-
Total Revenue up 20% over March 2018
Quarter
-
Total Revenue up 14% over June 2017
Quarter
Conference Call Begins at 4:30pm EDT
Today
Sonoma Pharmaceuticals, Inc. (Nasdaq: SNOA), today announced
financial results for the first quarter FY 2019 ended June 30,
2018. Total revenue of $4.4 million for the first quarter
ended June 30, 2018, was up 14% when compared to $3.8 million for
the same period last year. Product revenues of $4.1 million for the
first quarter ended June 30, 2018, was up 14%, or $492,000, when
compared to the same period last year, with increases in the U.S.
and Latin American revenue.
“We’re pleased by our company's first quarter revenue growth and
are excited to see the initial success behind our
recently launched mail-order prescription delivery program,”
says Jim Schutz, Sonoma Pharmaceuticals CEO.
“We have a good track record of engaging doctors to support
our differentiated patient solutions in the dermatology market.
We believe our new mail-order, direct-to-patient initiative
will help to address the challenges with insurance coverage and the
use of rebates and will also
enable us to better serve our patients. We were
encouraged to see the percent of prescriptions directed to and
fulfilled by this program increase throughout the first
quarter FY2019. Also, in the quarter, we
expanded our addressable markets as the result
of new FDA approvals for our dermatology and eye care product
lines and additional market approvals and partnerships for our
products internationally.”
Business Highlights:
- Received U.S. FDA clearance for post-laser therapy gel enabling
entry into lucrative cosmetic markets.
- Received FDA clearances to add antimicrobial language to key
dermatology and eye care products.
- Relaunched Acuicyn™ eye care solution
with next-gen formulation, antimicrobial name
and enhanced packaging to more aggressively compete in
eye hygiene market.
- Launched direct-to-patient mail order program accounting for
20% of dermatology units shipped in month of June.
- Signed a license and supply agreement in June 2018 with the
largest pharmaceutical company in Brazil, NC Group/U.SK, to
commercialize seven HOCl products.
- Received approval from United Arab Emirates (UAE) Ministry of
Health & Prevention for seven products addressing the following
indications; daily eyelid hygiene, antimicrobial nasal
cleaning, antiseptic mouth and throat rinse, acne and several
anti-fungal indications.
Results for the Three Months Ended June
30, 2018Product revenues in the United States of
$2 million for the three months ended June
30, 2018, increased by $112,000, or 6%, as compared to
$1.9 million for the three months ended June
30, 2017. This increase was mostly the result of higher
sales of the company’s dermatology and animal health care products,
partly offset by a decrease in sales of our acute care
products. While the gross dermatology revenue showed strong
growth, the amount of the rebate costs and the growth in units
sold were still impacted by the reset of the health care plans
in January and the growth of high deductible health care
programs. Product revenue in Latin America for the
quarter ended June 30, 2018, was $1.1 million, up 90%
from the same period last year. This amount reflects the high
growth in the sale of products to Invekra and the
sale of products into the Latin America
market, following the completion of Sonoma’s asset
sale to Invekra in October 2016. Sonoma will
continue to supply products to
Invekra until its manufacturing facility is
operational.
Product revenue in Europe and the rest of the world of
$1 million, for the first quarter ended June 30, 2018,
decreased by $130,000, or 11%, as compared to
$1.2 million for the three months ended June
30, 2017. This decrease was the result of lower
sales in the Middle East and Singapore, partly
offset by higher sales in China,
Korea, Australia, New Zealand and India.
Gross profit for the quarter ended June 30,
2018, was $1.7 million, or 40% of total revenue, compared to a
gross profit of $1.8 million, or 46% of total
revenue in the same period in the prior
year. The decrease in gross profit, as a percentage of
revenue, was primarily due to the change in the mix as a
result of higher sales in Latin
America to Invekra at a low
profit margin.
Operating expenses minus non-cash expenses during
the first quarter of fiscal year 2019 were
$4.9 million, up $206,000 or 4%, as compared to the
same period in the prior year. This increase in
operating expenses was mostly due to higher marketing and
legal expenses in the United States, partly offset by a
decline in Latin American expenses.
Loss from operations was $3.5 million, down $50,000,
compared to $3.5 million for the same period last
year. Operating loss less non-cash expenses (EBITDA) for
the three months ended June 30, 2018, was $3.1 million, compared to
$2.8 million for the same period last year.
As of June 30, 2018, Sonoma had cash and cash
equivalents of $7.7 million, as compared to $10.1 million as
of March 31, 2018.
Conference CallSonoma’s management will hold a
conference call today to discuss first quarter fiscal year 2019
results and answer questions beginning at 4:30 p.m. EDT.
Individuals interested in participating in the conference call may
do so by dialing 877-303-7607 for domestic callers or 973-638-3203
for international callers. Those interested in listening to the
conference call live via the Internet may do so at
https://edge.media-server.com/m6/p/b5tvh3bj. Please log on
approximately 10 minutes prior to the presentation in order to
register and download the appropriate software, if any. Also,
participants can download a graphical presentation of the quarterly
results at this same site, which provides greater granular detail
in conjunction with the call.
A telephone replay will be available for seven days following
the conclusion of the call by dialing 855-859-2056 for domestic
callers, or 404-537-3406 for international callers, and entering
conference code 1292509. A webcast replay will be available on the
site at http://ir.sonomapharma.com/events.cfm for one year
following the call.
About Sonoma Pharmaceuticals, Inc.Sonoma is a
specialty pharmaceutical company that develops and markets unique
and effective solutions for the treatment of dermatological
conditions and advanced tissue care. The company’s
products, which are sold throughout the United States and
internationally, have improved outcomes for more than five million
patients globally by reducing infections, itch, pain, scarring
and harmful inflammatory responses. The company's headquarters are
in Petaluma, California, with manufacturing operations in the
United States and Latin America. European marketing and sales
are headquartered in Roermond, Netherlands. More information can be
found at www.sonomapharma.com.
Forward-Looking StatementsExcept for historical
information herein, matters set forth in this press release
are forward-looking within the meaning of the “safe harbor”
provisions of the Private Securities Litigation Reform Act of 1995,
including statements about the commercial and technology progress
and future financial performance of Sonoma Pharmaceuticals,
Inc. and its subsidiaries (the “Company”). These forward-looking
statements are identified by the use of words such as “provide,”
“entry,” and “commercialize,” among others. Forward-looking
statements in this press release are subject to certain risks and
uncertainties inherent in the Company’s business that could cause
actual results to vary, including such risks
that regulatory clinical and guideline developments may
change, scientific data may not be sufficient to meet
regulatory standards or receipt of required regulatory clearances
or approvals, clinical results may not be replicated in actual
patient settings, protection offered by the
Company’s patents and patent applications may be challenged,
invalidated or circumvented by its competitors, the available
market for the Company’s products will not be as
large as expected, the Company’s products will not be able to
penetrate one or more targeted markets, revenues will not be
sufficient to meet the Company’s cash needs, fund further
development and clinical studies, as well as uncertainties relative
to varying product formulations and a multitude of diverse
regulatory and marketing requirements in different countries and
municipalities, and other risks detailed from time to time in the
Company’s filings with the Securities and Exchange Commission. The
Company disclaims any obligation to update these forward-looking
statements, except as required by law.
Sonoma Pharmaceuticals™ is a trademark or registered trademark
of Sonoma Pharmaceuticals, Inc. All other trademarks and service
marks are the property of their respective
owners.
Media and Investor
Contact:
Sonoma Pharmaceuticals,
Inc.Bob MillerCFO(925) 787-6218
|
SONOMA PHARMACEUTICALS, INC. AND
SUBSIDIARIES |
Condensed Consolidated Balance
Sheets |
(In thousands, except share and per share amounts) |
|
|
|
June 30, |
|
|
March 31, |
|
|
|
2018 |
|
|
2018 |
|
|
|
(Unaudited) |
|
|
|
|
ASSETS |
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
|
|
Cash and
cash equivalents |
|
$ |
7,685 |
|
|
$ |
10,066 |
|
Accounts
receivable, net |
|
|
2,214 |
|
|
|
1,537 |
|
Inventories |
|
|
2,600 |
|
|
|
2,865 |
|
Prepaid
expenses and other current assets |
|
|
1,276 |
|
|
|
1,547 |
|
Current
portion of deferred consideration, net of discount |
|
|
218 |
|
|
|
239 |
|
Total
current assets |
|
|
13,993 |
|
|
|
16,254 |
|
Property
and equipment, net |
|
|
988 |
|
|
|
1,136 |
|
Deferred
consideration, net of discount, less current portion |
|
|
1,174 |
|
|
|
1,322 |
|
Other
assets |
|
|
478 |
|
|
|
494 |
|
Total
assets |
|
$ |
16,633 |
|
|
$ |
19,206 |
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
|
|
|
|
|
Current
liabilities: |
|
|
|
|
|
|
|
|
Accounts
payable |
|
$ |
1,336 |
|
|
$ |
1,272 |
|
Accrued
expenses and other current liabilities |
|
|
1,608 |
|
|
|
1,406 |
|
Deferred
revenue |
|
|
139 |
|
|
|
147 |
|
Deferred
revenue Invekra |
|
|
54 |
|
|
|
59 |
|
Current
portion of long-term debt |
|
|
194 |
|
|
|
230 |
|
Current
portion of capital leases |
|
|
151 |
|
|
|
147 |
|
Total
current liabilities |
|
|
3,482 |
|
|
|
3,261 |
|
Long-term deferred
revenue |
|
|
389 |
|
|
|
443 |
|
Long-term debt, less
current portion |
|
|
29 |
|
|
|
32 |
|
Long-term capital
leases, less current portion |
|
|
104 |
|
|
|
144 |
|
Total
liabilities |
|
|
4,004 |
|
|
|
3,880 |
|
Commitments and
Contingencies |
|
|
|
|
|
|
|
|
Stockholders’
Equity |
|
|
|
|
|
|
|
|
Convertible preferred stock, $0.0001 par value; 714,286 shares
authorized,none issued and outstanding at March 31, 2018 and March
31, 2017, respectively |
|
|
- |
|
|
|
- |
|
Common
stock, $0.0001 par value; 12,000,000 shares authorized at June 30,
2018 and March 31, 2018,6,432,749 and 6,171,736 shares
issued and outstanding at June 30, 2018 and March 31, 2018,
respectively |
|
|
1 |
|
|
|
1 |
|
Additional paid-in capital |
|
|
178,003 |
|
|
|
176,740 |
|
Accumulated deficit |
|
|
(160,898 |
) |
|
|
(157,440 |
) |
Accumulated other comprehensive loss |
|
|
(4,477 |
) |
|
|
(3,975 |
) |
Total
stockholders’ equity |
|
|
12,629 |
|
|
|
15,326 |
|
Total
liabilities and stockholders’ equity |
|
$ |
16,633 |
|
|
$ |
19,206 |
|
|
|
|
|
|
|
|
|
|
SONOMA PHARMACEUTICALS, INC. AND
SUBSIDIARIES |
Condensed Consolidated Statements of
Comprehensive Loss |
(In thousands, except per share amounts) |
(Unaudited) |
|
|
|
Three Months EndedJune
30, |
|
|
|
2018 |
|
|
2017 |
|
Revenues |
|
|
|
|
|
|
Product |
|
$ |
4,095 |
|
|
$ |
3,603 |
|
Service |
|
|
274 |
|
|
|
232 |
|
Total
revenues |
|
|
4,369 |
|
|
|
3,835 |
|
Cost of revenues |
|
|
|
|
|
|
|
|
Product |
|
|
2,424 |
|
|
|
1,913 |
|
Service |
|
|
214 |
|
|
|
160 |
|
Total
cost of revenues |
|
|
2,638 |
|
|
|
2,073 |
|
Gross profit |
|
|
1,731 |
|
|
|
1,762 |
|
Operating expenses |
|
|
|
|
|
|
|
|
Research
and development |
|
|
350 |
|
|
|
382 |
|
Selling,
general and administrative |
|
|
4,933 |
|
|
|
4,763 |
|
Total
operating expenses |
|
|
5,283 |
|
|
|
5,145 |
|
Loss from
operations |
|
|
(3,552 |
) |
|
|
(3,383 |
) |
Interest expense |
|
|
(12 |
) |
|
|
(10 |
) |
Interest income |
|
|
55 |
|
|
|
53 |
|
Other income (expense),
net |
|
|
51 |
|
|
|
(168 |
) |
Net loss |
|
|
(3,458 |
) |
|
|
(3,508 |
) |
Net loss per share:
basic and diluted |
|
$ |
(0.55 |
) |
|
$ |
(0.82 |
) |
Weighted-average number
of shares used in per common |
|
|
|
|
|
|
|
|
share
calculations: basic and diluted |
|
|
6,241 |
|
|
|
4,294 |
|
Other comprehensive
loss |
|
|
|
|
|
|
|
|
Net loss |
|
$ |
(3,458 |
) |
|
$ |
(3,508 |
) |
Foreign currency
translation adjustments |
|
|
(502 |
) |
|
|
200 |
|
Comprehensive loss |
|
$ |
(3,960 |
) |
|
$ |
(3,308 |
) |
|
|
|
|
|
|
|
|
|
SONOMA PHARMACEUTICALS, INC. AND
SUBSIDIARIES |
Reconciliation of Gaap Measures To Non-GAAP
Measures |
(In thousands) |
(Unaudited) |
|
|
|
|
|
|
Three Months EndedJune
30, |
|
|
|
2018 |
|
|
2017 |
|
(1) Loss from
operations minus non-cash expenses (EBITDA): |
|
|
|
|
|
|
|
|
GAAP loss from
operations as reported |
|
$ |
(3,552 |
) |
|
$ |
(3,383 |
) |
Non-cash
adjustments: |
|
|
|
|
|
|
|
|
Stock-based
compensation |
|
|
347 |
|
|
|
438 |
|
Depreciation and
amortization |
|
|
121 |
|
|
|
109 |
|
Non-GAAP loss from
operations minus non-cash expenses (EBITDA) |
|
$ |
(3,084 |
) |
|
$ |
(2,836 |
) |
|
|
|
|
|
|
|
|
|
(2) Net loss
minus non-cash expenses: |
|
|
|
|
|
|
|
|
GAAP net loss as
reported |
|
$ |
(3,458 |
) |
|
$ |
(3,508 |
) |
Non-cash
adjustments: |
|
|
|
|
|
|
|
|
Stock-based
compensation |
|
|
347 |
|
|
|
438 |
|
Depreciation and
amortization |
|
|
121 |
|
|
|
109 |
|
Non-GAAP net loss minus
non-cash expenses |
|
$ |
(2,990 |
) |
|
$ |
(2,961 |
) |
|
|
|
|
|
|
|
|
|
(3) Operating
expenses minus non-cash expenses |
|
|
|
|
|
|
|
|
GAAP operating expenses
as reported |
|
$ |
5,283 |
|
|
$ |
5,145 |
|
Non-cash
adjustments: |
|
|
|
|
|
|
|
|
Stock-based
compensation |
|
|
(312 |
) |
|
|
(394 |
) |
Depreciation and
amortization |
|
|
(56 |
) |
|
|
(42 |
) |
Non-GAAP operating
expenses minus non-cash expenses |
|
$ |
4,915 |
|
|
$ |
4,709 |
|
|
|
|
|
|
|
|
|
|
(1) |
Loss from operations minus
non-cash expenses (EBITDA) is a non-GAAP financial measure. The
Company defines operating loss minus non-cash expenses as GAAP
reported operating loss minus operating depreciation and
amortization, and operating stock-based compensation. The Company
uses this measure for the purpose of modifying the operating loss
to reflect direct cash related transactions during the measurement
period. |
|
|
(2) |
Net loss minus non-cash
expenses is a non-GAAP financial measure. The Company defines net
loss minus non-cash expenses as GAAP reported net loss minus
depreciation and amortization, stock-based compensation, and
non-cash foreign exchange transaction losses. The Company uses this
measure for the purpose of modifying the net loss to reflect only
those expenses to reflect direct cash transactions during the
measurement period. |
|
|
(3) |
Operating expenses minus
non-cash expenses is a non-GAAP financial measure. The Company
defines operating expenses minus non-cash expenses as GAAP reported
operating expenses minus operating depreciation and amortization,
and operating stock-based compensation. The Company uses this
measure for the purpose of identifying total operating expenses
involving cash transactions during the measurement period. |
|
SONOMA PHARMACEUTICALS, INC. AND
SUBSIDIARIES |
Product Related Revenue
Schedules |
(In thousands) |
(Unaudited) |
|
The
following table shows the Company’s product revenues by geographic
region: |
|
|
|
Three Months Ended June 30, |
|
|
|
|
|
|
|
|
|
|
2018 |
|
|
2017 |
|
|
$ Change |
|
|
% Change |
|
United States |
|
$ |
1,971 |
|
|
$ |
1,859 |
|
|
$ |
112 |
|
|
|
6 |
% |
|
Latin America |
|
|
1,079 |
|
|
|
569 |
|
|
|
510 |
|
|
|
90 |
% |
|
Europe and Rest of the
World |
|
|
1,045 |
|
|
|
1,175 |
|
|
|
(130 |
) |
|
|
(11 |
)% |
|
Total |
|
$ |
4,095 |
|
|
$ |
3,603 |
|
|
$ |
492 |
|
|
|
14 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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