Advanced Medical Institute Inc. Announces Results for the Second Quarter and Six Months Ended December 31, 2005.SYDNEY, Australia -- Advanced Medical Institute Inc. (Pink Sheets:AVMD AVMD - Adult-Onset Vitelliform Macular Dystrophy), a leading provider of treatment for erectile dysfunction (ED) and premature ejaculation (PE) treatment in Australia and New Zealand, announced results for the second quarter and first half of fiscal year 2006, ended December 31, 2005. All figures are in U.S. dollars. Revenues for the second quarter ended December 31, 2005 were approximately $7.5 million compared with revenues of approximately $3.3 million in the same period in 2004, an increase of 129%. Forward sales or unearned revenues Unearned Revenue When an individual or company receives money for a service or product that has yet to be fulfilled.Notes: For example, prepayment on a lease contract - the revenue is a liability until it has been earned. See also: Earned Income, Passive Income increased by an additional $0.4 million for a total
of $3.36 million during the second quarter ended December 31, 2005
compared with an increase in forward sales of only $23 thousand for a
total of $1.6 million as of December 31, 2004. Forward or unearned sales
are reported as deferred income when sales contracts are executed and
those sales contracts exceed three months. Costs associated with these
contracts, including the delivery of three months medication to patients
on signing, are expensed on the date they are incurred. Deferred income
from these contracts is amortized on a straight-line basis over the term
of the contracts, often one year.While the dollar amount of cost of revenues rose, the cost of revenues as a percentage of revenues decreased dramatically to 21.8% for the six months ended December 31, 2005 versus more than 35.5 % in the same period in 2004, reflecting the increase in revenues to the Company with only a moderate rise in cost of revenues. Cost of revenues did rise to approximately $1.6 million for the second quarter ended December 31, 2005 compared with cost of revenues of approximately $1.2 million in the same period in 2004. Gross profit was approximately $5.9 million, or 78.2%, for the second quarter ended December 31, 2005 compared with gross profit of approximately $2.1 million, or 64.4%, in the same period in 2004. Net income after tax was approximately $0.84 million or $.026 per fully diluted share of common stock compared with net loss after tax of approximately ($53) thousand or ($.002) per fully diluted share of common stock in the same period in 2004. AVMD recognizes all expenses on the date they are incurred regardless of whether they relate to recognized or unearned revenue whereas unearned revenue (which is generated by current expenses) is unable to be recognized in the current period. Revenues for the six months ended December 31, 2005 were approximately $12.6 million compared with revenues of approximately $6.1 million in the same period in 2004, an increase of approximately $6.5 million or 106%. For the six months ended December 31, 2005, cost of revenues was approximately $3.5 million or 28.1% of approximately $12.6 million compared with approximately $2 million or 33% of approximately $6.1 million in the same period in 2004, an increase in dollar terms but a reduction in percentage of revenues. Gross profit was approximately $9 million or $.27 per share compared with gross profit of approximately $4.1 million or $.16 per share in the same period in 2004. Net income was approximately $.66 million or $.02 per share compared with net profit of approximately $0.24 million or $.009 per share in the same period in 2004. "We are very pleased with the continued growth in revenues from the PE market and our resulting return to profitability," said Dr. Jack Vaisman, Chief Executive Officer, President and Chairman of the Board of Directors of AVMD. "We are also pleased that we have been able to reduce the costs of our revenues in percentage terms quite substantially, thereby increasing our profit margins, while increasing the advertising, infrastructure and personnel costs needed to support our growth. We believe our results are beginning to validate our business plan and our plans for continued growth in Australia, New Zealand and beyond. We have a very strong cash position as well, with, at quarter end, almost $900 thousand in cash and considerable forward revenues. We believe we are well positioned to take advantage of the new opportunities in our field that we are currently pursuing," Dr. Vaisman continued. About the Company Advanced Medical Institute Inc., (Pink Sheets:AVMD), headquartered in Sydney Australia, is a leading provider of treatment programs for erectile dysfunction and premature ejaculation in Australasia. The Company operates 21 treatment clinics in Australia and New Zealand, has more than 195 employees, including 47 medical personnel and, since its inception, has provided treatment or counseling to more than 250,000 patients. Advanced Medical Institute and its predecessor companies began treating PE and ED patients in 1993. For more information, visit the company's website at: http://www.avmd.com.au. This news release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward- looking statements are based on current expectations or beliefs, including, but not limited to, statements concerning the company's operations and financial performance and condition. For this purpose, statements that are not statements of historical fact may be deemed to be forward-looking statements. The company cautions that these statements by their nature involve risks and uncertainties, and actual results may differ materially depending on a variety of important factors, including, among others, the impact of competitive products and pricing; changes in consumer preferences and tastes or perceptions of health-related issues; effectiveness of advertising or market-spending programs; changes in laws and regulations; fluctuations in costs of production, foreign exchange and interest rates; and other factors as those discussed in the Company's reports filed with the Securities and Exchange Commission from time to time.
STATEMENTS OF INCOME
Three Months Ended
December 31, December 31,
2005 2004
------------ ------------
TOTAL REVENUE $7,511,008 $3,278,932
COST OF REVENUE (1,636,528) (1,167,577)
------------ ------------
GROSS PROFIT 5,874,480 2,111,355
------------ ------------
SELLING, GENERAL AND
ADMINISTRATIVE EXPENSES
Employee benefits (1,202,891) (132,619)
Depreciation (61,324) (24,966)
Advertising (1,726,173) (1,027,415)
Consultancy Fees (53,121) (97,782)
Contract Work (11,203) (51,154)
Rent (306,929) (162,245)
Call Centre Charges (226,271) (74,098)
Legal expenses (179,472) (149,897)
Research and development expenses (33,124) -
Telephone expenses (134,438) (77,357)
Commissions (227,822) (51,661)
Traveling expenses (53,217) (25,144)
Other expenses from ordinary activities (373,472) (193,232)
------------ ------------
TOTAL SELLING, GENERAL AND ADMINISTRATIVE
EXPENSES (4,589,457) (2,067,570)
------------ ------------
OTHER INCOME AND (EXPENSE)
Rental income 2,783 2,136
Bank interest 1,726 2,450
Sundry income 315 -
Provision for doubtful debt written back - (121,580)
Borrowing costs 5 (2,049)
------------ ------------
TOTAL OTHER INCOME AND (EXPENSE 4,829 (119,043)
------------ ------------
NET INCOME (before income tax expense) 1,289,852 (75,258)
INCOME TAX BENEFIT (EXPENSE) (439,408) 22,577
------------ ------------
NET INCOME 850,444 (52,681)
NET INCOME (EXPENSE) ATTRIBUTABLE TO OUTSIDE
EQUITY INTERESTS (5,512) -
------------ ------------
NET INCOME ATTRIBUTABLE TO THE MEMBERS OF THE
PARENT ENTITY 844,932 (52,681)
============ ============
Net income per share, basic $0.026 ($0.002)
------------ ------------
Weighted average number of shares 32,344,672 25,000,000
------------ ------------
Six Months Ended
December 31, December 31,
2005 2004
------------ ------------
TOTAL REVENUE $12,605,708 $6,111,748
COST OF REVENUE (3,547,042) (2,017,361)
-------------------------
GROSS PROFIT 9,058,666 4,094,387
-------------------------
SELLING, GENERAL AND ADMINISTRATIVE
EXPENSES
Employee benefits (1,609,532) (265,204)
Depreciation (83,088) (44,032)
Advertising (3,289,558) (1,840,271)
Consultancy Fees (231,946) (225,392)
Contract Work (21,330) (97,087)
Rent (591,700) (324,267)
Call Centre Charges (402,922) (136,863)
Legal expenses (387,284) (207,664)
Research and development expenses (64,410) -
Telephone expenses (243,002) (213,549)
Commissions (403,920) (79,881)
Traveling expenses (106,242) (45,127)
Other expenses from ordinary activities (672,525) (368,400)
------------ ------------
TOTAL SELLING, GENERAL AND ADMINISTRATIVE
EXPENSES (8,107,459) (3,847,737)
------------ ------------
OTHER INCOME AND (EXPENSE)
Rental income 15,716 7,676
Bank interest 4,417 4,154
Sundry income 694 -
Provision for doubtful debt written back - 90,265
Borrowing costs (1,241) (12,167)
------------ ------------
TOTAL OTHER INCOME AND (EXPENSE 19,586 89,928
------------ ------------
NET INCOME (before income tax expense) 970,793 336,578
INCOME TAX BENEFIT (EXPENSE) (311,935) (100,973)
------------ ------------
NET INCOME 658,858 235,605
NET INCOME ATTRIBUTABLE TO OUTSIDE EQUITY
INTERESTS 985 -
------------ ------------
NET INCOME ATTRIBUTABLE TO THE MEMBERS OF THE
PARENT ENTITY 657,873 235,605
============ ============
Net income per share, basic $0.020 $0.009
------------ ------------
Weighted average number of shares 33,566,894 25,000,000
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