Contact:
| |
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| George Longo |
Carl Hymans |
| Vice President, CFO |
G.S. Schwartz & Co. |
| (215) 345-0919 |
(212) 725-4500 |
| |
carlh@schwartz.com |
The Quigley Corporation Reports Third Quarter Results
- Increases Investment in Pharmaceutical R&D For Diabetic Neuropathy -
DOYLESTOWN, PA. - October 25, 2007 - The Quigley Corporation (Nasdaq: QGLY)
today reported net sales of $11.8 million, for the third quarter ended
September 30, 2007, compared to $11.5 million reported for the same period in
2006. For the nine-months ended September 30, 2007, net sales were $25.9
million compared to $27.9 million reported for the same period in 2006.
The third quarter and first nine months of 2007 reflect a net sales increase
for the Company's Cold Remedy segment of $1.0 million and $1.6 million,
respectively, as compared to the same periods of 2006. These increases include
a price increase and inaugural sales of two new COLD-EEZE® branded line
extensions that commenced on July 2, 2007. The impact of these initiatives were
offset by changes in seasonal purchase patterns by our customers that can occur
when comparing quarters of different years.
The COLD-EEZE brand should continue to garner acceptance among consumers who
want Natural Common Cold remedies that demonstrate proven clinical efficacy and
safety. As part of ongoing initiatives to generate future growth, the
introduction of two new COLD-EEZE brand extensions, Organix™ Cough and
Sore Throat Drops and COLD-EEZE Immune Support Complex-10 (ISC-10) will enable
consumers to choose two new options to support their health during the upcoming
Cold and Flu Season.
Organix Cough and Sore Throat Drops is a proprietary product manufactured in
the Company's certified organic manufacturing facility, the first facility of
its kind to obtain USDA organic certification. COLD-EEZE ISC-10 will compete
in the growing immune boosting dietary supplement marketplace and features a
proprietary blend of 10 important immune supporting nutrients, minerals and
herbs shown to support proper immune system functioning. Both of these new
products are currently being sold in many major market retailers.
Net income for the third quarter ended September 2007 was $1.3 million, or
$0.10 per share compared to a net income of $1.1 million, or $0.08 per share,
for the same period last year. Net loss for the nine-months ended September 30,
2007 was $4.1 million, or ($0.32) per share, compared to a net loss of $3.0
million, or ($0.25) per share, for the same period last year.
Marginal improvement in net income for the third quarter of 2007 and the
increase in net loss for the nine-months ended September 30, 2007 is
principally attributed to increased research and development costs for the
pharmaceutical segment and a reduction in gross profits from the Health and
Wellness operating segment. These increases to net loss were lessened somewhat
by improvement in other operating expenses and Cold Remedy gross profits from
related increases in net sales.
The increase in research and development costs were associated with Phase II(b)
clinical studies for QR-333, an investigational new drug for treating
conditions associated with diabetic peripheral neuropathy. Increased research
costs associated with QR-333 were $1.2 million for the third quarter ended
September 30, 2007 and $2.4 million for the nine months ended September 30,
2007, respectively as compared to 2006.
According to The World Health Organization estimates, more than 171 million
people have diabetes worldwide. It is also estimated that 20 million people,
representing approximately 7% of the United States population have diabetes of
which more than 60% suffer from mild to severe nerve damage due to diabetic
peripheral neuropathy. Conditions associated with diabetic peripheral
neuropathy include numbness, skin ulcers, constant pain or extreme sensitivity
to stimulus.
Net sales for the Health and Wellness segment declined $0.8 million and $3.9
million, respectively, for the third quarter and nine-months ended September
30, 2007 as a reduction in the number of active independent distributor
representatives reflects the effects of ongoing litigation, which the Company
is vigorously pursuing with the sponsor of the Company's product line in this
segment. Corrective actions continue to be taken to resolve the litigation and
increase the number of active independent distributor representatives as part
of strategic efforts with the goal to increase sales and return to
profitability.
No tax provision or benefits, to reduce losses, are provided for the quarter
and nine-months ended September 30, 2007 and 2006, except for any requirements
imposed by the federal alternative minimum taxes or for compliance with state
tax regulations, since the Company is in a net operating loss carry-forward
position.
The research by the Company is part of its strategic initiatives to generate
future growth. These initiatives include capitalizing on the growth potential
of Quigley Pharma, a wholly-owned Ethical Pharmaceutical subsidiary, by
developing natural-source potential prescription products for Systemic
Radiation, Rheumatoid Arthritis, Avian Flu in animals and particularly,
Diabetic Peripheral Neuropathy.
During the third quarter of 2007, a human safety study was undertaken to
investigate the effects of QR-449, a broad spectrum anti-inflammatory compound,
on patients suffering from Metabolic Syndrome, a condition which inhibits
normal metabolic processes. Metabolic Syndrome sufferers are vulnerable to
dangerous heart attack risk factors including diabetes, abdominal obesity, high
cholesterol and high blood pressure. Inflammation plays a major role in this
condition as well as Rheumatoid Arthritis, Cancer and Cachexia.
The primary objectives for the study are the determination of safety and to
measure the corrective capacity of the compound on the imbalance of important
anti-oxidant, nutrient and pro-inflammatory markers as well as other metabolic
disturbances, associated with Metabolic Syndrome. The International Disease
Foundation estimates that one quarter of the world's population have Metabolic
Syndrome, including as many as 65 million people in the United States. The
number of children and adolescents afflicted with the condition continues to
increase as the worldwide epidemic of obesity spreads across all age groups.
Lastly, an update was issued on a Phase II(b) Clinical Study of QR-333 on
Diabetic Peripheral Neuropathy stating that over 100 subjects had been
enrolled, 52 subjects had completed treatment and over 225 subjects have been
screened for the Phase II(b) study designed to evaluate the safety and efficacy
of the topical formulation on subjects with diabetic peripheral neuropathy.
Subject screening and enrollment will continue to ensure that a 140 evaluable
patient study population occurs and that once enrolled, subject treatment time
for the patient in the study is 12 weeks.
The Quigley Corporation makes no representation that the US Food and Drug
Administration or any other regulatory agency will allow this Investigational
New Drug to be 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.
About The Quigley Corporation
The Quigley Corporation (Nasdaq: QGLY, http://www.Quigleyco.com) is a
diversified natural health medical science company. Its Cold Remedy segment is
a leading marketer and manufacturer of the COLD- EEZE® family of lozenges,
gums and sugar free tablets clinically proven to cut the common cold nearly in
half. COLD-EEZE customers include leading national wholesalers and
distributors, as well as independent and chain food, drug and mass merchandise
stores and pharmacies. The Quigley Corporation has several wholly owned
subsidiaries. Darius International markets health and wellness products through
its wholly owned subsidiary, InnerLight Inc. Quigley Manufacturing Inc.
consists of two FDA approved facilities to manufacture COLD-EEZE® lozenges
as well as fulfill other contract manufacturing opportunities. Quigley Pharma
Inc. (http://www.QuigleyPharma.com) conducts research in order to develop and
commercialize a pipeline of patented botanical and naturally derived potential
prescription drugs.
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.
(Tables Follow)
Consolidated Statements of Operations (Unaudited)
The following represents condensed financial data (in thousands) except per share data:
Three-Months Three-Months Nine-Months Nine-Months
Ended Ended Ended Ended
Sep 30, 2007 Sep 30, 2006 Sep 30, 2007 Sep 30, 2006
($) ($) ($) ($)
Net Sales 11,840 11,481 25,908 27,929
Gross profit 6,939 6,260 14,052 13,882
Sales & marketing expenses 1,077 1,283 4,637 4,796
Administrative expenses 2,683 3,195 9,366 10,001
Research & development 2,020 892 4,796 2,534
Income taxes (benefit) - - - 89
Net income (loss) 1,329 1,079 (4,119) (2,994)
Diluted loss per share:
Net income (loss) $0.10 $0.08 ($0.32) ($0.25)
Diluted weighted average
common shares outstanding: 13,143,276 13,242,127 12,693,300 12,163,858
Consolidated Balance Sheets (Unaudited)
The following represents condensed financial
data (in thousands) at September 30, 2007 and December 31, 2006:
2007 2006
($) ($)
Cash & cash equivalents 12,484 17,757
Accounts receivable, net 6,959 6,557
Inventory 5,803 4,262
Total current assets 26,296 29,793
Total assets 30,936 34,845
Total current liabilities 9,302 9,252
Total stockholders' equity 21,573 25,529
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