PRINCETON, N.J., April 1 /PRNewswire-FirstCall/ -- Derma Sciences, Inc. (OTC Bulletin Board: DSCI), a provider of advanced wound care products, reported that sales for 2008 rose 47.1% year-over-year, reflecting incremental sales from its First Aid Division (FAD) and higher sales of proprietary advanced wound care products led by MEDIHONEY(R). Sales for the year were $50.2 million vs $34.1 million in 2007. The Company's loss increased consistent with expectations to $4.0 million or $0.10 per share, compared to 2007's loss of $2.3 million or $0.09 per share, as Derma Sciences implemented its advanced wound care growth strategy, integrated FAD into the company and continued its investment in R&D. Fourth quarter 2008 sales were $12.6 million versus $10.7 million in 2007. Net losses diminished each quarter during the year, and the 2008 fourth quarter loss was $0.6 million versus $2.0 million in 2007.
Chairman and CEO Ed Quilty commented, "Our advanced wound care products made great strides in 2008. Sales for our silver alginate product, ALGICELL(R) Ag, nearly doubled to over $1.1 million. Sales of our MEDIHONEY product, launched in October 2007, grew consistently each quarter, and ended the year at $1.5 million in 2008 versus $0.1 million for the final three months of 2007. MEDIHONEY continues to get great media coverage, typified by a cluster of television and print articles reporting that the product was credited for saving a patient's leg from having to be amputated at Long Island Jewish Hospital in January 2009. Its coverage in medical journals continues to be strong, as seven separate articles on the emerging use of MEDIHONEY were published in the major wound care journals since December of 2008.
"In the fourth quarter and early 2009, we launched three additional promising new products," Quilty stated. "Our proprietary lines now include the TCC-EZ(TM) Total Contact Casting system, XTRASORB(TM) Super Absorbent Dressings and the MOBILITY1(TM) Intermittent Pneumatic Compression Therapy system for ambulatory patients. Last month we received clearance from the Food and Drug Administration for the marketing and sale of BIOGUARD(TM) Barrier Dressings, our novel line of infection control products. We are also pleased to report that patients are currently enrolling into the Phase II efficacy study of DSC127, a novel angiotensin analog licensed from the
At December 31, the Company had a current ratio of 1.6:1. Total assets were $36.2 million vs total liabilities of $14.8 million. Shareholder's equity grew to $21.4 million, or approximately $0.53 per share. Quilty pointed out that the Company's common stock is trading below book value, in spite of growing sales and successful proprietary products added to the company's portfolio. "It's a sign of the times," he said, "but clearly not a satisfactory valuation from our point of view. We will stick to our strategic plan, reduce expenses wherever we are able to without adversely affecting our products and customer service, and continue to build sales and value for our shareholders.
"Getting through a difficult economic time like this requires hard work and dedication on the part of our staff, and a willingness to follow financial priorities rigorously," Quilty continued. "The integration of our FAD acquired in November 2007 was more costly than we had expected in 2008, and we had to continue working in a high-cost plant until we successfully transitioned manufacturing. Although that manufacturing transition took significantly longer than expected, we achieved our target margins for FAD in Q4. We expect further margin improvements in 2009, and we anticipate continuously improving EBITDA and cash flow as well."
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 866-271-5140 (domestic) or 617-213-8893 (international), with passcode 42480759 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 May 1, 2009 and can be accessed by dialing 888-286-8010 (domestic), and 617-801-6888 (international). The passcode is 36656033.
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. AND SUBSIDIARIES Consolidated Statements of Operations Three months ended December 31 (Unaudited) 2008 2007 Net Sales $12,558,067 $10,651,944 Cost of sales 8,148,059 7,231,758 Gross Profit 4,410,008 3,420,186 Operating expenses Selling, general and administrative 4,277,737 3,968,259 Research and development 414,127 868,069 Total operating expenses 4,691,864 4,836,328 Operating loss (281,856) (1,416,142) Other expense, net: Interest expense 191,405 270,605 Loss on debt extinguishment - 256,628 Other expense, net 44,426 35,699 Total other expense, net 235,831 562,932 Loss before provision for income taxes (517,687) (1,979,074) Provision for income taxes 62,355 66,869 Net Loss $(580,042) $(2,045,943) Net loss per common share - basic and diluted $(0.01) $(0.07) Shares used in computing net loss per common share - basic and diluted 40,140,743 30,289,386 Year ended December 31 2008 2007 Net Sales $50,199,428 $34,135,401 Cost of sales 35,289,684 22,530,986 Gross Profit 14,909,744 11,604,415 Operating expenses Selling, general and administrative 17,196,863 11,885,368 Research and development 653,326 993,069 Total operating expenses 17,850,189 12,878,437 Operating loss (2,940,445) (1,274,022) Other expense, net: Interest expense 940,148 413,992 Loss on debt extinguishment -- 256,628 Other expense, net 22,529 77,929 Total other expense, net 962,677 748,549 Loss before provision for income taxes (3,903,122) (2,022,571) Provision for income taxes 58,815 262,034 Net Loss $(3,961,937) $(2,284,605) Net loss per common share - basic and diluted $(0.10) $(0.09) Shares used in computing net loss per common share - basic and diluted 38,606,779 26,523,541 DERMA SCIENCES, INC. AND SUBSIDIARIES Consolidated Balance Sheets December 31 ASSETS 2008 2007 Current Assets Cash and cash equivalents $391,038 $577,096 Accounts receivable, net 3,892,523 3,667,119 Inventories 12,423,042 9,935,977 Prepaid expenses and other current assets 397,117 1,210,135 Total current assets 17,103,720 15,390,327 Cash - restricted 2,014,422 - Equipment and improvements, net 3,977,853 4,909,049 Goodwill 7,119,726 9,524,305 Other intangible assets, net 5,310,129 5,537,653 Other assets, net 681,472 509,507 Total Assets $36,207,322 $35,870,841 LIABILITIES AND SHAREHOLDERS' EQUITY Current Liabilities Line of credit borrowings 3,446,605 1,219,197 Current maturities of long-term debt 1,298,207 1,288,532 Accounts payable 3,614,764 4,092,278 Accrued expenses and other current liabilities 2,004,493 3,421,282 Total current liabilities 10,364,069 10,021,289 Long-term debt 4,065,036 5,292,136 Other long-term liabilities 44,848 82,402 Deferred tax liability 340,871 420,059 Total Liabilities 14,814,824 15,815,886 Shareholders' Equity Convertible preferred stock, $.01 par value; 11,750,000 shares authorized; issued and outstanding: 2,280,407 at December 31, 2008 and 2007 (liquidation preference of $4,210,231 at December 31, 2008) 22,804 22,804 Common stock, $.01 par value, authorized shares 150,000,000; issued and outstanding shares: 40,140,743 at December 31, 2008 and 33,829,755 at December 31, 2007 401,407 338,298 Additional paid-in capital 40,027,645 33,540,952 Accumulated other comprehensive income - cumulative translation adjustments 604,465 1,854,787 Accumulated deficit (19,663,823) (15,701,886) Total Shareholders' Equity 21,392,498 20,054,955 Total Liabilities and Shareholders' Equity $36,207,322 $35,870,841
|SOURCE Derma Sciences, Inc.|
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