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Carrington Reports 2007 Financial Results

Company Cites Important Progress With Needle-free Vaccine Technology and

Bird Flu Clinical Program Webcast/teleconference Call Set for 4:30 pm Today, Monday March 31, 2008

IRVING, Texas, March 31 /PRNewswire-FirstCall/ -- Carrington Laboratories, Inc. (OTC Bulletin Board: CARN) today reported revenue of $21.8 million and a net loss of $9.8 million, or ($0.90) per basic and diluted share, for the year ended December 31, 2007.

Excluding net funding of $2.8 million for DelSite Biotechnologies, Inc., the Company's wholly-owned drug delivery subsidiary, the pro forma loss for 2007 was $7.0 million. 2006's net loss, including DelSite net costs of $3.1 million, was $7.6 million, or ($0.70) per basic and diluted share, on Company- wide revenue of $27.4 million.

The decrease in revenue for 2007 was primarily due to a decrease in consumer services revenue, to $11.6 million from $16.6 million a year ago. Medical services revenues dropped slightly, to $8.4 million from $8.8 million in 2006; royalty income remained roughly the same at $417,000.

Revenue for the fourth quarter ended December 31, 2007 decreased to $5.0 million from $6.7 million in the year-ago period. The net loss for the quarter was $2.7 million, or ($0.25) per basic and diluted share. The pro forma loss, before accounting for net expenses of DelSite, was $2.1 million. The year-ago fourth quarter's final net loss, including DelSite net expenses of $622,000, was $2.2 million, or ($0.20) per basic and diluted share.

"While our consumer services revenue base continues to be under pressure due to general economic conditions and lower order flow from our historically largest customer, we are stabilizing our revenue base in medical services. I am excited about the advances being made in the three technology platforms and the typhoid antigen being developed by DelSite. As previously stated, DelSite is currently engaged in the cGMP manufacture of the H5N1 (bird flu) nasal powder vaccine and is excited about initiating the Phase I clinical trials later this year," noted Carlton E. Turner, PhD, Carrington's President and Chief Executive Officer.

"As previously announced, the Board of Directors, in conjunction with outside advisors, is reviewing a range of strategic options, including the sale of non-core assets, to help address our present liquidity concerns. If we are to strengthen the scientific, clinical and business developments at DelSite and enhance shareholder value, we must secure funds and focus on clinical developments. We cannot afford to dilute our efforts," Turner added.

2007's Company highlights included:

-- Initiation in August 2007 and subsequent successful completion of

toxicology studies of cell-based H5N1 (bird flu) antigen in GelVac(TM)

nasal powder vaccine; Phase I human study planned for Q3-07

-- Evaluation of GelSite(R) polymer for transdermal vaccine delivery, with

an undisclosed biotech company; and for cardiac tissue repair, with an

undisclosed large US company; and for intranasal delivery of peptides

and proteins, with Nastech Pharmaceuticals

-- Presentation on GelSite(R) polymer as an antigen-sparing and

immunoenhancing adjuvant at the International Vaccine Conference in

Dublin, Ireland in October 2007

-- Expansion of agreement with DaySpring Pharma to 5 years (from 2 years)

for distribution of diabetic and radiation products into physician


-- New multi-year supply and patent license agreement with Primus

Pharmaceuticals for use of Acemannan Hydrogel(TM) in topical

prescription products

-- Extension of drug delivery technology evaluation agreement with

Brookwood Pharmaceuticals for use of GelSite(R) polymer as a matrix for

injectable applications and for selected classes of drugs

-- Expansion of license agreement with ElSohly Laboratories for GelSite(R)

polymer, allowing ElSohly to use the polymer in combination with small

molecules with defined biological activity for formulating new drug


-- Commercial evaluation license agreement with NIH for evaluating a novel

polysaccharide technology, discovered at NIH, with GelSite(R) polymer

in developing a typhoid vaccine

-- $8 million financing completed in August 2007

-- Presentation on DelSite drug delivery technology at the Acumen BioFin

Rodman & Renshaw Investor Conference in New York in November 2007

Conference Call Information

Investors are invited to listen to the conference call by dialing 1-800- 295-4740 in the US or 617-614-3925 internationally. The pass code is 23455797. The call is also being web cast by CCBN and can be accessed at Carrington's web site at A replay of the call will be available a few hours after the call concludes by dialing 1-888-286-8010 in the US and 617-801-6888 internationally. The pass code for the replay is 71596841.

The webcast is also being distributed through the Thomson StreetEvents Network to both institutional and individual investors. Individual investors can listen to the call at, Thomson/CCBN's individual investor portal, powered by StreetEvents. Institutional investors can access the call via Thomson's password-protected event management site, StreetEvents (

About Carrington

Carrington Laboratories, Inc. is an ISO 9001-certified, research-based, biopharmaceutical and consumer products company currently utilizing naturally- occurring complex carbohydrates to manufacture and market products for mucositis, radiation dermatitis, wound and oral care, as well as to manufacture and market the nutraceutical raw material Manapol(R) and cosmetic raw material Hydrapol(TM). Carrington also manufactures and markets consumer products and manufactures quality products for other companies. Manufacturing operations comply with cGMP standards. Carrington's DelSite Biotechnologies subsidiary is developing its proprietary GelSite(R) technology designed to provide controlled release of peptide and protein-based drugs. Carrington's technology is protected by more than 130 patents in 26 countries. Select products carry the CE mark, recognized by more than 20 countries around the world. For more information, visit

Non-GAAP Financial Information

This press release contains the non-generally accepted accounting principle financial measure of Pro forma loss which is defined as net loss excluding net DelSite expenses. The amounts included in the calculation of this measure are computed in accordance with generally accepted accounting principles (GAAP). We believe this measure is useful to investors because it may provide users of this financial information with a meaningful measure of the Company's profitability before funding the research and development activities of its DelSite subsidiary. Pro forma loss is not a measure of financial performance under GAAP and thus should not be considered in isolation. Furthermore, it should not be seen as a substitute for metrics prepared in accordance with GAAP. Our reconciliation of this measure to net loss is included in the following tables.

Certain statements in this release concerning Carrington may be forward- looking. Actual events will be dependent upon a number of factors and risks including, but not limited to: subsequent changes in plans by the Company's management; delays or problems in formulation, manufacturing, distribution, production and/or launch of new finished products; changes in the regulatory process; changes in market trends; and a number of other factors and risks described from time to time in the Company's filings with the Securities & Exchange Commission, including the Form 10-K, filed March 31, 2008.


Condensed Consolidated Statements of Operations

(in thousands, except per share amounts)

Three Months Ended Twelve Months Ended

December 31, (unaudited) December 31, (audited)

2007 2006 2007 2006


Medical Services $1,985 $2,034 $7,975 $8,417

Royalty income 104 104 417 417

Medical Services, total 2,089 2,138 8,392 8,834

Consumer Services 2,493 4,118 11,622 16,583

Grant income, DelSite 387 483 1,785 1,989

Total revenues 4,969 6,739 21,799 27,406

Cost and expenses:

Cost of product sales 4,200 5,328 16,619 20,586

Selling, general and

administrative 1,376 2,009 7,101 7,662

Research and development 86 134 544 670

Research and development

- DelSite 954 1,105 4,529 5,090

Other (income)/expense (4) 27 (30) (9)

Interest expense, net 1,034 291 2,805 1,014

Net loss before income

taxes (2,677) (2,155) (9,769) (7,607)

Provision for income

taxes - - - -

Net loss $(2,677) $(2,155) $(9,769) $(7,607)

Net loss per common

share - Basic and

diluted $ (0.25) $(0.20) $(0.90) $(0.70)

Weighted average

shares outstanding -

Basic 10,987 10,891 10,931 10,855

Weighted average

shares outstanding -

Diluted 10,987 10,891 10,931 10,855

Reconciliation of

Non-GAAP Financial


Net loss: $(2,677) $(2,155) $ (9,769) $(7,607)

Less: DelSite grant

income 387 483 1,785 1,989

Plus: DelSite expenses 954 1,105 4,529 5,090

Pro forma loss before

DelSite $(2,110) $(1,533) $ (7,025) $(4,506)


Condensed Consolidated Balance Sheets

(in thousands)

December 31, December 31,

2007 2006

(audited) (audited)


Current Assets:

Cash and cash equivalents $1,185 $878

Cash, restricted 489 0

Accounts receivable, net 2,348 2,659

Inventories, net 3,267 3,405

Prepaid expenses 147 155

Total current assets 7,436 7,097

Property, plant and equipment, net 5,171 6,093

Customer relationships, net - 199

Other assets, net 1,558 609

Total assets $14,165 $13,998


Current Liabilities:

Line of credit $2,990 $1,811

Accounts payable 1,697 1,324

Accrued liabilities 1,702 1,820

Current portion of long-term debt and capital

lease obligations 4,167 203

Deferred revenue 485 903

Total current liabilities $11,041 $6,061

Long-term debt and capital lease obligations,

net of debt discount 4,892 3,745

Commitments and contingencies - -

Shareholders' Equity:

Common stock 110 109

Capital in excess of par value 61,283 57,475

Accumulated deficit (63,158) (53,389)

Treasury stock at cost (3) (3)

Total shareholders' equity (deficit) (1,768) 4,192

Total liabilities and shareholders' equity

(deficit) $14,165 $13,998

SOURCE Carrington Laboratories, Inc.
Copyright©2008 PR Newswire.
All rights reserved

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