- Gains Realized in Raw Material, Specialty Manufacturing And
- Company Reports Profit Before DelSite Expenses Of $413,000 Compared
To Loss Of $738,000 Last Year
- Company Invests $1.5 Million In R&D And Capital Expenditures
- Net Loss Narrows To $298,000 From $1 Million
IRVING, Texas, May 8 /PRNewswire-FirstCall/ -- Carrington Laboratories, Inc. (Nasdaq: CARN) today reported first-quarter revenues climbed nearly 85 percent to $6.9 million from $3.7 million a year earlier. The net loss for the quarter ended March 31, 2003, narrowed to $298,000, or 3 cents per diluted share, from a loss of $1 million, or 11 cents per diluted share, in the prior-year first quarter.
Carlton E. Turner, president and chief executive officer, noted that both of the company's operating segments, the Medical Services Division and Caraloe Inc., reported substantial increases in sales.
Caraloe sales, fueled primarily by a $1.8 million increase in raw material sales, increased more than threefold to $4.4 million from $1.4 million a year earlier. The former Custom Division of Creative Beauty Innovations, Inc. (CBI) business, acquired by Carrington late last year, contributed $348,000 to first-quarter revenues with an operating profit. Other specialty manufacturing revenue increased to $1.2 million from $321,000 a year earlier.
Carrington's wound-care and related product sales, reported as part of the Medical Services segment, increased 10 percent to $1.9 million from $1.7 million. Including royalty income, segment revenue increased to $2.5 million from $2.3 million.
During the quarter Carrington invested substantially in growth initiatives, spending a total of $1.5 million in research and development and capital expenditures. These expenditures included a $711,000 investment in research and development through the company's DelSite subsidiary, which is further developing the promising GelSite(TM) technology for controlled delivery of drugs and vaccines-well over double the $304,000 spent a year earlier. That was partially offset by a $172,000 decrease in product support R&D expenditures to $207,000.
The company also made other significant investments in future operations, including $615,000 in capital expenditures for facilities improvements and equipment, compared with $105,000 a year earlier.
Benefiting From Strategic Initiatives
"Overall this was a very good quarter, with the company realizing the benefits of several strategic moves made over the past few months," said Turner. "We are delivering on our goals of increasing specialty manufacturing activities, increasing raw material sales and improving capacity utilization in our manufacturing operations."
"Our research and development efforts remain market-focused, with an emphasis on activities that should lead to future earnings," Turner said. "We also are benefiting from improvements in manufacturing processes and equipment at both our Texas and Costa Rica plants, which will enable us to continue handling increased growth."
The company's DelSite Biotechnologies, Inc. subsidiary is responsible for the research, development and marketing of the company's proprietary GelSite(TM) technology for controlled release and delivery of drugs and vaccines. Efforts during the quarter focused on completion of proof-of-concept studies for both sustained-release injectable and intra-nasal vaccine delivery applications.
DelSite's strategic partner for drug delivery, Southern Research Institute of Birmingham, Alabama, performed formulation, kinetic and resorption studies for injectable delivery during the quarter. DelSite's strategy is to develop and commercialize the technology by partnering with pharmaceutical and biotechnology companies for the development of commercial drug products. The company's objective is to continue to fund DelSite internally from operations.
"We are encouraged by the results achieved during the first quarter 2003 and plan to continue our present programs and to seek other new sales opportunities over the balance of this year," Turner said. "At the same time, based on the progress made so far, we will continue the development of DelSite, which we believe has good potential in the drug delivery area. This combination of our growing present business and the potential we see for DelSite gives us even greater confidence in the future of the company."
Carrington Laboratories, Inc., is an ISO 9001-certified, research-based biopharmaceutical and consumer products 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 material Manapol(R) and the raw material Hydrapol(TM) for use in cosmetic formulations. Carrington also manufactures and markets consumer products sold under its AloeCeuticals(R) brand and manufactures quality products for other companies. Manufacturing operations comply with cGMP standards. The company's DelSite subsidiary is developing its proprietary GelSite(TM) technology designed to provide controlled release of peptide- and protein-based drugs. 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 March 31, 2003.