ImmuCell Corporation (Nasdaq: ICCC)
(“ImmuCell” or the “Company”), a growing animal health company that
develops, manufactures and markets scientifically-proven and
practical products that improve the health and productivity of
dairy and beef calves, today announced unaudited financial
results for the quarter ended March 31, 2020.
Product Sales Results:
- Total product sales increased by 11%, or $500,000, to $4.9
million during the three-month period ended March 31, 2020 versus
the comparable period during 2019.
- Sales of the First Defense® product line
increased by 16% during the quarter ended March 31, 2020 versus the
comparable period during 2019.
- Total product sales increased by 14%, or $1.7 million, to $14.2
million during the twelve-month period ended March 31, 2020 versus
the twelve-month period ended March 31, 2019.
Management’s Discussion:“The first quarter is
historically our highest sales quarter due to market seasonality,
but the first quarter of 2020 set a record with an 11% increase in
sales. Demand was higher than we could service resulting in a
$1.4 million backlog as of March 31, 2020 compared to a backlog of
$276,000 as of March 31, 2019,” commented Michael F. Brigham,
President and CEO. “This record sales pace is fueling our intensity
to adapt so we can better serve our markets despite the challenging
circumstances.”
“The leasehold improvements necessary to increase our annual
production capacity for the First Defense® product
line from approximately $18 million to approximately $27 million
are almost complete,” Mr. Brigham added. “Phase I of this
expansion project (that being the relocation of our capsule
assembly functions to the new facility to create space for the
installation of increased freeze-drying capacity) is most critical
to filling our current backlog of orders. We are taking a measured
approach to Phase II of this expansion project (that being the
relocation of our gel assembly functions to the new facility to
create space for the installation of increased liquid processing
capacity) later in the year as we continue to monitor economic
conditions, fill the backlog of orders and build up our inventory
levels.”
For up-to-date photos of the Company’s First
Defense® manufacturing facility expansion, please visit
https://immucell.com/construction/.
“Our very dedicated team has been flexible and creative in
finding ways to continue producing First Defense®
during these extremely difficult times,” concluded Mr.
Brigham. “To the extent feasible, we have implemented social
distancing practices, remote work, extra cleaning and sanitizing
and alternate shift scheduling, among other procedures, to move
forward safely.”
Other Financial Results:
- Gross margin earned was 46% and 50% of product sales during the
quarters ended March 31, 2020 and 2019, respectively.
- Product development expenses were $974,000 and $910,000 during
the quarters ended March 31, 2020 and 2019, respectively.
- Net loss was $122,000, or $0.02 per share, during the quarter
ended March 31, 2020 in contrast to net income of $145,000, or
$0.03 per share, during the quarter ended March 31, 2019.
- EBITDA (a non-GAAP financial measure, see page 4 of this press
release) was approximately $770,000 and $836,000 during the
quarters ended March 31, 2020 and 2019, respectively.
Balance Sheet Data as of March 31,
2020:
- Cash, cash equivalents, short-term investments and restricted
cash decreased to $8.4 million as of March 31, 2020 from $8.8
million as of December 31, 2019.
- Net working capital decreased to $9.1 million as of March 31,
2020 from $10.7 million as of December 31, 2019.
- Stockholders’ equity was almost unchanged at just under $29
million as of March 31, 2020 and December 31, 2019.
Conference Call: Interested parties can access
the conference call scheduled by the Company to review the first
quarter 2020 financial results by dialing (844) 855-9502 (toll
free) or (412) 317-5499 (international) at 9:00 AM ET on Thursday,
May 14, 2020. A teleconference replay of the call will be
available for seven days at (877) 344-7529 (toll free) or (412)
317-0088 (international), utilizing confirmation #10143957.
Investors are encouraged to review the Company’s Form 10-Q for the
three-month period ended March 31, 2020 that was filed with the SEC
on May 13, 2020 and its updated Corporate Presentation slide deck
that provides an overview of the Company’s business and is
available under the “Investors” tab of the Company’s website at
www.immucell.com, or by request to the Company.
Condensed Statements of
Operations (Unaudited)
|
During the Three-Month Periods
Ended March 31, |
|
(In thousands, except per
share amounts) |
2020 |
|
2019 |
|
|
|
|
|
|
Product sales |
$4,910 |
|
|
$4,411 |
|
Costs of goods sold |
2,674 |
|
|
2,210 |
|
Gross margin |
2,236 |
|
|
2,201 |
|
|
|
|
|
|
Sales, marketing and
administrative expenses |
1,065 |
|
|
1,026 |
|
Product development
expenses |
974 |
|
|
910 |
|
Operating expenses |
2,039 |
|
|
1,936 |
|
|
|
|
|
|
NET OPERATING
INCOME |
197 |
|
|
265 |
|
|
|
|
|
|
Other expenses, net |
334 |
|
|
111 |
|
|
|
|
|
|
(LOSS) INCOME BEFORE INCOME TAXES |
(137 |
) |
|
154 |
|
|
|
|
|
|
Income tax (benefit)
expense |
(15 |
) |
|
9 |
|
|
|
|
|
|
NET (LOSS)
INCOME |
($122 |
) |
|
$145 |
|
|
|
|
|
|
Basic weighted average common shares outstanding |
7,213 |
|
|
5,625 |
|
Basic net (loss) income per share |
($0.02 |
) |
|
$0.03 |
|
|
|
|
|
|
Diluted weighted average common shares outstanding |
7,213 |
|
|
5,667 |
|
Diluted net (loss) income per share |
($0.02 |
) |
|
$0.03 |
|
|
|
|
|
|
Selected Balance Sheet Data (In
thousands) (Unaudited)
|
As of March 31, 2020 |
|
|
As of December 31, 2019 |
|
|
|
|
|
|
|
Cash, cash equivalents,
short-term investments and restricted cash |
$8,399 |
|
|
$8,774 |
|
Net working capital |
9,086 |
|
|
10,694 |
|
Total assets |
40,054 |
|
|
38,692 |
|
Stockholders’ equity |
$28,990 |
|
|
$28,991 |
|
|
|
|
|
|
|
Non-GAAP Measures:Generally, a non-GAAP
financial measure is a numerical measure of a company’s
performance, financial position or cash flow that either excludes
or includes amounts that are not normally excluded or included in
the most directly comparable measure calculated and presented in
accordance with GAAP. The non-GAAP measures included in this press
release, however, should be considered in addition to, and not as a
substitute for or superior to, the comparable measure prepared in
accordance with GAAP. We believe that considering the non-GAAP
(loss) income before income taxes and before certain non-cash
expenses assists management and investors by looking at our
performance across reporting periods on a consistent basis
excluding these certain charges that are not uses of cash from our
reported (loss) income before income taxes. We start with our
reported (loss) income before income taxes because presently we are
not paying cash for income taxes and do not anticipate paying
significant cash for income taxes in the near-term future. We
calculate non-GAAP income before income taxes and before certain
non-cash expenses as indicated in the table below:
|
During the Three-MonthPeriods Ended March
31, |
|
(In thousands) |
2020 |
|
2019 |
|
|
|
|
|
|
(Loss) income before income taxes |
($137 |
) |
|
$154 |
|
Depreciation |
555 |
|
|
563 |
|
Amortization and write-off of
debt issuance costs |
103 |
|
|
9 |
|
Stock-based compensation |
77 |
|
|
83 |
|
Income before income taxes and
certain non-cash expenses |
$ 598 |
|
|
$809 |
|
|
|
|
|
|
|
The figures reported above differ from the calculation of
Earnings Before Interest, Taxes, Depreciation and Amortization
(EBITDA) in two significant ways. In our calculation above,
we have not added back interest expense because we do pay cash for
interest. Interest expense was approximately $249,000 and $110,000
during the quarters ended March 31, 2020 and 2019, respectively. We
have added back stock-based compensation expense because this is a
non-cash expense, but it is not added back to the calculation of
EBITDA. EBITDA was approximately $770,000 and $836,000 during
the quarters ended March 31, 2020 and 2019, respectively.
About ImmuCell: ImmuCell Corporation's
(Nasdaq: ICCC) purpose is to create
scientifically-proven and practical products that improve the
health and productivity of dairy and beef calves. ImmuCell
manufactures and markets First Defense®, providing
Immediate Immunity™ to newborn dairy and beef
calves, and is in the late stages of developing
Re-Tain™, a novel treatment for subclinical
mastitis without a milk discard requirement that provides an
alternative to traditional antibiotics. Press releases and other
information about the Company are available at:
http://www.immucell.com.
Cautionary Note Regarding Forward-Looking Statements
(Safe Harbor Statement):This Press Release contains
“forward-looking statements” within the meaning of Section 27A of
the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934. Such statements include, but are not limited
to, any statements relating to: our plans and strategies for our
business; projections of future financial or operational
performance; the timing and outcome of pending or anticipated
applications for regulatory approvals; factors that may affect the
dairy and beef industries and future demand for our products; the
extent, nature and duration of the COVID-19 pandemic and its
consequences, and their direct and indirect impacts on the
Company’s production activities, operating results and financial
condition and on the customers and markets the Company serves; the
scope and timing of ongoing and future product development work and
commercialization of our products; future costs of product
development efforts; the estimated prevalence rate of subclinical
mastitis and dairy producers’ level of interest in treating
subclinical mastitis given current economic and market conditions;
the expected efficacy of new products; estimates about the market
size for our products; future market share of and revenue generated
by current products and products still in development; our ability
to increase production output and reduce costs of goods sold
associated with our new product, Tri-Shield
First Defense®; the future adequacy of our own
manufacturing facilities or those of third parties with which we
have contractual relationships to meet demand for our products on a
timely basis; the anticipated costs of (or time to complete)
planned expansions of our manufacturing facilities and the adequacy
of our funds available for these projects; the continuing
availability to us on reasonable terms of third-party providers of
critical products or services; the robustness of our manufacturing
processes and related technical issues; estimates about our
production capacity, efficiency and yield; the future adequacy of
our working capital and the availability and cost of third-party
financing; future regulatory requirements relating to our products;
future expense ratios and margins; future compliance with bank debt
covenants; costs associated with sustaining compliance with current
Good Manufacturing Practice (cGMP) regulations in our current
operations and attaining such compliance for the facility to
produce the Nisin Drug Substance; implementation of international
trade tariffs that could reduce the export of dairy products, which
could in turn weaken the price received by our customers for their
products; our effectiveness in competing against competitors within
both our existing and our anticipated product markets; the
cost-effectiveness of additional sales and marketing expenditures
and resources; anticipated changes in our manufacturing
capabilities and efficiencies; the value of our net deferred tax
assets; projections about depreciation expense and its impact on
income for book and tax return purposes; anticipated market
conditions; and any other statements that are not historical facts.
Forward-looking statements can be identified by the use of words
such as “expects”, “may”, “anticipates”, “aims”, “intends”,
“would”, “could”, “should”, “will”, “plans”, “believes”,
“estimates”, “targets”, “projects”, “forecasts”, “seeks” and
similar words and expressions. In addition, there can be no
assurance that future developments affecting us will be those that
we anticipate. Such statements involve risks and uncertainties,
including, but not limited to, those risks and uncertainties
relating to difficulties or delays in development, testing,
regulatory approval, production and marketing of our products
(including the First Defense® product line and
Re-Tain™), competition within our anticipated
product markets, customer acceptance of our new and existing
products, product performance, alignment between our manufacturing
resources and product demand, our reliance upon third parties for
financial support, products and services, changes in laws and
regulations, decision making and delays by regulatory authorities,
currency values and fluctuations and other risks detailed from time
to time in filings we make with the SEC, including our Quarterly
Reports on Form 10-Q, our Annual Reports on Form 10-K and our
Current Reports on Form 8-K. Such statements involve risks and
uncertainties and are based on our current expectations, but actual
results may differ materially due to various factors, including the
risk factors summarized above.
|
|
Contacts: |
Michael F. Brigham, President and CEO |
|
ImmuCell Corporation |
|
(207) 878-2770 |
|
|
|
Joe Diaz, Robert Blum and Joe Dorame |
|
Lytham Partners, LLC |
|
(602) 889-9700 |
|
iccc@lythampartners.com |
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