MGC Diagnostics Corporation, a global medical technology company that recently entered into an agreement to distribute SleepVirtual, yesterday reported financial results for the second quarter ended April 30, 2014.

Second Quarter Fiscal 2014 Highlights:

  • Net income for the 2014 second quarter increased 22% to $308,000, or $0.07 per diluted share, compared to net income of $252,000, or $0.06 per diluted share in the 2013 second quarter.
  • Second quarter revenue was $7.4 million, compared to $7.6 in the 2013 second quarter.
  • Sequential quarterly revenue grew 17.8% versus the fiscal 2014 first quarter.
  • International sales for the quarter increased 27% to $1.6 million, compared to last year’s period.
  • Second quarter service revenue increased 35% on a year-over-year basis.
  • The second quarter Attachment Rate of point-of-sale extended service contracts improved to 32%, compared to 27% in the 2013 second quarter.
  • Second quarter 2014 recurring revenue (service and supplies revenues) totaled $3.2 million, or 43% of total revenue.
  • The company achieved 12 second quarter competitive account conversions, resulting in $839,000 of revenue.
  • Second quarter current and long-term deferred revenue was $5.9 million.
  • Backlog at the end of the second quarter was $542,000, an increase of 46% from the first quarter of fiscal 2014.
  • Strong balance sheet with $11.4 million in cash and cash equivalents, $15.4 million of working capital, and no long-term debt.
  • At October 31, 2013, the company had federal net operating loss carry forwards of approximately $12.8 million that may be used to offset a portion of the company’s future tax liability.

Todd M. Austin, MGC Diagnostics CEO, says in a release: “Our fiscal 2014 second quarter results demonstrate significant improvement compared to our fiscal 2014 first quarter. We continue to have orders in our pipeline that have been delayed due to customer uncertainties regarding the financial impact of the Affordable Care Act, which has lengthened our sales cycle. Management anticipates MGC will close these orders during fiscal 2014 as the industry more fully understands the reimbursement issues under the Affordable Care Act.”

He adds, “We are well positioned to leverage our newly formed strategic partnership with Sleep Virtual, as we enter the adjacent cardiorespiratory diagnostic market for the detection, classification, and management of sleep apnea. This, and other strategic opportunities, allows us to strengthen our competitive and financial position.”

Mark W. Sheffert, chairman of the Board of Directors, says, “The recently appointed executive management team of CEO Todd Austin, President Matt Margolies, and COO and CFO Wes Winnekins is dedicated to leveraging the progress achieved by our employees and business partners over the past two years to drive operational and financial results with the goal of rewarding our loyal shareholders. We look forward to the opportunities ahead with great anticipation.”