Product Sales Increase 300%
Revenues From Continuing Operations Up 84% Operating Loss Continues to Narrow
KAILUA-KONA, Hawaii, Jun 15, 2004 /PRNewswire-FirstCall via COMTEX/ -- Mera Pharmaceuticals (MRPI) has posted its first ever quarterly profit of $91,000 for its second quarter of fiscal 2004. The results, included in the Form 10-Q that Mera filed with the Securities and Exchange Commission yesterday, also show a continuation of the favorable trends of increasing revenues and decreasing expenses that the Company began a year ago.
Dan Beharry, Mera's chief executive, was very pleased with the results. "Even though the largest factor in the quarterly profit was a non-operating income item, without the steady and substantial progress we have made in the past year to increase revenues and reduce expenses, we could not have achieved this welcome result. Our revenues from product sales, the most significant category, increased over 300%, rising to $117,100 compared to $28,200 for the same quarter a year ago. The increase in revenues from continuing operations was a healthy 84%. Total operating revenues for the quarter rose to $162,000, an increase of 23%, even though a royalty revenue stream has ended, and revenues were up 37% versus the first half of 2003.
"We had cut expenses in each of the four previous quarters, and our second quarter this year was no exception, as we managed a further reduction of 40%, from $531,000 down to $317,000. Once again, decreases in selling, general and administrative expenses led the way, dropping 46%. The result was a decrease in the Company's operating loss to $206,000, down from $406,000 for our second quarter last year, a 49% drop."
The Company believes that a number of factors will support continued improvement in its performance. Among them is the launch of a new product, SalmonEssentials(TM), a unique combination of astaxanthin and Omega-3 fatty acids that provides those who take it with the important health benefits associated with eating wild salmon, the best dietary source of natural astaxanthin. Mera has also made progress in expanding international distribution of its products, both in Asia and elsewhere.
According to Mr. Beharry, "There is evidence that awareness of astaxanthin and recognition of its importance as a nutritional supplement is growing rapidly. Although initially viewed as a novel product that was not well understood, astaxanthin is now poised to enter the health supplement mainstream. Given the limited amount of worldwide production capacity that exists and the technological barriers to entering the market, Mera is well positioned to take advantage of that trend. We have made productivity improvements over the past year that have increased the capacity of our production facility in Hawaii and reduced our costs. We have also identified other improvements that will enable us to reduce production costs by 50% or more compared to just a year ago, and we think that more improvement is possible.
"Our cost reductions and efficiency improvements will enable us to participate actively in the raw materials markets, where the greatest growth is expected to occur, and still preserve margins. Combined with the planned expansion of our Kona facility, Mera is well-positioned to continue its progress toward achieving and maintaining operating profitability."
For the past 12 months Mera has focused on reducing costs to match revenues, and it managed to reduce expenses by over $500,000 in the first half of this year compared to last. The focus has now shifted to taking advantage of the expanding astaxanthin market to increase revenues rapidly and become consistently profitable on an operating basis. Plans are in place to intensify sales and marketing activities and to support greatly expanded international distribution.
Mera Pharmaceuticals, Inc., based in Kona, Hawaii, is focused on identifying and producing valuable products from the rich, untapped resource of microbial aquatic plants. Long recognized for their potential medical and nutritional value, these plants have been largely ignored because of the virtual impossibility of growing them at commercial scale. Mera has overcome that obstacle through application of its patented photobioreactor technology, which allows Mera to produce a large number of species at scale reliably, efficiently and at high quality. Mera's first nutraceutical product, the AstaFactor(R), is a concentrated source of natural astaxanthin, found in a number of fish and seafood species. Astaxanthin is known to be an effective anti-inflammatory and an extremely powerful antioxidant.
This press release contains forward-looking statements characterized by the use of words such as "believe," "expect," "anticipate," "feel" and similar expressions. Actual results might differ materially from those projected in, expressed in or implied by the forward-looking statements. The kinds of risks and uncertainties that could affect the future operating results of Mera include, without limitation: (i) the ability to attract new business for its existing products; (ii) the ability to identify new products and bring them to market; (iii) the ability to identify promising pharmaceutical candidates and, if they are identified, the ability to have them successfully complete the clinical trial process; (iv) the sensitivity of Mera to general economic conditions; (v) the inability to attract the additional investment needed to plans regarding the drug discovery and development business. Additional information concerning risk factors that could cause actual results to differ materially from those described in forward looking statements can be found in Mera's SEC filings, including its Annual Report on Form 10-KSB and other periodic reports that it files under the Securities Exchange Act of 1934, as amended.