BUFFALO, N.Y., Aug. 7 /PRNewswire-FirstCall/ -- MINRAD International, Inc. today announced its financial results for the quarter ended June 30, 2006. The Company generated revenue of $2,048,000 for the quarter and $5,171,000 for the six month period ending June 30, 2006. This compared to revenue of $2,027,000 in the same quarter of 2005 and $4,456,000 for the six month period ending June 30, 2005.
2nd Quarter Six Months Ended June 30, $ Thousands 2006 2005 % 2006 2005 % United States 851 713 19% 1,753 1,527 15% International 1,197 1,314 (9%) 3,418 2,929 17% Total 2,048 2,027 1% 5,171 4,456 16%
There was a shortfall in the production of sevoflurane in our second quarter leaving us with unfilled orders of approximately $1.4 million on June 30, 2006. These orders have now already shipped in the third quarter contributing approximately $0.7 million in operating profit. While sales year-over-year were relatively flat for the second quarter, sales would have increased by 70% if we had been able to ship the unfilled orders. Year-to-date sales increased by 16%, but if we had shipped the unfilled orders, sales would have increased by 47%.
For the second quarter, the Company experienced a loss of $(1,827,000), $(0.05) per common share. This compares with a loss of $(8,312,000), $(0.29) per common share for the second quarter in 2005. In the second quarter of 2005 there were non cash dividends of $6,599,000 related to the preferred stock offering in that time period. For the six month period ending June 30, 2006 the Company experienced a loss of $(2,574,000), $(0.08) per common share. The loss for the same period in 2005 was $(9,207,000), $(0.33) per common share.
On an operating basis, the loss for the quarter of $(1,701,000) compares to a loss of $(725,000) for the same period in the 2005. For the six month period ending June 30, 2006 the operating loss increased to $(2,190,000) from $(866,000) for the same period in 2005. The increased operating loss of $976,000 for the quarter and $1,324,000 for the six month period primarily reflect increased operating expenses. Sales and marketing expenses increased by $875,000 or 126% year-over-year for the six month period as we increased the sales force world wide to support the launch of new products including SabreSourceTM. R&D expenses increased by $251,000 or 33% for the six month period ending June 30, 2006 as we invest in new products for the future such as Conscious Sedation. Finance and Administration expenses increased by $488,000 or 35% for the six month period year-over-year due in large part to a non-recurring franchise tax of $118,000 and $84,000 associated with the amortization of fees related to a bank line of credit and an increase of $114,000 in salary and employee taxes related to increased headcount and shorter vacancies when attrition occurs.
In the quarter we successfully raised net of costs $34,512,000 through the sale of 11.5 million shares of common stock. At June 30, 2006 we had $26,124,000 in cash.
Contact: Bill Bednarski, President & CFO bbednarski@minrad.com (716) 803-4660 www.minrad.com About the Company
MINRAD International, Inc. is an interventional pain management company with real-time image guidance and anesthesia and analgesia product lines. The real-time image guidance products facilitate minimally invasive surgery especially for pain management and have broad applications in orthopedics, neurosurgery, and interventional radiology. These devices enable medical professionals to improve the accuracy of interventional procedures and reduce radiation exposure. MINRAD International also manufactures and markets generic inhalation anesthetics for use in connection with human and veterinary surgical procedures. The company is developing a drug/drug delivery system for conscious sedation, which, similar to nitrous oxide in dental surgery, provides a patient with pain relief without loss of consciousness.
The information contained in this news release, other than historical information, consists of forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements may involve risks and uncertainties that could cause actual results to differ materially from those described in such statements. Factors that may cause actual results to differ materially from those expressed or implied by its forward-looking statements include, but are not limited to, Minrad International’s limited operating history and business development associated with being a growth stage company; its dependence on key personnel; its need to attract and retain technical and managerial personnel; its ability to execute its business strategy; the intense competition it faces; its ability to protect its intellectual property and proprietary technologies; its exposure to product liability claims resulting from the use of its products; general economic and capital market conditions; financial conditions of its customers and their perception of its financial condition relative to that of its competitors; as well as those risks described under the heading “Risk Factors” of Minrad International’s Form 10-KSB, filed with the Securities and Exchange Commission on March 29, 2006. Although Minrad International, Inc. believes that the expectations reflected in such forward-looking statements are reasonable, it can give no assurance that such expectations will prove to have been correct.
MINRAD INTERNATIONAL, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS 2ND QUARTER ENDED JUNE 30, 2006 (UNAUDITED) COMPARED TO 2ND QUARTER END JUNE 30, 2005 (UNAUDITED) IN THOUSANDS Three-Month Periods Ended June 30, June 30, FAVORABLE FAVORABLE 2006 2005 (UNFAVORABLE) (UNFAVORABLE) Revenue $2,048 $2,027 $21 1% Cost of goods sold 1,343 1,211 (132) (11%) Gross profit 705 816 (111) (14%) Operating expenses: Sales and marketing 809 386 (423) (109%) Research and development 594 431 (163) (38%) Finance and administrative 1,003 724 (279) (39%) Total operating expenses 2,406 1,541 (865) (56%) Operating loss (1,701) (725) (976) (135%) Interest expense: Stockholders and affiliates - (854) 854 100% Bank and other (78) (106) 28 26% Interest Income 114 - 114 NA Total non-operating expenses 36 (960) 996 104% Net Loss (1,665) (1,685) 20 1% Less Preferred Stock Dividends Cash dividends (162) (28) (134) (479%) Non cash dividends - (6,599) 6,599 100% Net loss available for common stockholders $(1,827) $ (8,312) $ 6,485 78% Net Loss per share basic and diluted $(0.05) $(0.29) $0.24 83% Weighted average common shares outstanding basic and diluted 33,605 28,367 5,238 18% MINRAD INTERNATIONAL, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS
SIX-MONTH PERIOD ENDED JUNE 30, 2006 (UNAUDITED) COMPARED TO SIX-MONTH PERIOD
JUNE 30, 2005 (UNAUDITED) IN THOUSANDS Six-Month Periods Ended June 30, June 30, FAVORABLE FAVORABLE 2006 2005 (UNFAVORABLE) (UNFAVORABLE) Revenue $5,171 $4,456 $715 16% Cost of goods sold 2,907 2,482 (425) (17%) Gross profit 2,264 1,974 290 15% Operating expenses: Sales and marketing 1,570 695 (875) (126%) Research and development1,020 769 (251) (33%) Finance and administrative 1,864 1,376 (488) (35%) Total operating expenses 4,454 2,840 (1,614) (57%) Operating loss (2,190) (866) (1,324) (153%) Interest expense: Stockholders and affiliates - (1,548) 1,548 100% Bank and other (153) (166) 13 8% Interest Income 114 - 114 NA Total non-operating expenses (39) (1,714) 1,675 98% Net Loss (2,229) (2,580) 351 14% Less Preferred Stock Dividends Cash dividends (162) (28) (134) (479%) Non cash dividends (183) (6,599) 6,416 97% Net loss available for common stockholders $(2,574) $(9,207) $ 6,633 72% Net Loss per share basic and diluted $(0.08) $(0.33) $0.25 75% Weighted average common shares outstanding basic and diluted 31,378 28,302 3,076 11% MINRAD INTERNATIONAL, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (UNAUDITED) IN THOUSANDS June 30, December 31, 2006 2005 ASSETS Current assets: Cash and cash equivalents $ 26,124 $ 670 Accounts receivable 3,606 3,459 Inventories, net 6,101 3,860 Prepaid expenses and other current assets 689 962 Total current assets 36,520 8,951 Net property and equipment 1,919 1,069 Other assets 233 163 Total assets $38,672 $10,183 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities: Bank demand note payable $ - $2,720 Accounts payable 832 2,542 Dividends payable 162 170 Accrued expenses 276 405 Total current liabilities 1,270 5,837 Stockholders’ equity 37,402 4,346 Total liabilities and stockholders’ equity $ 38,672 $10,183 MINRAD INTERNATIONAL, INC. AND SUBSIDIARIES STATEMENT OF CASH FLOWS (UNAUDITED) IN THOUSANDS Six Months Six Months Ended Ended Cash flows from operating June 30, June 30 activities: 2006 2005 Net cash used by operating activities $ (5,807) (4,957) Net cash used by investing activities (1,047) (125) Net cash provided by financing activities 32,308 10,407 Net increase in cash and cash equivalents 25,454 5,325 Cash-and cash equivalents - Beginning of period 670 3 Cash and cash equivalents - End of period $ 26,124 $5,328
MINRAD International, Inc.
CONTACT: Bill Bednarski, President & CFO of MINRAD International, Inc.,+1-716-803-4660, or bbednarski@minrad.com
Web site: http://www.minrad.com//
