Pyng Medical Corp.
TSX VENTURE : PYT

Pyng Medical Corp.

May 28, 2013 19:23 ET

Pyng Medical Corp. Reports Second Quarter Fiscal 2013 Results

VANCOUVER, BRITISH COLUMBIA--(Marketwired - May 28, 2013) - Pyng Medical Corp. (TSX VENTURE:PYT) today announced financial and operating results for the three and six months ended March 31, 2013. All amounts are in Canadian dollars unless stated otherwise.

For the three months ended March 31, 2013, the Company recorded total sales of $992,342, up 22% compared with $810,391 for the same quarter last year. The increase in sales was primarily attributed to a slight sales rebound from the U.S.A. military market as well as some global sales gains with the Trauma Products (MAT and TPOD). The gross margin decreased to $412,432, from $492,751 reported a year ago. The gross margin as a percentage of revenue decreased from 61% to 42%. The significant drop in gross margin is primarily explained by one-time costs incurred to transfer FAST1 manufacturing from Canada to a new technology partner in the U.S.A . The decrease in gross margin can also be partially attributed to severance expenses paid to production staff when the manufacturing facility was closed in Canada, an increase in landed costs of raw materials to alleviate backorders and material shortages, and different labour costs than those that existed in Canada. The company is focused on cost-reduction efforts related to labour and material handling, so that it may maximize the efficiency of its relationship with technology partners going forward, and also to achieve efficiency of scale via the launch of new products. Total operating expenses went up 17% to $796,015 from $678,802 for the first quarter of last year as a result of higher general and administrative expenses primarily due to the office relocation, product development expenses related to training products, and foreign exchange loss caused by the unfavorable exchange rate fluctuation.

The Company also reported a net loss of $383,583 for this quarter, equal to a loss of $0.02 per share, compared to a net loss of $186,051 or loss of $0.02 per share one year earlier. Earnings before interest, depreciation, amortization and taxes ("EBITDA") from continuing operations was negative $222,700, a decrease of $205,516 from negative $17,184 reported for the first quarter of fiscal 2012.

For the six months period, the total sales of $2,035,650 were down 5% from $2,137,581 reported for the same period last year. The net loss increased from $80,410 a year ago to $643,626 for the first half of this year. Several main factors contributed to the large operating loss, including the lower gross margin caused by the temporary higher landed costs (primarily attributable to recovery from raw material shortages), one time manufacturing transfer costs, and higher operating expenses due to the higher product development expenses and foreign exchange loss.

As at March 31, 2013, the Company had a cash balance of $200,302, a decrease of $83,295 compared with the balance of $283,597 as at September 30, 2012. The working capital deficiency increased to $678,790 from $196,463 as at September 30, 2012, primarily due to an increase in accounts payable caused by lower gross margins and higher operating expenses as mentioned above.

The Company continues to pursue debt and/or equity financing to help fund its working capital needs. Management hopes to secure the necessary financing through the combination of new credit facilities, issuance of new equity, and debt conversion. 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.

Contact Information

  • Pyng Medical Corp.
    George Dorin
    Chief Financial Officer
    (604) 303-7964 ext. 219
    www.pyng.com