LIVINGSTON, N.J., Nov. 14 /PRNewswire-FirstCall/ -- Milestone Scientific Inc. , which develops, manufactures, and markets computer controlled local anesthetic delivery systems, today announced its operating results for the third quarter and first nine months of 2005.
For the three months ended September 30, 2005, revenues increased 64% to approximately $1.8 million, including net product sales of $1,567,382, compared with net product sales of $1,110,043 in the third quarter of 2004. Royalty income from the Ionic White(TM) consumer tooth whitening system approximated $252,842, or 14% of total revenues, in the most recent quarter. Domestic sales of CompuDent(R) systems and handpieces rose 134%, or $209,347, and 28%, or $161,960, respectively, from the prior-year period. Gross profit for the quarter increased 110% to $1,146,457, versus $546,313 in the prior-year period. Gross profit margin improved to 63% of sales, compared with 49% in the 2004 quarter, primarily due to increased domestic CompuDent(R) sales, which generate a higher gross profit margin than international sales. Net loss for the quarter was reduced by 57% to ($612,375), or ($0.05) per share, compared with a net loss of ($1,083,176), or ($0.11) per share, in the third quarter of 2004.
Continued growth in domestic CompuDent(R) unit sales reflects Milestone’s investment in new sales and marketing initiatives during the past twelve months. Domestic sales increases were partially offset by a decline in international sales of CompuDent(R) units of $101,926, due to the termination of relationships with several under-performing sub-distributors. International sales of The Wand(R) disposable handpieces increased 135% to $273,353 in the third quarter of 2005, when compared with the prior-year period.
Selling, general and administrative expenses for the three months ended September 30, 2005 and 2004 totaled $1,738,286 and $1,608,176 respectively. The $130,110 increase included a $102,074, or 16%, increase in hiring and other employee expenses related to a continued investment in strengthening the Company’s domestic sales infrastructure, including sales commissions, and a $96,234, or 77%, increase in selling, marketing and advertising expenses. Legal fees increased by $89,514, or 67%, primarily due to litigation expenses related to the action against a competitor to the Ionic White(TM). Consulting expenses increased by $48,013, or 200%, due to the engagement of several consultants for market development services. These increases were partially offset by reductions in travel and stock-related expenses.
Research and development expenses increased to $53,678 in the most recent quarter, from $41,679 in the prior-year period, as Milestone continued to invest in the development of its Ionic White(TM) and CoolBlue(TM) tooth whitening systems and CompuFlo(TM) technology.
As of September 30, 2005, Milestone’s cash and cash equivalents approximated $3.7 million, and its working capital approximated $5.5 million.
“Domestic sales growth continues to gain momentum, reflecting our efforts to build an effective domestic sales force,” commented Leonard Osser, Chief Executive Officer of Milestone Scientific Inc. “We continue to see positive trends in our domestic sales and have begun to reduce operating expenses. Our expenses during the final months of 2005 will include increased costs associated with the planned filing of an application with the FDA regarding our CompuFlo medical injection technology, which we expect to play a key role in the Company’s growth in coming years.”
Revenues for the nine months ended September 30, 2005, increased 46% to approximately $4,954,068, compared with approximately $3,392,288 in the corresponding period of the previous year. Product sales rose 32% to $4,482,016, in the first nine months of 2005, versus $3,392,288 in the prior-year period. During the nine months ended September 30, 2005, the Company received $472,052 in royalties from sales of Ionic White, whereas there were no royalties in the year-earlier period.
The Company reported a net loss of ($2,281,108), or ($0.21) per share, in the first nine months of 2005, compared with a net loss of ($2,429,648), or ($0.27) per share, in the nine months ended September 30, 2004.
The Company will host a conference call on Tuesday November 15, 2005 at 11:00 a.m. EST to discuss third quarter results. The dial-in number for the conference call is 800-322-0079 (international/local participants dial 973-409-9258) and referencing the ID code 6716567. Parties interested in participating in the conference call should dial in approximately five minutes prior to 11:00 a.m. EST. A replay of the call will be available from November 15 through November 22, 2005 by dialing 877-519-4471 (international/local callers dial 973-341-3080), and entering the conference ID 6716567.
About Milestone Scientific Inc.
Milestone Scientific 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 (Cool Blue) teeth whitening systems that were introduced to the market in early 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 “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, 2004. 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. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS September 30, 2005 December 31, (Unaudited) 2004 * ASSETS Current Assets: Cash and cash equivalents $3,651,943 $3,041,306 Accounts receivable, net of allowance for doubtful accounts of $31,720 in 2005 and $24,903 in 2004 633,035 421,339 Royalty receivable 252,842 -- Inventories 1,309,940 936,221 Advances to contract manufacturer 320,216 62,034 Prepaid expenses 102,755 104,562 Total current assets 6,270,731 4,565,462 Investment in distributor, at cost 76,319 69,956 Equipment, net 559,358 612,263 Patents, net 419,709 101,242 Other assets 26,711 20,408 Totals $7,352,828 $5,369,331 LIABILITIES AND STOCKHOLDERS’ EQUITY Current Liabilities: Accounts payable $550,741 $474,075 Accrued expenses 256,185 224,549 Total current liabilities 806,926 698,624 Deferred compensation payable to officer 262,500 150,000 Total liabilities 1,069,426 848,624 Stockholders’ Equity: 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; 11,466,024 shares issued and 11,432,691 shares outstanding in 2005, and 9,824,287 shares issued and 9,790,954 shares outstanding in 2004 11,466 9,824 Additional paid-in capital 56,661,074 52,618,913 Accumulated deficit (49,477,647) (47,196,539) Treasury stock, at cost, 33,333 shares (911,516) (911,516) Total stockholders’ equity (deficiency) 6,283,402 4,520,707 Totals $7,352,828 $5,369,331 See notes to Condensed Consolidated Financial Statements *Derived from the audited financial statements as of December 31, 2004. MILESTONE SCIENTIFIC INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2005 AND 2004 (Unaudited) Three Months Ended Nine Months Ended September 30, September 30, September 30, September 30, 2005 2004 2005 2004 Products sales, net $1,567,382 $1,110,043 $4,482,016 $3,392,288 Royalty income 252,842 -- 472,052 -- Total revenue 1,820,224 1,110,043 4,954,068 3,392,288 Cost of products sold 643,426 563,730 1,896,736 1,879,414 Royalty expense 30,341 -- 56,646 -- Total cost of revenue 673,767 563,730 1,953,382 1,879,414 Gross profit 1,146,457 546,313 3,000,686 1,512,874 Selling, general and administrative expenses 1,738,286 1,608,176 5,194,541 3,804,961 Research and development expenses 53,678 41,679 155,067 135,300 1,791,964 1,649,855 5,349,608 3,940,261 Loss from operations (645,507) (1,103,542) (2,348,922) (2,427,387) Other income (expense) Interest income 33,132 23,942 67,814 64,952 Interest expense -- (3,576) -- (67,213) Other income (expense) net 33,132 20,366 67,814 (2,261) Net Loss (612,375) (1,083,176) (2,281,108) (2,429,648) Dividends applicable to preferred stock (507) (1,544) (1,522) (1,544) Net loss applicable to common stockholders $(612,882) $(1,084,720) $(2,282,630) $(2,431,192) Loss per share applicable to common stockholders - basic and diluted $(0.05) (0.11) $(0.21) (0.27) Weighted average shares outstanding - basic and diluted 11,366,617 9,667,381 10,738,396 8,952,598 See Notes to Condensed Consolidated Financial Statements MILESTONE SCIENTIFIC INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS NINE MONTHS ENDED SEPTEMBER 30, 2005 AND 2004 (Unaudited) 2005 2004 Cash flows from operating activities: Net loss $(2,281,108) $(2,429,648) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation 74,457 28,481 Amortization of debt discount and deferred financing costs -- 49,119 Amortization of patents 13,468 -- Stock and options issued for compensation and consulting services 428,433 1,548 Bad debt expense 6,817 -- Changes in operating assets and liabilities: (Increase) in accounts receivable (218,513) (93,881) (Increase) in royalty receivable (252,842) -- (Increase) in inventories (373,719) (341,982) (Increase) decrease in advances to contract manufacturer (258,182) 227,630 Decrease in prepaid expenses 1,807 7,202 (Increase) decrease in other assets (6,303) 5,364 Increase (decrease) in accounts payable 76,666 (675,643) (Decrease) in accrued interest -- (81,265) Increase in accrued expenses 31,636 250,199 Increase (decrease) in deferred compensation 112,500 (143,500) Net cash used in operating activities (2,644,883) (3,196,376) Cash flows from investing activities: Payment for capital expenditures (21,552) (354,888) Payment for patent rights (244,602) -- Payment for investment in distributor (6,363) -- Net cash used in investing activities: (272,517) (354,888) Cash flows from financing activities: Proceeds from equity financings, net 3,527,288 7,620,104 Proceeds from exercise of option 749 Payments of note payable - officer/stockholder -- (50,000) Net cash provided by financing activities 3,528,037 7,570,104 NET INCREASE IN CASH AND CASH EQUIVALENTS 610,637 4,018,840 Cash and cash equivalents beginning of period 3,041,306 3,277 Cash and cash equivalents end of period $3,651,943 $4,022,117 Supplemental disclosure of cash flow information: Cash paid during the period for interest $-- $99,359 See Notes to Condensed Consolidated Financial Statements
Milestone 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//
