- Net Sales Increased 28%; Cold Remedy Segment Net Sales Up 36% -
DOYLESTOWN, Pa., July 28, 2005 /PRNewswire-FirstCall via COMTEX/ --
The Quigley Corporation (Nasdaq: QGLY) today reported net sales of $8.8 million for the second quarter of 2005, a 28.2% increase over the $6.9 million reported for the same period in 2004. For the six-months ended June 30, 2005, net sales were $20.6 million, a 24.8% increase over the $16.5 million reported for the same period in 2004.
Net sales of the Company's Cold Remedy segment increased 36.4% for the second quarter of 2005 compared to 2004. Overall net sales of the Health and Wellness segment remained relatively unchanged for the second quarter of 2005 compared to 2004. The segment's European sales increased 39.7% and were offset by a decrease in the domestic Health and Wellness operation, which was due to a decline in the number of active domestic independent representatives. Net sales also reflects $1.4 million generated from the Company's Contract Manufacturing segment which has no comparable amount in 2004, as operations of this segment were part of the fourth quarter 2004 acquisition of the facilities that manufactured COLD-EEZE(R).
The increase in net sales for the six-months reflects a 38.8% increase in the Company's Cold Remedy segment and a 4.5% decrease in the Health and Wellness segment.
The Company's Cold Remedy net sales continued to far outpace the growth in its category as the further expansion of the Cold Remedy segment reflects the success of strategic advertising and marketing initiatives; new product extensions of COLD-EEZE(R); and a notable increase in consumer acceptance, as reflected in a recent analysis demonstrating an expanded household penetration.
The Company's Health and Wellness European sales for the six-months increased 28.7% reflecting the expansion of international distribution. The rise in international distribution partially offset a decrease in domestic Health and Wellness segment sales. Net sales for 2005 also reflect $2.4 million from the Company's Contract Manufacturing segment, which has no comparable amount in 2004.
Guy J. Quigley, Chairman, President and Chief Executive Officer said, "We are generally pleased with our overall results which include increases in sales for the quarter and six-month periods, particularly as the second quarter is our seasonally weakest period for COLD-EEZE(R) sales. The increase in sales reflects the success of ongoing initiatives to generate greater market share for our COLD-EEZE(R) Cold Remedy products and the expansion of the European Health and Wellness segment. We remain well positioned to continue to generate increasing sales of our core COLD-EEZE(R) products and expand its market penetration."
Net loss for the second quarter ended June 30, 2005 was $1.8 million, or ($0.15) per share compared to a net loss of $912,000, or ($0.08) per share, for the same period last year. Net loss for the six-months ended June 30, 2005 was $1.9 million, or ($0.17) per share, compared to a net loss of $1.7 million, or ($0.15) per share, for the same period last year. Net loss for the six-months ended June 30, 2005 and 2004 is principally attributed to research and development costs of $1.9 million and $1.8 million, respectively.
Gross profit percentage margins for the Cold Remedy segment for the quarter were consistent with margins attained for the comparable period in 2004. The gross profit percentage margins for the Health and Wellness declined due to inventory obsolescence charges. Gross profit gains of the Cold Remedy segment for the quarter and six-months ended June 30, 2005 were offset by decreases in Health and Wellness gross profit including substantially lower gross profit margins for the Contract Manufacturing segment than other operating segments.
The net loss for the quarter and six-months ended June 30, 2005 increased as compared with the same periods last year, due to increased operating costs of all business segments, including non-manufacturing operating costs of the contract manufacturing segment that impacted current operations rather than being carried as inventory. Net loss for the six-months was in line with the same period last year.
No tax benefits to reduce losses are provided for the quarter and six-month periods ended June 30, 2005 and 2004, as the Company is in a net operating loss carry-forward position from the cumulative effect of deductions attributed to options, warrants and unrestricted stock from previous year's taxable income.
Mr. Quigley continued, "During the quarter we announced several important developments in our pharmaceutical segment including the completion of a double-blind placebo controlled study of our QR-340 Scar Formula in which initial results demonstrated that the formula was safe, effective and outperformed Mederma(R), the top selling scar appearance formula in the commercial marketplace.
In addition, a series of In-Vivo (animal model) inflammation studies of our potential broad-spectrum anti-inflammatory, all natural, botanical compound, QR440 demonstrated a significant effect on both sterile and immune mediated inflammation. QR440 has the potential to meet the significant need for safe and effective therapies for patients with rheumatoid arthritis and other inflammatory disorders," concluded Mr. Quigley.
The Quigley Corporation makes no representation that the US Food and Drug Administration or any other regulatory agency will grant an Investigational New Drug ("IND") or take any other action to allow its formulations to be studied or marketed. Furthermore, no claim is made that potential medicine discussed herein is safe, effective, or approved by the Food and Drug Administration. Additionally, data that demonstrates activity or effectiveness in animals or in vitro tests do not necessarily mean the formula test compound, referenced herein will be effective in humans. Safety and effectiveness in humans will have to be demonstrated by means of adequate and well-controlled clinical studies before the clinical significance of the formula test compound is known. Readers should carefully review the risk factors described in filings the Company files from time to time with the Securities and Exchange Commission.
The Quigley Corporation (Nasdaq: QGLY, http://www.Quigleyco.com) is a leading developer and marketer of diversified health products including the COLD-EEZE(R) family of patented zinc gluconate glycine (ZIGG(TM)) lozenges and sugar free tablets. COLD-EEZE is the only (ZIGG) 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 naturally derived 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.
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.