PRINCETON, N.J., May 18 /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, 2009. For the quarter, the Company reported net sales of $10.4 million versus $11.7 million in the first quarter 2008. The sales decrease of $1.3 million was principally attributable to foreign exchange associated with a significant weakening in the Canadian dollar and inventory rationalization on the part of several customers due to current economic conditions. The Company's advanced wound care line continued with its positive growth trend in the quarter, led by MEDIHONEY(R) which recorded sales of $500,000 versus $320,000 in the first quarter 2008. Gross profit margins increased to 32.1% from 26.8% in the first quarter 2008 due to a favorable sales mix towards higher margined products and improved manufacturing performance (mainly in connection with the discontinuation of domestic manufacturing in the fourth quarter 2008 of our First Aid Division).
Selling, general and administrative costs decreased 10.6% in response to cost savings initiatives implemented in the fourth quarter 2008. The overall effect of all these changes significantly reduced the Company's quarterly net loss to $0.8 million or $0.02 per share in 2009, from a net loss of $1.4 million or $0.04 per share in 2008.
CEO Ed Quilty commented, "We are continuing to drive our results toward profitability and positive cash flow. The positive trends we have achieved are obvious, as margins improved, expenses decreased, and higher-margined proprietary products grew more quickly than our core products. In times like these, cash is king, and valuable products like MEDIHONEY, BIOGUARD(TM), ALGICELL(TM) Ag, XTRASORB(TM), and MOBILITY1(TM) can be the keys to better margins. Although we will not see a full quarter's impact until the third quarter, the Company will see a boost in sales from our new character bandages that will sell over retail counters around the United States."
Quilty added, "We now have several multi-million dollar products on the market, and we will continue to nurture the ones we have in development. We are continuing to make progress in the recruitment stage of the Phase II study for DSC127, our novel pharmaceutical in development. All these advancements from a technology perspective, combined with consistent operational and financial improvements, point to strong growth prospects for our company's overall valuation."
Conference Call / Webcast
Today at 11:00am EDT (8:00am PDT), a conference call will be held to review the DSCI results; interested parties should call 800-299-8538 (domestic) or 617-786-2902 (international), with passcode 98098954 to access the call. You may also access this call via the Internet at:
For those who are unavailable to listen to the live broadcast, a replay will be available through June 18, 2009 and can be accessed by dialing 888-286-8010 (domestic), and 617-801-6888 (international). The passcode is 82270316.
About Derma Sciences
Derma Sciences is a global manufacturer and marketer of advanced wound care products. Its key product, MEDIHONEY(R), is sold throughout the world by Derma Sciences and Comvita New Zealand -- the licensor of the patented honey-based technology -- and is the leading brand of honey-based dressings for the management of wounds and burns. The product has been shown to be effective in a variety of wounds and burns, and was the focus of a positive large-scale randomized controlled trial on leg ulcers. Derma's recently FDA cleared BIOGUARD(TM) Barrier Dressing is the Company's latest new product entrant into the $14 billion global wound care market. The barrier technology was licensed from Quick-Med Technologies, Inc. in Q1 of 2007. Derma also has in development DSC127, a novel angiotensin analog for accelerated wound healing and scar reduction. DSC127 was licensed from the
Statements contained in this release that are not statements of historical fact may be deemed to be forward-looking statements. Without limiting the generality of the foregoing, words such as "may," "will," "expect," "believe," "anticipate," "intend," "could," "estimate" or "continue" are intended to identify forward-looking statements. Readers are cautioned that certain important factors may affect the Company's actual results and could cause such results to differ materially from any forward-looking statements which may be made in this release or which are otherwise made by or on behalf of the Company. Factors which may affect the Company's results include, but are not limited to, product demand, market acceptance, impact of competitive products and prices, product development, completion of an acquisition, commercialization or technological difficulties, the success or failure of negotiations and trade, legal, social and economic risks. Additional factors that could cause or contribute to differences between the Company's actual results and forward-looking statements Include but are not limited to, those discussed in the Company's filings with the Securities and Exchange Commission.
Contact: Derma Sciences, Inc. Edward J. Quilty Chairman and CEO firstname.lastname@example.org (609) 514-4744 Allen & Caron Inc Rudy Barrio (US Investors) email@example.com (212) 691-8087 Brian Kennedy (Media) firstname.lastname@example.org (212) 691-8087 - FINANCIAL TABLES FOLLOW - DERMA SCIENCES, INC. Consolidated Statements of Operations (Unaudited) Three Months ended March 31 2009 2008 Net Sales $10,431,891 $11,724,822 Cost of sales 7,078,255 8,582,613 Gross Profit 3,353,636 3,142,209 Operating expenses Selling, general and administrative 3,864,127 4,320,417 Research and development 130,346 48,108 Total operating expenses 3,994,473 4,368,525 Operating loss (640,837) (1,226,316) Other expense, net: Interest expense 171,470 264,915 Other (income) expense (1,536) 8,614 Total other expense 169,934 273,529 Loss before benefit for income taxes (810,771) (1,499,845) Benefit for income taxes (52,691) (90,057) Net Loss $(758,080) $(1,409,788) Loss per common share - basic and diluted $(0.02) $(0.04) Shares used in computing loss per common share - basic and diluted 40,140,743 34,038,207 DERMA SCIENCES, INC. AND SUBSIDIARIES Consolidated Balance Sheets March 31 December 31 ASSETS 2009 2008 (Unaudited) Current Assets Cash and cash equivalents $288,605 $391,038 Accounts receivable, net 2,818,283 3,892,523 Inventories 11,728,833 12,423,042 Prepaid expenses and other current assets 477,028 397,117 Total current assets 15,312,749 17,103,720 Cash - restricted 2,020,734 2,014,422 Equipment and improvements, net 3,696,866 3,977,853 Goodwill 7,119,726 7,119,726 Other intangible assets, net 4,979,749 5,310,129 Other assets, net 643,765 681,472 Total Assets $33,773,589 $36,207,322 LIABILITIES AND SHAREHOLDERS' EQUITY Current Liabilities Line of credit borrowings 3,534,113 3,446,605 Current maturities of long-term debt 1,290,523 1,298,207 Accounts payable 2,625,477 3,614,764 Accrued expenses and other current liabilities 1,541,653 2,004,493 Total current liabilities 8,991,766 10,364,069 Long-term debt 3,741,670 4,065,036 Other long-term liabilities 42,038 44,848 Deferred tax liability 315,095 340,871 Total Liabilities 13,090,569 14,814,824 Shareholders' Equity Convertible preferred stock, $.01 par value; 11,750,000 shares authorized; issued and outstanding: 2,280,407 shares (liquidation preference of $4,210,231 at March 31, 2009) 22,804 22,804 Common stock, $.01 par value; 150,000,000 authorized; issued and outstanding: 40,140,743 401,407 401,407 Additional paid-in capital 40,268,832 40,027,645 Accumulated other comprehensive income - cumulative translation adjustments 411,880 604,465 Accumulated deficit (20,421,903) (19,663,823) Total Shareholders' Equity 20,683,020 21,392,498 Total Liabilities and Shareholders' Equity $33,773,589 $36,207,322
|SOURCE Derma Sciences, Inc.|
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