth in core U.S. dermatology business year-over-year out-paced total revenue growth.
In May, the company sold animal health product rights and assets for the Asian and European markets to Petagon, Limited, an international importer and distributor of quality pet food and products, for $2.7 million. The sale involved certain Asian patents and trademarks and the exclusive right to distribute animal health care products in Asia and Europe.
The company also said in a statement that total operating expenses during the first quarter of fiscal year 2020 were $4.1 million, down $1.2 million, or 23%, as compared to the same period in the prior year.
“This decrease in operating expenses was primarily due to lower employee costs resulting from a reduction in headcount combined with cost-cutting across all divisions,” Sandford said.
Last year the Business Journal reported the company announced cost-cutting measures, including reductions to the company’s workforce and management. The company did not state how many people were being laid off, only that “the primary reductions were in the company’s consulting expenses, manufacturing force and manufacturing expenses.”
The company’s stock closed at just over $5 a share Wednesday, down from $5.40 per share Tuesday afternoon.