Oculus Innovative Sciences announced financial results for the fourth quarter and fiscal year 2016 ended March 31, 2016.
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Total revenues of $15.1 million increased by $1.2 million, or 9%, for the fiscal year ended March 31, 2016, as compared to $13.9 million for the twelve months ended March 31, 2015.
Product revenue of $13 million increased $3.1 million, or 31%, when compared to the same period in 2015.
This increase was the result of strong product revenue growth in the United States of $2.4 million, or 121%, and Europe and rest of world of $798,000, or 27%, partially offset by a 2% decrease in Latin America due in large part to the decline in the value of the peso against the U.S. dollar.
Oculus reported gross profit of $7.2 million, or 48% of revenue, for the twelve months ended March 31, 2016, compared to a gross profit of $7.3 million, or 53% of revenue, for the same period in the prior year.
The decrease in overall gross profit was caused by a decline in license and royalty revenues, which had higher margins than the product revenue.
For the twelve months ended March 31, 2016, Oculus reported product gross profit of $6.0 million, or 46%, compared to product gross profit of $4.0 million, or 41%, for the same period in the prior year. The increase in product gross profit was primarily related to improved margins in the United States as a result of the launch of higher margin dermatology products.
Total operating expenses less non-cash expenses increased $3.0 million, or 24%, for the twelve months compared to the same period in the prior year, primarily due to higher costs for the dermatology sales force. Operating loss less non-cash expenses (EBITDAS) for the twelve months ended March 31, 2016, was $7.9 million, compared to $4.6 million for the same period last year.
The net loss for the twelve months ended March 31, 2015, includes non-cash impairment losses related to an investment in Ruthigen of $4.7 million, partly offset by a non-cash gain of $3.2 million related to a reduction in Oculus' derivative liability relating to certain warrants reported in the same period.
Total revenue was $3.5 million for the fourth quarter, a decrease of 11%, when compared to $4.0 million for the same period in 2015, due mostly to a decline in royalty and licensing fees.
Product revenues were flat when compared to the same period last year, with an increase in U.S. revenue due to strong growth in dermatology sales, offset by a decrease in revenue from Latin America due to the decline in the peso, a very robust sales quarter last year in Mexico and a warehouse consolidation by our distributor.
Product revenue in the United States was $1.4 million for the three months ended March 31, 2016, as compared to $623,000 in the quarter ended March 31, 2015. Product revenues increased $765,000 or 123%.
Sales increased primarily due to continued growth in six existing products for the treatment of atopic dermatitis, scar management, surgical procedures, an oral anti-infective for severe acne and the launch of Ceramax, which utilizes a "state of the art" skin repair technology.
In addition, sales to a new farm and ranch animal health partner increased during the quarter compared to last year.
Product revenue in Europe and the rest of the world for the quarter ended March 31, 2016, of $981,000, increased by $49,000, or 5%, as compared to the same period in the prior year, with increases in Asia and Europe, mostly offset by a decline in the Middle East.
Product revenue in Latin America for the quarter ended March 31, 2016, was $880,000, a decrease of $833,000, or 49%, when compared to the same period in the prior year.
This decrease was caused by a 22% decline in the value of the peso from the same period in prior year along with very robust sales in the March quarter of 2015. The fourth quarter of fiscal year 2015 also included stocking by Oculus' new Latin American partner Sanfer to fill their expansive pharmacy store network.
In addition, there was a decline in local currency sales in the quarter ended March 31, 2016, as a result of warehouse consolidations. During the quarter, ended March 31, 2016, Sanfer closed a number of the former More Pharma warehouses, reducing the need for new product units.
For the three months ended March 31, 2016 and 2015, product licensing fees and royalty revenues were $75,000 and $455,000, respectively. The decrease is primarily related to the lower amortization of upfront payments from the company's partner, Sanfer, in Latin America.
Oculus reported gross profit of $1.7 million, or 49% of revenue, during the three months ended March 31, 2016, compared to a gross profit of $2.0 million, or 50% of revenue when compared to the same period in the prior year. The gross profit was down slightly compared to last year due to the reduction in higher margined products, license fees and royalties revenue of $380,000, related mostly to our agreement with Sanfer.
Total operating expenses of $4.6 million for the three months ended March 31, 2016, increased by $940,000, or 26%, as compared to the same period in the prior year. Operating expenses minus non-cash expenses during the fourth quarter of fiscal year 2016 were $4.1 million, up $850,000, as compared to the same period in the prior year.
The increase in operating expenses, minus non-cash expenses, was due to mostly higher sales and marketing expenses in the United States related to the costs of Oculus' direct sales force in dermatology.
Net loss for the quarter ended March 31, 2016, was $2.9 million, an increase of $1.4 million, as compared to net loss of $1.5 million for the same period in the prior year.
As of March 31, 2016, Oculus had unrestricted cash and cash equivalents of $7.5 million, as compared with $6.1 million as of March 31, 2015. The company has no debt outstanding. ■