DOYLESTOWN, Pa., Oct. 24 /PRNewswire-FirstCall/ -- The Quigley Corporation (Nasdaq: QGLY) today reported revenue of $8.3 million for the third quarter ended September 30, 2002, a 17% increase over the $7.1 million reported for the same period in 2001. For the first nine months of 2002, revenue was $19.7 million, a 20% increase over the $16.4 million for the first nine months of 2001.
The increase in revenue for the third quarter and nine months ended September 30, 2002 reflects significantly improved performance resulting from the Company's diversification strategy in its Health and Wellness business segment. The Company's core business cold remedy products are currently tracking at a reduced level from the comparable periods in 2001. Historically, cold remedy products produce the majority of its revenue during the fourth quarter of the year.
The increase in year-to-date revenue for 2002 was affected by a reduction of $1.3 million in licensing fees from settled litigation that was included in the comparable 2001 period.
Net loss for the third quarter 2002 was $500,000, or ($0.05) per share, compared to a net profit of $314,000, or $0.03 per share for the same period a year ago. Net loss for the nine months ended September 30, 2002 was $3.7 million, or ($0.34) per share, compared to a net loss of $770,000 or ($0.07) per share, for the first nine months of 2001.
Net loss in 2002 increased during the third quarter or during the first nine months from additional research and development costs associated with Quigley Pharma and other clinical studies; fees associated with consulting service; and net licensing fees from settled litigation that occurred during the second quarter of 2001. These additional losses were mitigated by profits reflected year-to-date 2002 from the Health and Wellness business segment.
Revenue during the first nine months of 2002 reflect an increase in Health and Wellness product sales, which have a lower gross profit margin than Cold Remedy product sales. In addition, the Cold Remedy product sales decreased compared to the same period a year ago. The significant increase in Health and Wellness revenue combined with the decrease in Cold Remedy revenue resulted in an overall reduced gross profit margin and increased losses in 2002.
No tax benefits to reduce losses are provided for the third quarter and the first nine months in both 2002 and 2001, since the Company is in a net operating loss carry-forward position, which began in the fourth quarter of 1999, from the cumulative effect of deductions attributed to options, warrants and unrestricted stock from previous years' taxable income.
Guy J. Quigley, Chairman, President and Chief Executive Officer, stated, "The performance of our Health and Wellness group demonstrates the soundness of our diversification strategy - serving as a balance to the seasonal revenue cycles of our Cold-Eeze branded products. Going forward, the potential of Quigley Pharma will expand our Company's ability to grow multiple revenue streams and shareholder value."
The Quigley Corporation (Nasdaq: QGLY) is a leading developer and marketer of diversified health products including the Cold-Eeze(R) family of patented zinc gluconate glycine (ZIGG(TM)) lozenges, gums and sugar free tablets. Cold- Eeze is the only (ZIGG(TM)) 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 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.
No claims are being made for the potential medicine discussed in this press release to be safe, effective, or approved by the Federal Food and Drug Administration (FDA).
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.