Milestone Scientific Reports Fourth Quarter and Year End 2015 Financial Results; Provides Update on Status of Clinical Trials for Epidural Instrument
LIVINGSTON, NJ--(Marketwired - April 07, 2016) - Milestone Scientific Inc. (NYSE MKT: MLSS), a medical R&D company that designs, patents, incubates and commercializes a growing portfolio of innovative injection technologies, today announced financial results for the fourth quarter and year ended December 31, 2015, and provided a business update including an update on its minority owned subsidiary which holds the exclusive rights to the epidural and intra-articular (IA) instruments ("Epidural & IA Subsidiary").
Leonard Osser, Chief Executive Officer of Milestone Scientific, stated, "Although our revenue declined compared to the same period last year, our revenue improved sequentially, and our gross profit increased compared to the same period last year. Moreover, we are making continued progress implementing a number of sales and marketing initiatives that will enable us to resume growth of our dental instruments in 2016. For the fourth quarter of 2015, we experienced a net loss of $1.4 million, or $0.07 per share, which reflects increased investment in sales and marketing for the dental instruments, as well as increased expenses related to the development of our medical instruments. Heading into the first quarter of 2016, we are now seeing the positive impact of these initiatives and anticipate improved revenue for the first quarter of 2016 and for the full year. I am also pleased to report that our global sales initiatives for the dental instrument are taking hold and we are seeing positive results heading into 2016, especially in China. We recently announced a purchase order for one thousand dental instruments and over seven thousand disposable handpieces from Milestone China, a joint venture distribution company between Milestone Scientific and a team of senior healthcare executives from China. The purchase order is valued at approximately $1.4 million, and will be recognized in the first quarter of 2016. Based on the feedback thus far, we expect these purchase orders will continue to increase in 2016."
Mr. Osser continued, "We have nearly completed the clinical trials of our epidural instrument, and have less than 40 patients remaining. Our trial was delayed due, in part, to the recent addition of two new sites in the U.S. at leading universities, which will broaden the scope of our clinical trials. The trials at these two sites are commencing this week and should be completed in May. We are also pleased to report that we have had abstracts on our epidural instrument accepted in some of the most prestigious academic journals in the U.S. and Europe. Upon completion of the clinical trials, we will conduct a statistical analysis, which should take no more than one week, at which time, we will submit the final data to the U.S. Food & Drug Administration (FDA). Feedback from distributors has been positive, however, in order to negotiate the most favorable terms, we are holding off on signing new distributors until the FDA approval is in place. We have also submitted the required information to the U.S. FDA for approval of the IA instrument, and are awaiting feedback, the timing of which is uncertain as this remains outside of our control. At the same time, we remain focused on launching new medical instruments, which we believe will open sizable new markets for the company."
Revenue for the year ended December 31, 2015 was $9.5 million versus $10.3 million for year ended December 31, 2014. The decrease in revenue of $(841,521) or 8% was due to a decrease in instruments and handpiece unit sales. In the domestic market, total revenue decreased by $(1.1) million. On the international front, total revenue increased by $308,000 to $5.9 million versus $5.6 million for the same period in 2014. Gross profit for the year ended December 31, 2015 was $6.4 million or 68% of revenue versus $6.7 million or 65% of revenue for the year ended December 31, 2014. Operating loss for the year ended December 31, 2015 was $(3,056,748) versus an operating loss of $790,196 for the same period last year. Net loss for the year ended December 31, 2015 was $(5,539,903), or $(0.26) per share, versus a loss of $(1,707,496), or $(0.08) per share, for the comparable period in 2014. Net loss for the year ended December 31, 2015 includes a Loss on Earnings from the Medical Joint Venture of $(2,019,211) compared to $(891,500) for the same period last year and a Loss of Earnings on Milestone China of $(418,432) compared to a loss of $(810,000) for the same period last year.
Conference Call
Milestone Scientific's executive management team will host a teleconference on Monday, April 11, 2016 at 8:00 AM Eastern Time to discuss the company's financial results. The conference call can be accessed via telephone by dialing toll free 888-710-4015 and entering the passcode 6792477 or on the company website at www.milestonescientific.com. For those unable to participate at that time, a replay of the call can be accessed by dialing 888-203-1112 and entering the pass code 6792477. The replay will be available for 90 days.
About Milestone Scientific Inc.
Milestone Scientific Inc. (MLSS) is a medical R&D company that designs, patents, incubates and commercializes a growing portfolio of innovative injection technologies. Milestone's computer-controlled systems make injections precise, efficient, and virtually painless. For more information please visit our website: www.milestonescientific.com.
Safe Harbor Statement
This press release contains forward-looking statements regarding the timing and financial impact of Milestone's ability to implement its business plan, expected revenues and future success. These statements involve a number of risks and uncertainties and are based on assumptions involving judgments with respect to future economic, competitive and market conditions and future business decisions, all of which are difficult or impossible to predict accurately and many of which are beyond Milestone's control. Some of the important factors that could cause actual results to differ materially from those indicated by the forward-looking statements are general economic conditions, failure to achieve expected revenue growth, changes in our operating expenses, adverse patent rulings, FDA or legal developments, competitive pressures, changes in customer and market requirements and standards, and the risk factors detailed from time to time in Milestone's periodic filings with the Securities and Exchange Commission, including without limitation, Milestone's Annual Report for the year ended December 31, 2014. The forward looking statements in this press release are based upon management's reasonable belief as of the date hereof. Milestone undertakes no obligation to revise or update publicly any forward-looking statements for any reason.
MILESTONE SCIENTIFIC AND SUBSIDIARIES | |||||||||||
CONSOLIDATED BALANCE SHEETS | |||||||||||
DECEMBER 31, 2015 and 2014 | |||||||||||
December 31, 2015 | December 31, 2014 | ||||||||||
ASSETS | |||||||||||
Current Assets: | |||||||||||
Cash and cash equivalents | $ | 4,194,384 | $ | 10,367,993 | |||||||
Accounts receivable, net of allowance for doubtful accounts of $5,000 as of December 31, 2015 and December 31, 2014 | 1,793,801 | 1,541,478 | |||||||||
Other receivable | 58,140 | - | |||||||||
Inventories | 4,258,094 | 2,497,099 | |||||||||
Advances on contracts | 1,215,128 | 721,197 | |||||||||
Prepaid expenses and other current assets | 304,604 | 454,566 | |||||||||
Total current assets | 11,824,151 | 15,582,333 | |||||||||
Investment in Milestone Medical Inc | - | 888,720 | |||||||||
Investment in Milestone Education LLC | 16,346 | 24,192 | |||||||||
Investment in Milestone China | - | 348,651 | |||||||||
Furniture, fixtures & equipment net of accumulated depreciation of $566,477 as of December 31, 2015 and $416,210 as of December 31, 2014 | 235,935 | 88,818 | |||||||||
Patents, net of accumulated amortization of $646,388 as of December 31, 2015 and $576,960 as of December 31, 2014 | 715,540 | 530,029 | |||||||||
Other assets | 17,355 | 14,685 | |||||||||
Total assets | $ | 12,809,327 | $ | 17,477,428 | |||||||
LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||||||
Current Liabilities: | |||||||||||
Accounts payable | $ | 2,088,268 | $ | 1,453,908 | |||||||
Accrued expenses and other payables | 1,555,567 | 981,168 | |||||||||
Total current liabilities | 3,643,835 | 2,435,076 | |||||||||
Commitments and Contingencies | |||||||||||
Stockholders' Equity | |||||||||||
Series A convertible preferred stock, par value $.001, authorized 5,000,000 shares, 7,000 shares issued and outstanding, respectively | 7 | 7 | |||||||||
Common stock, par value $.001; authorized 50,000,000 shares; 21,720,497 shares issued, 963,451 shares to be issued and 21,687,164 shares outstanding as of December 31, 2015; 21,404,494 shares issued, 974,953 shares to be issued and 21,371,161 shares outstanding as of December 31, 2014 | 22,685 | 22,380 | |||||||||
Additional paid-in capital | 78,632,383 | 77,504,415 | |||||||||
Accumulated deficit | (67,434,984 | ) | (61,967,462 | ) | |||||||
Treasury stock, at cost, 33,333 shares | (911,516 | ) | (911,516 | ) | |||||||
Total Milestone Scientific Inc. stockholders' equity | 10,308,575 | 14,647,824 | |||||||||
Noncontrolling interest | (1,143,083 | ) | 394,528 | ||||||||
Total Equity | 9,165,492 | 15,042,352 | |||||||||
Total liabilities and stockholders' equity | $ | 12,809,327 | $ | 17,477,428 | |||||||
The following table includes assets to settle liabilities of the consolidated variable interest. These assets and liabilities are included in the consolidated balance sheet above. | ||||
Assets: | ||||
Cash and cash equivalents | $ | 1,222 | ||
Accounts receivable | 45,075 | |||
Inventories | 885,961 | |||
Advances on contracts | 43,524 | |||
Furniture, fixtures & equipment net of accumulated depreciation | 119,007 | |||
Liabilities: | ||||
Accounts payable | $ | 461,292 | ||
Accrued expenses and other payables | 354,361 | |||
MILESTONE SCIENTIFIC AND SUBSIDIARIES | ||||||||||||||
CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||||||||
YEARS ENDED DECEMBER 31, 2015 AND 2014 | ||||||||||||||
2015 | 2014 | |||||||||||||
Product sales, net | $ | 9,491,569 | $ | 10,333,090 | ||||||||||
Cost of products sold | 3,048,260 | 3,630,765 | ||||||||||||
Gross profit | 6,443,309 | 6,702,325 | ||||||||||||
Selling, general and administrative expenses | 9,399,201 | 7,404,258 | ||||||||||||
Research and development expenses | 100,856 | 88,243 | ||||||||||||
Total operating expenses | 9,500,057 | 7,492,501 | ||||||||||||
Loss from operations | (3,056,748 | ) | (790,176 | ) | ||||||||||
Other (expenses) | (5,347 | ) | - | |||||||||||
Interest income | 3,838 | 2,389 | ||||||||||||
Total other expenses, net | (1,509 | ) | 2,389 | |||||||||||
Loss before provision for income tax and equity in net earnings of equity investments | (3,058,257 | ) | (787,787 | ) | ||||||||||
Provision for income tax | (36,157 | ) | (9,509 | ) | ||||||||||
Loss before equity in net earnings of equity investments | (3,094,414 | ) | (797,296 | ) | ||||||||||
Loss on earnings from Milestone Medical Inc. | (2,019,211 | ) | (891,500 | ) | ||||||||||
Loss on earnings from Education Joint Venture | (7,846 | ) | (17,890 | ) | ||||||||||
Loss on earnings from China Joint Venture | (418,432 | ) | (810 | ) | ||||||||||
Net loss in equity investments | (2,445,489 | ) | (910,200 | ) | ||||||||||
Net Loss | (5,539,903 | ) | (1,707,496 | ) | ||||||||||
Net loss attributable to noncontrolling interests | 72,381 | 5,472 | ||||||||||||
Net loss attributable to Milestone Scientific Inc. | $ | (5,467,522 | ) | $ | (1,702,024 | ) | ||||||||
Net loss per share applicable to common stockholders- | ||||||||||||||
Basic | $ | (0.26 | ) | $ | (0.08 | ) | ||||||||
Diluted | $ | (0.26 | ) | $ | (0.08 | ) | ||||||||
Weighted average shares outstanding and to be issued- | ||||||||||||||
Basic | 21,429,993 | 20,063,513 | ||||||||||||
Diluted | 21,429,993 | 20,063,513 | ||||||||||||
