SOURCE: Biomerica

January 17, 2007 08:37 ET

Biomerica Announces Second Quarter Financial Results

Diagnostic Sales Increase Over 52%

NEWPORT BEACH, CA -- (MARKET WIRE) -- January 17, 2007 -- Biomerica, Inc. (OTCBB: BMRA) today reported stand-alone results of diagnostic net sales of $1,332,176 for the second quarter fiscal 2007 ended November 30, 2006, compared to stand-alone results of diagnostic net sales of $875,984 in fiscal 2006, an increase of $456,192 or 52.1%. Stand-alone results of diagnostic net sales for the first six months of fiscal 2007 were $2,485,442 compared to stand-alone results of diagnostic net sales of $1,849,036 for the first six months in fiscal 2006, an increase of $636,406 or 34.4%.

Biomerica announced stand-alone results of diagnostic net income from continuing operations for the second quarter fiscal 2007, of $106,448 or $0.02 per share versus stand-alone results of diagnostic net income from continuing operations of $28,861 or $0.00 per share in fiscal 2006.

As disclosed in the Company's 8-K filed on December 5, 2005, the Company's subsidiary's (Lancer Orthodontics) financial statements are no longer consolidated with Biomerica's financial statements, effective December 1, 2005. Therefore consolidated net sales for the second quarter and six months of fiscal 2007 are lower (see attached financials).

"This is the eighth consecutive quarter of profitability for the Company. The growth in our diagnostic products group continues to increase," stated Zackary Irani, Biomerica CEO. "We are looking forward to accelerating the growth in sales by introducing a number of new products during this fiscal year."

About Biomerica (OTCBB: BMRA)

Biomerica, Inc. (www.biomerica.com) is a global medical technology company, based in Newport Beach, CA. The Company's diagnostics division manufactures and markets advanced diagnostic products used at home, in hospitals, and in physicians' offices for the early detection of medical conditions and diseases.

The Private Securities Litigation Reform Act of 1995 provides a "safe harbor" for forward-looking statements. Certain information included in this press release (as well as information included in oral statements or other written statements made or to be made by Biomerica) contains statements that are forward-looking; such as statements relating to intended launch dates, sales potential, significant benefits, market size, growth of business, favorable positions, expansion, expected orders, leading market positions, anticipated future revenues or production volume of the Company, success of product and new product offerings. Such forward-looking information involves important risks and uncertainties that could significantly affect anticipated results in the future, and accordingly, such results may differ materially from those expressed in any forward-looking statements made by or on behalf of Biomerica. The potential risks and uncertainties include, among others, fluctuations in the Company's operating results due to its business model and expansion plans, downturns in international and or national economies, the Company's ability to raise additional capital, the competitive environment in which the Company will be competing, and the Company's dependence on strategic relationships. The Company is under no obligation to update any forward-looking statements after the date of this release.

The following financial statements reflect the operating results of Biomerica as reported in the Company's Form 10-QSB filed on January 16, 2007. The full financial statements and management's discussion and analysis are available in the above-mentioned Form 10-QSB.

The deconsolidation of Lancer Orthodontics from Biomerica occurred December 1, 2005. Therefore, the three and six months ended November 30, 2006 include ONLY the results of operations for Biomerica diagnostics and the three and six months ended November 30, 2005 include operations of BOTH Biomerica diagnostics and Lancer Orthodontics.

                                 BIOMERICA, INC.
                     CONSOLIDATED STATEMENTS OF OPERATIONS
                       AND COMPREHENSIVE GAIN (UNAUDITED)


                               Six Months Ended       Three Months Ended
                                  November 30,            November 30,
                               2006        2005        2006        2005
                            ----------  ----------  ----------  ----------

Net sales                   $2,485,442  $4,774,074  $1,332,176  $2,423,924

   Cost of sales             1,591,373   3,226,131     813,758   1,618,189
                            ----------  ----------  ----------  ----------
   Gross profit                894,069   1,547,943     518,418     805,735
                            ----------  ----------  ----------  ----------

Operating Expenses:
   Selling, general and
    administrative             635,198   1,593,580     344,743     840,420
   Research and development     99,513     154,581      58,512      69,804
                            ----------  ----------  ----------  ----------
                               734,711   1,748,161     403,255     910,224
                            ----------  ----------  ----------  ----------

Operating gain (loss) from
 continuing operations         159,358    (200,218)    115,163    (104,489)
                            ----------  ----------  ----------  ----------

Other Expense (income):
   Interest expense             16,242      29,503       8,740      18,490
   Other income, net               (35)    (44,845)        (25)     (6,948)
                            ----------  ----------  ----------  ----------
                                16,207     (15,342)      8,715      11,542
                            ----------  ----------  ----------  ----------

     Income (loss) from
      continuing operations,
      before minority
      interest in net loss
      of consolidated
      subsidiaries and
      income taxes             143,151    (184,876)    106,448    (116,031)

Minority interest in net
 losses of consolidated
 subsidiaries                       --     251,670          --     119,434
                            ----------  ----------  ----------  ----------

Income from continuing
 operations, before income
 taxes                         143,151      66,794     106,448       3,403

Income tax expense                  --       1,600          --       1,600
                            ----------  ----------  ----------  ----------

Net income from continuing
 operations                 $  143,151  $   65,194  $  106,448  $    1,803
                            ==========  ==========  ==========  ==========

Discontinued operations:
  Income from discontinued
   operations, net              27,869          --          --          --
                            ----------  ----------  ----------  ----------
Net income                     171,020      65,194     106,448       1,803

Other comprehensive loss,
 net of tax
  Unrealized loss on
   available-for-sale
   securities                  (28,207)     (4,380)    (28,372)     (1,022)
                            ----------  ----------  ----------  ----------

Comprehensive gain          $  142,813  $   60,814  $   78,076  $      781
                            ==========  ==========  ==========  ==========

Basic net income per common
 share:

   Net income from
    continuing operations   $      .02  $      .01  $      .02  $      .00
   Net income from
    discontinued operations        .00         .00         .00         .00
                            ----------  ----------  ----------  ----------
Basic net income per common
 share                      $      .02  $      .01  $      .02  $      .00
                            ==========  ==========  ==========  ==========

   Net income from
    continuing operations   $      .02  $      .01  $      .02  $      .00
   Net income from
    discontinued operations        .00         .00         .00         .00
                            ----------  ----------  ----------  ----------

Diluted net income per
 common share               $      .02  $      .01  $      .02  $      .00
                            ==========  ==========  ==========  ==========

Weighted average number of
 common and common
 equivalent shares:
   Basic                     5,926,111   5,753,791   5,929,580   5,753,912
                            ==========  ==========  ==========  ==========
   Diluted                   6,379,965   6,354,655   6,364,358   6,376,094
                            ==========  ==========  ==========  ==========




PRO FORMA STATEMENT OF OPERATIONS BY COMPANY (UNAUDITED)

                                         Six Months Ended
                                         November 30, 2005
                                         -----------------
                                 Intercompany      Pro-forma
                     Actual      Eliminations       Lancer      Biomerica
--------------------------------------------------------------------------
NET SALES            $ 4,774,074           --     $(2,925,038) $ 1,849,036
COST OF SALES          3,226,131  $    15,780(1)   (2,190,495)   1,051,416
--------------------------------------------------------------------------
GROSS PROFIT           1,547,943      (15,780)       (734,543)     797,620
--------------------------------------------------------------------------

OPERATING EXPENSES:
SELLING, GENERAL AND
 ADMIN                 1,593,580           --      (1,029,059)     564,521
RESEARCH AND
 DEVELOPMENT             154,581           --         (42,470)     112,111
--------------------------------------------------------------------------

TOTAL OPERATING
 EXPENSES              1,748,161           --      (1,071,529)     676,632
--------------------------------------------------------------------------

  OPERATING INCOME
  (LOSS)                (200,218)     (15,780)        336,986      120,988
OTHER EXPENSE
 (INCOME)
 Interest                 29,503           --         (14,456)      15,047
 Other expense
 (income)                (44,845)     (15,780)(2)      33,096      (27,529)
--------------------------------------------------------------------------

INCOME (LOSS) FROM
 OPERATIONS BEFORE
 INTEREST IN NET
 INCOME (LOSS) OF
 CONSOLIDATED
 SUBSIDIARIES AND
 INCOME TAXES           (184,876)          --         318,346      133,470

MINORITY INTEREST IN
 NET LOSS (INCOME)
 OF LANCER               251,670     (319,146)(3)          --           --
                                       67,476 (4)
--------------------------------------------------------------------------

INCOME (LOSS) FROM
 OPERATIONS BEFORE
 INCOME TAXES             66,794     (251,670)        318,346      133,470
--------------------------------------------------------------------------

INCOME TAX EXPENSE         1,600           --            (800)         800
--------------------------------------------------------------------------

NET INCOME (LOSS)    $    65,194  $  (251,670)    $   319,146  $   132,670
==========================================================================

(1) To record the charge for rent by Lancer at the manufacturing facility
    in Mexico which was eliminated in consolidation.
(2) To record the income from Biomerica received by Lancer for rent at the
    Mexico facility, which was eliminated in consolidation.
(3) To de-consolidate Lancer's loss.
(4) Elimination of Biomerica's portion of Lancer's operations as if the
    termination of the voting agreement occurred May 31, 2005.



                                         Three Months Ended
                                          November 30, 2005
                                          -----------------

                                 Intercompany      Pro-forma
                     Actual      Eliminations       Lancer      Biomerica
--------------------------------------------------------------------------
NET SALES            $ 2,423,924           --     $(1,547,940) $   875,984
COST OF SALES          1,618,189        7,155(1)   (1,125,790)     499,554
--------------------------------------------------------------------------
GROSS PROFIT             805,735       (7,155)(1)    (422,150)     376,430
--------------------------------------------------------------------------

OPERATING EXPENSES:
SELLING, GENERAL
 AND ADMIN               840,420           --        (548,048)     292,372
RESEARCH AND
 DEVELOPMENT              69,804           --         (22,314)      47,490
--------------------------------------------------------------------------

TOTAL OPERATING
 EXPENSES                910,224           --        (570,362)     339,862
--------------------------------------------------------------------------

  OPERATING INCOME
  (LOSS)                (104,489)      (7,155)(1)     148,212       36,568

OTHER EXPENSE
 (INCOME)
 Interest                 18,490           --         (11,566)          --
                                                                     6,924
 Other expense
 (income)                 (6,948)      (7,155)(2)      14,086          (17)
--------------------------------------------------------------------------
                          11,542       (7,155)(2)       2,520        6,907
--------------------------------------------------------------------------
INCOME (LOSS) FROM
 OPERATIONS BEFORE
 INTEREST IN NET
 INCOME (LOSS) OF
 CONSOLIDATED
 SUBSIDIARIES AND
 INCOME TAXES           (116,031)          --         145,692       29,661

MINORITY INTEREST
 IN NET LOSS
 (INCOME) OF LANCER      119,434     (146,492)(3)          --           --
                                       27,058 (4)
INCOME (LOSS) FROM
 OPERATIONS BEFORE
 INCOME TAXES              3,403     (119,434)        145,692       29,661
--------------------------------------------------------------------------

INCOME TAX EXPENSE         1,600           --            (800)         800
--------------------------------------------------------------------------

NET INCOME (LOSS)    $     1,803  $  (119,434)    $   146,492  $    28,861
==========================================================================

(1) To record the charge for rent by Lancer at the manufacturing facility
    in Mexico which was eliminated in consolidation.
(2) To record the income from Biomerica received by Lancer for rent at the
    Mexico facility, which was eliminated in consolidation.
(3) To de-consolidate Lancer's loss.
(4) Elimination of Biomerica's portion of Lancer's operations as if the
    termination of the voting agreement occurred May 31, 2005.

Contact Information

  • Contact:
    Zackary Irani
    949-645-2111