DOYLESTOWN, PA. - July 28, 2005 - The Quigley Corporation (Nasdaq: QGLY)
today reported net sales of $8.8 million for the second quarter of 2005, a 28.2% increase over
the $6.9 million reported for the same period in 2004. For the six months ended June 30, 2005,
net sales were $20.6 million, a 24.8% increase over the $16.5 million reported for the same period
in 2004.
Net sales of the Company's Cold Remedy segment increased 36.4% for the second quarter of 2005
compared to 2004. Overall net sales of the Health and Wellness segment remained relatively unchanged
for the second quarter of 2005 compared to 2004. The segment's European sales increased 39.7% and
were offset by a decrease in the domestic Health and Wellness operation, which was due to a decline in the
number of active domestic independent representatives. Net sales also reflects $1.4 million generated
from the Company's Contract Manufacturing segment which has no comparable amount in 2004, as
operations of this segment were part of the fourth quarter 2004 acquisition of the facilities that
manufactured COLD-EEZE®.
The increase in net sales for the six months reflects a 38.8% increase in the Company's Cold Remedy
segment and a 4.5% decrease in the Health and Wellness segment.
The Company's Cold Remedy net sales continued to far outpace the growth in its category as the further
expansion of the Cold Remedy segment reflects the success of strategic advertising and marketing
initiatives; new product extensions of COLD-EEZE®; and a notable increase in consumer acceptance, as
reflected in a recent analysis demonstrating an expanded household penetration.
The Company's Health and Wellness European sales for the six months increased 28.7% reflecting the
expansion of international distribution. The rise in international distribution partially offset a decrease in
domestic Health and Wellness segment sales. Net sales for 2005 also reflect $2.4 million from the
Company's Contract Manufacturing segment, which has no comparable amount in 2004.
Guy J. Quigley, Chairman, President and Chief Executive Officer said, "We are generally pleased with our
overall results which include increases in sales for the quarter and six-month periods, particularly as the
second quarter is our seasonally weakest period for COLD-EEZE® sales. The increase in sales reflects the
success of ongoing initiatives to generate greater market share for our COLD-EEZE® Cold Remedy
products and the expansion of the European Health and Wellness segment. We remain well positioned to
continue to generate increasing sales of our core COLD-EEZE® products and expand its market
penetration."
Net loss for the second quarter ended June 30, 2005 was $1.8 million, or ($0.15) per share compared to a
net loss of $912,000, or ($0.08) per share, for the same period last year. Net loss for the six-months ended
June 30, 2005 was $1.9 million, or ($0.17) per share, compared to a net loss of $1.7 million, or ($0.15) per
share, for the same period last year. Net loss for the six-months ended June 30, 2005 and 2004 is
principally attributed to research and development costs of $1.9 million and $1.8 million, respectively.
Gross profit percentage margins for the Cold Remedy segment for the quarter were consistent with
margins attained for the comparable period in 2004. The gross profit percentage margins for the Health
and Wellness declined due to inventory obsolescence charges. Gross profit gains of the Cold Remedy
segment for the quarter and six months ended June 30, 2005 were offset by decreases in Health and
Wellness gross profit including substantially lower gross profit margins for the Contract Manufacturing
segment than other operating segments.
The net loss for the quarter and six months ended June 30, 2005 increased as compared with the same
periods last year, due to increased operating costs of all business segments, including non-manufacturing
operating costs of the contract manufacturing segment that impacted current operations rather than being
carried as inventory. Net loss for the six months was in line with the same period last year.
No tax benefits to reduce losses are provided for the quarter and six month periods ended June 30, 2005
and 2004, as the Company is in a net operating loss carry-forward position from the cumulative effect of
deductions attributed to options, warrants and unrestricted stock from previous year's taxable income.
Mr. Quigley continued, "During the quarter we announced several important developments in our
pharmaceutical segment including the completion of a double-blind placebo controlled study of our QR-
340 Scar Formula in which initial results demonstrated that the formula was safe, effective and
outperformed Mederma, the top selling scar appearance formula in the commercial marketplace.
In addition, a series of In-Vivo (animal model) inflammation studies of our potential broad-spectrum anti-inflammatory, all natural, botanical compound, QR440 demonstrated a significant effect on both sterile
and immune mediated inflammation. QR440 has the potential to meet the significant need for safe and
effective therapies for patients with rheumatoid arthritis and other inflammatory disorders," concluded Mr.
Quigley.
The following is a list of other formulations currently in the Quigley Pharma pipeline:
Diabetic Neuropathy - QR333: A patented topical compund that extends through March 2021 is being tested to treat people that suffer from
diabetic peripheral neuropathy, which can affect 60 to 70 percent of the 15.7 million diabetics in the country.
Systemic Radiation - QR336: A patented compound that extends through November 2021 is being investigated to potentially reduce the effects of
radiation exposure.
Arthritis - QR440: A patented naturally-derived compound that extends through April 2023 is being
developed for the treatment of arthritis and related inflammatory disorders as arthritis can afflict 40 million people in the US; 350 million worldwide.
Influenza A - QR435: A test compound with potentially broad anti-viral properties for applications such as Influenza A&B in an intranasal delivery.
The Quigley Corporation makes no representation that the US Food and Drug Administration or any other
regulatory agency will grant an Investigational New Drug ("IND") or take any other action to allow its
formulations to be studied or marketed. Furthermore, no claim is made that potential medicine discussed
herein is safe, effective, or approved by the Food and Drug Administration. Additionally, data that
demonstrates activity or effectiveness in animals or in vitro tests do not necessarily mean the formula test
compound, referenced herein will be effective in humans. Safety and effectiveness in humans will have to
be demonstrated by means of adequate and well-controlled clinical studies before the clinical significance
of the formula test compound is known. Readers should carefully review the risk factors described in
filings the Company files from time to time with the Securities and Exchange Commission.
The Quigley Corporation (Nasdaq: QGLY, http://www.Quigleyco.com) is a leading developer and
marketer of diversified health products including the COLD-EEZE® family of patented zinc gluconate
glycine (ZIGG™) lozenges and sugar free tablets. COLD-EEZE® is the only (ZIGG™) lozenge proven in two
double-blind studies to reduce the duration of the common cold from 7.6 to 4.4 days or by 42%. In
addition to Over-The-Counter (OTC) products, the Company has formed Quigley Pharma Inc.
(http://www.QuigleyPharma.com), a wholly owned ethical pharmaceutical subsidiary, to introduce a line
of naturally derived patented prescription drugs. The Quigley Corporation's customers include leading
national wholesalers and distributors, as well as independent and chain food, drug and mass merchandise
stores and pharmacies.
Forward-Looking Statements
Certain statements in this press release are "forward-looking statements" within the meaning of the Private Securities
Litigation Reform Act of 1995 and involve known and unknown risk, uncertainties and other factors that may cause
the Company's actual performance or achievements to be materially different from the results, performance or
achievements expressed or implied by the forward-looking statement. Factors that impact such forward-looking
statements include, among others, changes in worldwide general economic conditions, changes in interest rates,
government regulations, and worldwide competition.
