Message #18 From:
Stock News Bot Date: November 14, 2006 06:00:00 AM
DSCI News Derma Sciences Reports Results for Third Quarter 2006
PRINCETON, N.J.--(BUSINESS WIRE)--Derma Sciences, Inc. (OTCBB:DSCI), a manufacturer and full line supplier
of wound and skin care products, today reported its results for the
three and nine months ended September 30, 2006.
For the third quarter 2006, the Company reported net sales of $7,876,307
and net income of $380,194, or $0.02 per share basic and $0.01 per share
diluted, compared to net sales of $5,712,457 and net income of $43,105
for the third quarter of 2005. The 37.9% sales increase was driven
primarily by the addition of incremental Western Medical sales of
$1,857,746 coupled with continued growth of the private label business.
Excluding Western Medical sales, U.S. sales were up $297,307, or 10.6%.
Company gross profit increased $955,002 or 48.7% to $2,917,075 in 2006
from $1,962,073 in 2005 while Company gross profit margin percentage
increased to 37.0% in 2006 from 34.4% in 2005. The increase in gross
profit dollars and margin percentage reflect the combined impact of
favorable exchange, continuing improvement in manufacturing performance,
higher unit volume throughput and the benefit of lower negotiated basic
wound care costs.
For the nine months ended September 30, 2006, the Company reported net
sales of $21,019,902, an increase of $3,479,780, or 19.8% from sales of
$17,540,122 in 2005. Net income for the nine month 2006 period was
$768,704 or $0.04 per basic share and $0.03 per diluted share versus a
net loss of $11,763 or ($0.00) loss per share (basic and diluted) in
2005. Gross profit increased $2,152,959 or 38.0% to $7,826,638 in 2006
from $5,673,679 in 2005. Company gross profit margin percentage
increased to 37.2% in 2006 from 32.4% in 2005. The increase in net sales
was largely due to the addition of incremental Western Medical sales of
$3,114,321, while profit margin percentage improved due to the continued
impact of product cost savings and favorable product mix. Excluding
Western Medical sales, U.S. sales were up $922,191, or 11.4%.
In accordance with SFAS 123R, net income for the first nine months of
2006 includes equity-based compensation expense of $146,191 related to
employee stock option and restricted common stock grants. Excluding
these expenses, net income for the first nine months of 2006 would have
been $914,895, or $0.05 per share basic and $0.04 per share diluted.
Edward J. Quilty, Chairman, President and CEO of Derma Sciences
commented, “We believe our results for the
third quarter are further evidence of the success we are achieving in
building a strong platform from which we can leverage additional growth.
We continue to grow sales through our strong private label relationships
and we absorbed the Western Medical business primarily utilizing
existing overhead. The additional sales and profits from both of these
initiatives have exceeded our own forecasts.
“Looking ahead, our focus now is on
introducing new technology. We have filed a submission to the FDA for
our first Active Manuka Honey Wound Dressing and we are anticipating a
response by the end of this year. The first shipment of our ALGICELL™
Antimicrobial Silver Dressing took place recently and we anticipate this
product line will be a key contributor to sales growth in 2007.”
“We believe the key to our future success will
be through the generation of new products. We are investing in plant and
equipment in order to establish the capability to better develop and
manufacture these products, and we are building our marketing resources
and selling organization in order to help us get these new products to
market. Significantly, these initiatives are presently being financed
out of internal cash flow. Given out current financial condition and new
product opportunities, the future looks promising for Derma Sciences.”
Derma Sciences will hold a conference call at 11:00 a.m. ET today to
discuss these results. Interested parties should call 888-873-4896
(domestic) or 617-213-8850 (international), with passcode
11080523 to access the call. You may also access this call via the
Internet at: http://phx.corporate-ir.net/playerlink.zhtml?c=107533&s=wm&e=1415230
For those who are unavailable to listen to the live broadcast, a replay
will be available through November 21, 2006 and can be accessed by
dialing 888-286-8010 (domestic), and 617-801-6888
(international). The pass code is 84409508.
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 Statements
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.
