VANCOUVER, BRITISH COLUMBIA--(Marketwired - Aug 27, 2013) - Pyng Medical Corp. (TSX VENTURE:PYT) today announced financial and operating results for the three and nine months ended June 30, 2013. All amounts are in Canadian dollars unless stated otherwise.
For the three months ended June 30, 2013, the Company recorded total sales of $1,294,369, down 10% compared with $1,445,785 reported a year ago. The sales decline was primarily attributed to some backorders in manufacturing, thus causing the Company to be unable to ship all orders by quarter-end. Had these backorders shipped, sales would have increased approximately $468,534 for an approximate quarterly total of $1.763M, thus an increase of 22% compared with one year ago. Gross margin as a percentage of revenue decreased to 51%, from 65% for the same quarter of last year. The decrease was primarily due to higher production costs and increased shipping costs to alleviate backorders and material shortages. The Company has initiated a shipping cost reduction project, and manufacturing efficiency projects, to address these issues going forward. Total operating expenses decreased 4% to $838,859 from $874,517 for the third quarter of last year, as a result of lower sales, marketing, and general/administrative expenses, partially offset by higher interest costs and foreign exchange loss.
The Company also reported a net loss of $177,905 for this quarter, equal to a loss of $0.01 per share, compared to a net income of $73,468 or earnings of $0.004 per share one year earlier. Earnings before interest, depreciation, amortization and taxes ("EBITDA") from continuing operations was negative $4,053, a decrease of $240,824 from the positive $236,771 reported for the third quarter of fiscal 2012. Note that the net loss would have been net profit, if all backordered items had shipped.
For the nine-month period reported, total sales of $3,330,019 were reported, down 7% from $3,583,366 for the same period last year. With shipment of backorders at end of Q3, total sales for the nine-month period would have increased 6% versus a decrease of 7%. Net loss expanded from $6,944 a year ago to $821,968 for the nine-months ended June 3, 2013. This large increase in operating loss was attributable to numerous factors, including higher production costs, increased shipping costs caused by backorders and material shortages, one time manufacturing transfer costs, severance expenses for closing the Canadian production facilities, office relocation, higher product development expenses, higher interest expense and unfavorable foreign exchange fluctuation.
As at June 30, 2013, the Company had a cash balance of $204,344, a decrease of $79,253 compared with the balance of $283,597 as at September 30, 2012. The working capital deficiency increased to $787,559 from $196,463 as at September 30, 2012, primarily due to an increase in accounts payable related to development costs for FASTResponder, higher production costs and operating expenses, as mentioned above. Total current assets increased to $1,531,624 and total assets to $6,394,970 compared to $1,183,799 and $6,212,513 respectively as at September 30, 2012.
Mark Hodge, President & CEO, stated, "After making a significant investment in developing new products, obtaining regulatory approvals, and initiating manufacturing for these products, the Company is well positioned to 'turn the corner' as we move into Q4, and begin to reap the rewards of the value that has been created."
The Company continues to pursue debt and equity financing to help fund its working capital needs. While management hopes to secure the necessary financing by issuance of debt and equity instruments, there can be no assurance that these initiatives will be successful.
Full audited financial results for fiscal year ended September 30, 2012 are available on SEDAR at www.sedar.com.
About Pyng Medical Corp.
Pyng Medical Corp. commercializes award-winning trauma and resuscitation products for front-line critical care personnel. Pyng's expanded product portfolio includes a variety of innovative, lifesaving tools. With growing markets in North America, Europe and Asia, Pyng offers user-preferred medical devices for use by hospital staff, emergency medical services and military forces worldwide.
Safe Harbour Statement; Forward-Looking Statements: This release may contain forward-looking statements based on management's expectations, estimates and projections. All statements that address expectations or projections about the future, including statements about the Company's strategy for growth, product development, market position, expected expenditures and financial results are forward-looking statements. Some of the forward-looking statements may be identified by words like "expects", "anticipates", "plans", "intends", "projects", "indicates", and similar expressions. These statements are not guarantees of future performance and involve a number of risks, uncertainties and assumptions. Many factors, including those discussed more fully elsewhere in this release and in documents which may be filed with the British Columbia Securities Commission, the Alberta Securities Commission, the Ontario Securities Commission, the TSX Venture Exchange, as well as other USA Commissions, could cause results to differ materially from those stated. These factors include, but are not limited to changes in the laws, regulations, policies and economic conditions, including inflation, interest and foreign currency exchange rates, of countries in which the Company does business; competitive pressures; successful integration of structural changes, including restructuring plans, acquisitions, divestitures and alliances; cost of raw material, research and development of new products, including regulatory approval and market acceptance; and seasonality of sales in some products.
Neither the TSX Venture Exchange nor its Regulatory Service Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.