Quigley Corporation Amends Third Quarter Results
DOYLESTOWN, Pa., Nov. 14 /PRNewswire-FirstCall/ -- The Quigley Corporation today reported that net sales for the third quarter of 2005 increased 58.1% to $15.3 million from $9.7 million reported for the third quarter of 2004. For the nine months ended September 30, 2005, net sales increased 37.1% to $35.9 million, compared to $26.2 million reported for the nine months ended September 30, 2004.
Net sales for the third quarter of 2005 reflect an 85.1% increase in the Company's Cold Remedy segment compared to the third quarter of 2004. In addition, net sales also benefited from an 11.6% increase in the Company's Health and Wellness operation for the third quarter of 2005 compared to the third quarter last year. International sales for the Health and Wellness segment increased 86.2% for the third quarter of 2005 and domestic sales remained relatively unchanged from the third quarter last year. Net sales also reflect $830,000 generated from the Company's Contract Manufacturing segment which has no comparable amount in 2004, as operations of this segment were part of the fourth quarter 2004 acquisition of the facilities that manufactured COLD-EEZE(R).
For the third consecutive quarter, the Company's Cold Remedy net sales continued to far outpace the growth in its category as the further expansion of the Cold Remedy segment reflects the success of strategic advertising and marketing initiatives; new product extensions of COLD-EEZE(R); and a notable increase in consumer acceptance and expanded household penetration.
The increase in net sales for the nine months reflects a 60.4% increase in the Company's Cold Remedy segment with the Health and Wellness segment remaining relatively unchanged. In addition, the Company's Health and Wellness international sales for the nine months increased 44.4% reflecting the continued expansion of international distribution. The rise in international distribution offset a decrease in domestic Health and Wellness segment sales that occurred during the first half of 2005. Net sales for 2005 also reflect $3.2 million from the Company's Contract Manufacturing segment, which has no comparable amount in 2004.
Guy J. Quigley, Chairman, President and Chief Executive Officer said, "We are very pleased with the increases in sales for the quarter and nine-month periods, which lend further credence to the success of our ongoing initiatives to garner additional market penetration of our COLD-EEZE(R) Cold Remedy products and greater expansion of our international sales for the Health and Wellness segment. Our strategic plans are to generate increasing sales, expand market share, and enhance acceptance of our core COLD-EEZE(R) products among a broad array of consumers including the growing geriatric population of people over sixty-five years of age who represent a new expanding opportunity for our COLD-EEZE(R) products."
A recent independent double-blind placebo-controlled study, found the COLD-EEZE(R) Zinc Gluconate Glycine formula to be an extremely safe course of therapy to reduce the duration of the common cold when administered to a geriatric population medically diagnosed with one or more health conditions. The study found no adverse effects with the wide range of concomitant medications, both prescription (Rx) and over-the-counter (OTC), that the seniors participating in the study reported taking.
Net income for the third quarter ended September 30, 2005 was $3.0 million, or $0.23 per share compared to $177,000, or $0.01 per share, for the same period last year. Net income for the nine months ended September 30, 2005 was $1.1 million, or $0.08 per share, compared to a net loss of $1.5 million, or ($0.13) per share, for the same period last year. Net income gains for the three and nine months ended September 30, 2005 and 2004 are principally attributed to the significant increase in cold-remedy sales, which has a greater gross profit margin and fewer fixed costs than the other operating segments. Results for the three and nine months ended September 30, 2005 and 2004 also include research and development costs of $1.0 million and $627,000 and $2.9 million and $2.4 million, respectively.
Gross profit percentage margins for the Cold Remedy segment for the quarter and nine months ended September 30, 2005 increased due to; increased cold remedy sales volume; the expiration in May 2005 of the founder's commission and to the discontinuation of a cold remedy product, which reflected a charge of $1.4 million during the third quarter of 2004. This charge included a $422,000 write-off for inventory and a $974,000 reduction in net sales resulting from anticipated customer returns of the product. The gross profit percentage margins for the Health and Wellness declined due to inventory obsolescence and other charges. Gross profit gains of the Cold Remedy segment for the quarter and nine months ended September 30, 2005 were offset by decreases in Health and Wellness gross profit including substantially lower gross profit margins for the Contract Manufacturing segment, which is significantly lower than the other operating segments.
In addition to the foregoing net changes in gross profit, net income for the quarter and nine months ended September 30, 2005 as compared with the net income for the quarter and net loss for the nine months ended September 30, 2004, was impacted by increased operating costs of all business segments, including non-manufacturing operating costs of the contract manufacturing in current operations rather than being carried as inventory.
No tax provisions or tax benefits to reduce income or losses are provided for the quarter and nine month periods ended September 30, 2005 and 2004, as the Company is in a net operating loss carry-forward position from the cumulative effect of deductions attributed to options, warrants and unrestricted stock from previous year's taxable income.
Mr. Quigley continued, "We are pleased with the progress of our Pharma products segment including two pre-clinical toxicity studies which determined that QR-333, our topical compound for the treatment of diabetic neuropathy, is safe for topical application. In addition, further positive In-Vitro study results supported conclusions of previous animal study findings that our potential broad-spectrum anti-inflammatory, all natural, botanical compound, QR440, can inhibit inflammatory cell recruitment and delayed type hypersensitivity.
We are encouraged by the positive results revealed by the further testing of QR-333 and QR440 as we continue to make significant progress in bringing our compounds to market," concluded Mr. Quigley.
The following is a list of formulations currently in the Quigley Pharma pipeline:
Diabetic Neuropathy - QR333: A patented topical compound that extends through March 2021 is being tested to treat people that suffer from diabetic peripheral neuropathy, which can affect 60 to 70 percent of the 15.7 million diabetics in the country.
Systemic Radiation - QR336: A patented compound that extends through November 2021 is being investigated to potentially reduce the effects of radiation exposure.
Arthritis - QR440: A patented naturally-derived compound that extends through April 2023 is being developed for the treatment of arthritis and related inflammatory disorders as arthritis can afflict 40 million people in the US; 350 million worldwide.
Influenza A - QR435: A test compound with potentially broad anti-viral properties for applications such as Influenza A&B in an intranasal delivery.
The Quigley Corporation makes no representation that the US Food and Drug Administration or any other regulatory agency will grant an Investigational New Drug ("IND") or take any other action to allow its formulations to be studied or marketed. Furthermore, no claim is made that potential medicine discussed herein is safe, effective, or approved by the Food and Drug Administration. Additionally, data that demonstrates activity or effectiveness in animals or in vitro tests do not necessarily mean the formula test compound, referenced herein will be effective in humans. Safety and effectiveness in humans will have to be demonstrated by means of adequate and well-controlled clinical studies before the clinical significance of the formula test compound is known. Readers should carefully review the risk factors described in filings the Company files from time to time with the Securities and Exchange Commission.
The Quigley Corporation is a leading developer and marketer of diversified health products including the COLD-EEZE(R) family of patented zinc gluconate glycine (ZIGG(TM)) lozenges and sugar free tablets. COLD-EEZE is the only (ZIGG) lozenge proven in two double- blind studies to reduce the duration of the common cold from 7.6 to 4.4 days or by 42%. In addition to Over-The-Counter (OTC) products, the Company has formed Quigley Pharma Inc. (http://www.QuigleyPharma.com), a wholly owned ethical pharmaceutical subsidiary, to introduce a line of naturally derived patented prescription drugs. The Quigley Corporation's customers include leading national wholesalers and distributors, as well as independent and chain food, drug and mass merchandise stores and pharmacies.
Certain statements in this press release are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 and involve known and unknown risk, uncertainties and other factors that may cause the Company's actual performance or achievements to be materially different from the results, performance or achievements expressed or implied by the forward-looking statement. Factors that impact such forward-looking statements include, among others, changes in worldwide general economic conditions, changes in interest rates, government regulations, and worldwide competition.
Carl Hymans G.S. Schwartz & Co. 212-725-4500 email@example.com Consolidated Statements of Operations (Unaudited)
The following represents condensed financial data (in thousands) except per share data:
Three-Months Three-Months Nine-Months Nine-Months Ended Ended Ended Ended Sept. 30, 2005 Sept. 30, 2004 Sept. 30, 2005 Sept. 30, 2004 ($) ($) ($) ($) Net Sales 15,320 9,691 35,917 26,198 Gross profit 8,294 3,800 17,031 11,097 Sales & marketing expenses 1,452 916 4,354 3,373 Administrative expenses 2,898 2,314 8,879 7,119 Research & development 1,030 627 2,939 2,395 Income taxes (Benefit) - - - - Net income (loss) 2,999 177 1,054 (1,517) Diluted income (loss) per share: Net income (loss) $0.23 $0.01 $0.08 ($0.13) Diluted weighted average common shares outstanding: 13,316,660 14,107,313 13,285,422 11,511,858 Consolidated Balance Sheets (Unaudited)
The following represents condensed financial data (in thousands) at September 30, 2005 and December 31, 2004:
2005 2004 ($) ($) Cash & cash equivalents 12,173 14,366 Accounts receivable, net 8,530 6,376 Inventory 3,998 3,455 Total current assets 25,660 24,961 Total assets 31,543 31,530 Total current liabilities 7,351 7,109 Long-term debt 1,143 2,464 Total stockholders' equity 22,996 21,902Quigley Corporation
CONTACT: Carl Hymans of G.S. Schwartz & Co., +1-212-725-4500, firstname.lastname@example.org
Web site: http://www.Quigleyco.com/