- Top And Bottom Lines Improve Sequentially For Second Straight Quarter
- Revenues For Consumer Products Subsidiary Caraloe Climb 78%,
Specialized Manufacturing Grows 75%
- Net Loss Of $541,000 Due To Significant Investment In Development Of
Promising GelSite(TM) Drug-Delivery Technology
IRVING, Texas, Nov. 14 /PRNewswire-FirstCall/ -- Carrington Laboratories, Inc. (Nasdaq: CARN), citing substantially increased sales by its Caraloe Inc. subsidiary, today reported third-quarter revenues increased 16 percent to $5.1 million from $4.4 million a year earlier. The net loss for the quarter ended September 30, 2002, was $541,000, or 5 cents per share, compared with net income of $77,000, or 1 cent per share, in 2001. The loss was attributed primarily to research and development expenditures of $586,000 for the DelSite subsidiary that began operations this year.
Excluding the DelSite expenditures, Carrington would have recorded net income of $45,000, or slightly above break-even per share.
For the nine months ended September 30, 2002, total revenues were $13.2 million compared with $13.4 million the prior year. Including expenditures of $1.3 million in DelSite research, the net loss was $2.4 million, or 25 cents per share, compared with net income of $363,000, or 4 cents per share, the first nine months of 2001.
"We remain committed to our strategy to increase revenue and reduce losses from quarter to quarter. I am encouraged by the gains in raw material sales and specialized manufacturing revenues by our Caraloe consumer products subsidiary," said Dr. Carlton E. Turner, president and chief executive officer. "Raw material sales and specialized manufacturing are two key areas we targeted for growth during the second half of this year."
Third quarter revenue increased more than 36 percent over revenue recorded in the first quarter of this year and more than 16 percent higher than revenue posted in the second quarter. The loss also narrowed in each of those quarters.
Third quarter revenues for Caraloe increased 78.6 percent to $3.0 million from $1.7 million for the third quarter of 2001. Raw material sales increased by $966,000 to $2.2 million and specialized manufacturing revenue increased $334,000 to $779,000.
Revenue for medical products, consisting primarily of wound-care products, declined about 21.6 percent to $2.1 million from $2.7 million in 2001. The decrease was attributed largely to decreased orders from Carrington's exclusive distributor.
Carrington Increases Investment In GelSite(TM) Development
"Our investment in further development of the GelSite(TM) technology, which we are currently funding entirely through our DelSite subsidiary, was $586,000 during the third quarter, compared with no expenses a year earlier," Turner said. "That also represented a more than 50 percent increase from the second quarter of this year.
"We will continue funding further development of what we view as a highly promising technology to address vital current and anticipated needs in the market," Turner said. "At the same time we are actively seeking partnerships with major pharmaceutical companies that would benefit from utilizing GelSite for controlled delivery of their existing and planned protein- and peptide- based drugs."
DelSite has established relationships with Southern Research Institute and Texas A & M University to facilitate its research and development and partnering efforts. The overall drug delivery market is estimated at $40 billion annually and projected to grow to $70 billion by mid decade. DelSite is targeting a segment of the market estimated at $18 billion annually and projected to grow to $40 billion by 2006.
Solid Balance Sheet
Carrington completed the third quarter with a cash balance of $2.4 million compared with $3.5 million at year-end 2001. The company's current ratio was about 2.8 to 1. The quick ratio was 1.3 to 1. Carrington has no significant long-term debt.
Carrington Laboratories, Inc., is an ISO 9001-certified, research-based biopharmaceutical company currently utilizing naturally occurring complex carbohydrates to manufacture and market products for mucositis, radiation dermatitis, wound and oral care; manufacture and market the nutraceutical raw materials Manapol(R) and Hydrapol(TM); and market consumer products under the AloeCeuticals(R) brand. Manapol is the only product available from the Aloe vera L. plant that carries a DSHEA (Dietary Supplement Health and Education Act of 1994) claim that it promotes and enhances immune system activity. Carrington's technology is protected by more than 120 patents in 26 countries. Select products are honored with the internationally coveted CE mark, recognized by more than 20 countries around the world.
Certain statements in this release concerning Carrington may be forward- looking. Actual events will be dependent upon a number of factors and risks including, but not limited to: subsequent changes in plans by the company's management; delays or problems in production; changes in the regulatory process; changes in market trends; and a number of other factors and risks described from time to time in the Company's filings with the Securities & Exchange Commission, including the Form 10K filed November 14, 2002.