MFIC Corporation Announces 2005 Third Quarter and Nine Month Results
Monday November 14, 3:10 pm ET
MFIC to Host Third Quarter 2005 Conference Call November 16, 2005 at 1:30 PM
NEWTON, Mass.--(BUSINESS WIRE)--Nov. 14, 2005--MFIC Corporation (OTCBB: MFIC - News) today reported financial results from continuing operations for its fiscal 2005 third quarter and nine months ended September 30, 2005.
For the third quarter ended September 30, 2005 the Company reported revenues from continuing operations in the amount of $2,881,267, representing a decrease of $282,518, or approximately 9%, from revenues of $3,163,785 for the quarter ended September 30, 2004. For the quarter ended September 30, 2005 the Company posted a net loss from continuing operations of $297,291, or $0.03 per diluted share as compared with net income from continuing operations in the amount of $282,050, or $.03 per diluted share for the quarter ended September 30, 2004.
For the nine month period ended September 30, 2005 revenues increased $84,167, or 1%, to $8,581,381, and the Company reported a net loss from continuing operations of $449,550, or $0.05 per diluted share, as compared with net income of $251,982, or $0.02 per diluted share from continuing operations, for the first nine months of 2004.
The backlog of orders from continuing operations as of September 30, 2005 was approximately $3,521,000. This compares with a backlog from continuing operations of approximately $2,228,000 as of September 30, 2004.
Robert P. Bruno, President & COO commented on the Company's operating performance, "The decline in comparative quarter sales resulted, in large part, from the longer lead times associated with the increased complexity of automated controls and sterilization requirements for systems ordered by our biopharma customers. In addition, the highly engineered design requirements for KITECH, a leading edge system which was the subject of our November 18, 2005 press release, resulted in low profit margins on that particular production scale system. However, the skills and capabilities developed in executing the KITECH order have positioned us to bid on many new scale-up opportunities with the appropriate profit margins."
Irwin Gruverman, CEO and Chairman stated, "The needs of our biopharma customers have caused us to acquire and build more skill and competence in advanced controls, automation and equipment functioning. This response by the Company has led to a somewhat larger and lengthier expenditure in R&D than was planned in 2004, after we divested ourselves of our unprofitable divisions and restructured our finances. We had anticipated seeing a significant increase in revenues and attainment of profitability in 2005. Integration of complex automation, controls and other elements with our basic processing systems, has lengthened the specification, quotation and delivery lead times for many systems. We view the cost of continued expenditures in the areas of product development and complementary competencies as an important investment in the Company's future that should result in significant financial benefits over the long term. An early indication is the growth of our backlog, currently approximately $4 million."
"The collaboration with UMass Lowell (UML) and its Nanomanufacturing Center of Excellence should afford development opportunities for both the Microfluidizer Processor and Chemical Reactor (MMR) for production of nanomaterials. UML's considerable talent and expertise, as well as its vigorous patent licensing activities, should assist the technologies in gaining traction in commercial applications. In essence, UML will serve as an outside R&D partner who will market any processing or product discoveries, creating equipment sales opportunities for our equipment and paying us a share of royalties received. We may also undertake a number of developmental projects, either internally or with outside partners, using our (MMR) nanoparticle production technology. We will continue with our MMR marketing initiatives utilizing varied channels and methods to attempt to reach targeted industries and product applications."
Mr. Gruverman continued, "Our objective for the remainder of 2005 and 2006 is to try to maintain a managed level of reinvestment with consideration for EBITDA performance until we start to more fully realize the financial reward of this initiative. Our current ratio remains favorable despite the disappointing revenue performance."
Third Quarter 2005 Company Highlights
During the quarter, MFIC:
Received two additional orders for the digitally controlled, Constant Pressure option providing uniform processing pressure in multiple-piston high pressure systems. This feature is expected to lengthen component life and reduce total operating costs, translating into competitive advantage and lower cost of ownership for customers.
Built and shipped to the Korean Institute of Industrial Technology an M-7250-20 production level Microfluidizer® system for biotech processes with the most advanced functionality, controls and features incorporated to date in any system delivered by the Company.
Shipped five (5) of six (6) orders for Constant Pressure equipped systems received.
Signed a Nanomaterials Research Collaboration with UMass Lowell (UML) For Use of the Company's Microfluidizer® Processor and Multiple Stream Mixer/Reactor (MMR) systems as key manufacturing platforms for high throughput nanomanufacturing at UML's Nanomanufacturing Center of Excellence.
Notice to Investors/Stockholders
MFIC will hold a conference call at 1:30 PM Eastern Time November 16, 2005 to discuss second quarter financial results. The domestic call in number is 800-683-1525. Management's discussion is expected to be no longer than 20 minutes in duration and will be followed by a question and answer period. For those who cannot listen and participate in the live event, it is anticipated that a replay of the call will be available on the Company's website: www.mficcorp.com
About MFIC CORPORATION
MFIC Corporation, through its Microfluidics Division, provides patented and proprietary high performance Microfluidizer® materials processing equipment to the biotechnology, pharmaceutical, chemical, cosmetics/personal care, and food industries. MFIC applies its 20 years of high pressure processing experience to produce the most uniform and smallest liquid and suspended solid structures available, and has provided manufacturing systems for nanoparticle products for more than 15 years. The Company is a leader in advanced materials processing equipment for laboratory, pilot scale and manufacturing applications, offering innovative technology and comprehensive solutions for nanoparticles and other materials processing and production. More than 3,000 systems are in use and afford significant competitive and economic advantages to MFIC equipment customers. For more information on MFIC and its products, please visit www.microfluidicscorp.com.
FORWARD LOOKING STATEMENT:
Management believes that this release contains forward-looking statements that are subject to certain risks and uncertainties including statements relating to the Company's plan to attain and/or increase operating profitability and/or to achieve net profitability. Such statements are based on management's current expectations and are subject to a number of factors and uncertainties that could cause actual results achieved by the Company to differ materially from those described in the forward-looking statements. The Company cautions investors that there can be no assurance that the actual results or business conditions will not differ materially from those projected or suggested in such forward-looking statements as a result of various factors, including but not limited to the following risks and uncertainties: (i) whether the performance advantages of the Company's Microfluidizer® materials processing equipment or that a commercial market for the equipment will continue to develop, (ii) whether the performance advantages of the Company's MMR nanoparticle production systems will be realized commercially, (iii) whether the Company will be able to increase its market penetration and market share, (iv) whether the timing of orders will significantly affect quarterly revenues and resulting net income results for particular quarters which may cause increased volatility in the Company's stock price, and (v) whether the Company will have access to sufficient working capital through continued and improving cash flow from sales, proceeds from its private placement equity offering, and ongoing borrowing availability, the latter being subject to the Company's ability to comply with the covenants and terms of its loan agreement with its senior lender.
MFIC CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
Three Three Nine Nine
months months months months
ended ended ended ended
September September September September
30, 30, 30, 30,
2005 2004 2005 2004
----------- ----------- ----------- -----------
Revenues $2,881,267 $3,163,785 $8,581,381 $8,497,214
----------- ----------- ----------- -----------
Total costs & expenses 3,172,232 2,870,833 9,080,605 7,798,491
----------- ----------- ----------- -----------
Interest income 7,321 5,955 18,334 18,456
----------- ----------- ----------- -----------
Interest expense (13,647) (16,857) (45,660) (53,817)
=========== =========== =========== ===========
Net (loss) income from
continuing operations
before tax benefit (297,291) 282,050 (526,550) 483,362
----------- ----------- ----------- -----------
Income tax benefit - - 77,000 -
----------- ----------- ----------- -----------
Net (loss) income from
continuing operations $(297,291) $282,050 $(449,550) $483,362
=========== =========== =========== ===========
Loss from discontinued
operations -0- -0- -0- (231,380)
----------- ----------- ----------- -----------
Net (loss) income $(297,291) $282,050 $(449,550) $251,982
=========== =========== =========== ===========
Weighted average
number of common and
common equivalent
shares outstanding:
Basic 9,783,860 9,641,705 9,723,605 9,243,901
----------- ----------- ----------- -----------
Diluted 9,783,860 10,441,116 9,723,605 10,248,393
----------- ----------- ----------- -----------
Net (loss) income per
share from continuing
operations:
Basic $(0.03) $0.03 $(0.05) $0.05
----------- ----------- ----------- -----------
Diluted $(0.03) $0.03 $(0.05) $0.05
----------- ----------- ----------- -----------
Net (loss) per share
from discontinued
operations:
Basic N/A N/A N/A $(0.03)
----------- ----------- ----------- -----------
Diluted N/A N/A N/A $(0.03)
----------- ----------- ----------- -----------
Net (loss) income per
share:
Basic $(0.03) $0.03 $(0.05) $0.03
----------- ----------- ----------- -----------
Diluted $(0.03) $0.03 $(0.05) $0.02
----------- ----------- ----------- -----------
Summary Consolidated Balance Sheet Information
Period Ended
September September
30, 30,
2005 2004
----------- -----------
Current Assets $5,977,626 $6,064,324
----------- -----------
Current Liabilities $1,246,070 $1,501,224
----------- -----------
Stockholders' Equity $4,840,508 $4,456,403
----------- -----------
Equity Per Share $0.49 $0.43
----------- -----------
Contact:
MFIC CORPORATION
Irwin Gruverman, CEO & Chairman
Robert P. Bruno, President & COO
Jack M. Swig, Investor Relations
Tel. 617-969-5452
E-mail: info@mfics.com
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Source: MFIC CORPORATION |
