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Encision Reports Fourth Quarter and Fiscal Year 2012 Results

May 14, 2012

BOULDER, Colo., May 14, 2012 /PRNewswire/ — Encision Inc. (ECIA:PK), a medical device company owning patented surgical technology that is emerging as a standard of care in minimally-invasive surgery, today announced financial results for its fiscal 2012 fourth quarter and fiscal year ended March 31, 2012.

The Company posted quarterly revenue of $3.370 million and quarterly net profit of $40 thousand, or $0.01 per diluted share. These results compare to revenue of $2.921 million and net profit of $35 thousand, or $0.01 per diluted share, in the year-ago quarter. Gross margin was 57.5 percent compared to 58.7 percent in the year-ago quarter. Gross margin decreased from the year-ago due to higher labor costs on service revenue, which was offset slightly by lower unit overhead costs as a result of higher product revenue volume.

The Company posted fiscal year revenue of $12.989 million and fiscal year net loss of $531 thousand, or $(0.08) per diluted share. These results compare to revenue of $11.617 million and net profit of $5 thousand, or $0.00 per diluted share, in the year-ago fiscal year. Gross margin was 54.1 percent compared to 62.1 percent in the year-ago fiscal year. Gross margin decreased from the year-ago due to higher material costs, higher unit overhead costs as a result of lower product revenue volume, and a one-time charge of $430,000, which occurred in the second quarter ended September 30, 2011, for a voluntary recall of certain electrode product, and higher labor costs on service revenue.

“Our fourth quarter net profit was a result of increased revenue and selected expense reductions,” said Fred Perner, President and CEO. “On March 30 and April 16, 2012, we completed a private placement of 1,755,000 shares of our common stock at $1.00 a share and raised $1,755,000, before costs. The net proceeds from the sale of the shares were partially used to pay down our line of credit, and, as we announced previously, will be used for sales, marketing and quality programs and needed product development to enable us to execute our business plan and grow revenues and profitability in the future. However, in the short-term, as we aggressively implement the plan and spend resources for these initiatives, we expect that, at least for the first and second quarters of the current fiscal year, we will not be profitable.”

Encision Inc. designs, develops, manufactures and markets innovative surgical devices that allow surgeons to optimize technique and patient safety during a broad range of surgical procedures. Based in Boulder, Colorado, the Company pioneered the development of patented AEM® Laparoscopic Instruments to improve electrosurgery and reduce the chance for patient injury in minimally invasive surgery.

In accordance with the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, the Company notes that statements in this press release and elsewhere that look forward in time, which include everything other than historical information, involve risks and uncertainties that may cause actual results to differ materially from those indicated by the forward-looking statements. Factors that could cause the Company’s actual results to differ materially include, among others, its ability to increase net sales through the Company’s distribution channels, its ability to compete successfully against other manufacturers of surgical instruments, insufficient quantity of new account conversions, insufficient cash to fund operations, delay in developing new products and receiving FDA approval for such new products and other factors discussed in the Company’s filings with the Securities and Exchange Commission. Readers are encouraged to review the risk factors and other disclosures appearing in the Company’s Annual Report on Form 10-K for the year ended March 31, 2011 and subsequent filings with the Securities and Exchange Commission. We do not undertake any obligation to update publicly any forward-looking statements, whether as a result of the receipt of new information, future events, or otherwise.

CONTACT: Marcia McHaffie, Encision Inc., 303-444-2600, mmchaffie@encision.com

                                   Encision Inc.
                              Condensed Balance Sheets
                               (Amounts in thousands)
                                    (Unaudited)

                                                 March 31,      March 31,
                                                          2012              2011
                                                          ----              ----
    ASSETS
    Cash and cash
     equivalents                                          $565              $120
    Accounts receivable, net                             1,428             1,160
    Inventories, net                                     2,489             2,604
    Prepaid expenses                                        28                74
                                                           ---               ---
        Total current assets                             4,510             3,958
                                                         -----             -----
    Equipment, net                                       1,619             1,169
    Patents, net                                           273               260
    Other assets                                             7                24
                                                           ---               ---
        Total assets                                    $6,409            $5,411
                                                        ------            ------
    LIABILITIES AND
     SHAREHOLDERS' EQUITY
    Accounts payable                                    $1,040              $674
    Accrued compensation                                   283               261
    Other accrued
     liabilities                                           349               287
    Line of credit                                          --               435
        Total current
         liabilities                                     1,672             1,657
                                                         -----             -----
    Common stock and
     additional paid-in
     capital                                            21,297            19,783
    Accumulated (deficit)                              (16,560)          (16,029)
                                                       -------           -------
        Total shareholders'
         equity                                          4,737             3,754
                                                         -----             -----
        Total liabilities and
         shareholders' equity                           $6,409            $5,411
                                                        ------            ------

                                                         Encision Inc.
                                              Condensed Statements of Operations
                                     (Amounts in thousands, except per share information)
                                                          (Unaudited)

                                           Three Months Ended   Fiscal Years Ended
                                           ------------------   ------------------
                                          March 31, 2012                            March 31, 2011         March 31,
                                                                                                           2012       March 31, 2011
                                                --------------                            --------------  ---------   --------------
    Net revenue:
        Product                                         $2,873                                    $2,720     $11,226                $11,367
        Service                                            497                                       201       1,763                    250
                                                           ---                                       ---       -----                    ---
            Total revenue                                3,370                                     2,921      12,989                 11,617
    Cost of revenue:
        Product                                          1,167                                     1,156       5,148                  4,307
        Service                                            265                                        51         816                     97
                                                           ---                                       ---         ---                    ---
            Total cost of revenue                        1,432                                     1,207       5,964                  4,404
                                                         -----                                     -----       -----                  -----
    Gross profit                                         1,938                                     1,714       7,025                  7,213
                                                         -----                                     -----       -----                  -----
    Operating expenses:
        Sales and marketing                              1,020                                     1,017       4,329                  4,242
        General and administrative                         531                                       324       1,819                  1,457
        Research and development                           338                                       328       1,349                  1,464
                                                           ---                                       ---       -----                  -----
            Total operating expenses                     1,889                                     1,669       7,497                  7,163
                                                         -----                                     -----       -----                  -----
    Operating income (loss)                                 49                                        45        (472)                    50
    Interest and other income
     (expense), net                                         (9)                                      (10)        (59)                   (45)
                                                           ---                                       ---         ---                    ---
    Income (loss) before
     provision for income taxes                             40                                        35        (531)                     5
    Provision for income taxes                              --                                        --          --                     --
                                                           ---                                       ---         ---                    ---
    Net income (loss)                                      $40                                       $35       $(531)                    $5
                                                           ===                                       ===       =====                    ===
    Net income (loss) per
     share-basic and diluted                             $0.01                                     $0.01      $(0.08)                 $0.00
    Basic weighted average
     number of shares                                    6,488                                     6,455       6,463                  6,455
    Diluted weighted average
     number of shares                                    6,490                                     6,464       6,463                  6,465

SOURCE Encision Inc.


Source: PR Newswire