#China #Hangzhou #Medical Devices #Fiscal 2024 #WORK Medical

WORK Medical Technology Group LTD Reports Fiscal Year 2024 Financial Results

WORK Medical Technology Group LTD, listed on Nasdaq as WOK, has released its financial results for the fiscal year ending September 30, 2024. The report showcases a challenging year for the company, largely influenced by the decreasing demand for masks as the world moves beyond the COVID-19 pandemic.

Executive Insights

Shuang Wu, the Chairman and Chief Executive Officer of WORK Medical, expressed satisfaction with the company's strategic transformation efforts despite the notable dip in overall revenue. The latest figures reflect a net revenue of $11.5 million, which marks a 15.2% decline from the previous fiscal year (2023), where revenue was reported at $13.6 million. The primary factor behind this decrease can be attributed to a steep 69.4% drop in mask sales, which plummeted to just $1.6 million.

Strategic Transformation

In response to the declining mask sales, WORK Medical has intensified its focus on the medical devices segment, achieving a 17.7% increase in sales of other medical devices to $9.4 million. This strategic pivot is crucial for long-term growth, as the company has recognized the need to diversify its offerings and reduce dependency on mask sales. Additionally, commodity trading revenue showed promise with a robust growth rate of 33.9%, contributing positively to the overall revenue stream.

WORK Medical has made significant investments in marketing, evidenced by a 31.0% increase in selling and marketing expenses. This is an essential part of their strategy to promote medical devices other than masks. Wu pointed out that these expenditures are critical investments designed to establish a more balanced revenue foundation for future success.

Financial Overview

Let's delve deeper into the financial specifics:

• - Net Revenue: $11.5 million (FY 2024) vs. $13.6 million (FY 2023)
• - Mask Sales: $1.6 million (FY 2024) vs. $5.1 million (FY 2023) - a substantial drop due to decreased demand.
• - Medical Devices (excluding masks): $9.4 million (FY 2024) vs. $8.0 million (FY 2023)
• - Commodity Trading: $0.4 million (FY 2024) vs. $0.3 million (FY 2023)

The company has also recorded an increase in operating expenses to $6.9 million, driven primarily by rising marketing costs and general administrative expenses. Comparatively, general and administrative expenses soared by 144.8% to $4.6 million, which reflects investment in professional consulting to support U.S. financial reporting standards.

Loss Report

Amid these financial challenges, WORK Medical reported a net loss of $3.5 million for the fiscal year 2024. This contrasts markedly with the modest net income of $0.06 million garnered in fiscal 2023. The basic and diluted loss per share was recorded at $0.27 per share.

Looking Ahead

Despite the struggles encountered this past fiscal year, WORK Medical is setting its sights on future growth. Plans are underway to leverage cash reserves to propel ongoing strategic transformations. Management aims to focus on innovation, international opportunities, and securing global orders to enhance shareholder value.

The company is also proud of its recent accomplishment - completing an initial public offering in August 2024, raising significant funds to support its strategic initiatives.

Conclusion

WORK Medical Technology Group LTD stands at a pivotal moment as it navigates through financial challenges while re-establishing its strategic direction following the pandemic era. By focusing on diversifying its product offerings and expanding market reach, the company hopes to stabilize its revenue streams and foster long-term growth in the evolving medical technology landscape. As they move into the following fiscal year, WORK Medical is optimistic about their path to recovery and success in the global market.