WOODSTOCK, Ga.--(BUSINESS WIRE)--Feb 16, 2021--
Sonoma Pharmaceuticals, Inc. (Nasdaq: SNOA), a global healthcare leader developing and producing stabilized hypochlorous acid (HOCl) products for a wide range of applications, including wound care, eye care, nasal care, oral care and dermatological conditions today announced financial results for its third fiscal quarter and nine months ended December 31, 2020.
“We continue to effectively execute our business plan of increasing revenue while reducing our expenses,” said Amy Trombly, CEO of Sonoma. She continued, “following our restructuring, we are now focused on investing in the future with a robust product pipeline, new partnerships and expanding our reach worldwide. Our efforts have started to show results with our first contract for the over the counter market in the U.S., and we are confident that these investments will continue to pay off in the upcoming quarters.”
In December 2020, Sonoma and Crown Laboratories, Inc. entered into an exclusive license and supply agreement for the sale of OTC HOCl products in the United States. Crown plans to sell Sonoma’s Microcyn® technology-based dermal products under their private label Sarna®. Sonoma will continue to sell its prescription strength products while Crown will distribute an OTC version available without prescription.
Also in December 2020, Sonoma launched a new dental product, Endocyn® and received its first order from Gabriel Science, LLC. Endocyn® is used to irrigate, cleanse, and debride root canal systems including the removal of foreign material and debris during root canal therapy.
Sonoma’s partner, Microderm Technologies Ltd., received import clearance for Dermodacyn® disinfectant for use as a medical device in Thailand with help from Microderm’s partner VetSynova Co. Ltd., Thailand, and it is now selling online and in pharmacies and stores in Hong Kong and Thailand. Dermodacyn® disinfecting solution is designed to be sprayed as an aerosol to disinfect areas suspected to contain bacteria and viruses that can lead to disease.
Sonoma received approval from The European Chemicals Agency (ECHA) to include its patented Microcyn® Technology as a biocide to the EU-wide list of active substances and suppliers that are used to protect humans, animals, and materials against harmful organisms like viruses and bacteria. The listing will enable Sonoma to market its products more broadly across the European Union and for new indications.
To respond to market demand for its Microcyn technology-based products, Sonoma launched Microcyn® OTC Wound and Skin Cleanser formulated for home use to help manage and cleanse wounds, minor cuts, and burns, including sunburns and other skin irritations. Microcyn® OTC Wound and Skin Cleanser is now available without prescription through Sonoma’s online store at or . Sonoma’s prescription version of Microcyn Wound and Skin Cleanser has been used in hospitals and wound care centers all over the world for over 20 years.
Revenue of $4,936,000 for the third quarter ended December 31, 2020, increased by $541,000, or 12%, from $4,395,000 for the same period last year. This increase was primarily the result of increases in revenue in Latin America, Europe and Rest of World of $305,000 and $317,000, respectively, offset by a decrease in revenue in the United States of $81,000. The decrease in U.S. revenue was primarily the result of a decrease in dermatology revenue as the result of the effects of COVID-19 on Sonoma’s business and the associated restructuring of the sales team in response to COVID-19.
For the quarter ended December 31, 2020, Sonoma reported gross profit of $1,995,000 or 40% of revenues, compared to a gross profit of $2,001,000 or 46% of revenues, for the same period in the prior year. For the quarter ended December 31, 2020, gross margins decreased by 6% when compared to the same period last year as a result of the product mix sold and more distributor sales which have a lower margin but do not result in a higher operating expense.
Total operating expenses during the third quarter of fiscal year 2020 were $2,133,000, down by $976,000, or 31%, when compared to $3,109,000 during the same period in the prior year. The decrease in total operating expenses was primarily the result of a reduction in headcount and the closure of the Petaluma facility.
Net loss from continuing operations for the quarter ended December 31, 2020, was $626,000, compared to a net loss of $1,210,000 for the quarter ended December 31, 2019. Approximately $560,000 of this quarterly net loss for the current year was the result of foreign currency transaction losses. Foreign currency transaction losses relate primarily to trade payables and receivables and intercompany transactions between subsidiaries in Mexico and Europe. These transactions are expected to be settled in the foreseeable future. EBITDAS income for the quarter ended December 31, 2020 of $35,000, was up $962,000, compared to an EBITDAS loss of $(927,000), for the same period last year.
Revenue of $16,472,000 for the nine months ended December 31, 2020, increased by $2,856,000, or 21%, from $13,616,000 for the same period last year. This increase was primarily the result of increases in revenue in Latin America of $2,944,000 and Europe and Rest of World of $1,083,000, respectively, offset by a decrease in revenue in the United States of $1,171,000. In addition, during the nine months ended December 31, 2020, sales of animal care products increased by $500,000 from the prior year. Sales of acute care products are down slightly in revenue from prior year during the nine months ended December 31, 2020.
For the nine months ended December 31, 2020, Sonoma reported gross profit of $6,753,000, or 41% of revenues, compared to a gross profit of $6,469,000 or 48% or revenues. For the nine months ended December 31, 2020, gross margins decreased by 7% as a result of a larger share of low-margin sales to Invekra based on our contract that is now ended compared to total sales.
Total operating expenses during the nine months ended December 31, 2020 of $7,388,000 decreased by $3,247,000, or 31%, compared to $10,635,000 during the same period last year. The decrease in total operating expenses was primarily the result of a reduction in headcount and the closure of the Petaluma facility.
Net loss from continuing operations for the nine months ended December 31, 2020, was $1,183,000, compared to a net loss of $1,824,000 for the same period in prior year. Approximately $980,000 of this net loss for the current year was the result of foreign currency transaction losses. Foreign currency transaction losses relate primarily to trade payables and receivables and intercompany transactions between subsidiaries in Mexico and Europe. These transactions are expected to be settled in the foreseeable future. EBITDAS loss for the nine months ended December 31, 2020 of $(152,000), was up $3,264,000, compared to an EBITDAS loss of $(3,416,000) for the same period last year.
As of December 31, 2020, Sonoma had cash and cash equivalents of $5,441,000 compared to $3,691,000 at March 31, 2020.
Sonoma Pharmaceuticals is a global healthcare leader for developing and producing stabilized hypochlorous acid (HOCl) products for a wide range of applications, including wound care, animal health care, eye care, nasal care, oral care and dermatological conditions. The company’s products reduce infections, itch, pain, scarring and harmful inflammatory responses in a safe and effective manner. In-vitro and clinical studies of hypochlorous acid (HOCl) show it to have impressive antipruritic, antimicrobial, antiviral and anti-inflammatory properties. Sonoma’s stabilized HOCl immediately relieves itch and pain, kills pathogens and breaks down biofilm, does not sting or irritate skin and oxygenates the cells in the area treated assisting the body in its natural healing process. The company’s products are sold either directly or via partners in 54 countries worldwide and the company actively seeks new distribution partners. The company’s principal office is in Woodstock, Georgia, with manufacturing operations in Latin America. European marketing and sales are headquartered in Roermond, Netherlands. More information can be found at . For partnership opportunities, please contact .
Except for historical information herein, matters set forth in this press release are forward-looking within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995, including statements about the commercial and technology progress and future financial performance of Sonoma Pharmaceuticals, Inc. and its subsidiaries (the “company”). These forward-looking statements are identified by the use of words such as “continue,” “expect,” “believe” and “expand,” among others. Forward-looking statements in this press release are subject to certain risks and uncertainties inherent in the company’s business that could cause actual results to vary, including such risks that regulatory clinical and guideline developments may change, scientific data may not be sufficient to meet regulatory standards or receipt of required regulatory clearances or approvals, clinical results may not be replicated in actual patient settings, protection offered by the company’s patents and patent applications may be challenged, invalidated or circumvented by its competitors, the available market for the company’s products will not be as large as expected, the company’s products will not be able to penetrate one or more targeted markets, revenues will not be sufficient to meet the company’s cash needs, fund further development, as well as uncertainties relative to the COVID-19 pandemic and economic development, varying product formulations and a multitude of diverse regulatory and marketing requirements in different countries and municipalities, and other risks detailed from time to time in the company’s filings with the Securities and Exchange Commission. The company disclaims any obligation to update these forward-looking statements, except as required by law.
Sonoma Pharmaceuticals™ is a trademark or registered trademark of Sonoma Pharmaceuticals, Inc. All other trademarks and service marks are the property of their respective owners.
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SOURCE: Sonoma Pharmaceuticals, Inc.
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PUB: 02/16/2021 05:30 PM/DISC: 02/16/2021 05:30 PM