Source: Stellar Pharmaceuticals Inc. |
STELLAR PHARMACEUTICALS INC. ANNOUNCES REVENUE
INCREASED BY 25.7% GROSS PROFITS UP BY 50.9%
London, Ontario, May 15, 2008 –Stellar Pharmaceuticals Inc. ("Stellar" or the “Company”)(TSX VENTURE:SLX.V) (OTCBB:SLXCF.OB) announced that for the three month period ended March 31, 2008, total operating revenues improved by 25.7%. This improvement was driven by increased international sales for NeoVisc, while cost of products sold for the period improved to 24.3% of product sales compared to 31.4% of product sales in the same period in 2007. The reduction in cost of products sold was a result of a decrease in the cost of materials used in the manufacturing process, as well as healthier production yields. These positive operating changes resulted in a gross profit increase of 50.9% over the same period in 2007.
Increased sales revenue was mainly a result of the growth in international sales of NeoVisc, which grew by 103.3%, as Stellar’s new European partners increased their market penetration. While Canadian sales for the quarter decreased 9.5% compared to the same period in 2007 (due to price increases, which generated a buy-in of NeoVisc and Uracyst, in February 2007), BladderChek sales were up over 604% compared to the first quarter of 2007.
During the quarter the Company also received interim results of a 50 patient Canadian, community based, clinical trial with Uracyst, which showed positive results. The Company anticipates these results to be formally published or presented by the fourth quarter of this year and although there can be no assurance, the Company believes this will have a positive impact on Uracyst sales in all sectors.
Peter Riehl, Stellar’s President and CEO stated, “We are very pleased with our progress in this quarter and believe these improvements should continue to occur for the balance of the year. The Company is moving forward to execute on its strategy to improve the top line and believes it is in a more positive position in its move to a profitable status for 2008.”
As at March 31, 2008, the Company was debt free and had working capital of $3,852,700 of which $3,014,100 was in cash.
ABOUT STELLAR PHARMACEUTICALS INC.
Stellar has developed and is marketing direct in Canada and in countries around the world through out-license agreements two products based on its core polysaccharide technology: NeoVisc®, for the treatment of osteoarthritis; and Uracyst® and the Uracyst® Test Kit, its patented technology for the diagnosis and treatment of interstitial cystitis (IC), an inflammatory disease of the urinary bladder wall. Stellar also has in-licensing agreements for NMP22® BladderChek®, a proteomics-based diagnostic test for the diagnosis and monitoring of bladder cancer.
May 14, 2008 release
Page 2
STELLAR PHARMACEUTICALS INC.
CONDENSED BALANCE SHEETS
(Expressed in Canadian Dollars)
ASSETS | |||||||
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| As at |
| As at |
|
|
|
|
| March 31, 2008 |
| December 31, 2007 |
CURRENT |
|
|
| (Unaudited) |
| (Audited) | |
| Cash and cash equivalents |
| $ 3,014,128 |
| $ 3,211,126 | ||
| Accounts receivable, net of allowance $nil (2007 - $nil) |
| 298,455 |
| 272,341 | ||
| Inventories |
|
|
| 328,280 |
| 305,040 |
| Taxes recoverable |
| 164,714 |
| 164,714 | ||
| Prepaid, deposits and sundry receivables |
| 50,743 |
| 44,066 | ||
|
|
|
|
| 3,856,320 |
| 3,997,287 |
|
|
|
|
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|
PROPERTY, PLANT AND EQUIPMENT |
| 808,554 |
| 822,692 | |||
|
|
|
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|
OTHER ASSETS |
|
| 61,154 |
| 55,430 | ||
LOAN RECEIVABLE |
| 14,822 |
| 14,822 | |||
|
|
|
|
| $ 4,740,850 |
| $ 4,890,231 |
|
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LIABILITIES | |||||||
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CURRENT |
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|
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| |
| Accounts payable |
| $ 230,649 |
| $ 214,442 | ||
| Accrued liabilities |
| 122,102 |
| 192,364 | ||
| Deferred revenues |
| 8,475 |
| 10,573 | ||
|
|
|
|
| 361,226 |
| 417,379 |
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CONTINGENCIES AND COMMITMENTS |
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SHAREHOLDERS' EQUITY | |||||||
CAPITAL STOCK |
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| ||
| AUTHORIZED |
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| |
| Unlimited | Non-voting, convertible, redeemable and retractable |
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| ||
|
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| preferred shares with no par value |
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| Unlimited | Common shares with no par value |
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| |
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| ISSUED |
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|
| 23,822,540 | Common shares (2007 - 23,822,540) |
| 8,303,054 |
| 8,303,054 | |
|
| Additional paid-in capital - options - outstanding |
| 128,591 |
| 123,002 | |
|
|
| - expired |
| 623,417 |
| 623,417 |
|
|
|
|
| 9,055,062 |
| 9,049,473 |
DEFICIT |
|
|
| (4,675,438) |
| (4,576,621) | |
|
|
|
|
| 4,379,624 |
| 4,472,852 |
|
|
|
|
| $ 4,740,850 |
| $ 4,890,231 |
|
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|
May 14, 2008 release
Page 3
STELLAR PHARMACEUTICALS INC.
CONDENSED INTERIM STATEMENTS OF OPERATIONS
AND COMPREHENSIVE LOSS AND DEFICIT
(Expressed in Canadian Dollars)
(Unaudited)
|
|
| For the Three Month Period Ended March 31 | ||
|
|
| 2008 |
| 2007 |
|
|
|
|
|
|
PRODUCT SALES |
| $ 329,456 |
| $ 328,931 | |
COST OF PRODUCTS SOLD (excluding amortization of $17,216 (2007 - $27,586) |
| 80,111 |
| 103,132 | |
MARGIN ON PRODUCTS SOLD |
| 249,345 |
| 225,799 | |
ROYALTIES & LICENSING REVENUE |
| 197,956 |
| 90,765 | |
WRITE-DOWN OF OBSOLETE INVENTORY |
| - |
| (20,145) | |
GROSS PROFIT |
| 447,301 |
| 296,419 | |
EXPENSES |
|
|
|
| |
| Selling, general and administrative |
| 490,991 |
| 512,784 |
| Research and development |
| 53,818 |
| 38,612 |
| Amortization |
| 30,383 |
| 40,442 |
|
|
| 575,192 |
| 591,838 |
LOSS FROM OPERATIONS |
| (127,891) |
| (295,419) | |
INTEREST AND OTHER INCOME |
| 29,074 |
| 34,029 | |
NET LOSS AND COMPREHENSIVE LOSS FOR THE PERIOD |
| $ (98,817) |
| $ (261,390) | |
DEFICIT,beginning of period |
| (4,576,621) |
| (4,429,180) | |
DEFICIT,end of period |
| $ (4,675,438) |
| $ (4,690,570) | |
LOSS PER SHARE- Basic |
| $ 0.00 |
| $ (0.01) | |
WEIGHTED AVERAGE NUMBER OF COMMON SHARES |
|
|
|
| |
| OUTSTANDING |
| 23,822,540 |
| 23,819,040 |
May 14, 2008 release
Page 4
STELLAR PHARMACEUTICALS INC.
STATEMENTS OF CASH FLOWS
(Expressed in Canadian Dollars)
(Unaudited)
|
|
|
| For the Three Month Period Ended March 31 | ||
|
|
|
| 2007 |
| 2006 |
CASH FLOWS FROM OPERATING ACTIVITIES |
|
|
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| ||
| Net loss |
| $ (98,817) |
| $ (261,390) | |
|
|
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| Items not affecting cash |
|
|
|
| |
|
| Amortization |
| 30,383 |
| 40,442 |
|
| Unrealized foreign exchange (gain) loss |
| (13,150) |
| 1,082 |
|
| Issuance of equity instruments for services rendered |
| 5,589 |
| 2,749 |
|
| Change in non-cash operating assets and liabilities |
| (112,184) |
| (128,326) |
CASH FLOWS USED IN OPERATING ACTIVITIES |
| (188,179) |
| (345,443) | ||
|
|
|
|
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CASH FLOWS FROM INVESTING ACTIVITIES |
|
|
|
| ||
| Additions to property, plant and equipment |
| (15,906) |
| (1,087) | |
| Increase in other assets |
| (6,063) |
| - | |
CASH FLOWS USED IN INVESTING ACTIVITIES |
| (21,969) |
| (1,087) | ||
|
|
|
|
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EFFECT OF EXCHANGE RATES ON CASH HELD |
|
|
|
| ||
| IN FOREIGN CURRENCY |
| 13,150 |
| (1,082) | |
CHANGE IN CASH AND CASH EQUIVALENTS |
| (196,998) |
| (347,612) | ||
CASH AND CASH EQUIVALENTS, beginning of year |
| 3,211,126 |
| 3,515,193 | ||
CASH AND CASH EQUIVALENTS,end of year |
| $ 3,014,128 |
| $ 3,167,581 |
May 14, 2008 release
Page 5
This press release contains forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Readers are cautioned not to place undue reliance on these forward-looking statements. Actual results may differ materially from those indicated by these forward-looking statements as a result of risks and uncertainties impacting the Company's business including increased competition; the ability of the Company to expand its operations, to attract and retain qualified professionals, technological obsolescence; general economic conditions; and other risks detailed from time to time in the Company's filings.
The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release.
Contact:
Stellar Pharmaceuticals Inc.
544 Egerton St.
London, ON N5W 3Z8
Peter Riehl
(800) 639-0643 or (519) 434-1540
or
Arnold Tenney
(416) 587-3200
###