Attached files
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| 8-K - CURRENT REPORT - Tribute Pharmaceuticals Canada Inc. | slxcf_8k.htm |
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Press Release
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Source: Stellar Pharmaceuticals Inc.
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Stellar Pharmaceuticals Reports Second Quarter
and First Half 2012 Financial Results
Total revenues and gross profits up due to strong Licensed Domestic Product Net Sales
MILTON, ONTARIO – (MARKET WIRE) – August 14, 2012 – Stellar Pharmaceuticals Inc. (OTCQB:SLXCF; OTCBB:SLXCF) ("Stellar" or "the Company"), an emerging specialty pharmaceutical company with a primary focus on the acquisition, licensing, development and promotion of healthcare products in Canada, today announced financial results for the period ended June 30, 2012. In this press release, all dollar amounts are expressed in Canadian currency – unless otherwise noted – and results are reported in accordance with United States generally accepted accounting principles (U.S. GAAP).
Second Quarter 2012 Highlights
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Revenues increase by 170% in Q2 and by 239% in the first half 2012
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Gross profit up 56% in Q2 and by 96% in the first half 2012
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Acquired Canadian rights to Collatamp G® from Theramed Corporation
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Closed a US$6 million loan to fund product growth and for the pending commercial launch of Cambia®.
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For the three month period ended June 30, 2012, Stellar reported total revenues of $2,891,100, an increase of 170% compared to the same period in 2011. This increase was largely driven by licensed domestic product net sales of $1,930,800 (compared to nil in the previous year) as a result of the acquisition and integration of Tribute Pharmaceuticals. Additionally in the quarter, domestic product sales increased by 13% whereas international product sales decreased by 38%. For the six month period, total revenues grew to $5,791,200, representing an increase of 239% when compared to the same period in 2011.
As a result, gross profit also increased. The Company enjoyed a 56% increase in gross profit over the three month period ended June 30, 2102 and a 96% increase in gross profit over the six month period of 2012. Gross profit for the second quarter was $1,263,400 and, for the first half of fiscal 2012, $2,496,200.
Selling, general and administrative expenses increased by $1,392,000. The increase is due mainly to the expansion of the Company’s sales force, business development activity and prelaunch activities related to Cambia. For the six month period ending June 30, 2012, selling, general and administrative expenses were $4,108,500 compared to $1,403,000 for the same period of the prior year.
The Company’s net loss for the three month period ended June 30, 2012 was $731,400 compared to net income of $58,400 during the same period in 2011. For the six month period ending June 30, 2012 the net loss was $1,357,800 compared to a prior year net loss of $244,500.
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The second quarter saw Stellar make significant advances on a number of key strategic objectives. In June 2012, the Company acquired the Canadian rights for Collatamp G® from Theramed Corporation, thereby adding to Stellar’s portfolio of hospital and specialty care products in Canada. The Company also met with the FDA in the United States in March 2012 to discuss the process for US approval of Bezalip SR, a product with significant growth potential in the US.
On May 11, 2012, the Company secured a US$6 million loan from MidCap Financial LLC, available in two tranches, to support further market growth and business development activities. Stellar plans to use these funds to expand its sales force and promotional activities related to both existing products and for the launch of Cambia, which is planned for Q4, 2012. The Company received US$3.5 million as proceeds of the first tranche of the term loan.
As of June 30 2012, the Company had cash and cash equivalents of $3,390,000.
“Over the first half of the year, Stellar has made significant progress executing on its growth strategy, culminating in a number of key achievements in the second quarter of this fiscal year,” said Rob Harris, CEO of Stellar Pharmaceuticals. “As we continue to lay the groundwork for strong future growth in both the domestic and international markets, we will increase our focus on enhancing our sales and business development capabilities while working closely with potential partners to identify and secure the rights to other products which – like Collatamp G, Cambia and Bezalip SR – promise to play key roles in the growth of both our revenue and profit going forward.”
About Stellar Pharmaceuticals Inc.
Stellar and its subsidiary, Tribute Pharmaceuticals, is an emerging Canadian specialty pharmaceutical company focused on the acquisition, licensing, development and management of pharmaceutical and healthcare products with its primary focus on the Canadian market.
Stellar’s current portfolio of assets includes nine products: NeoVisc®, NeoVisc® Single Dose, Uracyst®, BladderChek®, Bezalip® SR, Soriatane®, Cambia®, Daraprim®, Collatamp G® and MycoVa™. Each of these products has received regulatory approval in Canada, with the exception of MycoVa. Additionally, NeoVisc® and Uracyst® are commercially available and are sold globally through various international partnerships. Stellar is currently in negotiations to expand its global presence with both NeoVisc® and Uracyst® in other international markets. For further information on Stellar P, visit http://www.stellarpharma.com.
Forward-Looking Statements
This press release contains certain forward-looking statements about Stellar as defined in the Private Securities Litigation Reform Act of 1995, which statements can be identified by the use of forward-looking terminology, such as “may”, “will”, “expect”, “intend”, "anticipate", "estimate", "predict", "plan" or "continue" or the negative thereof or other variations thereon or comparable terminology referring to future events or results. Forward-looking statements, by their nature, are subject to risks and uncertainties. Stellar's actual results could differ materially from those anticipated in these forward-looking statements as a result of numerous factors, including general economic conditions, the ability of Stellar to successfully integrate operations, and the timing of expenditures and expansion opportunities, any of which could cause actual results to vary materially from current results or anticipated future results. See Stellar's reports filed with the Canadian Securities Regulatory Authorities and the U.S. Securities and Exchange Commission from time to time for cautionary statements identifying important factors with respect to such forward-looking statements, including certain risks and uncertainties that could cause actual results to differ materially from results referred to in forward-looking statements. Stellar assumes no obligation to update the information contained in this press release to update forward-looking statements to reflect changed assumptions, the occurrence of anticipated events or changes in future operating results, financial condition or business over time.
For further information on Stellar, visit http://www.stellarpharma.com.
Source references available by request.
Contacts:
Stellar Pharmaceuticals Inc.
Scott Langille
CFO
519-434-1540
scott.langille@stellarpharma.com
Stellar Pharmaceuticals Inc.
Arnold Tenney
Chairman
705-445-9505
www.stellarpharma.com
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STELLAR PHARMACEUTICALS INC.
CONDENSED INTERIM CONSOLIDATED BALANCE SHEETS
(Expressed in Canadian dollars)
(Unaudited)
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As at
June 30,
2012
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As at
December 31,
2011
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ASSETS
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Current
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Cash and cash equivalents
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$ | 3,389,670 | $ | 2,227,973 | ||||
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Accounts receivable, net of allowance of $nil
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916,181 | 763,810 | ||||||
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Inventories
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990,398 | 870,630 | ||||||
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Taxes recoverable
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193,595 | 180,160 | ||||||
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Loan receivable
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15,814 | 15,814 | ||||||
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Prepaid expenses and other receivables
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125,113 | 124,101 | ||||||
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Total current assets
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5,630,771 | 4,182,488 | ||||||
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Property, plant and equipment, net
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1,172,388 | 1,207,462 | ||||||
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Intangible assets, net
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10,463,961 | 10,409,744 | ||||||
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Goodwill
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3,597,077 | 3,408,741 | ||||||
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Debt issuance costs, net
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417,155 | - | ||||||
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Total assets
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$ | 21,281,352 | $ | 19,208,435 | ||||
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LIABILITIES
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Current
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Accounts payable and accrued liabilities
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$ | 2,665,969 | $ | 2,684,542 | ||||
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Amount payable and contingent consideration due
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465,558 | 1,624,289 | ||||||
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Current portion of long term debt
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891,713 | - | ||||||
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Warrant liability
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312,486 | 2,543 | ||||||
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Total current liabilities
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4,335,726 | 4,311,374 | ||||||
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Long term debt
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2,480,176 | - | ||||||
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Deferred tax liability
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1,009,600 | 1,524,200 | ||||||
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Total liabilities
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7,825,502 | 5,835,574 | ||||||
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Contingencies and commitments
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SHAREHOLDERS’ EQUITY
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Capital Stock
Common shares
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17,589,957 | 16,469,621 | ||||||
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Additional paid-in capital options
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1,598,253 | 1,277,830 | ||||||
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Deficit
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(5,732,360 | ) | (4,374,590 | ) | ||||
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Total shareholders’ equity
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13,455,850 | 13,372,861 | ||||||
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Total liabilities and shareholders’ equity
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$ | 21,281,352 | $ | 19,208,435 | ||||
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STELLAR PHARMACEUTICALS INC.
CONDENSED INTERIM CONSOLIDATED STATEMENTS OF OPERATIONS,
COMPREHENSIVE (LOSS) INCOME AND DEFICIT
(Expressed in Canadian dollars)
(Unaudited)
| For the Three Month Period
Ended June 30
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For the Six Month Period
Ended June 30
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2012
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2011
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2012
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2011
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Revenues
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Licensed domestic product net sales
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$ | 1,930,789 | $ | - | $ | 3,836,651 | $ | - | ||||||||
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Other domestic product sales
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656,895 | 580,622 | 1,131,162 | 954,388 | ||||||||||||
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International product sales
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303,378 | 485,920 | 823,403 | 743,431 | ||||||||||||
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Royalty and licensing revenues
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- | 6,163 | - | 8,929 | ||||||||||||
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Total revenues
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2,891,062 | 1,072,705 | 5,791,216 | 1,706,748 | ||||||||||||
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Operating costs and expenses
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Licensor sales and distribution fees
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1,352,845 | - | 2,699,618 | - | ||||||||||||
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Cost of products sold
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274,810 | 261,783 | 595,400 | 432,928 | ||||||||||||
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Total cost of sales
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1,627,655 | 261,783 | 3,295,018 | 432,928 | ||||||||||||
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Selling, general and administrative
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2,090,965 | 698,946 | 4,108,538 | 1,403,002 | ||||||||||||
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Amortization
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127,426 | 11,807 | 224,463 | 24,120 | ||||||||||||
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Total cost and expenses
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3,846,046 | 972,536 | 7,628,019 | 1,860,050 | ||||||||||||
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(Loss) Income from operations
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(954,984 | ) | 100,169 | (1,836,803 | ) | (153,302 | ) | |||||||||
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Non-operating income (expenses)
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Change in warrant liability
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134,671 | 25,024 | ) | 137,213 | 64,271 | ) | ||||||||||
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Cost of extending the warrant expiration
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(135,157 | ) | - | (135,157 | ) | - | ||||||||||
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Change in fair value of contingent consideration
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- | - | 79,724 | - | ||||||||||||
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Research and development
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(6,574 | ) | (20,093 | ) | (8,326 | ) | (33,771 | ) | ||||||||
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Accretion expense
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(33,703 | ) | - | (54,367 | ) | - | ||||||||||
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Interest income
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2,527 | 3,353 | 6,032 | 6,854 | ||||||||||||
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Interest (expense)
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(59,302 | ) | - | (60,686 | ) | - | ||||||||||
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(Loss) income and comprehensive (loss) income before tax
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(1,052,522 | ) | 58,405 | (1,872,370 | ) | (244,490 | ) | |||||||||
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Deferred income tax (recovery)
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(321,100 | ) | - | (514,600 | ) | - | ||||||||||
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Net (loss) income and comprehensive (loss) income for the period
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$ | (731,422 | ) | $ | 58,405 | $ | (1,357,770 | ) | $ | (244,490 | ) | |||||
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Deficit, beginning of period
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(5,000,938 | ) | (4,155,704 | ) | (4,374,590 | ) | (3,852,809 | ) | ||||||||
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Deficit, end of period
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$ | (5,732,360 | ) | $ | (4,097,299 | ) | $ | (5,732,360 | ) | $ | (4,097,299 | ) | ||||
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Basic and Diluted (Loss) Earnings per share
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$ | (0.02 | ) | $ | 0.00 | $ | (0.04 | ) | $ | (0.01 | ) |
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STELLAR PHARMACEUTICALS INC.
CONDENSED INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS
(Expressed in Canadian dollars)
(Unaudited)
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For the Six Month Period
Ended June 30
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2012
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2011
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Cash flows from (used in) operating activities
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Net (loss) income
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$ | (1,357,770 | ) | $ | (244,490 | ) | ||
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Items not affecting cash:
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Deferred income tax recovery
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(514,600 | ) | - | |||||
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Amortization
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254,145 | 55,054 | ||||||
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Changes in warrant liability
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(137,214 | ) | 64,271 | |||||
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Cost of extending the warrant expiration
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135,157 | - | ||||||
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Changes in fair value of contingent consideration
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(79,724 | ) | - | |||||
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Stock-based compensation
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320,423 | 90,998 | ||||||
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Unrealized foreign exchange
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66,851 | - | ||||||
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Accretion expense
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54,367 | - | ||||||
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Issuance of equity instruments for services rendered
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- | 5,466 | ||||||
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Change in non-cash operating assets and liabilities
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(278,495 | ) | (823,545 | ) | ||||
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Cash flows used in operating activities
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(1,536,860 | ) | (852,246 | ) | ||||
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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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(15,489 | ) | (5,008 | ) | ||||
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Increase in intangible assets
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(17,020 | ) | (19,480 | ) | ||||
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Acquisition
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(425,000 | ) | - | |||||
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Cash flows used in investing activities
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(457,509 | ) | (24,488 | ) | ||||
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Cash flows from (used in) financing activities
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Financing costs deferred
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(343,934 | ) | - | |||||
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Long term debt issued
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3,500,000 | - | ||||||
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Share issuance costs
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- | (21,684 | ) | |||||
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Cash flows from (used in) financing activities
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3,156,066 | (21,684 | ) | |||||
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Changes in cash and cash equivalents
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1,161,697 | (898,418 | ) | |||||
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Cash and cash equivalents, beginning of period
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2,227,973 | 4,352,285 | ||||||
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Cash and cash equivalents, end of period
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$ | 3,389,670 | $ | 3,453,867 | ||||
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