Derma Sciences Reports First Quarter 20...( Sales Reach ...)

Sales Reach $11.7 Million

PRINCETON, N.J., May 15 /PRNewswire-FirstCall/ -- Derma Sciences, Inc. (OTC Bulletin Board: DSCI), a provider of advanced wound-care products, announced results today for the first quarter ended March 31, 2008. For the quarter, sales were up 47 percent from the previous year, including sales from the newly acquired First Aid Division. The Company reported a loss consistent with earlier guidance, due primarily to higher than expected integration costs associated with its First Aid Division.

For the quarter, the Company reported sales of $11.7 million, compared to sales in the first quarter of the previous year of $8.0 million. Gross margins declined to 27 percent from the previous year's 35 percent, due to the additional integration costs causing temporary downward margin pressure on the First Aid Division's products and a shortfall in expected overhead absorption in the company's manufacturing facility in Toronto. This shortfall was primarily due to timing related issues on two large private label orders. SG&A costs were up significantly, consistent with the Company's growth strategy that was implemented in the second half of 2007. The Company reported a loss of $1.4 million or $0.04 loss per share, vs. a loss of $138,953 or $0.01 loss per share in the first quarter of 2007.

CEO Ed Quilty commented, "We are seeing gratifying growth in our sales from our proprietary branded business for products such as our MEDIHONEY(TM). We continued to expand the sales force, as our strategic plan specifies, and at the end of the quarter we had 10 sales reps and one clinical nurse, versus a year-earlier sales force of 2 sales reps. MEDIHONEY sales were $319,179 for the quarter -- on target for the product's projected first full quarter of sales. There have been over 800 clinical evaluations within the US and Canada since the product was launched last fall. Also, we have two additional 510K clearances for lin
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