DOYLESTOWN, PA. - October 28, 2004 - The Quigley Corporation (Nasdaq: QGLY)
today reported net sales of $9.7 million for the third quarter of 2004,
compared to $9.9 million reported for the same period in 2003. For the
nine-months ended September 30, 2004, net sales were $26.2 million, compared to
$25.1 million in 2003.
Net sales of the Company's Cold Remedy segment increased 8.3% for the third
quarter of 2004 as compared to 2003. Net sales of the Health and Wellness
segment decreased 11.4% during the quarter, due to a decline in the number of
active domestic independent representatives and reductions for summer vacation
activities, which was partially offset by an increase in European sales as
compared to 2003. The increase in net sales for the nine months reflects a
13.2% increase in the Company's Cold Remedy and also reflects relatively
unchanged sales of Health and Wellness segment. The Company's Cold Remedy net
sales increased for the nine months, as a result of continued strategic
advertising, marketing initiatives, and new product extensions of Cold-EEZE®.
The Company's Health and Wellness revenues for the nine months were relatively
unchanged even as distribution continues to expand internationally.
Net income for the third quarter ended September 30, 2004 was $177,000, or
$0.01 per share, compared to net income of $134,000, or $0.01 per share, for
the same period last year. Net loss for the nine-months ended September 30,
2004 was $1.5 million, or ($0.13) per share, compared to a net loss of $1.9
million, or ($0.16) per share, for the same period last year. During the third
quarter and nine-months ended September 30, 2004, the Company incurred research
and development costs of $627,000 and $2.4 million, respectively.
Net income for the quarter or net loss for the nine-months ended September 30,
2004 improved as compared with the same periods last year, primarily driven by
gross profit gains and operating costs savings from the Cold Remedy segment and
increases in other income, which were offset by a charge of $1.4 million
related to the discontinuation of the Company's Cold-EEZE® Cold Remedy Nasal
Spray product. The charge includes a $422,000 write-off of nasal spray
inventory and a $974,000 reduction to net sales resulting from anticipated
customer returns of the product. At this time, the Company does not anticipate
any additional future effects related to the discontinuation of the Company's
Cold-EEZE® Cold Remedy Nasal Spray product.
No tax or tax benefits to reduce income or losses are provided for the quarters
and nine-months ended September 30, 2004 and 2003, since the Company is in a
net operating loss carry-forward position, which is from the cumulative effect
of deductions attributed to options, warrants and unrestricted stock from
previous year's taxable income.
Guy J. Quigley, Chairman, President and Chief Executive Officer stated, "We
continue to increase market penetration of our Cold-EEZE® Cold Remedy products,
including our new COLD-EEZE® bubble gum and COLD-EEZE® 'green-tea with lemon'
lozenges. Although the Cold-EEZEŽ Cold Remedy Nasal Spray has not met our
expectations, we are quite pleased with the performance of our core products
and are reallocating our resources accordingly. Additionally, within our Health
and Wellness segment, we are adding an exclusive new skincare product line
promoted by a well known celebrity, details of which will be announced in the
near future."
Mr. Quigley continued, "During the quarter, several compounds in our pipeline
have shown positive preliminary results. We have also received guidance,
through pre-IND meetings, from the U.S. Food and Drug Administration regarding
the next steps for permission to further study QR-333 and QR-336."
The Company provides the following updates to its pharmaceutical pipeline:
Diabetic Neuropathy (QR-333)
The FDA has provided guidance at a pre-IND meeting for the company's QR-333
compound. The formulation will be entering into a series of toxicity studies in
order to support the safety of this naturally derived compound for the relief
of symptoms of diabetic peripheral neuropathy. Despite its composition of
all-natural botanical ingredients, the FDA views this compound as a chemical
entity that requires animal model safety data.
Radiation Exposure (QR-336)
At a recent pre-IND meeting with the FDA, the company's pre-clinical research
plan, to conduct an audited and inspected Good Laboratory Practice (GLP) animal
study at The University for the Uniform Health Services in Bethesda MD, was
reviewed and guidance was provided by the agency. Previous positive indications
in a preliminary non-GLP animal study necessitated this meeting. QR-336 is a
naturally derived compound that indicated in previously conducted non GLP
studies to protect against a lethal dose of ionizing radiation in an animal
model.
Influenza (QR-435)
Retroscreen LTD. at The University of London will be conducting a final animal
model influenza study in preparation for a proposed human proof-of-concept
study. The study will determine if there is any efficacy or safety issues with
different dose forms of this naturally derived broad-spectrum anti-viral
compound.
Arthritis (QR-440)
As previously announced, Quigley Pharma is also moving forward to establish
clinical testing for the treatment of arthritis for this naturally derived
compound.
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.
