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MISONIX INCORPORATED NASDAQ: MSON. 1 COMPANY CONFIDENTIAL Except for the historical information contained herein, the matters discussed in this presentation.

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Presentation on theme: "MISONIX INCORPORATED NASDAQ: MSON. 1 COMPANY CONFIDENTIAL Except for the historical information contained herein, the matters discussed in this presentation."— Presentation transcript:

1 MISONIX INCORPORATED NASDAQ: MSON

2 1 COMPANY CONFIDENTIAL Except for the historical information contained herein, the matters discussed in this presentation contain forward-looking statements. The accuracy of these statements is subject to significant risks and uncertainties. Actual results could differ materially from those contained in the forward-looking statements. See the Companys SEC filings on Forms 10-K and 10-Q for important information about the Company and related risks. Safe Harbor Statement

3 2 COMPANY CONFIDENTIAL Why Misonix? Would you want to invest in a Company using unique ultrasound technology in these markets? Prostate Cancer Breast Cancer Kidney/Liver Cancers Liposuction Neurosurgery Lithotripsy

4 3 COMPANY CONFIDENTIAL The Misonix Story Management at Misonix has embarked on a transition strategy that today has positioned the Company for years of growth. This plan includes: Major medical device company Leveraging decades of ultrasound research and existing businesses Allocating assets to build intellectual property portfolio Assembling a diversified line of medical devices with the potential for high growth and margins Developing efficient manufacturing processes and distribution capabilities

5 4 COMPANY CONFIDENTIAL Track Record of Execution – 5 Years of Progress * First full year of management team Smart Growth FY1999FY2000* FY2004FY2005 Total Revenue $25 million$29 million$39 million$46 million Medical Device Revenue $9 million$12 million$21 million$25 million Commercialized Medical Devices 1599

6 5 COMPANY CONFIDENTIAL Track Record of Execution – 5 Years of Progress FY1999FY2000*FY2004 SGA % of Sales30% 31.5% R&D % of Sales4%5%7% Total Assets$29 million$31.2 million$34.2 million * First full year of management team Investing for the Future and To Enhance Shareholder Value FY % 8% $38.1 million

7 6 COMPANY CONFIDENTIAL Value Proposition at the Core of Transition Leadership in Ultrasound Medical Devices Unique Proprietary Products Great Demand for Products Lower Price Sensitivity Unique Production Capability

8 7 COMPANY CONFIDENTIAL Allocating Assets – Opportunistic Acquisitions* Expanding product line, manufacturing and servicing capabilities, tactical benefits and technological prowess YearBusinessStrategic Purpose 1999Focus SurgeryHIFU Technology/Multiple Applications 1999Hearing InnovationsNew Technology/Application 2000Sonora MedicalUltrasound Equipment Servicing 2000CraMar TechnologiesUltrasound Equipment Servicing 2000Sonic TechnologiesMeasurement and Testing Lab 2001Fibra SonicsNeurosurgery, Liposuction, Lithotripsy * Certain transactions were investments for less than 100% ownership

9 8 COMPANY CONFIDENTIAL Current Line of Medical Devices Unique and Important Products Product Application Sonablate 500 ® Prostate Cancer – worldwide production and sales in Europe Auto Sonix TM Cutting and Coagulation Lysonix 3000Surgical Aspirator (Liposuction) Fibra SonicsNeurosurgery SonoraProprietary replacement probes, refurbished ultrasonic imaging equipment, probe testing HisonicTinnitus and profoundly deaf

10 9 COMPANY CONFIDENTIAL 1999 – MSON contractual relationship and investment 18% fully diluted equity position in Focus Surgery, developer of HIFU technology Right to produce their products for global distribution (manufacturing margin) Right to sell the Sonablate 500® for prostate cancer in Europe (manufacturing and distribution margins) 100% rights to worldwide license to market and sell HIFU treatments in Kidney, Liver and Breast (manufacturing and distribution margins) High Intensity Focused Ultrasound (HIFU) and Focus Surgery

11 10 COMPANY CONFIDENTIAL The Sonablate 500® Non-invasive Phase I in U.S. Sales in Europe and Asia Ability to treat radiated tissue Focus Surgery Sonablate 500® - utilizing High Intensity Focused Ultrasound (HIFU) for treatment of Prostate Cancer Focus Surgery - Prostate Cancer Over 1400 successful procedures Worldwide Over 300 successful procedures in Europe 24 patients in United States under 40 patient IDE

12 11 COMPANY CONFIDENTIAL Sonablate – Liver, Kidney, Breast and Prostate Market Size – Annual Incidences U.S.World Sonablate Growth Initiatives Liver20,000500,000 Kidney32,000118,255 Breast184,0001,050,346 Prostate200,000543,000 Est. Market $100 mil. $600 mil. $750 mil.

13 12 COMPANY CONFIDENTIAL Brigham & Womens Hospital – Fibroids of Uterus EDAP – Prostate cancer Epicor – Cardio Arterial Fibrillation Lyponsonic – Body Sculpting Therus & Boston Scientific – Internal bleeding China Medical – New Public Offering of Chinese HIFU Company Misonix is developing products both internally and externally to meet these market needs Expanding Use of Ultrasound Technology… …and Expanding Valuations? Single HIFU product company acquired by St. Jude Medical for $200 mil. in 6/04 after FDA approval Single product FDA approved in 4Q04; funding to date of $80+ mil. $75 Million Valuation $25 Million Investment Nasdaq: CMED - Market capitalization of $977 mil. with revenues of $26 mil. all of which are from China.

14 13 COMPANY CONFIDENTIAL Diversification to Support Short/Long Term Goals Ultrasound equipment refurbisher (Sonora) Ultrasonic cutting & coagulating system (Auto Sonix TM ) HIFU to treat tumors (SB500®) Neurosurgery (FS-1000) Soft tissue aspirator (Lysonix) Ultrasonic liquid processor (Sonicator) Ductless fume enclosures (Aura) Endoscope Cleaning Products (Guardian) Medical Devices Laboratory & Scientific Products Immediate Cash Flow Generator Short-term Tactical Importance Future Growth Long-term Goal

15 14 COMPANY CONFIDENTIAL Investments in high growth medical areas funded from cash flow of medical device products in addition to laboratory and scientific products Make investments consistent with companys core competency Manufacturing exclusivity plus the rights to other products in exchange for investment Generate marketing/manufacturing efficiencies and revenue growth Apply R&D to develop products for other medical device companies and for ourselves Growth Strategy

16 15 COMPANY CONFIDENTIAL Investments in R&D Pave Way for Growth Digital Platform: Reduce Manufacturing Costs, Ability to Add More Features, Speed to Market, Reduce Size of Products IndicationStrategy/EventTiming Prostate CancerEuropean Distribution FDA Approval Current 2007/2008 Liver & Kidney CancersApproval in Selected International Markets 510(k) Approval June 2005 January 2006 Wound Debridement Clinicals Currently Ongoing US FDA approved 510(k) device / Canada Launch Current July 2005 First half of calendar 2006 (Est.) Bone CuttingUS FDA Approved 510(k) Device Clinicals to Start for Spine First patient treated Commercial launch Approved June 2005 January 2006 Est. end of 2006 – Beginning of 2007 BreastStart Prototype Work on Aspiration of Fibroids of the BreastJanuary 2006 Breast Fibroids and Cancer with HIFU First half of calendar 2006 Uterus – FibroidsStart Prototype Work on Aspiration of Fibroids of UterusIn research phase

17 16 COMPANY CONFIDENTIAL Assuming clinical successes, regulatory approval and commercial production Indication Market Size Per Year Bone Cutter – Laminectomy$100 million Wound Debridement$3.0 billion Hearing$100 million Prostate Cancer (US)$300 million Breast Cancer$600 million Liver & Kidney Cancer$200 million Market Opportunity for Future Products $4.30 billion Annual Market for Existing Products $.65 billion Total Annual Market for Existing/Future Products $4.95 billion

18 17 COMPANY CONFIDENTIAL Distribution Channels International Reach and Extensive Medical Community Relationships Distribution Partner CountriesMedical Community Relationships United States (5)Russia Russia - SB500/NeuroaspiratorUnited Kingdom United Kingdom – SB500Austria TurkeyBelgium Egypt - NeuroaspiratorGermany Italy - SB500/Neuroaspirator China - Neuroaspirator

19 18 COMPANY CONFIDENTIAL We Believe We Are The Best Ultrasonic Medical Device Company Balancing economic benefits of direct sales force and partnering with market leaders With more products in the market and in anticipation of others nearing approval, management has increased spending on sales and marketing activities in FY2005 above level of previous year.

20 19 COMPANY CONFIDENTIAL Michael McManus, 62, President and CEO Health care product development and marketing experience as CEO of Jamcor Pharmaceuticals and positions with Pfizer and Revlon Substantial experience as CEO of New York Bancorp Richard Zaremba, 50, CFO 20+ years of financial experience with emphasis in technology companies Dr. W. Paul Constantine, 34, SVP, Marketing, Sales and New Product Development for Medical Devices division Extensive experience in medical device marketing Dan Voic, 43, VP, R&D Background in medical engineering Management Team

21 20 COMPANY CONFIDENTIAL Financial Review

22 21 COMPANY CONFIDENTIAL Revenue ($ in millions) Fiscal Year Revenue Momentum

23 22 COMPANY CONFIDENTIAL Earnings ($ Per Share) Fiscal Year Delivering Profits Maintaining Strong Profitability While Investing in Future Growth Opportunities *Before one-time litigation reserve charge of approximately $0.06.

24 23 COMPANY CONFIDENTIAL EBITDA* ($ in millions) Actual EBITDA Positive Trend Continues Fiscal Year Healthy Operating Cash Flow From Core Businesses *Earnings Before Interest, Taxes, Depreciation and Amortization

25 24 COMPANY CONFIDENTIAL As of: December 31, 2005 Cash and Cash Equivalents$2.7 million Total Assets$35.2 million Current Liabilities$9.5 million Long Term Debt$1.1 million Total Stockholders Equity$23.8 million Current Ratio2.5 to 1.0 Balance Sheet Ability to Fund Internally or Externally for Implementation of Growth Strategy

26 25 COMPANY CONFIDENTIAL Results for Strategies Implemented Since 1999 Increased Medical Devices from 1 Product to 9 Products in 2004 Revenue up 85% since 1999 or an average annual increase of 10+%; Medical device revenue up 184% Acquired and developed internally numerous new technologies/applications; Increased spending on R&D by 247% Healthy profitability maintained despite increase in spending for future growth through medical device initiatives

27 26 COMPANY CONFIDENTIAL Focus company to be a pure medical device organization Continue to focus on delivering sustainable results in the near term Invest in programs intended to provide more profitable long term growth Focus on synergistic acquisitions and other strategic alternatives to increase shareholder value Management Commitment

28 27 COMPANY CONFIDENTIAL Investment Merits Premiere platform of medical devices using ultrasonic technology – greatest number of unique products on the market Internally and externally generated growth Ability to forge alliances with strong third-party distributors and directly market to customers Barriers to entry include years of ultrasound research and significant investment in HIFU and other technologies Healthy balance sheet and cash flow from core businesses Milestone-driven company focused on attaining growth and enhancing shareholder value

29 28 COMPANY CONFIDENTIAL


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