MISSISSAUGA, Ontario--(BUSINESS WIRE)--Aug. 28, 2018--
Covalon Technologies Ltd. (the "Company" or "Covalon") (TSXV: COV;
OTCQX: CVALF), an advanced medical technologies company, is pleased to
announce today another milestone quarterly profit of $2.2 million on
excellent third quarter financial results.
Third Quarter Summary Financial Results
Revenue for the three months ended June 30, 2018 was $7,933,676, up
Gross margin for the quarter ended June 30, 2018 was 82%, compared to
79% last year.
Net income for the quarter was $2,198,467 or $0.10 per share, compared
to $541,346 or $0.03 per share last year.
Current cash balance in excess of $5 million and a new $17 million
Mr. Brian Pedlar, Covalon President and CEO, stated:
“Our third quarter financial results are very strong and are in line
with our expectations. We have continued our solid financial growth this
past quarter, with revenue of $7.9 million and profits of $2.2 million,
which are another milestone for Covalon. We have worked hard to
successfully deliver revenue from different Covalon product offerings as
well as from different geographical markets, which clearly demonstrates
that our business model is diverse and our strategy of operating in
complementary markets creates a stronger company.
“As this quarter’s financial performance demonstrates, we are not solely
dependent on one market for our growth and prosperity. Licensing and
royalty revenue for the quarter was very strong and reflects new and
existing contracts we have undertaken with customers in a number of
medical verticals. We have a very strong team focused on developing
innovate products for large medical companies under development
agreements, that create stable ongoing revenue from development
services, license fees and royalties. We recently announced the receipt
of the first license fee of US$3.5 million under a new license
agreement, which will deliver additional license fees of US$5 million,
fees for development services and equipment and ongoing royalties on
worldwide product sales, once they are cleared for sale.
“Our revenue in the United States has increased significantly this
quarter compared to last year. Revenue continues to grow from our IV
Clear vascular access dressings and our ColActive Plus advanced wound
care dressings in the United States where we currently operate without
our own dedicated sales force – a situation the Company is working to
address through acquiring our own sales team.
“We continue to deliver products under the competitive contracts
previously announced in the Middle East. Revenue fluctuates under these
contracts as our products are delivered to the institutions funded by
the ministries of health that participated in the competitive contracts.
Management of the Company believes, based on its ongoing communications
with the Company’s partner in Saudi Arabia, that the reported dispute
between the Government of Canada and the Government of Saudi Arabia will
not have a material negative impact on Covalon’s business in the Middle
“I am encouraged by our continued progress in Europe and Latin America.
We are receiving very positive feedback on our CovaWound line of
advanced wound care products from hospitals and clinicians in the United
Kingdom, as more hospitals and clinical commissioning groups purchase
and use our products. We are also seeing strong interest by Latin
American clinicians in the benefits of our full range of products, as we
begin to secure business under small competitive contracts in several
countries in the region. Over the coming months we anticipate continued
steady growth in Latin America as more countries like Mexico, Argentina
and Chile contribute to our revenue growth. We are also making great
progress in advancing our strategy to grow Covalon through acquisitions
that will provide us a direct sales force to expand our business in the
United States, in addition to our current internal efforts.
“We continue to prudently invest in new product development,
establishing distribution channels in new markets, and expand our
already talented Covalon team. A number of the new products we
introduced last year in our expanded CovaWound advanced wound care line
have begun to contribute to our revenue this year to date. We have
prudently begun to increase headcount in selected areas of operations,
sales and marketing and research and development compared to last year
at this time.
“Our balance sheet remains very strong and we currently have over $5
million of cash in the bank. We recently announced that Covalon entered
into a new acquisition and operating banking credit facility with HSBC
Bank Canada that provides the Company with up to $17 million of new
credit facilities that will allow Covalon to fund its acquisitions
plans, which are proceeding well, in addition to its inventory and
working capital needs as the Company grows. We believe this banking
agreement is in the best interests of shareholders as it provides growth
capital to Covalon without the need for the dilution resulting from the
issuance of shares.”
Conference Call Scheduled
A conference call to discuss Covalon’s financial results will be held
Tuesday August 28, 2018 at 9:00 a.m. EST. To participate in the call
North American Toll-Free:
Conference ID Code: 1897026
A recording of the call will be available by calling 855.859.2056 or
404.537.3406 and entering the conference ID code 1897026 from August
28th 2018 12:00pm EST to September 4th 2018 11:59pm EST.
Covalon Technologies Ltd. researches, develops and commercializes new
healthcare technologies that help save lives around the world. Covalon's
patented technologies, products and services address the advanced
healthcare needs of medical device companies, healthcare providers and
individual consumers. Covalon's technologies are used to prevent, detect
and manage medical conditions in specialty areas such as wound care,
tissue repair, infection control, disease management, medical device
coatings and biocompatibility. To learn more about Covalon, visit our
website at www.covalon.com
Neither TSX Venture Exchange nor its Regulation Services Provider (as
that term is defined in the policies of the TSX Venture Exchange)
accepts responsibility for the adequacy or accuracy of this release.
This news release contains forward-looking statements which reflect
the Company's current expectations regarding future events. The
forward-looking statements are often, but not always, identified by the
use of words such as "seek", "anticipate", "plan, "estimate", "expect",
"intend" and statements that an event or result "may", "will", "should",
"could" or "might" occur or be achieved and other similar expressions.
These forward-looking statements involve risk and uncertainties,
including the difficulty in predicting product approvals, acceptance of
and demands for new products, the impact of the products and pricing
strategies of competitors, delays in developing and launching new
products, the regulatory environment, fluctuations in operating results
and other risks, any of which could cause results, performance, or
achievements to differ materially from the results discussed or implied
in the forward-looking statements. Many risks are inherent in the
industry; others are more specific to the Company. Investors should
consult the Company's ongoing quarterly filings for additional
information on risks and uncertainties relating to these forward-looking
statements. Investors should not place undue reliance on any
forward-looking statements. The Company assumes no obligation to update
or alter any forward-looking statements whether as a result of new
information, further events or otherwise.
View source version on businesswire.com: https://www.businesswire.com/news/home/20180828005403/en/
Source: Covalon Technologies Ltd.
Covalon Technologies Ltd.
Brian Pedlar, 905-568-8400 x 233
Covalon Technologies Ltd.