SAINT PAUL, Minn., Aug. 30, 2012 /PRNewswire/ -- MGC Diagnostics Corporation (NASDAQ: MGCD) (formerly Angeion Corporation (NASDAQ: ANGN)), a global medical technology company, today reported financial results for the third quarter of fiscal year 2012, ended July 31, 2012.
(Logo: http://photos.prnewswire.com/prnh/20120821/LA60189LOGO) Third Quarter Highlights and Recent Developments:
For the third quarter of fiscal year 2012, total revenues increased 8% to $6.9 million compared to $6.4 million in the third quarter of fiscal 2011. Domestic sales for the third quarter totaled $5.6 million, compared to $5.3 million in the previous year's third quarter and international sales were $1.3 million, versus $1.1 million in last year's comparable third quarter.
During the third quarter, equipment, supplies and accessories sales totaled $5.9 million, compared to $5.3 million during last year's comparable quarter. Service revenues for the third quarter decreased $47,000, or 4.4%, to $1.02 million versus $1.07 million in last year's third quarter. The decrease in service revenues for the quarter reflects the Company's strategic decision to no longer support older customer equipment and to focus on transitioning those customers to newer MGC Diagnostic equipment. For the third quarter of fiscal 2012, income from discontinued operations was $147,000 (see "Discontinued Operations" below). The Company reported a net loss of $133,000, or ($0.03) per diluted share, versus net loss of $81,000, or ($0.02) per diluted share, in the comparable quarter last year.
Gross margin for the quarter was 53.7% compared to 57.5% in the third quarter of fiscal year 2011. This decrease is due in part to lower margin Group Purchasing Organization (GPO) sales accounting for a higher percent of fiscal 2012 Company sales.
General and administrative expenses in the third quarter of fiscal 2012 totaled $913,000 versus $916,000 in the comparable quarter last year. Sales and marketing expenses including GPO fees were $2.1 million compared to $1.6 million in the third quarter of fiscal year 2011. Research and development costs were $825,000 compared to $924,000 in last year's third quarter, reflecting an additional $100,000 of capitalized software development costs booked during the just completed third quarter.
For the nine month period, the Company reported total revenues of $18.9 million compared to $19.1 million in the first nine-months of 2011. For the nine months of fiscal 2012, income from discontinued operations was $277,000, compared to a loss of $518,000 in fiscal 2011 (see "Discontinued Operations" below). The Company reported a net loss of $791,000, or $(0.21) per fully diluted share, compared to a net loss of $543,000, or $(0.14) per diluted share in the comparable nine-month period of fiscal 2011.
Gregg O. Lehman, Ph.D., president and chief executive officer of MGC Diagnostics, said, "We are pleased with the operating progress made during the quarter, as well as with the ongoing rebranding and repositioning of the company. Considering the global economic challenges, we are pleased with the 14% increase in international sales and the 13% increase in worldwide equipment sales. Our new Executive Vice President – Global Sales, Matt Margolies and our Executive Vice President – Global Marketing and Corporate Strategy, Todd Austin are clearly having a positive impact on our sales process and are generating measurable results in the early going. This gives me great optimism for 2013 and beyond.
"The portion of our business from Group Purchasing Organizations (GPOs) nearly tripled to 52% of total sales in the third quarter of fiscal 2012 compared to 19% in last year's third quarter. I believe it's important to note, GPO sales are domestic only sales and accounted for 63% of the Company's third quarter domestic sales compared to 24% last year," said Dr. Lehman. "Although our GPO sales are at lower margins than our traditional sales, we believe this will continue to be a dependable sales channel for MGC Diagnostics going forward. This gives us the flexibility to focus our inside sales group on lead generation to provide our sales force qualified leads that can shorten the sales cycle and make our sales force more efficient. Additionally, our sales force is having measureable success in converting our customers with older equipment into purchasers of new equipment. Maintenance and service contract billings increased 22% for the quarter, a positive trend we are dedicated to build upon. We are also pleased with the 200% expansion of our backlog from the third quarter last year."
Dr. Lehman continued, "As you are aware, we recently announced a corporate rebranding initiative that included a change in the name of the Company to MGC Diagnostics Corporation. We believe that the new name more clearly communicates to our medical industry customers that we provide leading-edge cardio-pulmonary diagnostic technology based on the long and distinguished reputation of our MedGraphics brand. MGC Diagnostics will be a more proactive, forward-looking organization with a renewed dedication to product innovation, unmatched customer service and support, and always anticipating and creating solutions, technologically as well as in customer support, to solve unmet needs.
"As part of the rebranding initiative we have introduced a new logo, a new website, a new corporate identity package, and a new ticker symbol. The development of these new corporate branding initiatives had a moderate negative impact on the financial results of the just concluded third quarter, but we believe we will generate a solid return on our investment in the coming years."
Dr. Lehman concluded, "All in all, we are pleased with the continued progress in repositioning this company for consistent growth and profitability in the coming years. With our rebranding and corporate initiatives completed, we anticipate a very bright future for the Company.Discontinued Operations
In reporting these results for the three and nine months ended July 31, 2012 and 2011, the Company is presenting results from its New Leaf business line as "discontinued operations." In December 2011, the Company announced that its Board of Directors had determined that it would seek strategic alternatives, including the possibility of a sale, of the New Leaf business and that it had hired an investment banker to assist it in this process. In May 2012, the Company entered into a letter of intent with a non-affiliated third party for the sale of the New Leaf business. The Company announced earlier today it sold the assets of its New Leaf business to Life Time Fitness for $1.235 million in a transaction that closed on August 28, 2012.
As a result, in this press release the Company has eliminated from its statement of operations all revenues and expenses associated with its New Leaf business and presented the income (loss) from New Leaf activities as "discontinued operations." The Company has also reclassified its results for prior periods in these financial statements to reflect this discontinued operations treatment for its New Leaf business line.
The Company has scheduled a conference call for Thursday, August 30, 2012 at 4:30 p.m. ET to discuss its financial results for the third quarter of fiscal year 2012.
Participants can dial (877) 317-6789 or (412) 317-6789 to access the conference call, or listen via a live Internet webcast on the Company's website at www.mgcdiagnostics.com. A replay of the conference call will be available by dialing (877) 344-7529 or (412) 317-0088, confirmation code 10017652, through September 5, 2012. A webcast replay of the conference call will be accessible on the Company's website at www.mgcdiagnostics.com for 90 days.
About MGC Diagnostics
MGC Diagnostics Corporation (NASDAQ: MGCD), (formerly Angeion Corporation), is a global medical technology company dedicated to CardioRespiratory health solutions. MGC Diagnostics develops, manufactures and markets non-invasive diagnostic systems. This portfolio of products provide solutions for disease detection, integrated care, and wellness across the spectrum of CardioRespiratory healthcare. The Company's products are sold internationally through distributors and in the United States through a direct sales force targeting heart and lung specialists located in hospitals, university-based medical centers, medical clinics, physicians' offices, pharmaceutical companies, medical device manufacturers, and clinical research organizations (CROs). For more information about MGC Diagnostics, visit www.mgcdiagnostics.com.
Cautionary Statement Regarding Forward Looking Statements
From time to time, in reports filed with the Securities and Exchange Commission, in press releases, and in other communications to shareholders or the investing public, MGC Diagnostics Corporation may make forward−looking statements concerning possible or anticipated future financial performance, business activities or plans that include the words "believes," "expects," "anticipates," "intends" or similar expressions. For these forward−looking statements, the Company claims the protection of the safe harbor for forward−looking statements contained in federal securities laws. These forward−looking statements are subject to a number of factors, risks and uncertainties, including those disclosed in our periodic filings with the SEC, that could cause actual performance, activities or plans after the date the statements are made to differ significantly from those indicated in the forward−looking statements. For a list of these factors¸ see the sections entitled "Risk Factors" and "Cautionary Note Regarding Forward Looking Statements," in the Company's Form 10-K for the year ended October 31, 2011, and any updates in subsequent filings on Form 10-Q or Form 8-K under the Securities Exchange Act of 1934.Contact:
Robert M. WolfJoe Dorame, Robert Blum, Joe DiazMGC Diagnostics Corporation
Lytham Partners, LLCChief Financial Officer
(602) 889-9700(651) 484-4874
firstname.lastname@example.orgMGC DIAGNOSTICS CORPORATION AND SUBSIDIARIES
Consolidated Balance Sheets
July 31, 2012 and October 31, 2011
(In thousands, except share and per share data)July 31,2012October 31,2011ASSETS(Unaudited)Current Assets:Cash and cash equivalents$ 8,709$ 8,461Short-term investments-723Accounts receivable, net of allowance for doubtful accounts of $45 and $96, respectively4,7205,958Inventories, net of obsolescence reserve of $501 and $431, respectively4,0573,688Prepaid expenses and other current assets 550235Current assets of discontinued operations 5562Total Current Assets18,09119,127Property and equipment, net of accumulated depreciation of $3,887 and $3,709, respectively400440Intangible assets, net1,4381,174Noncurrent assets of discontinued operations2531Total Assets$ 19,954$ 20,772
LIABILITIES AND SHAREHOLDERS' EQUITYCurrent Liabilities:Accounts payable$ 1,587$ 2,022Employee compensation1,3671,481Deferred income1,8671,771Warranty reserve94141Other current liabilities and accrued expenses456221Total Current Liabilities5,3715,636Long-term Liabilities:Long-term deferred income and other725817Total Liabilities6,0966,453Commitments and Contingencies--Shareholders' Equity:Common Stock, $0.10 par value, authorized 25,000,000 shares, 3,993,900 and 3,905,648 shares issued and 3,884,029 and 3,778,796 shares outstanding in 2012 and 2011, respectively388378Undesignated shares, authorized 5,000,000 shares, no shares issued and outstanding--Additional paid-in capital20,94420,622Accumulated deficit(7,474)(6,683)Accumulated other comprehensive income-2Total Shareholders' Equity13,85814,319Total Liabilities and Shareholders' Equity$ 19,954$ 20,772MGC DIAGNOSTICS CORPORATION AND SUBSIDIARIES
Consolidated Statements of Comprehensive Loss
(Unaudited, in thousands, except per share data)Three Months EndedJuly 31,Nine Months EndedJuly 31,2012201120122011RevenuesEquipment, supplies and accessories revenues$ 5,876$ 5,313$ 15,738$ 16,176Service revenues1,0191,0663,1882,9336,8956,37918,92619,109Cost of revenuesCost of equipment, supplies and accessories revenues2,8352,3487,5647,208Cost of service revenues3543631,0861,0413,1892,7118,6508,249Gross margin3,7063,66810,27610,860Operating expenses:Selling and marketing2,1321,5855,5584,930General and administrative9139162,9883,243Research and development8259242,4552,387Amortization of intangibles1121053293153,9823,53011,33010,875Operating (loss) income(276)138(1,054)(15)Interest income310720(Loss) income from continuing operations before taxes(273)148(1,047)5Provision for taxes7102130(Loss) income from continuing operations(280)138(1,068)(25)Discontinued operations:Income (loss) from operations of discontinued operations147(219)277(518)Net loss(133)(81)(791)(543)Other comprehensive loss; net of taxUnrealized loss on securities-(4)(2)(3)Comprehensive loss$
(546)(Loss) income per share:BasicFrom continuing operations$ (0.07)$
.04$ (0.28)$ (0.01)From discontinued operations0.04(0.06)0.07(0.13)Total$ (0.03)$ (0.02)$ (0.21)$ (0.14)DilutedFrom continuing operations$ (0.07)$
.04$ (0.28)$ (0.01)From discontinued operations0.04(0.06)0.07(0.13)Total$ (0.03)$ (0.02)$ (0.21)$ (0.14)Weighted average common shares outstanding:Basic3,8473,7743,8083,767Diluted3,8473,8373,8083,767MGC DIAGNOSTICS CORPORATION AND SUBSIDIARIES
Consolidated Statements of Cash Flows
(Unaudited, in thousands)Nine Months EndedJuly 31,20122011Cash flows from operating activities:Net loss$
(543)Adjustments to reconcile net loss to net cash provided by (used in) operating activities:Depreciation182199Amortization329315Stock-based compensation269198Decrease in allowance for doubtful accounts(51)(54)Increase (decrease) in inventory obsolescence reserve70(27)Loss on disposal of equipment124Change in operating assets and liabilities:Accounts receivable1,289574Inventories(432)(407)Prepaid expenses and other current assets(315)24Accounts payable(435)(132)Employee compensation(114)(928)Deferred income32136Warranty reserve(47)(60)Other current liabilities and accrued expenses235(108)Net cash provided by (used in) operating activities222(789)Cash flows from investing activities:Sales of investments7212,476Purchases of property and equipment and intangible assets(730)(427)Net cash (used in) provided by investing activities(9)2,049Cash flows from financing activities:Proceeds from issuance of common stock under employee stock purchase plan5020Proceeds from the exercise of stock options9748Repurchase of common stock(66)(148)Repurchase of common stock upon vesting of restricted stock grants(46)(39)Net cash provided by (used in) financing activities35(119)Net increase in cash and cash equivalents2481,141Cash and cash equivalents at beginning of period8,4616,943Cash and cash equivalents at end of period$
Cash paid for taxes$
24Supplemental non-cash items:Common stock issued for long-term liability$
-Share value received for stock option exercises-89
|SOURCE MGC Diagnostics Corporation|
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