Full Press Release Details
Oculus Innovative Sciences Reports Record
Revenues of $4.5 Million for the Second Quarter of Fiscal 2013
Conference Call Begins at 4:30 p.m. (EDT)
PETALUMA, Calif.--(November 1, 2012)--Oculus Innovative
Sciences, Inc. (Nasdaq: OCLS) today announced financial results for the second quarter of fiscal year 2013, ended September 30,
2012. Total revenues were $4.5 million for the second quarter ended September 30, 2012, compared to $3.7 million for the same period
in the prior year. Product revenues, including product licensing fees received, increased $874,000, or 26%, for the second quarter
ended September 30, 2012, as compared to the same period in the prior year, with increases in the United States, Mexico and Singapore,
partly offset by declines in Europe, Middle East, India and China.
"This quarter's record results reaffirms the wisdom
of our strategy of sustainable growth through expansion of partnerships and product diversification," said Hoji Alimi, Oculus
CEO and founder. "For example, our collaboration with More Pharma expands commercialization of our Microcyn products in Mexico
and Latin America while allowing us to eliminate our marketing and sales infrastructure in those regions. This partnership improves
our profitability and enables us to grow faster without increasing our expenses. Similarly, the introduction of new dermatology
formulations for our U.S. partners contributes to meaningful top line growth via expanding domestic sales. We anticipate this growth-via-diversification
strategy to generate revenue ramps internationally as well as we expand both product offerings and partnerships outside the United
Product revenue in the United States for the three months ended
September 30, 2012, increased $452,000, or 31%, as compared to the same period in the prior year due to both unit growth and new
product launches into the dermatology market, and slightly higher unit growth from Oculus's animal healthcare partner, Innovacyn,
Inc. The revenue recorded from Innovacyn of $1.2 million for the three months ended September 30, 2012, was up $53,000 from the
same period last year. Revenue growth attributed to Oculus' dermatology partners reflected strong unit growth as three new
product lines were launched in the fourth quarter of the fiscal year ended March 31, 2012.
Revenue in Mexico for the three months ended September 30, 2012,
increased $558,000, or 43% when compared to the same period last year. The increase was driven by a 14% increase in sales of the
120-mL and 240-mL solutions and gel presentations; a 67% increase in sales of the 5-liter presentation and the recognition of $183,000
related to the amortization of upfront fees paid by More Pharma Corporation, S. de R.L. de C.V., Oculus' new partner in Mexico.
The effective date of Oculus' entry into the distribution
agreement with More Pharma was August 15, 2012. Accordingly, as a result of this agreement, revenues recognized during the first
half of the quarter ended September 30, 2012, were accounted for as Oculus had traditionally reported in the past with the sales
sold to, or collected from, the end customer. However, during the second half of the quarter ended September 30, 2012, Oculus recognized
revenue on the sell-through basis for the products More Pharma purchased from Oculus. Also, due to the transfer of the sales function
to More Pharma, Oculus reduced or transferred the cost of the sales people and promotions, thus eliminating those operating costs.
During the three months ended September 30, 2012, Oculus incurred about $410,000 of severance and related one-time costs in connection
with the More Pharma transaction. In addition, an upfront fee of $5.1 million will be recognized as revenue over a three-to-five
year period, which is based on the term of the agreements with More Pharma and an analysis of Oculus' experience with similar
Revenue in Europe and Rest of World for the three months ended
September 30, 2012, decreased $136,000, or 21% over the prior year period, primarily as the result of decreases in sales in Europe,
India, Middle East and China, partially offset by increases in Singapore.
Oculus reported gross profit related to sales of Microcyn -based
products of $3.2 million, or 74% of product revenues, during the three months ended September 30, 2012, compared to a gross profit
of $2.7 million, or 80% of product revenues, for the same period in the prior year. The lower gross profitability is primarily
the result of product mix in the United States and the impact of the execution of the More Pharma transaction in Mexico. Gross
margins in Mexico were 74% of product revenues during the three months ended September 30, 2012, compared to 81% for the same period
Total operating expenses increased by $609,000, or 18%, to $4.0
million for the three months ended September 30, 2012, compared to $3.4 million for the similar period in the prior year. Operating
expenses minus non-cash expenses during the quarter ended September 30, 2012, were $3.5 million, up from $2.9 million for the same
period last year. Research and development expenses decreased $47,000, or 8%, to $513,000 for the three months ended September
30, 2012, compared to $560,000 in the prior year period, mostly due to lower costs related to tests and studies. Selling, general
and administrative expense increased $656,000, or 23%, to $3.5 million during the three months ended September 30, 2012, as compared
to $2.8 million for the same period last year. The increase was primarily due to $410,000 of one-time severance costs in Mexico
and higher expenses related to new products, compensation, and investor-related costs in the United States.
Loss from operations minus non-cash expenses for the quarter
ending September 30, 2012, was at $213,000, which included $410,000 of one-time severance costs related to the More Pharma transaction.
Net loss for the three months ended September 30, 2012, was
$1.5 million, an increase of $680,000 from a net loss of $839,000 for the same period last year. Stock-based
compensation charges were $541,000 and $515,000 for the quarters ended September 30, 2012 and 2011, respectively.
As of September 30, 2012, Oculus had unrestricted cash and cash
equivalents of $8.3 million, compared with $3.4 million as of March 31, 2012. Oculus' total debt position was $3.7 million
as of September 30, 2012, compared with $4.6 million as of March 31, 2012.
Total revenue was $8.6 million in the six months ended September
30, 2012, compared to $6.6 million in the same period last year. Product revenues, including product licensing fees received, for
the six months ended September 30, 2012 was $8.1 million, up 32%, as compared to $6.1 million for the same period last year, with
revenue increases in the United States, Mexico and Singapore, partially offset by a decline in Europe, Middle East, India and China.
Gross profitability for product revenue for the six months ended September 30, 2012, decreased to 74%, from 76%, in the prior year
period, primarily due to lower profitability in the United States and Mexico. Total operating expenses increased $21,000 or 0.3%
for the six months compared to the same period last year. Operating loss minus non-cash expenses (EBITDAS) for the six months was
$235,000 compared to $1.2 million in the same period last year.
Oculus management will hold a conference call today to discuss
second quarter results and to answer questions, beginning at 4:30 p.m. EDT. Individuals interested in participating in the conference
call may do so by dialing 877-303-7607 for domestic callers or 973-638-3203 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 seven days following
the conclusion of the call by dialing 855-859-2056 for domestic callers, or 404-537-3406 for international callers, and entering
conference code 34864546. A webcast replay will be available on the site at http://ir.oculusis.com/events.cfm
for one year following the call.
About Oculus Innovative Sciences
Oculus Innovative Sciences is a commercial healthcare
company that designs, produces and markets innovative, safe and effective drugs, devices, and nutritional products. Oculus is pioneering
innovative solutions in multiple markets for the dermatology, surgical, wound care, and animal healthcare markets, and has commercialized
products in the United States, Europe, India, China, Mexico and select Middle East countries. The company's headquarters are in
Petaluma, California, with manufacturing operations in the United States and Latin America. More information can be found at www.oculusis.com.
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 use of words such as "expansion," "eliminate,"
and "enables," among others. Forward-looking statements in this press release are subject to certain risks
and uncertainties inherent in the Company's business that could cause actual results to vary, including such risks that regulatory
clinical and guideline developments may change, scientific data may not be sufficient to meet regulatory standards or receipt
of required regulatory clearances or approvals, clinical results may not be replicated in actual patient settings, protection
offered by the Company's patents and patent applications may be challenged, invalidated or circumvented by its competitors, the
available market for the Company's products will not be as large as expected, the Company's products will
not be able to penetrate one or more targeted markets, revenues will not be sufficient to fund further development and clinical
studies, the Company may not meet its future capital needs, and its ability to obtain additional funding, as well as uncertainties
relative to varying product formulations and a multitude of diverse regulatory and marketing requirements in different countries
and municipalities, and other risks detailed from time to time in the Company's filings with the Securities and Exchange Commission
including the annual report on Form 10-K for the year ended March 31, 2012. Oculus Innovative Sciences disclaims any obligation
to update these forward-looking statements except as required by law.
Oculus and Microcyn are trademarks or registered trademarks