Attached files
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| 8-K - CURRENT REPORT - Tribute Pharmaceuticals Canada Inc. | slxcf_8k.htm |
Exhibit 99.1
Source: Stellar Pharmaceuticals Inc.
Press Release
Stellar Pharmaceuticals Reports Second Quarter 2011 Financial Results
LONDON, ONTARIO — August 15, 2011 -- Stellar Pharmaceuticals Inc. (OTCQB: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 period ended June 30, 2011. In this press release, all dollar amounts are expressed in Canadian currency and results are reported in accordance with United States generally accepted accounting principles (U.S. GAAP).
Q2-2011 Financial Highlights
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International product revenues grew by 90.7%%
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Domestic product revenues grew by 4.2%
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Cost of sales down to 24.6% compared to 34.6% in 2010
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For the three month period ended June 30, 2011, total revenues from all sources decreased by 14.6% to $1,072,700, compared to $1,255,800 in the same period during 2010. This differential was due to a 98.6% decrease in royalty and licensing revenues to $6,200 for the three month ended June 30, 2011 compared to $444,100 in the same period during 2010. However, product sales for both domestic and international markets increased by 4.2% and 90.7%, respectively, for the three month period ended June 30, 2011.
For the six month period ended June 30, 2011, total revenues from all sources decreased by 6.9% to $1,706,700, compared to $1,833,700 for the same period in 2010.
Total expenses for the three month period ended June 30, 2011 increased 22.8% or $139,900, compared to the same period in 2010. Total expenses for the six month period end June 30, 2011 increased 24.6% or $301,400, compared to the same period in 2010.
Factors contributing to the decrease in net income loss of $244,490 for the six month period ended June 30, 2011, compared to the same period in 2010, were several non-cash transactions, including:
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share option expense of $91,000 (2010 – 51,400), of which $21,700 (2010 - $nil) related to options which fully vested upon the retirement of an officer of the Company
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amortization expense of $55,100 (2010 - $57,600)
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warrant liability expense of $64,300 (2010 - $nil) related to the re-valuation of warrants issued in the October 2010 private placement
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foreign currency exchange expense of $55,200 (2010 - $15,500)
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The Company’s net income for the second quarter of 2011 was $58,400 compared to $360,800 during the same period in 2010. As noted above, the net income for the three month period ended June 30, 2011 included $444,100 of royalty and licensing revenues, compared to $6,200 for the same period in 2011, which accounted for the deferential in profit. Although these revenues are an important part of the Company’s business, the Company is encouraged by the increases in sales noted in both the international and domestic markets as these are the driving forces in growing the Company.
Stellar Q2 2011 Results
Page 2 of 5
At June 30, 2011 the Company had $3.5 million in cash and cash equivalents, a decrease of $0.9 million over the December 31, 2010 balance of $4.4 million. A significant portion of this decrease was attributed to a $0.4 million retirement payout to an executive office of the Company.
Arnold Tenney, Stellar's President and Chief Executive Officer, commented, "Stellar ended the second quarter of 2011, in a strong financial position, with increases this quarter, in both international and Canadian product sales, no short or long tem debt and working capital of $4.5 million. The Company continues to evaluate all opportunities, including strategic partnerships, to improve product growth and our position in both Canada and international markets.”
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® and NeoVisc® Single Dose, for the symptomatic treatment of osteoarthritis; and Uracyst®, its patented technology for the treatment of interstitial cystitis (IC), an inflammatory disease of the urinary bladder wall. Both NeoVisc and Uracyst have their CE Mark certification for the European Community. Stellar also has an in-licensing agreement for NMP22® BladderChek®, a proteomics-based diagnostic test for the diagnosis and monitoring of bladder cancer. For more information, please visit the company's website at www.stellarpharma.com.
Forward-Looking Statements
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.
CONTACTS:
Company Contact
Arnold Tenney
President & CEO
Stellar Pharmaceuticals Inc.
(519) 434-1540
email – arnoldt@stellarpharma.com
Stellar Q2 2011 Results
Page 3 of 5
CONDENSED INTERIM FINANCIAL STATEMENTS
STELLAR PHARMACEUTICALS INC.
CONDENSED INTERIM BALANCE SHEETS
(Expressed in Canadian dollars)
(Unaudited)
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CURRENT
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As at
June 30, 2011
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As at
December 31, 2010
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Cash and cash equivalents
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$ | 3,453,867 | $ | 4,352,285 | ||||
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Accounts receivable, net of allowance of $nil (2010 - $nil)
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567,116 | 493,370 | ||||||
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Inventories
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725,466 | 611,676 | ||||||
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Taxes recoverable
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18,456 | - | ||||||
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Loan receivable
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15,814 | 15,814 | ||||||
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Prepaids, deposits and sundry receivables
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154,635 | 99,433 | ||||||
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Total current assets
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4,935,354 | 5,572,578 | ||||||
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PROPERTY, PLANT AND EQUIPMENT, net
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1,520,851 | 1,568,729 | ||||||
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OTHER ASSETS
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156,591 | 139,287 | ||||||
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Total assets
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$ | 6,612,796 | $ | 7,280,594 | ||||
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LIABILITIES
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CURRENT
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Accounts payable
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$ | 175,707 | $ | 236,420 | ||||
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Accrued liabilities
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167,593 | 557,735 | ||||||
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Deferred revenues
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9,643 | 8,645 | ||||||
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Product returns liability
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- | 112,500 | ||||||
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Total current liabilities
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352,943 | 915,300 | ||||||
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LONG TERM WARRANT LIABILITY
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281,093 | 216,823 | ||||||
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Total liabilities
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634,036 | 1,132,123 | ||||||
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CONTINGENCIES AND COMMITMENTS
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SHAREHOLDERS’ EQUITY
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CAPITAL STOCK
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AUTHORIZED
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| Unlimited Non-voting, convertible redeemable and retractable | ||||||||
| preferred shares with no par value | ||||||||
| Unlimited Common Shares with no par value | ||||||||
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ISSUED
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| 24,610,042 Common Shares (2010 – 24,585,040) | 9,039,764 | 9,055,982 | ||||||
| Additional Paid-in capital options - outstanding | 240,555 | 211,781 | ||||||
| Additional Paid-in capital options - expired | 795,740 | 733,517 | ||||||
| 10,076,059 | 10,001,280 | |||||||
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DEFICIT
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(4,097,299 | ) | (3,852,809 | ) | ||||
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Total shareholders’ equity
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5,978,760 | 6,148,471 | ||||||
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Total liabilities and shareholders’ equity
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$ | 6,612,796 | $ | 7,280,594 | ||||
Stellar Q2 2011 Results
Page 4 of 5
STELLAR PHARMACEUTICALS INC.
CONDENSED STATEMENTS OF OPERATIONS,
COMPREHENSIVE INCOME AND DEFICIT
(Expressed in Canadian Dollars)
(Unaudited)
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For the Three Month Period
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For the Six Month Period
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Ended June 30
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Ended June 30
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2011
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2010
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2011
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2010
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PRODUCT SALES
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$ | 1,066,542 | $ | 811,752 | $ | 1,697,819 | $ | 1,361,262 | ||||||||
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ROYALTY AND LICENSING REVENUES
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6,163 | 444,059 | 8,929 | 472,426 | ||||||||||||
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TOTAL REVENUES FROM ALL SOURCES
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1,072,705 | 1,255,811 | 1,706,748 | 1,833,688 | ||||||||||||
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COST OF PRODUCTS SOLD
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261,783 | 280,717 | 432,928 | 484,474 | ||||||||||||
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GROSS PROFIT
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810,922 | 975,094 | 1,273,820 | 1,349,214 | ||||||||||||
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EXPENSES
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Selling, general and administrative
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698,946 | 592,585 | 1,403,002 | 1,160,517 | ||||||||||||
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Research and development
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20,093 | 9,683 | 33,771 | 35,954 | ||||||||||||
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Change in warrant liability
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25,024 | - | 64,271 | - | ||||||||||||
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Amortization (non-manufacturing property, plant and equipment)
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11,807 | 13,660 | 24,120 | 27,320 | ||||||||||||
| 755,870 | 615,928 | 1,525,164 | 1,223,791 | |||||||||||||
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INCOME (LOSS) FROM OPERATIONS
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55,042 | 359,166 | (251,344 | ) | 125,423 | |||||||||||
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INTEREST AND OTHER INCOME
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3,353 | 1,610 | 6,854 | 3,123 | ||||||||||||
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LOSS ON DISPOSAL OF EQUIPMENT
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- | - | - | (15,308 | ) | |||||||||||
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INCOME (LOSS) AND COMPREHENSIVE INCOME FOR
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THE PERIOD BEFORE INCOME TAXES
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58,405 | 360,776 | (244,490 | ) | 113,238 | |||||||||||
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Current income tax expense
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- | (29,300 | ) | - | (29,300 | ) | ||||||||||
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Future income tax recovery
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- | 29,300 | - | 29,300 | ||||||||||||
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NET INCOME (LOSS) AND COMPREHENSIVE
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INCOME (LOSS) FOR THE PERIOD
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58,405 | 360,776 | (244,490 | ) | 113,238 | |||||||||||
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DEFICIT, beginning of period
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(4,155,704 | ) | (4,626,055 | ) | (3,852,809 | ) | (4,378,517 | ) | ||||||||
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DEFICIT, end of period
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$ | (4,097,299 | ) | $ | (4,265,279 | ) | $ | (4,097,299 | ) | $ | (4,265,279 | ) | ||||
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EARNINGS (LOSS) PER SHARE – Basic and diluted
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$ | 0.00 | $ | 0.02 | $ | (0.01 | ) | $ | 0.00 | |||||||
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WEIGHTED AVERAGE NUMBER OF
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COMMON SHARES OUTSTANDING – Basic and diluted
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24,602,074 | 23,485,535 | 24,593,604 | 23,482,802 | ||||||||||||
Stellar Q2 2011 Results
Page 5 of 5
STELLAR PHARMACEUTICALS INC.
STATEMENTS OF CASH FLOWS
(Expressed in Canadian dollars)
(Unaudited)
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For the Three Month Period
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For the Six Month Period
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Ended June 30
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Ended June 30
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2011
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2010
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2011
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2010
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CASH FLOWS FROM (USED IN) OPERATING ACTIVITIES -
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Net income (loss) for the period
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$ | 58,405 | $ | 360,776 | $ | (244,490 | ) | $ | 113,238 | |||||||
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Items not affecting cash
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Amortization
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28,340 | 30,794 | 55,054 | 57,579 | ||||||||||||
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Current income tax expense
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(29,300 | ) | - | (29,300 | ) | |||||||||||
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Future income tax recovery
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29,300 | - | 29,300 | |||||||||||||
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Loss on disposal of equipment
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- | - | - | 15,308 | ||||||||||||
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Change in warrant liability
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25,024 | - | 64,271 | - | ||||||||||||
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Issuance of equity instruments for services rendered
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- | 4,000 | 5,466 | 4,000 | ||||||||||||
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Stock-based compensation
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27,262 | 17,443 | 90,998 | 51,390 | ||||||||||||
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Change in non-cash operating asset and liabilities
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(381,116 | ) | (434,961 | ) | (823,545 | ) | (575,882 | ) | ||||||||
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CASH FLOWS (USED IN) OPERATING ACTIVITIES
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(242,085 | ) | (21,948 | ) | (852,246 | ) | (334,367 | ) | ||||||||
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CASH FLOWS FROM (USED IN) INVESTING ACTIVITIES -
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Additions to property, plant and equipment
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(5,008 | ) | (40,290 | ) | (5,008 | ) | (262,142 | ) | ||||||||
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Increase to other assets
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(15,537 | ) | (2,833 | ) | (19,480 | ) | (10,847 | ) | ||||||||
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Proceeds from sale of equipment
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- | - | - | 12,630 | ||||||||||||
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CASH FLOWS USED IN INVESTING ACTIVITIES
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(20,545 | ) | (43,123 | ) | (24,488 | ) | (260,359 | ) | ||||||||
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CASH FLOWS USED IN FINANCING ACTIVITIES -
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Stock options exercised
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- | 69,000 | - | 69,000 | ||||||||||||
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Share issuance costs
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(21,684 | ) | - | (21,684 | ) | - | ||||||||||
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CASH FLOWS FROM (USED IN) FINANCING ACTIVITIES
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(21,684 | ) | 69,000 | (21,684 | ) | 69,000 | ||||||||||
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CHANGE IN CASH AND CASH EQUIVALENTS
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(284,314 | ) | 3,929 | (898,418 | ) | (525,726 | ) | |||||||||
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CASH AND CASH EQUIVALENTS,
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Beginning of period
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3,738,181 | 1,795,557 | 4,352,285 | 2,325,212 | ||||||||||||
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CASH AND CASH EQUIVALENTS,
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End of period
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$ | 3,453,867 | $ | 1,799,486 | $ | 3,453,867 | $ | 1,799,486 | ||||||||
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