VANCOUVER, BRITISH COLUMBIA--(Marketwired - Jan. 14, 2014) - Pyng Medical Corp. (TSX VENTURE:PYT) today announced financial and operating results for the fiscal year ended September 30, 2013. All amounts are in Canadian dollars unless stated otherwise.
The Company reported total sales of $5,073,964 for fiscal 2013, up $533,565 or 12% compared to $4,540,399 reported a year ago. T-POD® sales of $1,215,647, an increase of 29% over fiscal 2012, were a major contributor to this growth, as was increased demand from the USA military market combined with international sales growth. During fiscal 2013, the Company made significant efforts to expand market penetration and improve the distribution network. As a result, both USA and international sales increased by 11% and 14% respectively, compared to the sales reported in fiscal 2012. Gross margin as a percentage of sales declined from 61% for fiscal 2012 to 46% for fiscal 2013 which was driven by several factors, including a large one-time production transfer cost for FAST1®
The Company also reported a net loss of $691,979 for fiscal 2013, a decrease of $357,473, or 34% compared to a net loss of $1,049,452 last year. The reduced loss was mainly due to the net amount of $323,965 that the Company accrued for refundable investment tax credits and related interest earned based on the finalization of an appeal process with Canada Revenue Agency on qualified product development expenditures in fiscal 2000. The loss per share reduced to $0.04 for fiscal year 2013 compared to net loss of $0.07 per share for last year. Earnings before interest, depreciation, amortization and taxes ("EBITDA") from continuing operations decreased to $107,865 during the year (2% of sales) compared with EBITDA of $488,637, (11% of sales) for fiscal year 2012.
For the fourth quarter ended September 30, 2013, the Company recorded total sales of $1,743,945, up $786,913 or 82% compared to $957,032 reported for the comparative quarter of last year. Gross margin increased from $521,142 to $743,284 due to the sales increase. Net income was $129,552 in the fourth quarter of fiscal 2013, compared to a net loss of $1,042,510 for fiscal 2012, which included the net one-time write-down of $1,229,440 related to the CRIC™ product.
As of September 30, 2013, the Company had a working capital deficiency of $947,852, which worsened by $751,389, compared with the amount $196,463 as at September 30, 2012. The increase in working capital deficiency was primarily attributable to the reclassification of convertible debentures to current liabilities, which come due in August 2014, and the increased accounts payable and accrued liabilities resulting from costs associated with product development, higher production costs, office relocation, and production transfer costs incurred during the year. To improve its working capital position, the Company initiated discussions with its largest manufacturer to transfer a significant portion of past due accounts payable into a term loan. The transaction was closed in November, 2013. The Company is also actively working on financing options to fulfill its debt obligations, including issuing additional debt or equity financing to pay back or refinance the current convertible debt on maturity. There can be no assurance that these initiatives will be successful.
During fiscal 2013, the Company completed the FASTx™ re-launch project (initiated after the recall of 2010) and obtained regulatory approval for the new FASTResponder™ product from Health Canada, Europe (CE Mark), and USA (Food and Drug Administration- "FDA"). The Company also successfully completed the manufacturing outsourcing process of FAST1®. With the launch of new products, various organizational changes, and enhanced marketing strategies, management believes the Company is well-positioned to achieve a stronger performance in fiscal 2014.
Full audited financial results for fiscal year ended September 30, 2013 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.
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