Search the web
Welcome, Guest
[Sign Out, My Account]
EDGAR_Online

Quotes & Info
Enter Symbol(s):
e.g. YHOO, ^DJI
Symbol Lookup | Financial Search
BMRA > SEC Filings for BMRA > Form 10-Q on 15-Oct-2013All Recent SEC Filings

Show all filings for BIOMERICA INC | Request a Trial to NEW EDGAR Online Pro

Form 10-Q for BIOMERICA INC


15-Oct-2013

Quarterly Report


Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

CERTAIN INFORMATION CONTAINED HEREIN (AS WELL AS INFORMATION INCLUDED IN ORAL STATEMENTS OR OTHER WRITTEN STATEMENTS MADE OR TO BE MADE BY BIOMERICA) CONTAINS STATEMENTS THAT ARE FORWARD-LOOKING, SUCH AS STATEMENTS RELATING TO ANTICIPATED FUTURE REVENUES OF THE COMPANY AND SUCCESS OR CURRENT PRODUCT OFFERINGS. SUCH FORWARD-LOOKING INFORMATION INVOLVES IMPORTANT RISKS AND UNCERTAINTIES THAT COULD SIGNIFICANTLY AFFECT ANTICIPATED RESULTS IN THE FUTURE, AND ACCORDINGLY, SUCH RESULTS MAY DIFFER MATERIALLY FROM THOSE EXPRESSED IN ANY FORWARD-LOOKING STATEMENTS MADE BY OR ON BEHALF OF BIOMERICA. THE POTENTIAL RISKS AND UNCERTAINTIES INCLUDE, AMONG OTHERS, FLUCTUATIONS IN THE COMPANY'S OPERATING RESULTS. THESE RISKS AND UNCERTAINTIES ALSO INCLUDE THE SUCCESS OF THE COMPANY IN RAISING NEEDED CAPITAL, THE ABILITY OF THE COMPANY TO MAINTAIN REQUIREMENTS TO BE LISTED ON NASDAQ, THE CONTINUAL DEMAND FOR THE COMPANY'S PRODUCTS, COMPETITIVE AND ECONOMIC FACTORS OF THE MARKETPLACE, AVAILABILITY OF RAW MATERIALS, HEALTH CARE REGULATIONS AND THE STATE OF THE ECONOMY. READERS ARE CAUTIONED NOT TO PLACE UNDUE RELIANCE ON THESE FORWARD-LOOKING STATEMENTS, WHICH SPEAK ONLY AS OF THE DATE HEREOF, AND THE COMPANY UNDERTAKES NO OBLIGATION TO UPDATE THESE FORWARD-LOOKING STATEMENTS.

OVERVIEW

Biomerica, Inc. and Subsidiaries ("Biomerica", the "Company", "we" or "our") develops, manufactures, and markets medical diagnostic products designed for the early detection and monitoring of chronic diseases and medical conditions. Our medical diagnostic products are sold worldwide in two markets: 1) clinical laboratories and 2) point of care (physicians' offices and over-the-counter drugstores). Our diagnostic test kits are used to analyze blood or urine from patients in the diagnosis of various diseases and other medical complications, or to measure the level of specific hormones, antibodies, antigens or other substances, which may exist in the human body in extremely small concentrations.

RESULTS OF OPERATIONS

Consolidated net sales for Biomerica were $1,013,739 for the three months ended August 31, 2013 as compared to $1,701,949 for the same period in the previous year. This represents a decrease of $688,210. The decrease was primarily due to the decrease of sales in Asia which was a result of the restructuring of the Company's distribution channel in China which is negatively impacting sales in the near term. Management believes that this new strategic focus will result in both higher sales and higher margins in the future.

For the three months ended August 31, 2013 as compared to August 31, 2012, cost of sales increased as a percentage of sales from $969,688 or 57.0% of sales, to $753,448, or 74.3% of sales. Cost of sales as a percentage of sales increased primarily due to a decrease in sales without a corresponding decrease in expenses due to certain fixed costs. Because produced units were lower, the Company did not realize the benefits of economies of scale.

For the three months ended August 31, 2013 compared to 2012, selling, general and administrative costs increased by $10,672, or 3.2%, which were primarily due to slightly higher wages, commissions and rent.

For the three months ended August 31, 2013 and 2012, research and development expenses were $91,257 as compared to $87,890, an increase of $3,277, or 3.7%. The increase was primarily due to materials purchased to be used in development of new and improvement of existing products in the gastroenterology area.

For the three months ended August 31, 2013 as compared to August 31, 2012, dividend and interest income and interest expense increased from $1,116 to $6,054, primarily due to a dividend of approximately $4,700 received from the Company's investment in one of its European distributors.

LIQUIDITY AND CAPITAL RESOURCES

As of August 31, 2013 and May 31, 2013, the Company had cash and cash equivalents in the amount of $2,085,463 and $2,469,796 and working capital of $4,568,802 and $4,793,462, respectively.

During the three months ended August 31, 2013 the Company's operations used cash of $376,271 compared to cash provided of $330,405 in the same period of the prior fiscal year. Cash used in operations in fiscal 2014 was primarily a result of net loss of $167,714 and an increase in inventory of $213,509. Inventory increased due to the purchase of raw materials as well as higher amounts of labor and overhead capitalized in inventory due to increased production costs per unit for the quarter. Cash used in investing activities in the three months ended August 31, 2013 was $8,731 compared to the three months ended August 31, 2012 of $65,186. Cash provided by financing activities in the three months ended August 31, 2013 was $760 as compared to cash used of $43,000 in the three months ended August 31, 2012.


On June 10, 2011, the Company renewed the line of credit (the "Line") with its bank which has a borrowing limit of $400,000. The Line is secured by substantially all of the Company's assets, bears interest at 1.0% plus the Wall Street Journal Prime West Coast Edition prime rate and expires February 24, 2013. The balance at August 31, 2013 and May 31, 2013 was $0.

Off Balance Sheet Arrangements - None.

CRITICAL ACCOUNTING POLICIES

The preparation of condensed consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires us to make a number of estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements. Such estimates and assumptions affect the reported amounts of revenues and expenses during the reporting period. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances. Actual results may differ materially from these estimates under different assumptions or conditions. We continue to monitor significant estimates made during the preparation of our financial statements. On an ongoing basis, we evaluate estimates and assumptions based upon historical experience and various other factors and circumstances. We believe our estimates and assumptions are reasonable in the circumstances; however, actual results may differ from these estimates under different future conditions.

We believe that the estimates and assumptions that are most important to the portrayal of our financial condition and results of operations, in that they require subjective or complex judgments, form the basis for the accounting policies deemed to be most critical to us. These relate to revenue recognition, bad debts, inventory overhead application, and inventory reserve. We believe estimates and assumptions related to these critical accounting policies are appropriate under the circumstances; however, should future events or occurrences result in unanticipated consequences, there could be a material impact on our future financial conditions or results of operations. We suggest that our significant accounting policies be read in conjunction with this Management's Discussion and Analysis of Financial Condition and Results of Operations.

  Add BMRA to Portfolio     Set Alert         Email to a Friend  
Get SEC Filings for Another Symbol: Symbol Lookup
Quotes & Info for BMRA - All Recent SEC Filings
Sign Up for a Free Trial to the NEW EDGAR Online Pro
Detailed SEC, Financial, Ownership and Offering Data on over 12,000 U.S. Public Companies.
Actionable and easy-to-use with searching, alerting, downloading and more.
Request a Trial      Sign Up Now


Copyright © 2014 Yahoo! Inc. All rights reserved. Privacy Policy - Terms of Service
SEC Filing data and information provided by EDGAR Online, Inc. (1-800-416-6651). All information provided "as is" for informational purposes only, not intended for trading purposes or advice. Neither Yahoo! nor any of independent providers is liable for any informational errors, incompleteness, or delays, or for any actions taken in reliance on information contained herein. By accessing the Yahoo! site, you agree not to redistribute the information found therein.