Milestone Scientific Inc. Announces Third Quarter Results
LIVINGSTON, N.J., Nov. 4 /PRNewswire-FirstCall/ -- Milestone Scientific Inc. , which develops, manufactures, and markets computer controlled local anesthetic delivery systems, today announced its results for the second quarter and first half of 2004.
Net sales for the three months ended September 30, 2004 increased 14.8% to $1,110,043, compared with $966,591 in the third quarter of 2003. Contributing to this increase was a 15.1% increase in domestic revenues and a 14.2% increase in international sales. Domestic sales growth was again led by a 22.8% increase in disposable handpiece revenues.
Net sales for the nine months ended September 30, 2004 rose 9.4% to $3,392,288, versus $3,101,281 in the corresponding period of the previous year. Domestic revenues increased 12.2% in the first nine months of 2004, while international sales increased 3.7% from the prior-year period. Domestic sales growth was led by a 25% increase in handpiece revenues during the first nine months of 2004.
"Continued growth in all sectors of our business is a very encouraging sign for the future," commented Stuart Wildhorn, President of Milestone Scientific Inc. "In particular, the growth in our recurring revenue stream from the sale of single-patient use handpieces reflects not only greater utilization by dentists who own CompuDent(TM) systems, but also an increase in the installed base of users. During the past several months, we have geared up for a more intensive sales and marketing effort within the domestic dental industry through the expansion and training of new independent field sales representatives and sales support specialists, and the addition of an internal direct sales staff. We expect the resultant increase in access to dentists to allow domestic sales of CompuDent systems and The Wand(TM) handpieces to accelerate in coming quarters."
"Our International Business continues to grow as well, with increases in both system and handpiece sales," continued Wildhorn. "The 14.2% increase in the third quarter, which is traditionally a very slow selling season, was primarily the result of better and more focused sales management in key foreign markets."
"Following the end of our third quarter, we announced the successful completion of clinical studies involving the use of our CompuFlo(TM) pressure/force computer controlled anesthetic delivery system in the identification of the epidural space," stated Leonard Osser, Chairman and Chief Executive Officer of the Company. "In order to minimize the risks of serious medical complications, it is critically important to effectively identify the epidural space when delivering local anesthesia during childbirth procedures and in the course of pain management therapy. In the clinical studies, which were conducted at the University of Texas Health Science Center at Houston, our CompuFlo system clearly identified the epidural space in every patient involved."
"Currently, almost one-third of the more than 4.5 million women who give birth to children in the U.S. each year refuse local anesthesia due to the risk of serious complications," continued Osser. "We believe our CompuFlo technology has the potential to target a large market opportunity by greatly improving the safety of epidural injection procedures. Additional clinical studies are underway, and we expect CompuFlo to be submitted to the FDA for marketing approval some time next year."
Selling, General and Administrative expenses for the three months ended September 30, 2004 totaled $1,608,176, compared with $891,322 in the prior-year quarter. The 80% increase in SG&A expenses was primarily related to a planned expansion in the Company's domestic sales organizations. Legal and professional fees increased by $163,581, with the increase primarily related to patent filings associated with product development, along with new marketing and advertising activities. The increase in these expenses was anticipated and is consistent with management's stated strategy of investing in revenue-generating aspects of its business.
Research and development expenses for the third quarter totaled $41,679, compared with $29,066 in the prior-year period. The Company's R&D activities are primarily associated with its CompuFlo, SafetyWand, and CoolBlue projects.
Net loss for the three months ended September 30, 2004 totaled ($1,083,176), or ($0.11) per share, compared with a net loss of ($628,580), or ($0.15) per share, in the three months ended September 30, 2003. For the nine months ended September 30, 2004, the Company reported a net loss of ($2,429,648), or ($0.27) per share, versus a net loss of ($1,787,382), or ($0.42) per share, in the corresponding period of the previous year. The increased net losses for the second quarter and first half of 2004, respectively, were primarily due to higher SG&A expenses that were anticipated and discussed above.
The weighted average number of common shares outstanding during the third quarter of 2004 totaled 9,667,381, which represented a 144% increase from the prior-year quarter, primarily reflecting a February 2004 public stock offering and the conversion of certain debt obligations into common stock during the previous twelve months. For the same reasons, the weighted average number of common shares outstanding increased 104% to 8,592,598 in the nine months ended September 30, 2004, compared with 4,217,185 in the first half of 2003.
About Milestone Scientific Inc.
Milestone Scientific Inc. is the developer, manufacturer and marketer of CompuMed(R) and CompuDent(R) computer controlled local anesthetic delivery systems. These systems comprise a microprocessor controlled drive unit as well as The Wand(R) handpiece, a single patient-use disposable product that is held in a pen-like manner for injections. In 2001, Milestone Scientific received broad United States patent protection on an enabling technology (CompuFlo(R)) for computer controlled, pressure sensitive infusion, perfusion, suffusion and aspiration that provides real time displays of pressures, fluid densities and flow rates, and advances the delivery and removal of a wide array of fluids from the human body. In 2002, Milestone Scientific received United States patent protection on a safety engineered sharps technology that allows for fully automated single-handed activation with needle anti-deflection and force-reduction capability. In 2003, Milestone received FDA Clearance to market the SafetyWand(TM), which complies with the Federal Needlestick Safety Prevention Act by incorporating engineered sharps injury protection features to aid in the prevention of accidental needlesticks.
The Company is headquartered in Livingston, New Jersey, and its common stock trades on the American Stock Exchange under the symbol "MS".
This press release contains forward-looking statements regarding the timing and financial impact of the Milestone's ability to implement its business plan, expected revenues and future success. These statements involve a number of risks and uncertainties and are based on assumptions involving judgments with respect to future economic, competitive and market conditions and future business decisions, all of which are difficult or impossible to predict accurately and many of which are beyond Milestone's control. Some of the important factors that could cause actual results to differ materially from those indicated by the forward-looking statements are general economic conditions, failure to achieve expected revenue growth, changes in our operating expenses, adverse patent rulings, FDA or legal developments, competitive pressures, changes in customer and market requirements and standards, and the risk factors detailed from time to time in Milestone's periodic filings with the Securities and Exchange Commission, including without limitation, Milestone's Annual Report on Form 10-KSB for the year ended December 31, 2003. The forward looking-statements in this press release are based upon management's reasonable belief as of the date hereof. Milestone undertakes no obligation to revise or update publicly any forward-looking statements for any reason.
For further information, please contact Stuart J. Wildhorn, President of Milestone Scientific Inc., +1-973-535-2717, or fax, +1-973-535-2829.
MILESTONE SCIENTIFIC INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS September 30, 2004 December 31, (Unaudited) 2003 * ASSETS Current Assets: Cash and cash equivalents $4,022,117 $3,277 Accounts receivable , net of allowance for doubtful accounts at September 30, 2004 and December 31, 2003 of $19,778 and $28,814, respectively 482,781 388,900 Inventories 768,693 426,711 Advances to contract manufacturer 867 228,497 Deferred debt financing costs, net 281 33,522 Prepaid expenses 109,982 117,184 Total current assets 5,384,721 1,198,091 Deferred registration costs -- 248,815 Equipment, net 568,650 242,243 Other assets 21,977 27,341 Totals $5,975,348 $1,716,490 LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIENCY) Current Liabilities: Accounts payable $492,222 $1,689,591 Accrued expenses 309,739 59,540 Accrued interest 4,042 231,296 Deferred compensation payable to officer 112,500 640,000 Notes payable, net of debt discount at September 30, 2004 and December 31, 2003 of $1,603 and $17,481, respectively 48,397 1,141,186 Notes payable to officer -- 358,215 Total current liabilities 966,900 4,119,828 Notes payable, less current maturities -- 41,333 Total liabilities 966,900 4,161,161 Commitments and contingencies Stockholders' Equity (Deficiency): Preferred stock, par value $.001; authorized 5,000,000 shares -- -- 8% Cumulative convertible preferred stock, par value $.001; authorized, issued and outstanding, 25,365 shares 25 25 Common stock, par value $.001; authorized 50,000,000 shares; 9,734,676 shares issued and 6,146,011 shares issued at September 30, 2004 and December 31, 2003, respectively 9,735 6,146 Additional paid-in capital 52,539,527 42,660,349 Accumulated deficit (46,629,323) (44,199,675) Treasury stock, at cost, 33,333 shares (911,516) (911,516) Total stockholders' equity (deficiency) 5,008,448 (2,444,671) Totals $5,975,348 $1,716,490 MILESTONE SCIENTIFIC INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2004 AND 2003 (Unaudited) Three Months Ended Nine Months Ended September 30, September 30, September 30, September 30, 2004 2003 2004 2003 Net sales $1,110,043 $966,591 $3,392,288 $3,101,281 Cost of sales 563,730 511,867 1,879,414 1,560,288 Gross profit 546,313 454,724 1,512,874 1,540,993 Selling, general and administrative expenses 1,608,176 891,322 3,804,961 2,491,737 Charge in connection with the closing of the Deerfield, IL facility -- 13,150 -- 79,023 Research and development expenses 41,679 29,066 135,300 112,158 1,649,855 933,538 3,940,261 2,682,918 Loss from operations (1,103,542) (478,814) (2,427,387) (1,141,925) Other income (expense) Interest income 23,942 -- 64,952 -- Interest expense (3,576) (149,766) (67,213) (645,457) Other income (expense) net 20,366 (149,766) (2,261) (645,457) Net loss (1,083,176) (628,580) (2,429,648) (1,787,382) Dividends applicable to preferred stock (1,544) (1,544) Net loss applicable to common stockholders $(1,084,720) $ (628,580) $(2,431,192) $(1,787,382) Loss per share - basic and diluted $(0.11) $(0.15) $(0.27) $(0.42) Weighted average shares outstanding - basic and diluted 9,667,381 4,229,110 8,952,598 4,217,185 MILESTONE SCIENTIFIC INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS NINE MONTHS ENDED SEPTEMBER 30, 2004 AND 2003 (Unaudited) 2004 2003 Cash flows from operating activities: Net loss $(2,429,648) $(1,787,382) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation 28,481 26,618 Amortization of debt discount and deferred financing costs 49,119 242,628 Amortization of stock options issued to consultants 1,548 -- Loss on disposal of fixed assets -- 11,248 Changes in operating assets and liabilities: Increase in accounts receivable (93,881) (372,167) Increase in inventories (341,982) (135,997) Decrease in advances to contract manufacturer 227,630 137,575 Decrease in prepaid expenses 7,202 3,341 Decrease in other assets 5,364 -- (Decrease) increase in accounts payable (675,643) 399,731 (Decrease) increase in accrued interest (81,265) 402,827 Increase (decrease) in accrued expenses 250,199 (29,412) (Decrease) increase in deferred compensation (143,500) 240,000 Net cash used in operating activities (3,196,376) (860,990) Cash flows from investing activities: Payment for capital expenditures (354,888) (15,817) Cash flows from financing activities: Expenses relating to registering shares -- (22,500) Proceeds from equity financing, net 7,620,104 -- Proceeds from note payable - officer/stockholder -- 180,537 Payments of note payable - officer/stockholder (50,000) (72,322) Proceeds from issuance of notes payable -- 900,000 Payments for deferred financing activities -- (22,721) Net cash provided by financing activities 7,570,104 962,994 NET INCREASE IN CASH AND CASH EQUIVALENTS 4,018,840 86,187 Cash and cash equivalents beginning of period 3,277 9,683 Cash and cash equivalents end of period $4,022,117 $95,870 Supplemental disclosure of cash flow information: Cash paid during the period for interest $99,359 $--Milestone Scientific Inc.
CONTACT: Stuart J. Wildhorn, President of Milestone Scientific Inc.,+1-973-535-2717, or fax, +1-973-535-2829
Web site: http://www.milesci.com/