Full Press Release Details
Oculus Innovative Sciences Reports FY 2009 Financial Results and
Discusses Worldwide Revenue Growth Prospects
| Q4 2009 (Ending March 31, 2009) Revenue of $1.5 Million, Up 59% over Q4 2008 | ||
| Total FY 2009 Revenue of $5.4 million, Up 42% over FY 2008 |
| Projected Q1 2010 (Ending June 30, 2009) Revenue of $1.8 Million | ||
| Projected Quarterly Revenue of $2.8 -$3.0 Million Required for Targeted March 2010 Cash Breakeven | ||
| Projected $45-$60 Million in Annual Revenues by FY 2013 with 20% Operating Profitability | ||
| Expect to Receive Two Additional FDA Clearances on New Microcyn Product Formulations |
| Secured FDA Clearances for Two Microcyn Products including New Reimbursable Wound HydroGel | ||
| Conference Call Begins at 4:30 p.m. (EDT) Today |
PETALUMA, Calif. (June 11, 2009) Oculus Innovative Sciences, Inc. (Nasdaq: OCLS) today announced
financial and operating results for the fourth quarter of fiscal year
2009, ended March 31, 2009.
During the quarter the company increased Microcyn -based product revenue by 63% with increases in
Europe, Mexico, India, China and the United States. As a result of the cost reduction programs
implemented earlier in the year, operating expenses declined $3.0 million in the fourth quarter,
compared to the same period last year. Oculus is targeting cash breakeven by the month of March
Oculus reported total revenue of $1.5 million in the fourth quarter of fiscal 2009, an increase of
59% over $926,000 in the fourth quarter of fiscal 2008. Product revenue was $1.2 million, up 63%
from $736,000 in the prior year primarily due to higher sales in Mexico, China and Europe.
Service revenue was $278,000, up 46% from the fourth quarter of fiscal 2008.
The company s Microcyn-based product sales growth of 63% for the quarter reflects strong growth in
Europe, India, Mexico, China and the United States. The sales growth rate in Mexico in local
currency was 90%; however due to the 33% drop in the value of the peso, this resulted in a
dollar-translated sales growth in Mexico of 42%. This devaluation in the peso
also reduced Oculus overall fourth quarter product revenue growth from 99% to 63%. European and
rest-of-world revenue growth of 160% reflects increases in China, India, Slovakia, Middle East and
Singapore. In China, initial sales represent a product
commercialization strategy that included sampling and introductory pricing.
With the introduction of new products, such as the Microcyn Skin Wound HydroGel, which recently
received FDA clearance, we expect global revenues to continue to grow at a 50% to 100% annual rate.
Our objective is to achieve cash breakeven by March of this coming year and annual revenue of $45
to $60 million by fiscal year 2013 with operating profitability of 20%, said Hoji Alimi, founder
and CEO of Oculus. We are also targeting additional growth as the result of opportunities for the
Microcyn Technology in markets outside of wound care including dermatology, ophthalmology,
respiratory infections and animal health care.
The gross margin on product revenue for the fourth quarter of fiscal 2009 was 60%, up from 34% in
the comparable quarter a year ago, primarily due to lower expenses in Europe as well as increased
sales volume worldwide. The gross margins were 75% and 44% in Mexico and Europe respectively. To
reduce costs and improve gross margins, Oculus intends to consolidate its European manufacturing
facility into its U.S. operations, while maintaining a sales office in Europe. Oculus management
believes the consolidation of manufacturing will increase overall gross margins from 60% to
approximately 75% in the second half of this fiscal year.
Operating expenses in the fourth fiscal quarter of 2009 were $3.0 million, down $3.0 million or
50%, compared with $6.0 million in the fourth fiscal quarter of 2008. This decrease was partially
due to $600,000 in lower outside clinical costs and reduced staffing in the United States. As a
result of this cost reduction program, Oculus lowered its U.S. headcount from 56 people as of June
30, 2008, to 26 as of March 31, 2009. During the fourth quarter of 2009, these cost reductions were
partially offset by higher expenses of $290,000 related to the company s product launch into the
U.S. wound care markets.
The net loss for the fiscal 2009 fourth quarter was $2.2 million, or $0.13 per share, compared with
the net loss for the fiscal 2008 fourth quarter of $4.5 million, or $0.34 per share. Non-cash
stock-compensation expenses for the quarter were $151,000, compared with $422,000 in the same
As of March 31, 2009, Oculus had unrestricted cash and cash equivalents of $1.9 million, compared
with $18.8 million as of March 31, 2008. Pursuant to the previously announced strategic agreement
with Vetericyn, Inc. entered into in February of this year, Oculus received an additional $2
million of the Vetericyn investment on June 1, 2009.
Commercial and Regulatory Progress
Oculus has made significant progress in its commercial operations and regulatory efforts, including
the following highlights:
| o | Received FDA 510(k) clearances for both a) Microcyn Skin Wound HydroGel, which is reimbursable by both Medicare and Medicaid, and b) the Microcyn Skin Wound Cleanser with preservatives (in liquid form, allowing the company to market this formulation for its in vitro activity against a broad spectrum of gram-positive, gram-negative and yeast species) with rapid 30-second in vitro time kill method results in solution. Pathogens killed include MRSA , VRE and E coli , among others. | ||
| o | Initiated revenue-sharing partnership with Vetericyn, Inc. for North American sales of animal healthcare products in February. Oculus has developed a family of unique Vetericyn animal healthcare products based upon the Microcyn Technology to be launched this summer. | ||
| o | Expanded U.S. sales effort beyond initial podiatry target to include wound care centers, hospitals, urgent care clinics, nursing homes and home health care via a dedicated sales force obtained through a partnership with a specialty contract sales organization , Advocos, which is highly experienced in the sales of medical products to the U.S. healthcare community. | ||
| o | Announced a second-generation Microcyn Technology with increased shelf life and potency to be submitted to regulatory bodies for review. The new technology is biocompatible and can be delivered through various media including devices, fluids and air. | ||
| o | Developed a family of Microcyn-based personal healthcare products under the brand name Microcyn Science that the company intends to commercialize in the United States by July 2009. The first three products include a nasal care solution, oral care rinse and a skin care hydrogel. | ||
| o | Pursuing large Mexican over-the-counter antiseptic market with introduction of consumer-sized 120 mL Microdacyn60 product in June 2009. |
Results for the 12 Months ended March 31, 2009
For the twelve months ended March 2009, Oculus reported total revenue of $5.4 million, up $1.6
million from the $3.8 million in the twelve months ended March 31, 2008. The company reported
product revenue of $4.4 million in fiscal year 2009, up 53% from the same period last year. The
gross margin on product revenue in the fiscal year 2009 was 62%, compared with 38% in the fiscal
year 2008. Operating expenses for the twelve months ending March 31, 2009 were $20.1 million,
compared with $23.5 million in the same period last year.
The net loss in the fiscal year 2009 was $17.7 million, or $1.09 per share, compared with the net
loss of $20.3 million, or $1.60 per share, in the fiscal year 2008. The non-cash stock-compensation
expense for the fiscal year 2009 was $2.3 million, compared with $1.3 million for the same period
last year. Also, the fiscal year 2009 included severance costs of $737,000 associated with the
significant reduction in the headcount in the U.S. operations.
Oculus expects to continue achieving strong growth in sales of Microcyn-based products over the
coming years through international and domestic sales, although quarterly rates of growth are
difficult to forecast accurately as the company s international revenues are subject to currency
fluctuations. Additionally, some marketing approvals and distribution agreements are recent, and
as a result the timing of sales and deliveries will be variable during these introductory stages.
Last quarter Oculus provided guidance that the net loss, minus non-cash expenses for the fourth
quarter would be less than $2.0 million, and in fact it was $1.9 million.
Oculus management will hold a conference call today to discuss fourth quarter results and to answer
questions, beginning at 4:30 p.m. Eastern Daylight Time. Individuals interested in participating in
the conference call may do so by dialing 877-397-0292 for domestic callers or 719-325-4907 for
international callers. Those interested in listening to the conference call live via the Internet
may do so at http://ir.oculusis.com/events.cfm. Please log on approximately 30 minutes prior to
the presentation in order to register and download the appropriate software.
A telephone replay will be available for 48 hours following the conclusion of the call by dialing
(888) 203-1112 for domestic callers, or (719) 457-0820 for international callers, and entering
reservation code 2591974. A webcast replay will be available on the site at
http://ir.oculusis.com/events.cfm for one year following the call.
Oculus Innovative Sciences develops, manufactures and markets a family of products based upon the
Microcyn Technology platform, which includes new formulations designed to significantly reduce the
need for antibiotics as it reduces infections. The Microcyn Technology platform features a
biocompatible, shelf-stable solution that is currently commercialized in the United States, Europe,
India, China and Mexico and select Middle East countries. Several solutions derived from this
platform have demonstrated, in a variety of research and investigational studies, the ability to
treat a wide range of pathogens, including antibiotic-resistant strains of bacteria (including MRSA
and VRE), viruses, fungi and spores, increase blood flow to the wound site, reduce both
inflammation and pain while assisting in faster wound closure. The company s headquarters are in
Petaluma, California, with operations in Europe and Latin America. More information can be found at
Forward-Looking Statements
Except for historical information herein, matters set forth in this press release are
forward-looking within the meaning of the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995, including statements about the Company s commercial and technology
progress and future financial performance. These forward-looking statements are identified by the