Press Release | Source: Stellar Pharmaceuticals Inc. |
Stellar Pharmaceuticals Reports Third Quarter 2010 Financial Results
LONDON, ONTARIO — November 9, 2010 -- Stellar Pharmaceuticals Inc. (OTCBB:SLXCF) ("Stellar" or "the Company"), a Canadian pharmaceutical developer and marketer of high quality, cost-effective products for select health care markets, today announced financial results for the quarter ended September 30, 2010. In this press release, all dollar amounts are expressed in Canadian currency rounded to the nearest hundredth. These results are reported in accordance with United States generally accepted accounting principles (U.S. GAAP).
For the three-month period ended September 30, 2010, Stellar's total revenues from all sources were $2,236,900 as compared to $826,900 in the same period in 2009. The Company noted that total revenues in for the third quarter of 2010, were positively impacted by a milestone payment from Watson Pharma, Inc. of $1,345,200 related to the issuance of the Company’s Uracyst® high-dose patent in the United States. With respect to product sales, the Company experienced solid growth for all products in the Canadian market as well as strong growth for Uracyst® in international markets. International NeoVisc® sales, however, declined primarily as a result of a negative economic situation in Eastern Europe. Stellar’s net profit for the three-month period ended September 30, 2 010 was $1,380,800. This result compares to a profit of $25,900 that was generated in the same period in 2009.
Stellar ended the quarter in a strong financial position, with no debt and working capital of $4,599,100. This amount does not include the gross proceeds of US$1,000,000 from a non-brokered private placement of 1,000,000 Units of the Company that was completed in October 2010. Each unit consists of one Common Share and warrants to purchase up to 1,500,000 additional Common Shares.
Peter Riehl, Stellar's President and Chief Executive Officer, commented, "We entered 2010 with a strong focus on building Canadian sales and expanding global partnerships for our two lead products, Uracyst® and NeoVisc®. By virtually any measure that focus has delivered improved operating performance over the previous year. Now, as we move through the fourth quarter, we will continue to execute our growth strategy while carefully managing our expenses.”
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®, its patented technology for treatment of interstitial cystitis/painful bladder syndrome, an inflammatory disease of the urinary bladder wall. Stellar also has in-licensing agreement for the distribution and sale of NMP22® BladderChek®, a proteomics-based diagnostic test for the diagnosis and monitoring of bladder cancer. For more information, please visit the company's website at www.stellarpharma.com.
Stellar Q3 2010 Results
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Forward-Looking Statements
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.
| CONTACTS: | |
| | |
| Company Contact | Investor Contact |
| | |
| Peter Riehl | Stephen Kilmer |
| President & CEO | President |
| Stellar Pharmaceuticals Inc. | Kilmer Lucas Inc. |
| (519) 434-1540 | (905) 690-2400 ext. 21 |
| email – corpinfo@stellarpharma.com | email – stephen@kilmerlucas.com |
| | |
| - or - | Media Contact |
| | |
| Arnold Tenney | Leonard Zehr |
| Chairman | Managing Director |
| Stellar Pharmaceuticals Inc. | Kilmer Lucas Inc. |
| (416) 587-3200 | (905) 690-2400 ext. 41 |
| | email - len@kilmerlucas.com |
Stellar Q3 2010 Results
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STELLAR PHARMACEUTICALS INC.
BALANCE SHEETS
(Expressed in Canadian dollars)
| | | As at September 30, 2010 | | | As at December 31, 2009 | |
| | | (Unaudited) | | | | |
| ASSETS | | | | | | |
| CURRENT | | | | | | |
| Cash and cash equivalents | | $ | 3,274,412 | | | $ | 2,325,212 | |
| Accounts receivable, net of allowance of $nil (2009 - $nil) | | | 608,513 | | | | 293,565 | |
| Inventories | | | 799,825 | | | | 721,061 | |
| Taxes recoverable | | | 5,998 | | | | 1,501 | |
| Loan receivable | | | 15,814 | | | | 15,818 | |
| Prepaids, deposits and sundry receivables | | | 125,000 | | | | 163,698 | |
| Total current assets | | | 4,829,562 | | | | 3,520,855 | |
PROPERTY, PLANT AND EQUIPMENT, net | | | 1,574,899 | | | | 1,390,296 | |
| OTHER ASSETS | | | 129,999 | | | | 114,553 | |
| Total assets | | $ | 6,534,460 | | | $ | 5,025,704 | |
| LIABILITIES | | | | | | | | |
| CURRENT | | | | | | | | |
| Accounts payable | | $ | 134,847 | | | $ | 228,367 | |
| Accrued liabilities | | | 91,173 | | | | 175,637 | |
| Deferred revenues | | | 4,473 | | | | 2,890 | |
| | | | | | | | | |
| Total current liabilities | | | 230,493 | | | | 406,894 | |
| | | | | | | | | |
| CONTINGENCIES AND COMMITMENTS | | | | | | | | |
| | | | | | | | | |
| SHAREHOLDERS’ EQUITY | | | | | | | | |
| | | | | | | | | |
| CAPITAL STOCK | | | | | | | | |
| AUTHORIZED | | | | | | | | |
| Unlimited Non-voting, convertible, redeemable and retractable | | | | | | | | |
| preferred shares with no par value | | | | | | | | |
| Unlimited Common shares with no par value | | | | | | | | |
| | | | | | | | | | |
| ISSUED | | | | | | | | |
| 23,585,040 Common shares (December 31, 2009 – 23,480,040) | | | 8,291,429 | | | | 8,183,638 | |
| Additional Paid-in capital options - outstanding | | | 172,849 | | | | 89,562 | |
| Additional Paid-in capital options - expired | | | 724,127 | | | | 724,127 | |
| | | | | 9,188,405 | | | | 8,997,327 | |
| DEFICIT | | | | (2,884,438 | ) | | | (4,378,517 | ) |
| Total shareholders’ equity | | | 6,303,967 | | | | 4,618,810 | |
| Total liabilities and shareholders’ equity | | $ | 6,534,460 | | | $ | 5,025,704 | |
Stellar Q3 2010 Results
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STELLAR PHARMACEUTICALS INC.
CONDENSED STATEMENTS OF OPERATIONS, COMPREHENSIVE INCOME AND DEFICIT
(Expressed in Canadian Dollars)
(Unaudited)
| | | For the Three Month Period | | | For the Nine Month Period | |
| | | Ended September 30 | | | Ended September 30 | |
| | | 2010 | | | 2009 | | | 2010 | | | 2009 | |
| | | | | | | | | | | | | |
| PRODUCT SALES | | $ | 690,881 | | | $ | 811,684 | | | $ | 2,052,144 | | | $ | 2,270,229 | |
| ROYALTY AND LICENSING REVENUES | | | 1,546,044 | | | | 15,233 | | | | 2,018,472 | | | | 403,498 | |
| TOTAL REVENUES FROM ALL SOURCES | | | 2,236,925 | | | | 826,917 | | | | 4,070,616 | | | | 2,673,727 | |
| COST OF PRODUCTS SOLD | | | 235,334 | | | | 275,710 | | | | 719,809 | | | | 763,744 | |
| GROSS PROFIT | | | 2,001,591 | | | | 551,207 | | | | 3,350,807 | | | | 1,909,983 | |
| | | | | | | | | | | | | | | | | |
| EXPENSES | | | | | | | | | | | | | | | | |
| Selling, general and administrative | | | 566,371 | | | | 505,391 | | | | 1,726,890 | | | | 1,646,388 | |
| Research and development | | | 45,606 | | | | 9,009 | | | | 81,560 | | | | 16,420 | |
| Amortization (non-manufacturing property, plant and equipment) | | | 11,600 | | | | 14,488 | | | | 38,919 | | | | 41,888 | |
| | | | 623,577 | | | | 528,888 | | | | 1,847,369 | | | | 1,704,696 | |
| INCOME FROM OPERATIONS | | | 1,378,014 | | | | 22,319 | | | | 1,503,438 | | | | 205,287 | |
| INTEREST AND OTHER INCOME | | | 2,827 | | | | 3,559 | | | | 5,949 | | | | 10,462 | |
| LOSS ON DISPOSAL OF EQUIPMENT | | | - | | | | - | | | | (15,308 | ) | | | - | |
| INCOME AND COMPREHENSIVE INCOME FOR | | | | | | | | | | | | | | | | |
| THE PERIOD BEFORE INCOME TAXES | | | 1,380,841 | | | | 25,878 | | | | 1,494,079 | | | | 215,749 | |
| | | | | | | | | | | | | | | | | |
| NET INCOME AND COMPREHENSIVE | | | | | | | | | | | | | | | | |
| INCOME FOR THE PERIOD | | | 1,380,841 | | | | 25,878 | | | | 1,494,079 | | | | 215,749 | |
| | | | | | | | | | | | | | | | | |
| DEFICIT, beginning of period | | | (4,265,279 | ) | | | (4,425,682 | ) | | | (4,378,517 | ) | | | (4,615,553 | ) |
| DEFICIT, end of period | | $ | (2,884,438 | ) | | $ | (4,399,804 | ) | | $ | (2,884,438 | ) | | $ | (4,399,804 | ) |
| | | | | | | | | | | | | | | | | |
| EARNINGS PER SHARE - basic | | $ | 0.06 | | | $ | 0.00 | | | $ | 0.06 | | | $ | 0.01 | |
| | | | | | | | | | | | | | | | | |
| WEIGHTED AVERAGE NUMBER OF | | | | | | | | | | | | | | | | |
| COMMON SHARES OUTSTANDING - BASIC | | | 23,585,040 | | | | 23,493,736 | | | | 23,517,256 | | | | 23,505,241 | |
| | | | | | | | | | | | | | | | | |
| EARNINGS PER SHARE - diluted | | $ | 0.06 | | | $ | 0.00 | | | $ | 0.06 | | | $ | 0.01 | |
| | | | | | | | | | | | | | | | | |
| WEIGHTED AVERAGE NUMBER OF | | | | | | | | | | | | | | | | |
| COMMON SHARES OUTSTANDING - DILUTED | | | 23,594,579 | | | | 23,493,736 | | | | 23,518,390 | | | | 23,505,241 | |
Stellar Q3 2010 Results
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STELLAR PHARMACEUTICALS INC.
STATEMENTS OF CASH FLOWS
(Expressed in Canadian dollars)
(Unaudited)
| | | For the Three Month Period | | | For the Nine Month Period | |
| | | Ended September 30 | | | Ended September 30 | |
| | | 2010 | | | 2009 | | | 2010 | | | 2009 | |
| | | | | | | | | | | | | |
| CASH FLOWS FROM (USED IN) OPERATING ACTIVITIES - | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| Net income for the period | | $ | 1,380,841 | | | $ | 25,878 | | | $ | 1,494,079 | | | $ | 215,749 | |
| Items not affecting cash | | | | | | | | | | | | | | | | |
| Amortization | | | 21,474 | | | | 15,770 | | | | 79,053 | | | | 83,885 | |
| Loss on disposal of equipment | | | - | | | | - | | | | 15,308 | | | | - | |
| Issuance of equity instruments for services rendered | | | - | | | | - | | | | 4,000 | | | | - | |
| Stock-based compensation | | | 66,689 | | | | - | | | | 118,079 | | | | - | |
| Change in non-cash operating asset and liabilities | | | 39,974 | | | | 65,698 | | | | (535,908 | ) | | | (322,815 | ) |
| CASH FLOWS (USED IN) OPERATING ACTIVITIES | | | 1,508,978 | | | | 107,346 | | | | 1,174,611 | | | | (23,181 | ) |
| | | | | | | | | | | | | | | | | |
| CASH FLOWS FROM (USED IN) INVESTING ACTIVITIES - | | | | | | | | | | | | | | | | |
| Additions to property, plant and equipment | | | (28,052 | ) | | | (66,899 | ) | | | (290,194 | ) | | | (112,776 | ) |
| Increase to other assets | | | (6,000 | ) | | | - | | | | (16,847 | ) | | | (26,231 | ) |
| Proceeds from sale of equipment | | | - | | | | - | | | | 12,630 | | | | - | |
| CASH FLOWS USED IN INVESTING ACTIVITIES | | | (34,052 | ) | | | (66,899 | ) | | | (294,411 | ) | | | (139,007 | ) |
| | | | | | | | | | | | | | | | | |
| CASH FLOWS USED IN FINANCING ACTIVITIES - | | | | | | | | | | | | | | | | |
| Stock options exercised | | | - | | | | - | | | | 69,000 | | | | - | |
| Re-purchase of Common shares for cash | | | - | | | | (9,293 | ) | | | - | | | | (30,584 | ) |
| | | | | | | | | | | | | | | | | |
| CASH FLOWS FROM (USED IN) FINANCING ACTIVITIES | | | - | | | | (9,293 | ) | | | 69,000 | | | | (30,584 | ) |
| | | | | | | | | | | | | | | | | |
| CHANGE IN CASH AND CASH EQUIVALENTS | | | 1,474,926 | | | | 31,154 | | | | 949,200 | | | | (192,772 | ) |
| | | | | | | | | | | | | | | | | |
| CASH AND CASH EQUIVALENTS, | | | | | | | | | | | | | | | | |
| Beginning of period | | | 1,799,486 | | | | 1,882,040 | | | | 2,325,212 | | | | 2,105,966 | |
| | | | | | | | | | | | | | | | | |
| CASH AND CASH EQUIVALENTS, | | | | | | | | | | | | | | | | |
| End of period | | $ | 3,274,412 | | | $ | 1,913,194 | | | $ | 3,274,412 | | | $ | 1,913,194 | |
