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Biomerica Reports Q2 Fiscal 2009 Results

Biomerica, Inc. (Biomerica) has reported net sales of $1.12 million for the second quarter of fiscal 2009, compared with the net sales of $1.02 million in the year-ago quarter. It has also reported a net loss of $0.10 million, or $0.02 per diluted share, for the second quarter of fiscal 2009, compared with the consolidated net income of $23,878, or $0.00 per diluted share, in the year-ago quarter.

Results of operations

Consolidated net sales for Biomerica were $2,314,920 for the first six months of fiscal 2009 as compared to $2,367,599 for the same period in the previous year. This represents a decrease of $52,679, or 2.2%. For the quarter then ended net sales were $1,120,575 as compared to $1,027,534 for the same period in the previous year. This represents an increase of $93,041, or 9.1%. The increase in sales for the quarter ended November 30, 2008 as compared to 2007 was a result of increased orders from foreign distributors. This, coupled with lower sales in the first quarter ended August 31, 2008, due to lower sales of the EZ Detect product as compared to the prior year, resulted in a decrease for the six months in sales of $52,679.

For the six months ended November 30, 2008 as compared to 2007, cost of sales increased from $1,276,809, or 53.9% of sales, to $1,448,977, or 62.6% of sales. For the three month period then ended cost of sales increased from $541,188, or 52.7% of sales, to $787,761, or 70.3% of sales. The increase was due to various factors which include the decrease in percentages of labor and overhead applied to work-in-process and finished goods, write-offs of slow-moving inventory in the first and second quarters of fiscal 2009, fixed costs in relationship to sales and the product mix of sales.

For the six months ended November 30, 2008 compared to 2007, selling, general and administrative costs decreased by $32,425, or 4.3%. For the three months then ended these expenses decreased by $51,025, or 12.1%. These decreases were primarily a result of decreased bad debt expense.

For the six months ended November 30, 2008 compared to 2007, research and development decreased by $11,730, or 9.2% and for the three months increased by $11,026, or 18.9%. The decrease for the six months was primarily due to lower wages and the increase for the three months was due to increased materials, supplies and travel expenses.

For the six months ended November 30, 2008, other income of $18,999 was realized as compared to $707,754 in the prior year. For the three months then ended, other income of $6,977 was realized as compared to $8,925 in the prior fiscal year. The decrease for the six months was a result of the non-recurring sale of a marketable security that had been carried on the company’s books at zero value.

For the six months interest expense increased from $15,448 to $17,454. For the three months net interest decreased from $11,830 to $7,783 as a result of lower interest rates and debt balances.