-- Total Sales Increase Slightly Over Last Year -- Caraloe Subsidiary Revenues Rise 29% -- Advances in Development Of Drug-Delivery Technology (GelSite(TM)) -- Carrington Complies with New Reporting Requirements
IRVING, Texas, Aug. 14 /PRNewswire-FirstCall/ -- Carrington Laboratories, Inc. (NASDAQ: CARN) today will file its Form 10-Q with the Securities Exchange Commission, including CEO and CFO certifications, reporting revenues for the second quarter ended June 30, 2002, of $4,346,000, compared with $4,330,000 for the same period last year and $3,736,000 for the first quarter of this year. The company reported a net loss for the quarter of $858,000, or 9 cents per diluted share, compared with net income of $60,000, or 1 cent per diluted share, a year earlier.
Sales for Caraloe, Inc., the company's consumer products subsidiary, increased 29 percent to $2.2 million from $1.7 million as raw materials sales grew 7 percent and contract manufacturing business grew 154 percent. These increases were offset by a 17 percent decline in sales of the company's wound and skin care products due to reduction in orders from the company's exclusive distributor. Softness in wound care orders is expected to continue until the fourth quarter when international orders are projected to increase.
Research and development expenses for the new DelSite(TM) Biotechnologies subsidiary for the quarter reached $383,000 as Carrington continues to advance development for the company's Gelsite(TM) controlled drug delivery technology. Basic R&D for the company decreased to $462,000 from $614,000 as it continues to focus on formulation research and development of new products in support of existing wound care and nutraceutical business and new contract manufacturing business.
The loss for the quarter is attributed to these R&D expenditures in combination with product mix weighted towards lower margins on contract manufacturing business.
For the six months, revenues were $8,082,000 compared with $8,987,000 for the comparable year-earlier period. The net loss was $1,901,000, or 19 cents per diluted share, compared with a net income of $286,000, or 3 cents per share in the comparable half a year earlier.
"Revenues for the quarter were up 16 percent from the first quarter of this year," said Dr. Carlton E. Turner, president and chief executive officer, "so we are showing top line growth in line with our expectations. Our contract research and product development and manufacturing business is growing and we are aggressively working to expand our new customer base. We have also invested approximately $525,000 this year in equipment to improve and validate manufacturing processes, which should enable us to reduce manufacturing costs in future periods. In addition, we continue to fund 100 percent of DelSite's operations."
"Carrington Laboratories has been and will continue to be in full compliance with the public disclosure requirements of the SEC and the Nasdaq exchange," Turner stated. "As we have done in the past, we will uphold the highest standards in our financial reporting and will conform to the most current corporate governance and reporting guidelines, including the recently enacted Sarbanes-Oxley Act of 2002. We believe that following these rules is right, is good for business, and is a fundamental element in creating shareholder value."
"We are encouraged by the increases we are seeing in our Caraloe business and the growing sales and customer base in contract manufacturing," Turner continued. "We expect revenues in these areas will continue growing through the remainder of the year."
Turner added, "Development of GelSite is on target. While the product is still in its early stages, we are hopeful of being in a position to discuss possible strategic relationships with selected pharmaceutical companies in the coming months."
Turner said third-quarter revenues probably will continue an upward trend but he expects profits to be affected negatively by the costs of continuing manufacturing improvements and ongoing research and development expenses, which will remain at their current or slightly higher levels.
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. 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 being filed August 14, 2002.