BMRA Biomerica, Inc.

Management Discussion

•       Consolidated net sales for Biomerica were $1,194,415 for the three months ended August 31, 2019 as compared to $1,272,870 for the same period in the previous year. This represents a decrease of $78,455, or 6.2%. The decrease was primarily due to decreased sales of approximately $91,000 in Europe which was due to lower sales to certain distributors and timing of certain orders. This was partially offset by an increase in Asia of approximately $15,000. Sales in the U.S. were down by approximately $28,000 from the prior year due to higher sales in the prior year of contract manufacturing.
•      For the three months ended August 31, 2019 as compared to August 31, 2018, cost of sales decreased as a percentage of sales from 73.5% of sales, or $935,647, to 69.2% of sales, or $827,111. Cost of sales as a percentage of sales decreased primarily due to product mix, lower material costs and capitalization of costs into inventory.
•      For the three months ended August 31, 2019 compared to 2018, selling, general and administrative costs were $506,397 as compared to $400,228, an increase of $106,169, or 26.5%. This was due to increased personnel costs in marketing and increased costs of CE mark certification and outside services in general and administrative.