ProPhase Labs Reports Financial Results for the Three Months and Nine Months Ended September 30, 2019
November 12 2019 - 09:35AM
ProPhase Labs, Inc. (NASDAQ: PRPH, www.ProPhaseLabs.com) today
reported net sales of $2.8 million for the three months ended
September 30, 2019 compared to net sales of $2.4 million for the
three months ended September 30, 2018.
The Company incurred a net loss for the three
months ended September 30, 2019 of $428,000, or ($0.04) per share,
compared to a net loss of $1.1 million, or ($0.09) per share, for
the three months ended September 30, 2018.
Results for the third quarter of 2019 compared
to the third quarter of 2018 principally reflect the net effect of
(i) an increase in net sales of $327,000 due to an increase in
shipments and (ii) a decrease in total operating costs of
$373,000.
The Company generated net sales for the nine
months ended September 30, 2019 of $6.7 million, a decrease of $2.3
million, or 25.4%, as compared to net sales of $9.0 million for the
nine months ended September 30, 2018.
The Company incurred a net loss for the nine
months ended September 30, 2019 of $2.7 million, or ($0.23) per
share, compared to a net loss of $1.3 million, or ($0.11) per
share, for the nine months ended September 30, 2018.
Results for the nine months ended September 30,
2019 compared to the nine months ended September 30, 2018
principally reflect the net effect of (i) a decrease in net sales
of $2.3 million and (ii) an increase in sales and marketing costs
of $108,000, offset by a decrease in administrative costs of
$315,000 principally due to a decrease in legal and professional
costs.
Mr. Karkus stated, “We have revised the
operations of our ProPhase Digital Media business which has in turn
resulted in a decrease in overhead and expenses of that business
line. At the same time, we remain focused on efforts to grow the
revenues at our Pharmaloz Manufacturing division. Accordingly, our
year-over-year third quarter results reflect the company’s progress
in deploying these strategies.”
Mr. Karkus added, “We have also made progress in
the distribution of our flagship dietary supplement, Legendz XL, in
retail stores. To follow on to our progress in distributing this
product line, we anticipate initiating limited TV advertising
within the next few months. The successful implementation of our
dietary supplement strategy may require significant investments in
marketing as well as obtaining significant additional distribution
within the various retail channels and e-commerce venues in order
to achieve a successful launch and build a successful new product
line. Our strategy for Legendz XL tracks the strategy we
successfully executed to revive and expand our prior Cold-EEZE®
brand.”
Mr. Karkus concluded, “The Company continues to
explore a wide range of acquisition opportunities in the consumer
products space, as well as investments and acquisitions in other
sectors and industries.”
About the Company
We are a vertically integrated and diversified
branding, marketing and technology company with deep experience
with over-the-counter (“OTC”) consumer healthcare products, dietary
supplements and other remedies. We are engaged in the research,
development, manufacture, distribution, marketing and sale of OTC
consumer healthcare products, dietary supplements and other
remedies in the United States. This includes the development and
marketing of dietary supplements under the TK Supplements®
brand.
In addition, the Company also continues to
actively pursue acquisition opportunities for other companies,
technologies and products inside and outside the consumer products
industry. For more information visit us at
www.ProPhaseLabs.com.
Forward Looking Statements
Except for the historical information contained
herein, this document contains forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of
1995, including statements relating to our plans to expand our
production capacity and capabilities at Pharmaloz, the
implementation of our dietary supplement strategy, and potential
acquisition opportunities. Management believes that these
forward-looking statements are reasonable as and when made.
However, such forward-looking statements involve known and unknown
risks, uncertainties, and other factors that may cause actual
results to differ materially from those projected in the
forward-looking statements. These risks and uncertainties include,
but are not limited to: the difficulty of predicting the acceptance
and demand for our products, the impact of competitive products and
pricing, costs involved in the manufacture and marketing of
products, the timely development and launch of new products, and
the risk factors listed from time to time in our Annual Report on
Form 10-K, Quarterly Reports on Form 10-Q and any subsequent SEC
filings.
Investor Contact
Ted Karkus, Chairman and CEOProPhase Labs,
Inc.(267) 880-1111
ProPhase Labs, Inc. and
SubsidiariesCondensed Consolidated Statements of
Operations(in thousands, except per share
amounts)(unaudited)
|
|
For the Three Months Ended |
|
|
For the Nine Months Ended |
|
|
|
September 30, 2019 |
|
|
September 30, 2018 |
|
|
September 30, 2019 |
|
|
September 30, 2018 |
|
Net sales |
|
$ |
2,766 |
|
|
$ |
2,439 |
|
|
$ |
6,735 |
|
|
$ |
9,033 |
|
Cost of sales |
|
|
1,932 |
|
|
|
1,683 |
|
|
|
5,120 |
|
|
|
5,593 |
|
Gross profit |
|
|
834 |
|
|
|
756 |
|
|
|
1,615 |
|
|
|
3,440 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales and marketing |
|
|
302 |
|
|
|
395 |
|
|
|
910 |
|
|
|
802 |
|
Administration |
|
|
936 |
|
|
|
1,129 |
|
|
|
3,232 |
|
|
|
3,547 |
|
Research and development |
|
|
57 |
|
|
|
144 |
|
|
|
246 |
|
|
|
319 |
|
Total operating expenses |
|
|
1,295 |
|
|
|
1,668 |
|
|
|
4,388 |
|
|
|
4,668 |
|
Loss from operations |
|
|
(461 |
) |
|
|
(912 |
) |
|
|
(2,773 |
) |
|
|
(1,228 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest income, net |
|
|
33 |
|
|
|
15 |
|
|
|
94 |
|
|
|
115 |
|
Loss from continuing
operations |
|
|
(428 |
) |
|
|
(897 |
) |
|
|
(2,679 |
) |
|
|
(1,113 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Discontinued operations: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss on sale of discontinued
operations, net of taxes |
|
|
- |
|
|
|
(160 |
) |
|
|
- |
|
|
|
(160 |
) |
Loss from discontinued
operations |
|
|
- |
|
|
|
(160 |
) |
|
|
- |
|
|
|
(160 |
) |
Net
(loss) |
|
$ |
(428 |
) |
|
$ |
(1,057 |
) |
|
$ |
(2,679 |
) |
|
$ |
(1,273 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other comprehensive loss: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unrealized gain (loss) on
marketable debt securities |
|
|
(5 |
) |
|
|
28 |
|
|
|
18 |
|
|
|
54 |
|
Total comprehensive loss |
|
$ |
(433 |
) |
|
$ |
(1,029 |
) |
|
$ |
(2,661 |
) |
|
$ |
(1,219 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic loss per share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss from continuing operations |
|
$ |
(0.04 |
) |
|
$ |
(0.08 |
) |
|
$ |
(0.23 |
) |
|
$ |
(0.10 |
) |
Loss from discontinued operations |
|
|
- |
|
|
|
(0.01 |
) |
|
|
- |
|
|
|
(0.01 |
) |
Net loss |
|
$ |
(0.04 |
) |
|
$ |
(0.09 |
) |
|
$ |
(0.23 |
) |
|
$ |
(0.11 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted loss per share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss from continuing operations |
|
$ |
(0.04 |
) |
|
$ |
(0.08 |
) |
|
$ |
(0.23 |
) |
|
$ |
(0.10 |
) |
Loss from discontinued operations |
|
|
- |
|
|
|
(0.01 |
) |
|
|
- |
|
|
|
(0.01 |
) |
Net loss |
|
$ |
(0.04 |
) |
|
$ |
(0.09 |
) |
|
$ |
(0.23 |
) |
|
$ |
(0.11 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common shares
outstanding: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted |
|
|
11,565 |
|
|
|
11,541 |
|
|
|
11,561 |
|
|
|
11,344 |
|
ProPhase Labs, Inc. and
SubsidiariesCondensed Consolidated Balance
Sheets (in
thousands)(unaudited)
|
|
September 30, |
|
|
December 31, |
|
|
|
2019 |
|
|
2018 |
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
968 |
|
|
$ |
1,554 |
|
Marketable debt securities,
available for sale |
|
$ |
3,760 |
|
|
$ |
6,687 |
|
Accounts receivable, net |
|
$ |
1,483 |
|
|
$ |
4,830 |
|
Inventory, net |
|
$ |
1,886 |
|
|
$ |
1,903 |
|
Total current assets |
|
$ |
13,219 |
|
|
$ |
18,238 |
|
Total assets |
|
$ |
15,601 |
|
|
$ |
20,737 |
|
|
|
|
|
|
|
|
|
|
Total current liabilities |
|
$ |
1,073 |
|
|
$ |
4,233 |
|
Total non-current
liabilities |
|
$ |
129 |
|
|
$ |
- |
|
Total stockholders'
equity |
|
$ |
14,399 |
|
|
$ |
16,504 |
|
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