Milestone Scientific Announces 2005 Operating Results
LIVINGSTON, N.J., April 17 /PRNewswire-FirstCall/ -- Milestone Scientific Inc. , which develops, manufactures, and markets 'intelligent' computer controlled injection systems for medical and dental markets, today announced its operating results for 2005.
For the twelve months ended December 31, 2005, total revenue increased 35% to approximately $6.4 million, compared with approximately $4.8 million in 2004. Net product sales rose 22% to $5,775,394, versus $4,751,186 in 2004. This increase was primarily driven by a 68% rise in domestic sales of CompuDent(R) and CompuMed(R) systems and a 20% increase in global sales of The Wand(R) disposable handpieces. International sales of CompuDent and CompuMed systems declined as a result of the termination of underperforming distributors. Royalty income from sales of the Ionic White(TM) consumer tooth whitening product, which was introduced into the marketplace by a strategic partner in the second quarter of 2005, totaled $657,754 for the full year.
Gross profit increased to 56.3% of product sales, compared with 50.8% in the previous year, primarily due to a sales mix that reflected strong growth in domestic unit and handpiece sales. The Company's net loss for the year ended December 31, 2005 narrowed to ($2,754,227), or $(0.25) per share, compared with a 2004 net loss of ($2,996,864), or $(0.33) per share. Working capital increased to $5,194,760 as of December 31, 2005, from $3,866,838 at the end of 2004, as a result of a private placement of common stock and warrants and extraordinary income related to the sale of certain non-operating assets.
"During 2005, we continued to execute a multi-faceted strategy to (1) further penetrate dental and medical markets with our computer controlled injection technology, (2) utilize our LED technology platform to enter the consumer and professional teeth whitening markets, and (3) continue development of our CompuFlo(TM) pressure force technology for both medical and dental applications," commented Leonard Osser, Chief Executive Officer of Milestone Scientific Inc. "Based on results to date, we believe that we have made substantial progress towards the achievement of these objectives."
"Towards the end of 2005, Milestone announced the market launch of its CoolBlue Professional Teeth Whitening System, which is designed to further our penetration of the $5 billion global teeth whitening market. As with other Milestone products, the CoolBlue system, which utilizes the same basic technology as the Ionic White consumer teeth whitening system, is designed to maximize long-term revenues from disposable per-patient kits that are utilized in the whitening treatment process. The CoolBlue system is unique in that it eliminates the need for high levels of heat to accelerate the chemical reaction necessary to remove chromagenic staining of teeth, and we are optimistic that it will appeal to both dental professionals and patients. The Once-A-Week(TM) home maintenance kit that is included with the system eliminates the need for dentists to mold custom trays typically required for home maintenance when using competitors' products."
"Looking towards the future, 2006 will be a year in which Milestone will move forward aggressively with a new product development program that should allow the Company to further penetrate its existing markets and to exploit new medical and dental market opportunities with its patent-protected products," continued Osser. "In December 2005, we submitted a 510(k) Premarket Notification to the FDA on our CompuFlo Computer Controlled Infusion Pump technology. We have identified a number of potential applications for CompuFlo, including the identification of the epidural space when administering local anesthesia during childbirth and pain management procedures, along with the potential for assisting in the targeted delivery of drugs to cancerous tumors during the course of chemotherapeutic procedures."
"Our new CompuDent with TurboFlo(TM) system, which was introduced in early 2005 and speeds up the delivery of medication relative to older CompuDent models for certain injections, has been well-received in the marketplace and should bolster our competitive positioning in the future. During 2006, we hope to complete the development of our Single-Tooth Anesthesia (STA) system, which combines the capabilities of CompuDent with our CompuFlo pressure- sensing technology to allow dentists to greatly improve the efficiency of periodontal ligament (PDL) injections. We believe that a device which allows dentists to effectively and predictably anesthetize a single tooth will significantly enhance the productivity of dental practices as well as patient comfort. Our goal is to have the STA device on the market by the first quarter of 2007."
"From a financial perspective, we recognize that these new product development activities, along with the pursuit of certain strategic initiatives designed to significantly enhance shareholder value over the long term, will require additional expenditures during 2006. A key near-term target is to become cash-flow-positive as the year progresses, and we have implemented a number of cost-control measures in support of this objective. With approximately $2.5 million of cash currently in the bank, we believe the financial resources available to the Company will be adequate to realize our short- and long-term goals."
The Company will host a conference call on Tuesday April 18, 2006 at 11:00 a.m. EDT to discuss fourth quarter and year end results. Shareholders and other interested parties may participate in the conference call by dialing 888-889-5602 (international/local participants dial 973-582-2734) and referencing the ID code 7285404, a few minutes before 11:00 a.m. EST on Tuesday, April 18, 2006. A replay of the conference call will be available two hours after the completion of the conference call from April 18, 2006 until April 25, 2006 by dialing 877-519-4471 (international/local participants dial 973-341-3080) and entering the conference ID 7285404.
About Milestone Scientific, Inc.
Milestone Scientific Inc. is the developer, manufacturer and marketer of CompuMed(R) and CompuDent(R) computer controlled injection systems. These systems comprise a microprocessor controlled drive unit as well as The Wand(R) handpiece, a single patient use product that is held in a pen-like manner for injections. The Company also sells the SafetyWand(R), which incorporates engineered sharps injury protection features to aid in the prevention of accidental needlesticks. Milestone has also developed proprietary consumer (Ionic White(TM)) and professional (CoolBlue(TM)) teeth whitening systems that were introduced to the market in 2005.
In 2001, Milestone Scientific received broad United States patent protection on an enabling technology for computer controlled, pressure sensitive infusion, perfusion, suffusion and aspiration, which provides real time displays of pressures, fluid densities and flow rates, that advances the delivery and removal of a wide array of fluids. Development of this CompuFlo technology is currently underway.
The Company is headquartered in Livingston, New Jersey, and its common stock trades on the American Stock Exchange under the symbol "MSS".
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, 2005. 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.
CONTACT Leonard Osser, Chairman and CEO Milestone Scientific Inc. (973) 535-2717; (973) 535-2829 (Fax) Web site: www.milesci.com (Financial Highlights Follow) MILESTONE SCIENTIFIC INC. BALANCE SHEET December 31, 2005 December 31, 2004* ASSETS Current Assets: Cash and cash equivalents $2,892,679 $3,041,306 Accounts receivable, net of allowance for doubtful accounts of $27,117 347,065 421,339 Royalty receivable 185,702 -- Inventories 1,371,354 936,221 Advances to contract manufacturer 1,019,663 62,034 Prepaid expenses 109,691 104,562 Total current assets 5,926,154 4,565,462 Investment in distributor, at cost 76,319 69,956 Equipment, net 536,295 612,263 Patents, net of accumulated amortization of $19,090 486,635 101,242 Other assets 24,197 20,408 Total assets $7,049,600 $5,369,331 LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities: Accounts payable $508,044 $474,075 Accrued expenses 223,350 224,549 Total current liabilities 731,394 698,624 Commitments (Note O) Stockholders' Equity: Preferred stock, par value $.001; authorized 5,000,000 shares 8% cumulative convertible preferred stock, par value $.001; none issued -- 25 Common stock, par value $.001; authorized 50,000,000 shares; 11,550,479 shares issued, 207,726 shares to be issued, and 11,517,146 shares outstanding 11,758 9,824 Additional paid-in capital 57,172,915 52,618,913 Accumulated deficit (49,954,951) (47,196,539) Treasury stock, at cost, 33,333 shares (911,516) (911,516) Total stockholders' equity 6,318,206 4,520,707 Total liabilities and stockholders' equity $7,049,600 $5,219,331 See Notes to Financial Statements MILESTONE SCIENTIFIC INC. STATEMENTS OF OPERATIONS YEARS ENDED DECEMBER 31, 2005 AND 2004 2004 2005 (consolidated) Products sales, net $5,775,394 $4,751,186 Royalty income 657,754 -- Total revenue 6,433,148 4,751,186 Cost of products sold 2,521,022 2,415,826 Royalty expense 78,930 -- Total cost of revenue 2,599,952 2,415,826 Gross profit 3,833,196 2,335,360 Selling, general and administrative expenses 6,794,032 5,155,569 Research and development expenses 286,260 187,992 Total operating expenses 7,080,292 5,343,561 Loss from operations (3,247,096) (3,008,201) Other income (expense) Interest income 92,869 80,867 Interest expense -- (69,530) Other income 400,000 Other income (expense), net 492,869 11,337 Net Loss (2,754,227) (2,996,864) Dividends applicable to preferred stock (1,691) (2,029) Net loss applicable to common stockholders $(2,755,918) $(2,998,893) Loss per share applicable to common stockholders - basic and diluted $ (0.25) (0.33) Weighted average shares outstanding - basic and diluted 11,007,755 9,147,634 See Notes to Financial Statements MILESTONE SCIENTIFIC INC. STATEMENTS OF CASH FLOWS YEARS ENDED DECEMBER 31, 2005 AND 2004 2005 2004 (consolidated) Cash flows from operating activities: Net loss $(2,754,227) $(2,996,864) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation 99,060 50,920 Amortization of debt discount and deferred financing costs -- 51,003 Amortization of patents 19,090 -- Common stock and options issued for compensation and consulting services 700,098 29,048 Stock issued for interest on notes payable -- 2,700 Bad debt expense 33,111 1,593 Deferred compensation 150,000 (106,000) Changes in operating assets and liabilities: Decrease (increase) in accounts receivable 41,163 (34,032) (Increase) in royalty receivable (185,702) -- (Increase) in inventories (435,133) (509,510) (Increase) decrease in advances to contract manufacturer (957,629) 166,463 (Increase) decrease in prepaid expenses (5,129) 12,622 (Increase) decrease in other assets (3,789) 6,933 Increase (decrease) in accounts payable 33,969 (1,015,516) (Decrease) in accrued interest -- (83,532) (Decrease) increase in accrued expenses (1,199) 139,303 Net cash used in operating activities (3,266,317) (4,284,869) Cash flows from investing activities: Payment for capital expenditures (23,092) (350,529) Payment for patent rights (306,317) (75,536) Payment for investment in distributor (6,363) (69,956) Net cash used in investing activities: (335,772) (496,021) Cash flows from financing activities: Proceeds from equity financings, net 3,452,713 7,868,919 Proceeds from exercise of options 749 Payment of note payable - officer/ stockholder -- (50,000) Net cash provided by financing activities 3,453,462 7,818,919 NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS (148,627) 3,038,029 Cash and cash equivalents, beginning of year 3,041,306 3,277 Cash and cash equivalents, end of year $2,892,679 $3,041,306 Supplemental disclosure of cash flow information: Cash paid during the period for interest $-- $99,359 See Notes to Financial StatementsMilestone Scientific Inc.
CONTACT: Leonard Osser, Chairman and CEO of Milestone Scientific Inc.,+1-973-535-2717, or fax, +1-973-535-2829
Web site: http://www.milesci.com/