Full Press Release Details
Sonoma Pharmaceuticals Reports Record
Revenue in Second Quarter FY 2019
Total Revenue of $4.9 Million, up 13% over June 2018 Quarter
Total Revenue up 14% over September 2017 Quarter
Conference Call Begins at 4:30
PETALUMA, CA-(November 8, 2018) -Sonoma Pharmaceuticals,
Inc. (Nasdaq: SNOA), today announced financial results for the second quarter FY 2019 ending September 30, 2018. Total revenue
of $4.9 million for the quarter ending September 30, 2018, was up 14% when compared to $4.3 million for the same period last year.
Product revenues of $4.6 million for the second quarter ending September 30, 2018, was up 12%, or $491,000, when compared to the
same period last year, with increases in the United States, European and Latin American revenues.
"A record high quarterly revenue for the company of $4.9
million, along with higher gross profitability enabled us to achieve a two-year low in EBITDA loss, which is operating loss minus
non-cash expenses," said Jim Schutz, Sonoma Pharmaceuticals CEO. "We are also excited to be preparing for the upcoming
commercial launches of our Epicyn Antimicrobial Facial Cleanser in the United States and our acne product, Gramacyn ,
in Brazil. These markets represent significant opportunity for the company, as physicians and patients desire safe and efficacious
alternatives to antibiotics."
Business Highlights:
Results for the Three Months Ended September 30, 2018
Product revenues in the United States of $2.4
million for the three months ended September 30, 2018, increased by $158,000, or 7%, as compared to $2.3
million for the three months ended September 30, 2017. This increase was mostly the result of higher sales of the
company's animal health care products, partly offset by a small decrease in sales of the company's acute care and
dermatology products.
Product revenue in Latin America for the quarter
ended September 30, 2018, was $1.0 million, up 32% from the same period last year. This amount reflects the
high growth in the sale of products to Invekra and the sale of products into the Brazilian market. Sonoma will
continue to supply products to Invekra until its manufacturing facility is operational.
Product revenue in Europe and the rest of
the world of $1.2 million for the second quarter ended September 30, 2018, increased by $90,000, or 8%, as compared to
$1.1 million for the three months ended September 30, 2017. This increase was the result of higher
sales in Europe and India, partly offset by lower sales in the Middle East, Far East and New Zealand.
Gross profit for the
quarter ended September 30, 2018, was $2.4 million, or 49% of total revenue, compared to a gross profit of
$1.8 million, or 43% of total revenue for the same period in the prior year. The increase in gross
profit, as a percentage of revenue, was primarily due to the higher unit volume in the United States and higher margin
products sold into Brazil.
Operating expenses minus non-cash expenses during
the second quarter of fiscal year 2019 were $4.5 million, up $231,000 or 5%, as compared to the
same period in the prior year. This increase in operating expenses was mostly due to higher marketing and
legal expenses in the United States, partly offset by a decline in Latin American expenses.
Loss from operations was $2.7 million, down
$205,000, compared to $2.9 million for the same period last year. Operating loss less non-cash expenses (EBITDA)
for the three months ended September 30, 2018, was $1.95 million, down $313,000, or 14%, compared to $2.26 million for the
same period last year.
As of September 30, 2018, Sonoma had cash and
cash equivalents of $4 million, as compared to $10.1 million as of March 31, 2018. While the operating loss minus
non-cash expenses (EBITDA) was $1.95 million for the quarter ended September 30, 2018, the reduction in cash for the quarter was
$3.6 million. The $1.6 million difference is mostly the result of an increase in working capital of $1.4 million including $0.8
million in receivables, which are being collected; and a $0.4 million increase in international inventory, which has been shipped
and is being sold to our partners.
Results for the Six Months Ended September 30, 2018
Total revenues of $9.3 million increased by $1.1 million, or
14%, for the six months ended September 30, 2018, as compared to $8.2 million for the six months ended September 30, 2017. Product
revenue of $8.7 million for the six months ended September 30, 2017, increased $983,000 , or 13%, compared to the same period last
year. This increase in product revenue was driven by growth in Latin America of 57% and in the United States of 7%.
The company reported gross profit related to sales of its products
of $4.2 million, or 45% of total revenues, for the six months ended September 30, 2018, compared to a gross profit of $3.6 million,
or 44% of total revenues, for the same period in the prior year.
Total operating expenses less non-cash expenses of $9.4 million
increased $437,000, or 5%, for the six months ended September 30, 2018, as compared to the same period in the prior year. This
increase was primarily due to higher marketing and legal expenses in the United States. Operating loss less non-cash expenses (EBITDA)
for the six months ended September 30, 2018, was $5 million, as compared to $5.1 million for the same period last year.
Sonoma's management will hold a conference call today
to discuss second quarter fiscal year 2019 results and answer questions beginning at 4:30 p.m. EST. 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 https://edge.media-server.com/m6/p/gxh562de.
Please log on approximately 10 minutes prior to the presentation in order to register and download the appropriate software, if
any. Also, participants can download a graphical presentation of the quarterly results at this same site, which provides greater
granular detail in conjunction with the call.
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 1292509. A webcast replay will be available on the site at http://ir.sonomapharma.com/events-and-presentations for
one year following the call.
About Sonoma Pharmaceuticals, Inc.
Sonoma is a specialty pharmaceutical company that develops and
markets unique and effective solutions for the treatment of dermatological conditions and advanced tissue care. The company's
products, which are sold throughout the United States and internationally, have improved outcomes for more than five million
patients globally by reducing infections, itch, pain, scarring and harmful inflammatory responses. The company's headquarters
are in Petaluma, California, with manufacturing operations in the United States and Latin America. European marketing and
sales are headquartered in Roermond, Netherlands. More information can be found at www.sonomapharma.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 Sonoma Pharmaceuticals, Inc. and its subsidiaries (the "Company"). These
forward-looking statements are identified by the use of words such as "preparing," "represent," and
"upcoming," 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 meet the Company's cash needs, fund further development and clinical studies, 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. The Company disclaims any obligation to update these forward-looking statements, except
Sonoma Pharmaceuticals is a trademark or registered trademark
of Sonoma Pharmaceuticals, Inc. All other trademarks and service marks are the property of their respective owners.
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