Advanced Medical Institute Inc. Announces Results for the Third Quarter and Nine Months Ended March 31, 2006.SYDNEY Sydney, city, Australia Sydney, city (1991 pop. 3,097,956), capital of New South Wales, SE Australia, surrounding Port Jackson inlet on the Pacific Ocean. Sydney is Australia's largest city, chief port, and main cultural and industrial center. , Australia Australia (ôstrāl`yə), smallest continent, between the Indian and Pacific oceans. With the island state of Tasmania to the south, the continent makes up the Commonwealth of Australia, a federal parliamentary state (2005 est. pop. -- Advanced Medical Institute Inc. (Pink Sheets:AVMD AVMD Adult-Onset Vitelliform Macular Dystrophy ), a leading provider of treatment for erectile dysfunction Erectile Dysfunction Definition Erectile dysfunction (ED), formerly known as impotence, is the inability to achieve or maintain an erection long enough to engage in sexual intercourse. (ED) and premature ejaculation Premature Ejaculation Definition Premature ejaculation occurs when male sexual climax (orgasm) occurs before a man wishes it or too quickly during intercourse to satisfy his partner. (PE) treatment in Australia and New Zealand New Zealand (zē`lənd), island country (2005 est. pop. 4,035,000), 104,454 sq mi (270,534 sq km), in the S Pacific Ocean, over 1,000 mi (1,600 km) SE of Australia. The capital is Wellington; the largest city and leading port is Auckland. , announced results for the third quarter and first nine months of fiscal year 2006, ended March 31, 2006. All figures are in U.S. dollars. Revenues for the third quarter ended March 31, 2006 were approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. $9.15 million compared with revenues of approximately $3.45 million in the same period a year ago, an increase of $5.7 million or 165%. Forward sales forward sales npl → ventas fpl a término 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 $0.3 million for a total of $3.66 million during the third quarter ended March 31, 2006 compared with an increase in forward sales of $0.48 million for a total of $2.01 million as of March 31, 2005. Forward or unearned sales are reported as deferred income when sales contracts Sales Contract Contract between a seller and buyer for the sale of goods, services, or both. are executed and those sales contracts exceed three months. Costs associated with these contracts, including the delivery of three months medication medication /med·i·ca·tion/ (med?i-ka´shun) 1. medicine (1). 2. impregnation with a medicine. 3. administration of a medicine or other remedy. to patients on signing, are expensed on the date they are incurred. Deferred income from these contracts is amortized on a straight-line straight-line adj. 1. Lying in a straight line. 2. Relating to a device whose linkage produces or copies motion in straight lines. 3. 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 to 24.5% for the nine months ended March 31, 2006 versus more than 32% in the same period in 2005, reflecting the continued increase in revenues to the Company with only a moderate rise in cost of revenues. Cost of revenues did rise to approximately $2.24 million for the third quarter ended March 31, 2006 compared with cost of revenues of approximately $1.11 million in the same period in 2005. Taxes also increased as a result of the increase in revenues and resulting increase in gross profits to 5.7% compared with income tax expenses in the same period last year of 3.8%. Gross profit was approximately $6.9 million, or 75.5%, for the third quarter ended March 31, 2006 compared with gross profit of approximately $2.35 million, or 67.9%, in the same period in 2005. Net income after tax was approximately $1.21 million or $.034 per fully diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share of common stock compared with net income after tax of approximately $58 thousand or $.002 per fully diluted share of common stock in the same period in 2005. 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 nine months ended March 31, 2006 were approximately $21.76 million compared with revenues of approximately $9.55 million in the same period in 2005, an increase of approximately $12.21 million or 128%. For the nine months ended March 31, 2006, cost of revenues was approximately $5.8 million or 26.6% compared with cost of revenues of approximately $3.2 million or 33.2% in the same period in 2005, an increase in dollar terms but a reduction in percentage of revenues. Gross profit was approximately $16 million compared with gross profit of approximately $6.4 million in the same period in 2005. Net income was approximately $1.87 million or $.056 per share compared with net income of approximately $0.35 million or $.017 per share in the same period in 2005. "We began fiscal 2006 with three major goals, focusing on the PE market while retaining our position in the Australian Australian pertaining to or originating in Australia. Australian bat lyssavirus disease see Australian bat lyssavirus disease. Australian cattle dog a medium-sized, compact working dog used for control of cattle. market in the treatment of ED, continuing to research, develop and commercialize new treatment programs and technologies to expand the range of methods and delivery systems available to our customers, and to increase shareholder value through increased profitability," said Dr. Jack Vaisman, Chief Executive Officer, President and Chairman of the Board of Directors of AVMD. "We are pleased that we have made considerable progress in each area in the third quarter and nine months ended March 31, 2006. During the past nine months, our PE treatment revenues have risen 292% while our ED revenues have increased 47%," Dr. Vaisman stated. "We have also made substantial progress in our R&D efforts. Just subsequent to the end of the quarter, on April 19, 2006 we completed the acquisition of our formerly 93% subsidiary, Intelligent Medical Technologies Pty Limited. IMT IMT, n.pr See inspiratory muscle training. recently received approval from the Queensland Institute of Medical Research The Queensland Institute of Medical Research (QIMR) is one of the largest medical research institutes in the southern hemisphere, and is recognised worldwide for the quality of its research. QIMR was established in 1945 by the State Government in Queensland. to undertake human testing of its nebulizer nebulizer /neb·u·liz·er/ (neb´u-li?zer) atomizer; a device for throwing a spray. neb·u·liz·er n. device to be used to deliver medications used in the treatment of sexual dysfunction sexual dysfunction Inability to experience arousal or achieve sexual satisfaction under ordinary circumstances, as a result of psychological or physiological problems. . The testing, conducted by an independent contract research organization, is scheduled to begin in the first half of calendar 2006, and be completed in the second half of 2006. IMT also applied for several additional worldwide patents relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc its recently completed nebulizer device during the quarter just completed and IMT is close to finalizing an application to include the nebulizer on the register of medical devices with the Therapeutic Goods Administration The Therapeutic Goods Administration or TGA is the regulatory body for therapeutic goods (including medicines, medical devices, gene technology, and blood products) in Australia. (the Australian functional equivalent to the U.S. FDA FDA abbr. Food and Drug Administration FDA, n.pr See Food and Drug Administration. FDA, n.pr the abbreviation for the Food and Drug Administration. ) and the European Medicines Agency The European Medicines Agency (EMEA) is a European agency for the evaluation of medicinal products. Until 2004, the European Medicines Agency was known as The European Agency for the Evaluation of Medicinal Products. Roughly parallel to the U.S. (the European European emanating from or pertaining to Europe. European bat lyssavirus see lyssavirus. European beech tree fagussylvaticus. European blastomycosis see cryptococcosis. functional equivalent to the U.S. FDA) and hope to begin commercialization of the device later this year," Dr. Vaisman added. "We are also pleased that in addition to substantially increasing revenues, we have been able to reduce the costs of our revenues in percentage terms, thereby increasing our profit margins, while increasing the advertising, infrastructure and personnel costs needed to support our growth. We believe our results in the first three quarters of fiscal 2006 validate To prove something to be sound or logical. Also to certify conformance to a standard. Contrast with "verify," which means to prove something to be correct. For example, data entry validity checking determines whether the data make sense (numbers fall within a range, numeric data our business plan and our plans for continued growth in Australia, New Zealand and beyond. We look forward to continuing to report on our progress and believe we are well positioned to take advantage of the new opportunities in our field that we are currently developing," 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 Australasia (ôstrəlā`zhə, –shə), islands of the South Pacific, including Australia, New Zealand, New Guinea, and adjacent islands. The term is sometimes used to include all of Oceania. . The Company operates 22 treatment clinics in Australia and New Zealand, has more than 220 employees, including 51 medical personnel, and, since its inception, has provided treatment or counseling to more than 300,000 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 forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. within the meaning of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and 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
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March 31, March 31,
2006 2005
----------------- ----------------
Sales, net $9,150,703 $3,454,762
Cost of sales 2,242,042 1,107,700
----------------- ----------------
Gross profit 6,908,661 2,347,062
Selling, general and administrative
expenses 5,177,799 2,219,732
----------------- ----------------
Loss from operations 1,730,862 127,330
----------------- ----------------
Other (Income) Expense
Rental income (3,720) 52,307
Bank interest 12,706 1,812
Sundry income 10,275 0
Provision for doubtful debt
written back 0 15,035
Interest expense 7 (7,332)
----------------- ----------------
Total Other (Income) Expense 19,268 61,822
----------------- ----------------
Income/(loss) before income
taxes 1,750,130 189,152
Income Tax Expense (523,001) (131,559)
----------------- ----------------
Net income attributable to
outside equity interest (16,712) 0
----------------- ----------------
Net income (loss) $1,210,417 $57,593
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Nine Months Ended
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March 31, March 31,
2006 2005
----------------- ----------------
Sales, net $21,756,411 $9,546,871
Cost of sales 5,789,084 3,174,243
----------------- ----------------
Gross profit 15,967,327 6,372,628
Selling, general and administrative
expenses 13,285,258 5,953,662
----------------- ----------------
Loss from operations 2,682,069 418,966
----------------- ----------------
Other (Income) Expense
Rental income 11,996 60,170
Bank interest 17,123 6,067
Sundry income 10,969 0
Provision for doubtful debt
written back 0 15,035
Interest expense (1,234) (19,795)
----------------- ----------------
Total Other (Income) Expense 38,854 61,477
----------------- ----------------
Income/(loss) before income
taxes 2,720,923 480,443
Income Tax Expense (834,936) (131,559)
----------------- ----------------
Net income attributable to
outside equity interest (17,697) 0
----------------- ----------------
Net income (loss) $1,868,290 $348,884
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