LONDON, ONTARIO--(Marketwire - April 13, 2009) - Stellar Pharmaceuticals Inc. (OTCBB: SLXCF) ("Stellar" or "the Company"), a Canadian pharmaceutical developer and marketer of high quality, cost-effective products for select health care markets, today announced financial results for the year ended December 31, 2008. This is the second consecutive year that the company has generated positive cash (calculated before adjusting for changes in non-cash operating assets and liabilities) based on total revenue for each year. Amounts shown in this press release are in Canadian dollars, rounded to the nearest one hundred dollars and are the result of the use of U.S. generally accepted accounting principles.
Results for the Twelve Month Period Ending December 31, 2008
Total revenue for the year ended December 31, 2008 increased by 13.9% to $2,559,400 compared to $2,247,300 in the same period during 2007. In 2008, the Canadian market showed positive growth with NeoVisc sales up 3.6% while Uracyst sales grew by 10.4% and BladderChek sales increased by 39.1%, with a total increase in Canadian product sales of 4.8%. Given the very competitive market conditions in 2008, the Company felt these increases were exceptional.
International revenues were impacted with the lack of Uracyst royalty revenues in the last nine months, due to the termination of the European market licensing agreement with Pohl Boskamp as of March 31, 2008. This resulted in royalty revenues decreasing by 61% in 2008 compared to the same period in 2007. Conversely, total NeoVisc sales for the twelve month period ended December 31, 2008, were up by 31.8% compared to 2007, in large part due to the improved sales from our European partners. It is also noteworthy to report that although the Company showed a loss in its royalty revenues, the strong European market growth for NeoVisc sales, contributed greatly to the overall improvement in revenues in 2008 over those reported in 2007.
In the fourth quarter of 2008, the Company signed four new licensing agreements for Uracyst in various European markets. With product orders shipped to each of these licensees in the first quarter of 2009, the Company expects these partners to be actively selling Uracyst going into the second quarter of 2009. Certain non-refundable license fees from these agreements were recorded as licensing revenue in 2008. The Company continues discussions with other potential Uracyst licensees and expects to have agreements in place for all of Europe in the first half of 2009. Although the Company cannot be certain, it expects these agreements will have a positive effect on Stellar's 2009 revenues.
Gross Profit for the year ended December 31, 2008, was $2,003,000 up 15.9% from $1,728,000 recorded for the same period in 2007. This improvement in gross profits was prompted by the positive sales growth in domestic and international markets.
Although the Company showed a loss for the twelve month period of $31,000, when adjusted for non cash expenses, the Company showed a positive cash flow of approximately $84,100 for the year.
Peter Riehl, Stellar's President & CEO commented, "We have been focused on building Canadian sales and expanding global partnerships and it is very rewarding to see these efforts finally showing results. The success experienced in 2008 should be even stronger in 2009 as more markets become active. In fact, I am pleased to report that as of this date, for the first quarter of 2009, sales are up substantially over 2008 and more importantly the company expects to be profitable for the first quarter. Even though we are pleased with our 2008 results, we believe 2009 will be a much stronger year in all aspects."
About Stellar Pharmaceuticals Inc.
Stellar has developed and is marketing direct in Canada, and in countries around the world through out-license agreements, three products based on its core polysaccharide technology: NeoVisc®, for the treatment of osteoarthritis; and Uracyst® and the Uracyst® Test Kit, its patented technology for the diagnosis and treatment of interstitial cystitis (IC), an inflammatory disease of the urinary bladder wall. Stellar also has an in-licensing agreement for NMP22® BladderChek®, a proteomics-based diagnostic test for the diagnosis and monitoring of bladder cancer.
This press release contains forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Readers are cautioned not to place undue reliance on these forward-looking statements. Actual results may differ materially from those indicated by these forward-looking statements as a result of risks and uncertainties impacting the Company's business including increased competition; the ability of the Company to expand its operations, to attract and retain qualified professionals, technological obsolescence; general economic conditions; and other risks detailed from time to time in the Company's filings.
STELLAR PHARMACEUTICALS INC.
BALANCE SHEETS (i)
(Expressed in Canadian dollars)
December 31
ASSETS
CURRENT 2008 2007
---- ----
Cash and cash equivalents $ 2,105,966 $ 3,211,126
Accounts receivable, net of allowance
$nil (2007 - $nil) 549,055 272,341
Inventories 364,551 305,040
Taxes recoverable 212,445 164,714
Loan receivable 18,369 -
Prepaids, deposits and sundry receivables 130,515 44,066
------------ ------------
3,380,901 3,997,287
PROPERTY, PLANT AND EQUIPMENT 1,270,257 822,692
OTHER ASSETS 65,495 55,430
LOAN RECEIVABLE - 14,822
------------ ------------
$ 4,716,653 $ 4,890,231
------------ ------------
------------ ------------
LIABILITIES
CURRENT
Accounts payable $ 173,812 $ 214,442
Accrued liabilities 186,201 192,364
Deferred revenues 1,749 10,573
------------ ------------
361,762 417,379
CONTINGENCIES AND COMMITMENTS
SHAREHOLDERS' EQUITY
CAPITAL STOCK
AUTHORIZED
Unlimited Non-voting, convertible redeemable
and retractable preferred shares
with no par value
Unlimited Common shares with no par value
ISSUED
23,702,540 Common shares (2007 - 23,822,540) 8,261,403 8,303,054
(147,500) Treasury shares (51,625) -
Paid-in capital for cancelled
Common shares 2,329 -
Paid-in capital options 758,337 746,419
------------ ------------
8,970,444 9,049,473
DEFICIT (4,615,553) (4,576,621)
------------ ------------
4,354,891 4,472,852
------------ ------------
$ 4,716,653 $ 4,890,231
------------ ------------
------------ ------------
STELLAR PHARMACEUTICALS INC.
STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (i)
(Expressed in Canadian dollars)
FOR THE YEARS ENDED DECEMBER 31
2008 2007
---- ----
PRODUCT SALES $ 2,118,282 $ 1,664,595
COST OF PRODUCTS SOLD 556,401 519,291
------------ ------------
MARGIN ON PRODUCTS SOLD 1,561,881 1,145,304
ROYALTIES & LICENSING REVENUE 441,130 582,670
------------ ------------
GROSS PROFIT 2,003,011 1,727,974
EXPENSES
Selling, general and administrative 2,010,383 2,090,517
Research and development 62,727 (55,268)
Amortization of assets 54,384 53,213
------------ ------------
2,127,494 2,088,462
------------ ------------
LOSS FROM OPERATIONS (124,483) (360,488)
INTEREST AND OTHER INCOME 83,741 213,047
GAIN ON DISPOSAL OF EQUIPMENT 9,676 -
------------ ------------
NET LOSS AND COMPREHENSIIVE LOSS FOR THE YEAR (31,066) (147,441)
INCOME TAXES - -
------------ ------------
NET LOSS AND COMPREHENSIVE LOSS $ (31,066) $ (147,441)
------------ ------------
------------ ------------
LOSS PER SHARE - Basic $ 0.00 $ (0.01)
------------ ------------
------------ ------------
- Diluted $ - $ -
------------ ------------
------------ ------------
------------ ------------
------------ ------------
WEIGHTED AVERAGE NUMBER OF COMMON
SHARES OUTSTANDING - Basic 23,801,450 23,821,562
------------ ------------
------------ ------------
- Diluted 23,801,450 23,821,562
------------ ------------
------------ ------------
STELLAR PHARMACEUTICALS INC.
STATEMENTS OF CASH FLOWS
(Expressed in Canadian dollars)
FOR THE YEARS ENDED DECEMBER 31
2008 2007
---- ----
CASH FLOWS PROVIDED BY (USED IN)
OPERATING ACTIVITIES
Net loss $ (31,066) $ (147,441)
Items not affecting cash
Amortization 126,556 146,847
Gain on disposal of equipment (9,676) -
Write-down of property, plant & equipment 2,656 -
Unrealized foreign exchange (gain) loss (17,945) 849
Issuance of equity instruments for services
rendered 13,618 34,607
Change in non-cash operating assets and
liabilities (562,256) (202,643)
------------ ------------
CASH FLOWS USED IN OPERATING ACTIVITIES (478,113) (167,781)
------------ ------------
CASH FLOWS PROVIDED BY (USED IN) INVESTING
ACTIVITIES
Additions to property, plant and equipment (539,511) (114,369)
Increase in other assets (11,420) (7,095)
Proceeds from sale of equipment 10,000
Loan receivable - (14,822)
------------ ------------
CASH FLOWS USED IN INVESTING ACTIVITIES (540,931) (136,286)
------------ ------------
CASH FLOWS (USED IN) FINANCING ACTIVITIES
Repurchase of common shares for cash (100,514) -
------------ ------------
CASH FLOWS USED IN FINANCING ACTIVITIES (100,514) -
------------ ------------
EFFECT OF EXCHANGE RATES ON CASH HELD IN
FOREIGN CURRENCY 14,398 16,575
------------ ------------
CHANGE IN CASH AND CASH EQUIVALENTS (1,105,160) (287,492)
CASH AND CASH EQUIVALENTS, beginning of year 3,211,126 3,515,193
------------ ------------
CASH AND CASH EQUIVALENTS, end of year $ 2,105,966 $ 3,211,126
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Contacts:
Stellar Pharmaceuticals Inc.
Peter Riehl
President & CEO
(800) 639-0643 or (519) 434-1540
Stellar Pharmaceuticals Inc.
Arnold Tenney
Chairman
(416) 587-3200
