Message #6 From:
NewsBot Date: May 16, 2005 12:13:59 PM
DSCI Derma Sciences Announces First Quarter 2005 Results; Conference Call to Be Held Monday, May 16, 2005 at 4:30 PM ET
Derma Sciences Announces First Quarter 2005 Results; Conference Call to Be Held Monday, May 16, 2005 at 4:30 PM ET
PRINCETON, N.J.
Derma Sciences, Inc.
Edward J. Quilty
President & CEO
equilty@dermasciences.com
609-514-4744
or
Cameron Associates
Peter Seltzberg, Investor Relations
peter@cameronassoc.com
212-245-8800 x205
Derma Sciences, Inc. (OTCBB:DSCI), a manufacturer and full line supplier of wound and skin care products, today reported financial results for the first quarter ended March 31, 2005.
Net sales for the first quarter of 2005 decreased $135,975, or 3% to $4,893,447 compared to $5,029,422 in the same period in 2004. The decline in quarterly net sales was the net result of a 7%, or $261,782 gain in Wound Care net sales, offset primarily by a 34% decline in Wound Closure net sales. In addition, Skin Care net sales in the quarter were 15% below last year's comparable period due primarily to lower pricing as dictated by market conditions.
The company's gross profit margin of 28% remained consistent in the quarter as a 15% improvement in 2005 Wound Care margins was largely offset by decreasing Skin Care margins. Excluding $542,600 in one-time costs incurred in 2004, primarily due to an employee termination and start up costs associated with the company's new distribution center, operating expenses were largely unchanged. For the quarter, the company incurred a net loss of $213,052, or $0.02 loss per share (basic and diluted) in 2005 compared to a $976,466 loss, or $0.11 loss per share (basic and diluted) in 2004. Working capital was approximately $2.8 million at the end of the period.
Edward J. Quilty, President and CEO of Derma Sciences commented, "Though we're not pleased to report a loss, we are encouraged by the improvement in our results, particularly as evidenced in the performance of our Advanced Wound Care program. Our solid relationship with McKesson within this program continues to expand as we have brought more manufacturing on-line and ramped-up our shipping volumes to them. Our performance in this quarter was most negatively impacted from the end of our Distribution Agreement with UnoMedical which generated $750,000 in annual revenues and also from a steep drop in our margin from our Skin Care business. We continue to pursue ways to reduce our cost structure, in particular at Skin Care.
"Continued strength in Wound Care business from both McKesson and our recently announced relationship with Source Medical should contribute to meaningful top- and bottom-line improvements going forward. We will continue to pursue these and other initiatives designed to boost our gross margins, reduce our inventories, and ultimately resume profitability and generate solid returns for our shareholders," concluded Quilty.
Conference Call Information:
What: Derma Sciences First Quarter 2005 Conference Call
When: Monday, May 16, 2005 at 4:30 P.M. ET
Where Webcast address: www.dermasciences.com, www.streetevents.com
Dial-in numbers: 800-510-9834, (domestic), and 617-614-3669
(international) passcode # 63598874.
Contact: Peter Seltzberg, Cameron Associates, 212-554-5487,
peter@cameronassoc.com
If you are unable to participate, an audio digital replay of the call will be available from Monday, May 16, 2005, at 6:30 pm, ET until Midnight ET on May 23, 2005, by dialing 888-286-8010 (domestic) or 617-801-6888 (international) using confirmation code # 64888557. A web archive will be available for 30 days at www.dermasciences.com and www.streetevents.com
About Derma Sciences, Inc.
Derma Sciences, Inc. provides a full range of skin care, wound management and specialty securement devices that are used primarily in the professional markets, specifically hospitals, nursing homes and home care settings. For more information about Derma Sciences, Inc., visit its home page on the Internet at http://www.dermasciences.com.
Forward-Looking Statement
Statements contained in this release that are not statements of historical fact may be deemed to be forward-looking statements. Without limiting the generality of the foregoing, words such as "may," "will," "expect," "believe," "anticipate," "intend," "could," "estimate" or "continue" are intended to identify forward-looking statements. Readers are cautioned, that certain important factors may affect the Company's actual results and could cause such results to differ materially from any forward-looking statements which may be made in this release or which are otherwise made by or on behalf of the Company. Factors which may affect the Company's results include, but are not limited to, product demand, market acceptance, impact of competitive products and prices, product development, completion of an acquisition, commercialization or technological difficulties, the success or failure of negotiations and trade, legal, social and economic risks. Additional factors that could cause or contribute to differences between the Company's actual results and forward-looking statements include but are not limited to, those discussed in the Company's filings with the Securities and Exchange Commission.
DERMA SCIENCES, INC
CONSOLIDATED STATEMENTS OF OPERATIONS
Three months ended
March 31 (Unaudited)
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2005 2004
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Net Sales $4,893,447 $5,029,422
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Cost of Sales 3,506,061 3,596,516
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Gross Profit 1,387,386 1,432,906
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Operating Expenses 1,681,055 2,245,055
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Interest Expense, net 84,584 46,667
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Other (income) expense, net (165,201) 117,650
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Total Expenses 1,600,438 2,409,372
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Loss before provision for income taxes (213,052) (976,466)
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Provision for income taxes - -
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Net Loss $(213,052) $(976,466)
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Loss per common share - basic and diluted $(0.02) $(0.11)
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Shares used in computing loss per common share -
basic & diluted 12,011,674 8,809,151
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