ORCHARD PARK, N.Y., May 15 /PRNewswire/ -- MINRAD International, Inc. today announced its financial results for the quarter ended March 31, 2007. The Company generated revenue of $2.926 million for the first quarter of 2007 as compared to $3.123 million for the first quarter of 2006.
(in thousands) Three-Month Periods Ended March 31, March 31, 2007 2006 Revenue $2,926 $3,123 Cost of goods sold 2,236 1,564 Gross profit $690 $1,559 Gross margin 24% 50%
Revenue decreased by $197 thousand or 6%, to $2.926 million for the first three months of 2007 as compared to $3.123 million for the first three months of 2006. This decrease is primarily attributed to the processing of both isoflurane and sevoflurane on our isoflurane active pharmaceutical production line to meet customer demands while we our in the process of completing our additional sevoflurane active pharmaceutical production line. By changing between the production of isoflurane and sevoflurane on the same line, we incur a loss of production as changeover and clean outs occur, while also incurring a loss in margin due to the multiple start ups in the production cycle and reduced margin due to the inefficiency of producing sevoflurane on our isoflurane production line. Approximately two months of the production in the isoflurane active pharmaceutical production line in the first quarter were dedicated to the production of isoflurane, while the remaining time was spent on producing sevoflurane.
Assuming the Company would have produced at our standard margins during each of the periods, the gross margin during the first quarter of 2007 would have been 52% as compared to 60% for the first 3 months of 2006.
For the first quarter of 2007, the Company experienced a loss of $(3.386) million, $(0.07) per common share. This compares with a loss of $(0.748) million, $(0.03) per common share for the first quarter in 2006. The increased operating loss for the quarter is primarily due to decreases in gross margin combined with increases in overhead and headcount associated with our sales force, research and development efforts and administrative costs as we prepare to grow our business across our three product lines over the upcoming years.
Contact: Timothy Sheehan, VP - Corporate Development tsheehan@minrad.com (716) 855-1068 www.minrad.com
About the Company
MINRAD International, Inc. is an interventional pain management company with real-time image guidance, anesthesia and analgesia, conscious sedation 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. Additional information can be found at the company's website, www.minrad.com.
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 BALANCE SHEETS (UNAUDITED) (in thousands) March 31, December 31, ASSETS 2007 2006 Current assets: Cash and cash equivalents $2,053 $ 4,664 Investments 3,620 7,249 Interest receivable 62 86 Loan proceeds receivable 1,275 - Accounts receivable, net 7,247 10,473 Inventories, net 5,625 4,360 Prepaid expenses and advance payments 2,755 1,477 Total current assets 22,637 28,309 Property and equipment: Machinery and equipment 2,585 2,420 Computers 1,315 571 Furniture and fixtures 778 662 Leasehold improvements 385 385 Construction in progress 6,974 4,177 12,037 8,215 Less accumulated depreciation 1,454 1,234 Total property and equipment 10,583 6,981 Other assets 930 439 Total assets $34,150 $35,729 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $1,495 $965 Accrued expenses 1,025 1,262 Current portion of long term debt 151 - Total current liabilities 2,671 2,227 Commitments and contingencies - - Long term debt 1,124 - Stockholders' equity Common stock 471 470 Additional paid-in-capital 76,751 76,513 Accumulated deficit (46,867) (43,481) Total stockholders' equity 30,355 33,502 Total liabilities and stockholders' equity $34,150 $35,729 MINRAD INTERNATIONAL, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) (in thousands, except per share amounts) Three-Month Three-Month Period Ended Period Ended March 31, 2007 March 31, 2006 Revenue $2,926 $ 3,123 Cost of goods sold 2,236 1,564 Gross profit 690 1,559 Operating expenses: Sales and marketing 1,910 761 Research and development 1,061 427 Finance and administrative 1,196 861 Total operating expenses 4,167 2,049 Operating loss (3,477) (490) Interest income (expense): Interest expense (3) (75) Interest income 94 - Total interest income (expense) 91 (75) Net loss (3,386) (565) Less preferred stock dividends - non cash - (183) Net loss available for common stockholders $(3,386) $(748) Net loss per share, basic and diluted $(0.07) $ (0.03) Weighted average common shares outstanding, basic and diluted 47,071 29,125 MINRAD INTERNATIONAL, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (in thousands) Three-Month Three-Month Period Ended Period Ended March 31, 2007 March 31, 2006 Cash flows from operating activities: Net loss $(3,386) $ (565) Adjustments to reconcile net loss to net cash used by operating activities: Increase in inventory reserve - 10 Depreciation and amortization 223 107 Stock based compensation 122 118 Amortization of bond discount (12) - (Increase) decrease in assets: Accounts receivable 3,226 (242) Interest receivable 25 - Inventories (1,265) 206 Prepaid expenses (1,281) (106) Increase (decrease) in liabilities: Accounts payable (365) (228) Accrued expenses (237) 156 Net cash used by operating activities (2,950) (544) Cash flows from investing activities: Purchases of property and equipment (2,927) (128) Proceeds from sale of Investments 3,641 - Increase in other assets (492) (14) Net cash provided (used) by investing activities 222 (142) Cash flows from financing activities: Borrowings under demand notes payable - 400 Proceeds from options exercised 117 58 Deferred financing costs - (59) Preferred cash dividends paid - (170) Net cash provided by financing activities 117 229 Net decrease in cash and cash equivalents (2,611) (457) Cash and cash equivalents - Beginning of period 4,664 670 Cash and cash equivalents - End of period $2,053 $213 MINRAD INTERNATIONAL, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY THREE-MONTH PERIOD ENDED MARCH 31, 2007 (UNAUDITED) (in thousands, except number of shares) Series A Convertible Preferred Stock Common Stock Shares Amount Shares Amount Balance at December 31, 2006 - - 47,048,240 $470 Stock options exercised - - 45,291 1 Stock based compensation - - - - Net loss - - - - Balance at March 31, 2007 - - 47,093,531 $471 Additional Accumulated Paid-In Capital Deficit Total Balance at December 31, 2006 $76,513 $( 43,481) $33,502 Stock options exercised 116 - 117 Stock based compensation 122 - 122 Net loss - (3,386) (3,386) Balance at March 31, 2007 $76,751 $(46,867) $30,355
MINRAD International, Inc.CONTACT: Timothy Sheehan, VP - Corporate Development of MINRADInternational, Inc., +1-716-855-1068, tsheehan@minrad.com
Web site: http://www.minrad.com//
