Kerry P. Gray
Terry K. Wallberg
ULURU INC.
| ¬ | During the past ninety days, Altrazeal® has now been shipped to nine additional markets including the key markets of Italy, Spain and Portugal; |
| ¬ | Shipments to four additional new markets are scheduled to occur prior to August 30, 2014; |
| ¬ | Repeat shipments to numerous markets are scheduled in the third quarter of 2014; |
| ¬ | Substantial resolution of prior production issues has enabled an inventory of blisters to be established; |
| ¬ | Expansion in our international network of licensing and distribution partners; |
| ¬ | Presentation of important clinical experience data at European Wound Management Association (“EWMA”) 2014 including results of 12 nurses experiences using Altrazeal® on over 60 patients; and |
| ¬ | Further reduction in the quarterly operating loss compared to both prior year and first quarter. |
Commenting on the business activities, Kerry P. Gray, President and CEO, stated, “Commencing in May, with the shipments planned for August, thirteen new markets will have been supplied product. This clearly indicates that the international expansion in commercialization activities is escalating. We are optimistic that this trend will continue for the balance of 2015. With the resolution of the production issues we had experienced, and the establishment of an inventory of bulk blisters, we are now positioned to supply the market as orders are received. Additionally, activities are ongoing to further expand our network of licensees and distributors to include Asia, Latin America, the Middle East and Africa. With these ongoing activities the quarterly revenue is projected to rapidly sequentially increase. Important clinical experience data in over 60 patients was presented by a nurse from the Czech Republic at EWMA. This data clearly indicated the high satisfaction of patients and care givers as well as cost effectiveness.”
For the second quarter of 2014, the Company reported a net loss of $710,000, or $0.03 per share, as compared with a net loss of $823,000, or $0.06 per share, for the same period last year. For the six months ended June 30, 2014, the reported net loss was $1.40 million, or $0.06 per share, as compared with a net loss of $1.50 million, or $0.12 per share, for the same period last year.
Commenting on the financial results Mr. Gray added, “Our revenues for the second quarter were impacted by the delay in shipment of outstanding orders. This situation is currently being corrected and will be fully resolved in the third quarter. We have maintained our operating expense levels to reflect our current revenue level, any increment to our expense levels will be to support revenue growth. Our second quarter loss has been reduced below the first quarter level and we are projecting further reductions in the loss for the third and fourth quarter. Excluding non-cash items including share based compensation, amortization and depreciation our second quarter operating loss was approximately $480,000.”
Operating Results
Revenues
Revenues for the second quarter of 2014 were $209,000, as compared to $29,000 for the second quarter of 2013. The increase of approximately $180,000 in revenues is attributable to an increase in total revenue from Altrazeal, including product sales, royalties and license fees.
Revenues for the six months ended June 30, 2014 were $311,000, as compared to $131,000 for the comparative period of 2013. The increase of approximately $180,000 in revenues is as noted above.
Research and Development
Research and development expenses for the second quarter of 2014 were $184,000, including $5,000 in share-based compensation, as compared to $211,000 for the second quarter of 2013, which included $5,000 in share-based compensation. The decrease of approximately $27,000 in research and development expenses was primarily due to a decrease of $29,000 in regulatory costs and a decrease of $21,000 in direct research costs related to Altrazeal®. These expense decreases were partially offset by an increase of $36,000 in scientific compensation related primarily to a higher head count.
Research and development expenses were $372,000 for the six months ended June 30, 2014, including $11,000 in share-based compensation, as compared to $376,000 for the six months ended June 30, 2013, which included $6,000 in share-based compensation. The decrease of approximately $4,000 in research and development expenses was primarily due to a decrease of $47,000 in regulatory costs and a decrease of $30,000 in direct research costs related to Altrazeal®. These expense decreases were partially offset by an increase of $65,000 in scientific compensation related to share-based compensation and a higher head count and an increase of $20,000 in clinical study costs related to Altrazeal®.
Selling, General and Administrative
Selling, general and administrative expenses for the second quarter of 2014 were $411,000, including $17,000 in share-based compensation, as compared to $352,000, which included $17,000 in share-based compensation, for the second quarter of 2013. The increase of approximately $60,000 in selling, general and administrative expenses was primarily due to an increase of $27,000 in legal expenses related to a licensing agreement dispute, an increase of $26,000 in sales and marketing expenses and an increase of $22,000 in compensation costs due to time of expense recognition. These expense increases were partially offset by a decrease of $27,000 related to doubtful account accruals.
Selling, general and administrative expenses were $880,000 for the six months ended June 30, 2014, including $36,000 in share-based compensation, as compared to $612,000 for the six months ended June 30, 2013, which included $25,000 in share-based compensation. The increase of approximately $268,000 in selling, general and administrative expenses was primarily due to an increase of $142,000 in investor relations consulting related to share-based compensation, an increase of $66,000 in legal expenses related to a licensing agreement dispute and an increase of $46,000 in sales and marketing expenses.
Other Income and Other Expenses
Interest and miscellaneous income for the second quarter declined $17,000 primarily due to the offset in January 2014 of the outstanding notes receivable.
Interest and miscellaneous income was $5,000 for the six months ended June 30, 2014 as compared to $40,000 for the six months ended June 30, 2013. The decrease of approximately $35,000 in interest income is primarily attributable to the offset in January 2014 of the outstanding notes receivable.
Interest expense for the second quarter of 2014 was $33,000 as compared to $128,000 for the second quarter of 2013. The decrease of approximately $95,000 is primarily attributable to the offset in January 2014 of the outstanding notes receivable against the outstanding principle due on the convertible promissory note and the final payoff in March 2014 of the convertible promissory note with Inter-Mountain.
Interest expense was $98,000 for the six months ended June 30, 2014 as compared to $260,000 for the six months ended June 30, 2013. The decrease of approximately $162,000 is primarily attributable to the offset in January 2014 of the outstanding notes receivable against the outstanding principle due on the convertible promissory note.
About ULURU Inc.:ULURU Inc.
ULURU Inc.
