Diagnostic Sales Increase Over 52%
BIOMERICA, INC. CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE GAIN (UNAUDITED) Six Months Ended Three Months Ended November 30, November 30, 2006 2005 2006 2005 ---------- ---------- ---------- ---------- Net sales $2,485,442 $4,774,074 $1,332,176 $2,423,924 Cost of sales 1,591,373 3,226,131 813,758 1,618,189 ---------- ---------- ---------- ---------- Gross profit 894,069 1,547,943 518,418 805,735 ---------- ---------- ---------- ---------- Operating Expenses: Selling, general and administrative 635,198 1,593,580 344,743 840,420 Research and development 99,513 154,581 58,512 69,804 ---------- ---------- ---------- ---------- 734,711 1,748,161 403,255 910,224 ---------- ---------- ---------- ---------- Operating gain (loss) from continuing operations 159,358 (200,218) 115,163 (104,489) ---------- ---------- ---------- ---------- Other Expense (income): Interest expense 16,242 29,503 8,740 18,490 Other income, net (35) (44,845) (25) (6,948) ---------- ---------- ---------- ---------- 16,207 (15,342) 8,715 11,542 ---------- ---------- ---------- ---------- Income (loss) from continuing operations, before minority interest in net loss of consolidated subsidiaries and income taxes 143,151 (184,876) 106,448 (116,031) Minority interest in net losses of consolidated subsidiaries -- 251,670 -- 119,434 ---------- ---------- ---------- ---------- Income from continuing operations, before income taxes 143,151 66,794 106,448 3,403 Income tax expense -- 1,600 -- 1,600 ---------- ---------- ---------- ---------- Net income from continuing operations $ 143,151 $ 65,194 $ 106,448 $ 1,803 ========== ========== ========== ========== Discontinued operations: Income from discontinued operations, net 27,869 -- -- -- ---------- ---------- ---------- ---------- Net income 171,020 65,194 106,448 1,803 Other comprehensive loss, net of tax Unrealized loss on available-for-sale securities (28,207) (4,380) (28,372) (1,022) ---------- ---------- ---------- ---------- Comprehensive gain $ 142,813 $ 60,814 $ 78,076 $ 781 ========== ========== ========== ========== Basic net income per common share: Net income from continuing operations $ .02 $ .01 $ .02 $ .00 Net income from discontinued operations .00 .00 .00 .00 ---------- ---------- ---------- ---------- Basic net income per common share $ .02 $ .01 $ .02 $ .00 ========== ========== ========== ========== Net income from continuing operations $ .02 $ .01 $ .02 $ .00 Net income from discontinued operations .00 .00 .00 .00 ---------- ---------- ---------- ---------- Diluted net income per common share $ .02 $ .01 $ .02 $ .00 ========== ========== ========== ========== Weighted average number of common and common equivalent shares: Basic 5,926,111 5,753,791 5,929,580 5,753,912 ========== ========== ========== ========== Diluted 6,379,965 6,354,655 6,364,358 6,376,094 ========== ========== ========== ========== PRO FORMA STATEMENT OF OPERATIONS BY COMPANY (UNAUDITED) Six Months Ended November 30, 2005 ----------------- Intercompany Pro-forma Actual Eliminations Lancer Biomerica -------------------------------------------------------------------------- NET SALES $ 4,774,074 -- $(2,925,038) $ 1,849,036 COST OF SALES 3,226,131 $ 15,780(1) (2,190,495) 1,051,416 -------------------------------------------------------------------------- GROSS PROFIT 1,547,943 (15,780) (734,543) 797,620 -------------------------------------------------------------------------- OPERATING EXPENSES: SELLING, GENERAL AND ADMIN 1,593,580 -- (1,029,059) 564,521 RESEARCH AND DEVELOPMENT 154,581 -- (42,470) 112,111 -------------------------------------------------------------------------- TOTAL OPERATING EXPENSES 1,748,161 -- (1,071,529) 676,632 -------------------------------------------------------------------------- OPERATING INCOME (LOSS) (200,218) (15,780) 336,986 120,988 OTHER EXPENSE (INCOME) Interest 29,503 -- (14,456) 15,047 Other expense (income) (44,845) (15,780)(2) 33,096 (27,529) -------------------------------------------------------------------------- INCOME (LOSS) FROM OPERATIONS BEFORE INTEREST IN NET INCOME (LOSS) OF CONSOLIDATED SUBSIDIARIES AND INCOME TAXES (184,876) -- 318,346 133,470 MINORITY INTEREST IN NET LOSS (INCOME) OF LANCER 251,670 (319,146)(3) -- -- 67,476 (4) -------------------------------------------------------------------------- INCOME (LOSS) FROM OPERATIONS BEFORE INCOME TAXES 66,794 (251,670) 318,346 133,470 -------------------------------------------------------------------------- INCOME TAX EXPENSE 1,600 -- (800) 800 -------------------------------------------------------------------------- NET INCOME (LOSS) $ 65,194 $ (251,670) $ 319,146 $ 132,670 ========================================================================== (1) To record the charge for rent by Lancer at the manufacturing facility in Mexico which was eliminated in consolidation. (2) To record the income from Biomerica received by Lancer for rent at the Mexico facility, which was eliminated in consolidation. (3) To de-consolidate Lancer's loss. (4) Elimination of Biomerica's portion of Lancer's operations as if the termination of the voting agreement occurred May 31, 2005. Three Months Ended November 30, 2005 ----------------- Intercompany Pro-forma Actual Eliminations Lancer Biomerica -------------------------------------------------------------------------- NET SALES $ 2,423,924 -- $(1,547,940) $ 875,984 COST OF SALES 1,618,189 7,155(1) (1,125,790) 499,554 -------------------------------------------------------------------------- GROSS PROFIT 805,735 (7,155)(1) (422,150) 376,430 -------------------------------------------------------------------------- OPERATING EXPENSES: SELLING, GENERAL AND ADMIN 840,420 -- (548,048) 292,372 RESEARCH AND DEVELOPMENT 69,804 -- (22,314) 47,490 -------------------------------------------------------------------------- TOTAL OPERATING EXPENSES 910,224 -- (570,362) 339,862 -------------------------------------------------------------------------- OPERATING INCOME (LOSS) (104,489) (7,155)(1) 148,212 36,568 OTHER EXPENSE (INCOME) Interest 18,490 -- (11,566) -- 6,924 Other expense (income) (6,948) (7,155)(2) 14,086 (17) -------------------------------------------------------------------------- 11,542 (7,155)(2) 2,520 6,907 -------------------------------------------------------------------------- INCOME (LOSS) FROM OPERATIONS BEFORE INTEREST IN NET INCOME (LOSS) OF CONSOLIDATED SUBSIDIARIES AND INCOME TAXES (116,031) -- 145,692 29,661 MINORITY INTEREST IN NET LOSS (INCOME) OF LANCER 119,434 (146,492)(3) -- -- 27,058 (4) INCOME (LOSS) FROM OPERATIONS BEFORE INCOME TAXES 3,403 (119,434) 145,692 29,661 -------------------------------------------------------------------------- INCOME TAX EXPENSE 1,600 -- (800) 800 -------------------------------------------------------------------------- NET INCOME (LOSS) $ 1,803 $ (119,434) $ 146,492 $ 28,861 ========================================================================== (1) To record the charge for rent by Lancer at the manufacturing facility in Mexico which was eliminated in consolidation. (2) To record the income from Biomerica received by Lancer for rent at the Mexico facility, which was eliminated in consolidation. (3) To de-consolidate Lancer's loss. (4) Elimination of Biomerica's portion of Lancer's operations as if the termination of the voting agreement occurred May 31, 2005.
Contact Information: Contact: Zackary Irani 949-645-2111