VisionSciences Inc. Reports Operating Results (10-Q)
VISION-SCIENCES, INC. (DE) develops, manufactures, and markets products for endoscopy which have infection control advantages over conventional flexible endoscopes. Co. has developed, and is marketing, proprietary flexible endoscope systems designed to eliminate the risk of cross-contamination to patients and healthcare professionals which results from the reuse of conventional flexible endoscopes. Visionsciences Inc. has a market cap of $44.6 million; its shares were traded at around $1.21 with and P/S ratio of 3.4. Visionsciences Inc. had an annual average earning growth of 27.5% over the past 5 years. Highlight of Business Operations:Net sales increased $0.1 million, or 4%, in the second quarter of fiscal 2010 to $2.9 million compared to $2.8 million in the second quarter of fiscal 2009. During the second quarter of fiscal 2010, our medical segment s net sales of $2.2 million increased by $0.1 million, or 5%, while our industrial segment s net sales of $0.6 million remained flat compared to the same period last year.
Net sales to the ENT and TNE markets decreased $0.2 million, or 19%, in the second quarter of fiscal 2010 to $1.0 million compared to $1.2 million in the second quarter of fiscal 2009. The decrease in net sales was primarily attributable to a lower sales to Medtronic of our fiberscopes ($0.1 million) and digital processing units, a component of our videoscope product line ($0.2 million), which was partially offset by increased sales of our videoscopes ($0.1 million).
Net sales to the urology market decreased $198 thousand, or 28%, in the second quarter of fiscal 2010 to $520 thousand compared to $718 thousand in the second quarter of fiscal 2009. The second quarter of fiscal 2009 benefited from initial orders for videoscopes from our then-independent sales representatives and international distributors ($306 thousand), which were not repeated in the current fiscal year. Higher international sales of our EndoSheath disposables partially offset the decrease in net sales of urology endoscopes ($85 thousand).
Net sales of repairs, peripherals, and accessories increased $411 thousand, or 236%, in the second quarter of fiscal 2010 to $585 thousand compared to $174 thousand in the second quarter of fiscal 2009. The increase was primarily attributable to higher repairs sales ($69 thousand) and higher sales volume of peripherals and accessories for our ENT endoscopes ($342 thousand).
Gross profit increased $240 thousand, or 107%, in the second quarter of fiscal 2010 to $465 thousand, or 16% of net sales, compared to $225 thousand, or 8% of net sales, in the second quarter of fiscal 2009. In the medical segment, gross profit in the second quarter of fiscal 2009 reflected the start-up costs associated with manufacturing our videoscope line of products. We achieved an improved gross profit for our videoscope family of products in the second quarter of fiscal 2010 as net sales for these products increased by $113 thousand, or 26%, compared to the same period last year. We have put into place continuous improvements for our videoscope line of products, which we believe should result in improved gross margins across our entire family of products. In the industrial segment, gross profit decreased $160 thousand, or 48%, in the second quarter of fiscal 2010 to $172 thousand compared to $332 thousand in the second quarter of fiscal 2009. The decrease was primarily attributable to unfavorable labor and overhead absorption ($37 thousand) and lower borescope sales ($35 thousand).
R&D expenses decreased $617 thousand, or 41%, in the second quarter of fiscal 2010 primarily attributable to lower stock-based compensation ($359 thousand), reduced R&D materials purchases ($131 thousand), lower consulting expenses ($57 thousand), and reduced spending for new product development as the latest product innovations moved from the development stage into production ($46 thousand).
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