Biomerica, Inc. reported its financial results for the three months ended August 31, 2024, showing a modest increase in net sales but continued losses. Net sales reached approximately $1,807,000, a 5% increase from $1,713,000 in the same period of 2023. This growth was primarily driven by a significant rise in contract manufacturing sales, which increased by $222,000, while over-the-counter sales declined by $116,000 due to timing delays and previous large orders from CVS.
Despite the increase in sales, the company's gross profit decreased to $289,000 from $412,000 year-over-year, reflecting a gross margin decline attributed to a one-time severance expense related to a workforce reduction of nearly 15% implemented in July 2024. The cost of sales rose to approximately $1,518,000, representing 84% of net sales, compared to 76% in the prior year. Selling, general, and administrative expenses also increased by 16% to approximately $1,360,000, driven by severance costs and the establishment of a new sales force.
Biomerica's net loss for the quarter was $(1,316,000), compared to $(1,132,000) in the same period last year. The comprehensive loss also widened to $(1,322,000) from $(1,126,000). The company reported a decrease in cash and cash equivalents, which fell to $2,820,000 from $4,170,000 as of May 31, 2024. Working capital also declined to approximately $4,294,000 from $5,527,000.
The company’s accumulated deficit increased to $(49,511,000) as of August 31, 2024, from $(48,195,000) at the end of the previous fiscal year. Total liabilities decreased slightly to $2,524,000 from $2,663,000, while total assets fell to $7,870,000 from $9,254,000.
In terms of strategic developments, Biomerica has initiated cost-cutting measures, including a workforce reduction, to extend its cash runway. The company also filed a shelf registration statement on September 28, 2023, allowing for the issuance of up to $20,000,000 in common shares, with a prospectus supplement filed on May 10, 2024, for up to $5,500,000 in common stock through at-the-market offerings.
Overall, while Biomerica experienced a slight increase in sales, the company continues to face challenges with profitability and cash flow management, necessitating strategic adjustments to its operations.
About BIOMERICA INC
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