Full Press Release Details
Oculus Innovative Sciences Reports Revenues
of $3.4 Million for First Quarter of Fiscal 2014
Conference Call Begins at 4:30 p.m. (EDT)
PETALUMA, Calif.--(August 8, 2013)--Oculus Innovative
Sciences, Inc. (Nasdaq: OCLS) today announced financial results for the first quarter of fiscal year 2014, ended June 30, 2013.
Total revenues were $3.4 million for the first quarter were down $679,000 as compared to $4.1 million for the same period in the
"This is a year of transition for Oculus, setting the
stage to create long-term value and stronger revenue growth with several exciting near-term opportunities,"
said Jim Schutz, Oculus CEO. "First, our drug subsidiary, Ruthigen, continues to progress towards a planned IPO, which we
believe will add significant short-term value in the form of cash and potential for increased stock price. Second, Vetericyn's
animal healthcare sales are picking back up after a slow spring with a strong start to the summer. Third, we see continued
strong unit growth in Latin America that has averaged 50% plus over the last three quarters as compared to the prior years'
quarters. Fourth, we anticipate an FDA clearance for our new scar hydrogel and subsequent launch before the end of this fiscal
year. And finally, international sales, especially in Europe, should show solid growth before our fiscal year end as
a result of additional product approvals and added partners. We believe the stage is set for a return to positive year-over-year
revenue growth later this year and next."
The decline in quarterly revenue growth was the result of three
factors: 1) the delayed seasonal purchasing in the ranch and farm animal sector for the Vetericyn animal healthcare products
due to late winter storms, which negatively impacted sales in the months of April and May, 2013; 2) lower dermatology sales due
to the discontinuance of one partner and the launch of products by a new partner last year, causing a revenue spike in the first
quarter of FY 2013, which was not repeated this quarter; and 3) the structure of the Latin America-Mexico partnership, completed
in August last year, reduced Oculus' short-term revenue growth despite a 53% increase in unit volume sales.
Product revenue in the United States for the three months ended
June 30, 2013, decreased $710,000, or 35%, due to a decline in sales in U.S. dermatology and animal health care products. Oculus
recorded revenue in the amounts of $741,000 and $1.1 million for the three months ended June 30, 2013 and 2012, respectively, from
Innovacyn, the company's animal healthcare partner. The late winter Eastern and Midwestern storms that occurred through spring
have delayed seasonal sales to the ranch and farm animal sector for Q4 2013 and the first two months of Q1 2014. The decline in
U.S. dermatology revenues was due to the discontinuation of Oculus' partnership with Onset Dermatologics and revenue recognition
in the launch of the Quinnova Pharmaceuticals' Microcyn-based Atrapro dermatology products in the first quarter of 2012,
which was a one-time event and did not repeat in the first quarter of 2013.
Revenue in Mexico for the three months ended June 30, 2013,
was $1.4 million, up $46,000, or 3%, as compared to the same period in the prior year caused by the higher unit volume growth of
53% and the recognition of $375,000 related to the amortization of upfront license fees paid by More Pharma, our exclusive partner
in Mexico. The increase in units sold and the amortization was partially offset by about a 54% reduction in the overall average
sales price per unit. Also, due to the transfer of the sales function in Mexico to More Pharma, the company's exclusive partner
in Mexico, Oculus eliminated nearly all sales operating costs, thus improving the company's long-term operating profitability
Revenue in Europe and rest of world for the three months ended
June 30, 2013, increased $2,000 as compared to the same period in the prior year, with increases in sales in China, India and Singapore,
partially offset by decreases in Europe and Middle East.
Oculus reported gross profit related to Microcyn products
of $2.1 million or 68% of product revenues, during the three months ended June 30, 2013, compared to a gross profit of $2.8 million,
or 74% of product revenues, for the same period in the prior year. Gross margins were down due to the decline of margins in Mexico
related to the More Pharma transaction, partially offset by higher gross margins in the United States and Europe.
Total operating expenses decreased by $53,000, or 2%, to $3.3
million for the three months ended June 30, 2013. Operating expenses minus non-cash expenses during the first quarter, were $3.0
million, with $3.0 million and remained flat when compared with $3.0 million for the same period in the prior year. Research and
development expenses were $507,000 for the three months ended June 30, 2013, down $25,000 due to lower preclinical expenses. Selling,
general and administrative expense decreased $28,000, or 1%, to $2.8 million during the three months ended June 30, 2013. The slight
decrease was primarily due to lower selling expenses in Mexico, partially offset by higher expenses related to Ruthigen and investor-related
costs in the United States.
Loss from operations minus non-cash expenses for the three months
ended June 30, 2013, was $713,000, including $477,000 of expenses related to Ruthigen, compared to $22,000 for the same period
Net loss for the three months ended June 30, 2013, was $1.7
million, an increase of $2.2 million from a net income of $445,000 for the same period in the prior year.
Non-operating (expense) income declined $1.5 million from the same period last year to an
expense of $337,000 from an income of $1.2 million related to two separate non-cash adjustments related to stock issued to the
company's lender and warrants issued to an investor, which are in the table reconciling GAAP measures to non-GAAP measures
below. Stock-based compensation charges were $347,000 and $400,000 for the quarters ended June 30, 2013, and 2012, respectively.
As of June 30, 2013, Oculus had unrestricted cash and cash equivalents
of $5.4 million, compared with $4.4 million as of June 30, 2012, and $7.9 million as of March 31, 2013.
Oculus management will hold a conference call today to discuss
first quarter fiscal 2013 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 17450193. 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 27 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 "anticipates," "believes,"
"expects," "may," "plans," and "will," 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, the Company may not be
able 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, the uncertainties associated with an
initial public offering of a separate public company, and the discretion of the Company's Board of Directors to delay
or cancel the spinoff prior to execution, and other risks detailed from time to time in the Company's filings with the
Securities and Exchange Commission including its annual report on Form 10-K for the year ended March 31, 2013. The
Company disclaims any obligation to update these forward-looking statements, except as required by law.
Technology are trademarks or registered trademarks of Oculus Innovative Sciences, Inc. All other trademarks and service marks are
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