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MISONIX Inc. Reports Operating Results (10-Q)
Posted by: gurufocus (IP Logged)
Date: November 16, 2009 04:52PM
MISONIX Inc. (MSON) filed Quarterly Report for the period ended 2009-09-30. Misonix, Inc. designs, develops, manufactures, and markets medical, scientific, and industrial ultrasonic equipment, laboratory safety equipment, and air pollution control products. Misonix's ultrasonic platform is the basis for several innovative medical technologies. Misonix has a minority equity position in Focus Surgery, Inc. which uses high intensity focused ultrasound technology to destroy deep-seated cancerous tissues without affecting surrounding healthy tissue. Misonix acquired worldwide rights to use the Focus technology in kidney, liver and breast treatment. Addressing a combined market estimated to be in excess of billion annually, Misonix's proprietary ultrasonic medical devices are used for wound debridement, cosmetic surgery, neurosurgery, laparoscopic surgery, and other surgical and medical applications. Misonix Inc. has a market cap of $16.31 million; its shares were traded at around $2.33 with and P/S ratio of 0.41.
Highlight of Business Operations:
Net sales: Net sales of the Companys medical device products and laboratory and scientific products decreased $396,515 to $2,746,684 for the three months ended September 30, 2009 from $3,143,199 for the three months ended September 30, 2008. This difference in net sales is due to a decrease in sales of medical device products of $377,086 to $2,118,951 for the three months ended September 30, 2009 from $2,496,037 for the three months ended September 30, 2008. This difference in net sales is also due to a decrease in laboratory and scientific products sales of $19,429 to $627,733 for the three months ended September 30, 2009 from $647,162 for the three months ended September 30, 2008. The decrease in sales of therapeutic medical device products was primarily attributable to sales of the Companys Neuroaspirator, Lysonix ultrasonic assisted liposuction product and AutoSonix product, partially offset by an increase in sales of the Companys bone scalpel product and SonicOne.
Selling expenses: Selling expenses increased $151,087 to $949,413 for the three months ended September 30, 2009 from $798,326 for the three months ended September 30, 2008. Laboratory and scientific products selling expenses increased $13,781. Selling expenses for medical device products increased $137,306, primarily due to a higher headcount related to an expanded sales force.
Research and development expenses: Research and development expenses increased $101,837 from $320,632 for the three months ended September 30, 2008 to $422,469 for the three months ended September 30, 2009. Laboratory and scientific products research and development expenses increased approximately $36,616 due to increased product support related to the Fume products. Research and development expenses for medical device products increased $65,221, primarily due to increased headcount.
Other income (expense): Other income for the three months ended September 30, 2009 was $152,727 as compared to $1,650,056 for the three months ended September 30, 2008. The decrease of $1,497,329 was due to the receipt of $1,516,866 from USHIFU, LLC (USHIFU) pursuant to the Focus Surgery, Inc. (Focus) transaction between the Company and USHIFU. This payment consisted of $837,500 for the 2,500 shares of Series M Preferred Stock of Focus owned by the Company and fifty (50%) percent of the outstanding principal and accrued interest of loans previously made by the Company to Focus in the first quarter of fiscal year 2009.
Working capital at September 30, 2009 and June 30, 2009 was $12,993,000 and $7,768,000, respectively. For the three months ended September 30, 2009, cash used in operations totaled $1,136,398. For the three months ended September 30, 2009, cash used in investing activities totaled $122,631. For the three months ended September 30, 2009, cash used in financing activities was $1,156,700.
The available amount under the Credit Agreements is the lesser of $8,000,000 or the amount calculated under the Borrowing Base (as defined in the Credit Agreements). The Borrowers must maintain a minimum outstanding amount of $500,000 under the Credit Agreements at all times and pay a fee equal to the interest rate set forth on any such shortfall. Interest on amounts borrowed under the Credit Agreements is payable at Wells Fargos prime rate of interest plus 1% per annum floating, payable monthly in arrears. The default rate of interest is 3% higher than the rate otherwise payable. A fee of 1/2 % per annum on the Unused Amount (as defined in the Credit Agreements) is payable monthly in arrears. At September 30, 2009, the balance outstanding under the Credit Agreements is $1,609,122. An additional $992,877 was available to be borrowed at September 30, 2009.
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