Milestone Scientific Announces Second Quarter Operating Results
LIVINGSTON, N.J., Aug. 14 /PRNewswire-FirstCall/ -- Milestone Scientific Inc. , which develops, manufactures, and markets "intelligent" computer controlled local anesthetic delivery systems, today announced its operating results for the second quarter and first half of 2006.
For the three months ended June 30, 2006, net product sales decreased 2% to $1,425,821, compared with net product sales of $1,456,731 in the second quarter of 2005. Royalty income from the Ionic White(TM) consumer tooth whitening system totaled $49,473, or 3% of total revenues, in the most recent quarter, compared with $219,210 (13% of revenues) in the year-earlier quarter. Gross profit decreased to $781,533 in the most recent quarter, versus $1,111,032 in the second quarter of 2005. Net loss for the quarter increased to ($954,015), or ($0.08) per share, compared with a net loss of ($789,790), or ($0.07) per share, in the three months ended June 30, 2006.
Selling, general and administrative expenses for the three months ended June 30, 2006 and 2005 were $1,369,497 and $1,854,562, respectively. The $485,065 decrease reflects reductions in salaries, fees and travel expenses.
Research and development expenses for the three months ended June 30, 2006 and 2005 were $390,741 and $69,844, respectively. These increased costs are primarily associated with the accelerated development of the company's Single Tooth Anesthetic (STA) delivery system and CompuFlo(TM) technology.
Revenues for the six months ended June 30, 2006, increased 1% to $3,173,050, compared with $3,133,844 in the corresponding period of the previous year. Product sales rose 3% to $2,986,740, compared with $2,914,634 in the first half of 2005. During the six months ended June 30, 2006, the Company recorded $186,310 in royalties from sales of Ionic White, compared with $219,210 in the year-earlier period. The Company reported a net loss of ($1,639,594), or ($0.14) per share, in the first six months of 2006, compared with a net loss of ($1,668,733), or ($0.16) per share, in the six months ended June 30, 2005.
Due to a planned curtailment of the CompuDent sales program in order to focus on the development of the Company's single tooth anesthetic delivery system (to be introduced in the first quarter of 2007), domestic sales of CompuDent systems declined 39% in the second quarter and 36% in the first half of 2006, when compared with the prior-year periods. On the other hand, second quarter domestic handpiece sales increased 15%, while international handpiece sales increased 92%. Worldwide handpiece sales increased 17% in the six months ended June 30, 2006 over the same period in 2005.
As of June 30, 2006, Milestone's cash and cash equivalents approximated $2.0 million, and its working capital approximated $3.8 million.
"The decline in sales and profitability during the second quarter reflects the Company's current focus on readying its new products for commercialization," stated Leonard Osser, Chief Executive Officer of Milestone Scientific Inc. "Shortly after the end of our second quarter, Milestone received 510(k) Premarket Notification acceptance from the FDA for the marketing and sale of our CompuFlo(TM) Computer Controlled Infusion Pump. This represents a very important accomplishment in the commercialization process for CompuFlo, which we believe can deliver anesthesia and medicines more safely and effectively than current procedures in a large number of medical and dental applications. Our goal is to enter into strategic marketing relationships with one or more industry-leading companies during the second half of 2006."
"We also are finalizing the development of our Single Tooth Anesthesia (STA) delivery system, which incorporates our CompuFlo technology and has the potential to greatly expand the market appeal of our dental product line," continued Osser. "By allowing dentists to achieve total tooth anesthesia with a predictable single-tooth injection, the STA can enhance patient comfort, while eliminating collateral numbness and other unpleasant side effects of currently used injection techniques. By integrating our CompuFlo pressure feedback technology into the CompuDent platform, we have essentially 'repositioned' CompuDent as our new STA system -- an anesthetic delivery system that is not technique-dependent in its administration. We have targeted the first quarter of 2007 for commercial launch of this new STA system."
"While we are disappointed to report continued losses during this period of transition, management has implemented a cost-control program in order to allocate corporate and financial resources in the most efficient manner. Although this strategy has negatively impacted sales of our current products, we are confident that our new products and technologies will address expanded market opportunities," concluded Osser.
The Company will host a conference call on Monday, August 14, 2006 at 4:30 p.m. EDT to discuss its second quarter operating results. The dial-in number for the conference call is 888-889-5345 (international/local participants dial 973-935-8516) and referencing the Access Code 7734099. Parties interested in participating in the conference call should dial in approximately five minutes before 4:30 p.m. EDT. A replay of the call will be available from two hours after the conclusion of the conference call until August 21, 2006 by dialing 877-519-4471 (international/local callers dial 973-341-3080) and entering the Access Code 7734099.
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 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) and professional (CoolBlue) teeth whitening systems that were introduced to the market in early 2005.
Milestone has also received broad United States patent protection on CompuFlo(TM), an enabling technology for computer controlled, pressure sensitive infusion, perfusion, suffusion and aspiration that provides real time displays of pressures, fluid densities and flow rates. CompuFlo advances the delivery to and/or removal from patients of local anesthesia, medications and other fluids, and the Company is pursuing market opportunities in a variety of medical and dental applications.
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, CEO Milestone Scientific Inc. (973) 535-2717; (973) 535-2829 (Fax) Web site: www.milesci.com MILESTONE SCIENTIFIC INC. CONDENSED BALANCE SHEETS June 30, 2006 December 31, 2005* (Unaudited) ASSETS Current Assets: Cash and cash equivalents $1,999,019 $2,892,679 Accounts receivable , net of allowance for doubtful accounts of $17,150 in 2006 and $27,117 in 2005 504,394 347,065 Royalty receivable 49,473 185,702 Inventories 1,285,771 1,371,354 Advances to contract manufacturer 1,116,111 1,019,663 Deferred debt financing costs, net Prepaid expenses 85,917 109,691 Total current assets 5,040,685 5,926,154 Investment in distributor, at cost 76,319 76,319 Equipment, net of accumulated depreciation of $355,452 in 2006 and $307,000 in 2005 496,432 536,295 Patents, net of accumulated amortization of $30,514 in 2006 and $19,090 in 2005 496,755 486,635 Other assets 19,169 24,197 Total assets $6,129,360 $7,049,600 LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities: Accounts payable $1,031,554 $508,044 Accrued expenses 177,849 223,350 Deferred compensation payable to officers 108,332 Total current liabilities 1,317,735 731,394 Stockholders' Equity Common stock, par value $.001; authorized 50,000,000 shares; 11,594,547 shares issued, 207,726 shares to be issued, and 11,561,214 shares outstanding in 2006; 11,550,479 shares issued, 207,726 shares to be issued, and 11,517,146 shares outstanding in 2005 11,803 11,758 Additional paid-in capital 57,305,883 57,172,915 Accumulated deficit (51,594,545) (49,954,951) Treasury stock, at cost, 33,333 shares (911,516) (911,516) Total stockholders' equity 4,811,625 6,318,206 Total liabilities and stockholders' equity $6,129,360 $7,049,600 See Notes to Condensed Financial Statements * Derived from the audited financial statements as of December 31, 2005 MILESTONE SCIENTIFIC INC. CONDENSED STATEMENTS OF CASH FLOWS SIX MONTHS ENDED JUNE 30, 2006 AND 2005 (Unaudited) 2006 2005 Cash flows from operating activities: Net loss $(1,639,594) $(1,668,733) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation expense 48,661 49,700 Amortization of patents 11,424 7,053 Common stock and options issued for compensation, consulting, and vendor services 133,013 263,629 Loss on disposal 1,918 Bad debt (recovery) expense (19,957) 11,769 Changes in operating assets and liabilities: Increase in accounts receivable (137,372) (148,377) Decrease (increase) in royalty receivable 136,229 (219,210) Decrease (increase) in inventories 85,583 (114,026) Increase in advances to contract manufacturer (96,448) (258,182) Decrease in prepaid expenses 23,774 7,976 Decrease in other assets 5,028 3,138 Increase (decrease) in accounts payable 523,510 (117,179) (Decrease) increase in accrued expenses (45,501) 215,675 Increase in deferred compensation 108,332 75,000 Net cash used in operating activities (861,400) (1,891,767) Cash flows from investing activities: Payment for capital expenditures (10,716) (19,462) Payment for patent rights (21,544) (145,000) Net cash used in investing activities (32,260) (164,462) Cash flows from financing activities: Proceeds from equity financing, net -- 3,528,037 Net cash provided by financing activities -- 3,528,037 NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS (893,660) 1,471,808 Cash and cash equivalents at beginning of period 2,892,679 3,041,306 Cash and cash equivalents at end of period $1,999,019 $4,513,114 Supplemental disclosure of cash flow information: Cash paid during the period for interest $-- $-- See Notes to Condensed Financial Statements MILESTONE SCIENTIFIC INC. CONDENSED STATEMENTS OF OPERATIONS THREE AND SIX MONTHS ENDED JUNE 30, 2006 AND 2005 (Unaudited) Three Months Ended Six Months Ended June 30, June 30, June 30, June 30, 2006 2005 2006 2005 Product sales, net $1,425,821 $1,456,731 $2,986,740 $2,914,634 Royalty income 49,473 219,210 186,310 219,210 Total revenue 1,475,294 $1,675,941 3,173,050 3,133,844 Cost of products sold 688,124 538,604 $1,439,286 1,253,310 Royalty expense 5,637 26,305 22,057 26,305 Total cost of revenue 693,761 564,909 1,461,343 1,279,615 Gross profit 781,533 1,111,032 1,711,707 1,854,229 Selling, general and administrative expenses 1,369,497 1,854,562 2,849,212 3,456,255 Research and development expenses 390,741 69,844 554,183 101,389 Total operating expenses 1,760,238 1,924,406 3,403,395 3,557,644 Loss from operations (978,705) (813,374) (1,691,688) (1,703,415) Other income Interest income 24,690 23,584 52,094 34,682 Total other income 24,690 23,584 52,094 34,682 Net loss (954,015) (789,790) (1,639,594) (1,668,733) Dividends applicable to preferred stock -- (507) -- (1,014) Net loss applicable to common stockholders $(954,015) $(790,297) $(1,639,594) $(1,669,747) Loss per share applicable to common stockholders - basic and diluted $(0.08) $(0.07) $(0.14) $(0.16) Weighted average shares outstanding and to be issued - basic and diluted 11,768,940 10,931,052 11,755,335 10,410,451 See Notes to Condensed Financial StatementsMilestone Scientific Inc.
CONTACT: Leonard Osser, CEO of Milestone Scientific Inc., +1-973-535-2717,or fax, +1-973-535-2829
Web site: http://www.milesci.com/