Full Press Release Details
Oculus Innovative Sciences Reports Revenues
of $2.9 Million and Net
Income of $7.5 Million for Fourth Quarter of Fiscal 2014 Primarily Due to
Accounting Treatment of Ruthigen
Conference Call Begins at 4:30 p.m.
PETALUMA, Calif.--(June 12, 2014)--Oculus Innovative Sciences,
Inc. (NASDAQ: OCLS) today announced financial results for the fourth quarter of fiscal year 2014, ended March 31, 2014. Net income
increased $9.9 million to $7.5 million, mostly due to the accounting treatment of Oculus' investment in Ruthigen. Total revenues
were $2.9 million for the fourth quarter, down $421,000, as compared to $3.3 million for the same period in the prior year. Product
revenue, including product licensing fees received, was down $509,000, or 16%, with decreases in United States, Mexico and China,
which was partially offset by revenue growth in Europe, Middle East, India and Singapore.
As a result of the Ruthigen IPO and its deconsolidation with Oculus,
during the three months ended March 31, 2014, the company recorded a gain in the amount of $11.1 million. For financial reporting
purposes, the aggregate fair value of Oculus' remaining 43% investment as of March 31, 2014, was $10.2 million. Such valuation
may change over time as the market value of Ruthigen stock changes.
"Now that the IPO is behind us, our entire team is focused
on the expansion of our own commercial efforts to increase our revenue growth in multiple therapeutic areas including dermatology,
acute care, oral and animal healthcare," said Jim Schutz, Oculus CEO. "We are maximally focused on reversing the
trend of declining revenue and have a solid plan in place to return to healthy revenue growth."
Results for the Three Months Ended March 31, 2014
Product revenue in the United States for the three months ended
March 31, 2014, was down 37% from the same period last year due to lower sales of animal healthcare and dermatology products, partially
offset by increases in sales of wound care products. The company recorded revenue of $416,000 and $658,000 from Oculus' partner
Innovacyn for the three months ended March 31, 2014 and 2013, respectively. The impact of the severe winter weather, stronger competition
and lower prices reduced the sales of animal healthcare products, compared to the same period last year. In
May 2014, Innovacyn notified Oculus that over the next twelve months Innovacyn intends to transition to a new supplier
of product currently supplied by Oculus. Innovacyn and Oculus are discussing a transition agreement that could potentially offset
the Innovacyn-generated revenue from being eliminated. Oculus is also seeking new distribution channels and exploring the potential
of a new animal healthcare partner with greater market presence to replace the revenue.
Revenue in Mexico for the three months ended March 31, 2014,
decreased $44,000, or 3%, when compared to the same period in the prior year as a result of the lower sales of the hydrogel product
due to issues at one of More Pharma's major distributors. During the three months ended March 31, 2014 and 2013, $370,000
was recognized related to the amortization of upfront license fees received from More Pharma in August 2013.
Revenue in Europe and "Rest of World" for the three
months ended March 31, 2014, increased $5,000, as compared to the same period in the prior year, due to increases in sales in Europe,
Middle East, India and Singapore, mostly offset by a decrease in China of $225,000, which was related to a large one-time and non-recurring
revenue transaction that occurred in the same period last year.
Oculus reported gross profit related to the company's products
of $1.4 million, or 52% of product revenues, during the three months ended March 31, 2014, compared to a gross profit of $2.2 million,
or 69% of product revenues, for the same period in the prior year. Licensing revenues in the amounts of $370,000 and $575,000 are
included in the calculation of product revenues and gross profit for the quarters ended March 31, 2014 and 2013, respectively. Gross
margins were down in the United States due to lower U.S. sales, partially offset by higher gross margins in Europe.
Total operating expenses decreased by $79,000, or 2%, to $3.5 million
for the three months ended March 31, 2014, as compared to the same period in the prior year. Operating expenses minus non-cash
expenses during the fourth quarter of fiscal 2014 were $3.2 million, down $194,000 when compared to $3.4 million for the same period
in the prior year. The decrease in operating expenses minus non-cash expenses was due to lower U.S. operating expenses incurred
by Oculus, partially offset by higher expenses related to the company's subsidiary, Ruthigen, of $57,000 to $580,000.
Research and development expenses were $722,000 for the three months
ended March 31, 2014, up $53,000 from the same period last year, due to higher preclinical expenses of $266,000 incurred by Ruthigen.
Selling, general and administrative expense of $2.8 million for the three months ended March 31, 2014, decreased $132,000, or 5%,
largely related to the increase in Ruthigen expenses of $112,000.
Loss from operations minus non-cash expenses of $1.7 million for
the three months ended March 31, 2014, increased by $591,000, as compared to the same period in the prior year, mostly due to $580,000
of expenses related to Ruthigen, compared to $457,000 for the same period in the prior year.
Net income for the three months ended March 31, 2014, was $7.5 million,
an increase of $9.9 million, as compared to the net loss of $2.4 million for the same period in the prior year. The increase in
net income over the prior year is due to the accounting treatment for our investment in Ruthigen. Stock-based compensation charges
were $337,000 and $204,000 for the quarters ended March 31, 2014, and 2013, respectively.
As of March 31, 2014, Oculus had unrestricted cash and cash equivalents
of $5.5 million, compared with $7.9 million as of March 31, 2013.
Results for Twelve Months Ending March 31, 2014
Total revenues were $13.7 million for the twelve months ended March
31, 2014, as compared to $15.5 million for the same period in the prior year. Product revenues, including product licensing fees
received, for the twelve months ended March 31, 2014 of $12.7 million, decreased $1.9 million, or 13%, as compared to $14.6 million
for the same period in the prior year, with decreases in sales in the United States, Mexico and China, partially offset by increases
in Europe, Middle East, India and Singapore.
Oculus reported gross profit related to sales of Microcyn -based
products of $8.2 million, or 65% of product revenues, including product licensing fees received, for the twelve months ended March
31, 2014, as compared to a gross profit of $10.6 million, or 73% of product revenues and product licensing fees received, for the
same period in the prior year. Total operating expenses minus non-cash expenses increased $497,000, for the twelve months ended
March 31, 2014 as compared to the same period in the prior year, primarily due to Ruthigen-related expenses of $2.7 million, partially
offset by lower expenses of $1 million incurred in Mexico. Operating loss minus non-cash expenses (EBITDAS) for the twelve months
ended March 31, 2014, was $4.3 million, which included $2.7 million of Ruthigen expenses.
Oculus management will hold a conference call today to discuss fourth
quarter fiscal 2014 results and to answer questions, beginning at 4:30 p.m. ET. 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 46958307. 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, Inc.
Oculus Innovative Science is a global healthcare company that designs,
manufactures and markets prescription and non-prescription products in 33 countries. The company's products are used to treat
patients in surgical/advanced wound management, dermatology, women's health and animal health markets; addressing the unmet
medical needs of these markets, while raising the standard of patient care and lowering overall healthcare costs. 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 commercial and technology progress and future financial performance
of Oculus Innovative Sciences, Inc. and its subsidiaries (the "Company"). These forward-looking statements are identified
by the use of words such as "intends," "expansion," "increase," "reversing," "plans,"
and "return," 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