The financial report for the fiscal year 2024 (June 30, 2024) of the company, PCYN, shows a net income of $0.373 million, with total revenue of $10 million and total expenses of $9.627 million. The company’s cash and cash equivalents increased by $0.10 million during the year, and its total assets increased by $5 million. The company’s convertible preferred stock and common stock outstanding as of June 30, 2024, were $10 million and $10 million, respectively. The company’s operating lease for office equipment, warehouse space, and certain equipment had a remaining lease term of 5 years as of June 30, 2024. The company’s employee stock options and restricted stock units outstanding as of June 30, 2024, were 2 million and 2 million, respectively. The company’s selling, general, and administrative expenses increased by $1 million during the year. The company’s retained earnings as of June 30, 2024, were $2 million.
Financial Performance Overview
The company’s financial report for the fiscal years 2023 and 2024 provides insights into its overall performance and outlook. The company’s sole operating subsidiary is AMERX, which markets a range of skin and wound care products under the AMERIGEL, HELIX3, AMERX, and EXTREMIT-EASE brands.
Revenue and Profit Trends
In fiscal 2024, the company’s net sales increased by approximately $297,000 or 6% compared to fiscal 2023, reaching around $4,984,000. This increase was attributed to the company’s expansion into new markets, which offset reductions in sales in its traditional markets. AMERX management expects this new market expansion to continue in fiscal 2025, along with further plans to expand its traditional market channels.
Cost of sales decreased by approximately $24,000 or 2% in fiscal 2024 compared to fiscal 2023. As a percentage of net sales, cost of sales decreased from 24% in fiscal 2023 to 22% in fiscal 2024. This led to an increase in gross profit of about $321,000 or 9%, with gross profit margins improving from 76% in fiscal 2023 to 78% in fiscal 2024.
However, operating expenses increased by approximately $456,000 in fiscal 2024 compared to fiscal 2023. This increase was primarily due to higher salaries and benefits, as well as increased marketing efforts, internet-related expenses, and shipping costs. As a result, the company reported losses from operations of approximately $232,000 in fiscal 2024, compared to losses of $97,000 in fiscal 2023.
The company also recorded approximately $170,000 in income tax expense in fiscal 2024, compared to a $15,000 income tax benefit in fiscal 2023. This led to a net loss (after dividend requirements for Preferred Shares) of approximately $313,000 in fiscal 2024, compared to a net loss of $67,000 in fiscal 2023.
Strengths and Weaknesses
One of the company’s key strengths is its diverse product portfolio, which includes the AMERIGEL, HELIX3, AMERX, and EXTREMIT-EASE brands. This product diversity allows the company to cater to a wide range of skin and wound care needs, which has helped it expand into new markets and offset declines in traditional markets.
Another strength is the company’s focus on quality and regulatory compliance. The report mentions that the company must incur expenses and devote significant time and effort to ensure compliance with complex FDA and other regulatory requirements. This attention to compliance helps maintain the company’s reputation and ensures its products can continue to be sold in the market.
However, the company faces several weaknesses and risks, including:
Outlook and Future Expectations
The company’s management is focused on further penetrating the healthcare market through various strategies, such as participating in industry trade shows, advertising in trade journals, developing new distributor relationships, and expanding into new geographical territories, including international markets.
AMERX management is also exploring new marketing methods to support its multiple product lines and distribution channels. The company is seeking to develop new markets as its existing product lines gain broader acceptance, and it continues to explore opportunities to develop new products in fiscal 2025.
The report does not indicate any significant issues related to the COVID-19 pandemic in fiscal 2024, suggesting the company has been able to navigate the challenges posed by the pandemic.
Liquidity and Capital Resources
As of June 30, 2024, the company’s principal sources of liquidity included inventories of approximately $510,000, net accounts receivable of approximately $513,000, cash of approximately $326,000, and certificates of deposit of approximately $583,000. The company had net working capital of approximately $1,597,000 at the end of fiscal 2024.
During fiscal 2024, the company’s operating activities used cash of approximately $61,000, compared to providing $145,000 in cash during fiscal 2023. This was primarily due to an increase in the valuation allowance of $209,000 in fiscal 2024, compared to a decrease in inventory in fiscal 2023.
Cash used in investing activities during fiscal 2024 was approximately $64,000, compared to $455,000 in fiscal 2023. The company did not have any cash used in financing activities in either fiscal year.
The company does not anticipate having any external cash needs in the 2025 fiscal year and believes it will continue to generate enough funds through its operations to meet its capital needs in the short and long term future.
Conclusion
The company’s financial report for fiscal 2023 and 2024 highlights both strengths and challenges in its operations. While the company has been able to grow its revenue and improve gross profit margins, it has also faced increasing operating expenses, leading to losses from operations and net losses.
The company’s diverse product portfolio and focus on quality and regulatory compliance are strengths that have helped it navigate the market. However, it faces various risks, including supply chain disruptions, competitive pressures, regulatory challenges, and dependence on key personnel and a small group of products.
Looking ahead, the company’s management is focused on further expanding its market presence, exploring new marketing strategies, and developing new products to drive future growth. The company’s strong liquidity position and ability to generate cash from operations suggest it is well-positioned to weather any near-term challenges and invest in its long-term success.