ProPhase Labs, Inc. (NASDAQ: PRPH,
www.ProPhaseLabs.com) today reported its net sales from continuing
operations were $13.1 million for the year ended December 31, 2018,
as compared to net sales of $9.9 million for the year ended
December 31, 2017. The Company realized a net loss for the year
ended December 31, 2018 of $1.7 million compared to a net income of
$40.6 million for the year ended December 31, 2017.
The Company realized loss from continuing
operations for the year ended December 31, 2018, of $1.6 million,
or ($0.14) per share, as compared to a loss of $2.2 million, or
($0.14) per share, for the year ended December 31, 2017. The
Company realized loss from discontinued operations for the year
ended December 31, 2018, of $170,000, or ($0.01) per share, as
compared to income of $42.8 million, or $2.75 per share, for the
year ended December 31, 2017.
As previously announced, effective March 29,
2017 and with the approval of the Company’s stockholders, the
Company completed the sale of assets comprised principally of the
sale of intellectual property rights and other assets relating to
the Cold-EEZE® brand and product line (collectively, referred to
herein as the “Cold-EEZE® Business”) to a wholly-owned subsidiary
of Mylan N.V. (“Mylan”). As a consequence of the sale of the
Cold-EEZE® Business, for the years ended December 31, 2018 and
2017, the Company has classified as discontinued operations the (i)
gain from the sale of the Cold-EEZE® Business, (ii) all gains and
losses attributable to the Cold-EEZE® Business and (iii) the income
tax expense attributed to the sale of the Cold-EEZE® Business.
We continue to own and operate our manufacturing
facility and manufacturing business in Lebanon, Pennsylvania, and
our headquarters in Doylestown, Pennsylvania. As part of the sale
of the Cold-EEZE® Business, we entered into a manufacturing
agreement to supply various Cold-EEZE® lozenge products to Mylan.
In addition, we produce over-the-counter drug and dietary
supplement lozenges and other products for other third party
customers. We are also pursuing a series of new product development
and commercialization initiatives in the dietary supplement
category.
Ted Karkus, the CEO of the Company, stated: “It
continues to be our goal to optimize the long term value of our
company’s shares. In 2017, to provide enhanced liquidity to our
shareholders we conducted two self-tenders and enabled our
shareholders to sell back just over 6 million shares of Company
common stock. In 2018, we provided a one-time special dividend of
$1.00 per share to all of our shareholders. More recently, we
followed this up with an additional one-time special dividend of
$0.25 per share. In short, the ProPhase management team
continues to return great value to our shareholders.”
Mr. Karkus continued, “We are on track with the
development of ProPhase Digital Media (“PDM”), the digital
marketing division of the Company. We recently completed the
optimization phase for digital distribution of our lead product,
Legendz XL®. We expect to ramp up direct to consumer sales of
Legendz XL® during 2019. If our model proves successful, our goal
is for PDM to market our other internally developed products and
ultimately market other companies’ products as well.”
Mr. Karkus added, “In addition to digital
distribution, we continue to ship our new dietary supplement,
Legendz XL®, to a major retail drug chain and other retailers. We
currently have positive indications of interest from other major
retailers as well. Implementation of our dietary supplement
strategy will require significant investment in marketing as well
as 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.”
Mr. Karkus also noted, “We continue to own and
operate our Pharmaloz manufacturing facility which manufactures and
supplies Cold-EEZE® lozenges to Mylan as well as lozenges to other
companies on a contract manufacturing basis. Manufacturing revenue
fluctuates from quarter to quarter. Also, marketing and
distribution expenses may increase as we build our consumer
products businesses. Therefore, the Company’s results are likely to
continue to fluctuate from quarter to quarter.”
Mr. Karkus concluded, “Looking forward, in
addition to developing our consumer products businesses and growing
our manufacturing business, 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, a
wholly-owned subsidiary of the Company.
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 the launch of our new line
of TK Supplements®, our new product Legendz XL® and the formation
of ProPhase Digital Media. 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. &
SUBSIDIARIES |
CONSOLIDATED STATEMENTS OF
OPERATIONS |
(in thousands, except per share
amounts) |
|
|
Year Ended December 31, |
|
|
2018 |
|
2017 |
|
|
|
|
|
|
Net sales |
$ |
13,126 |
|
$ |
9,867 |
|
Cost of sales |
|
8,345 |
|
|
7,919 |
|
Gross profit |
|
4,781 |
|
|
1,948 |
|
|
|
|
|
|
|
|
Operating expenses |
|
|
|
|
|
|
Sales and
marketing |
|
1,107 |
|
|
699 |
|
Administration |
|
4,910 |
|
|
4,808 |
|
Research
and development |
|
398 |
|
|
431 |
|
Total
operating expenses |
|
6,415 |
|
|
5,938 |
|
|
|
|
|
|
|
|
Interest income,
net |
|
167 |
|
|
177 |
|
Other income |
|
- |
|
|
150 |
|
Total
interest and other income |
|
167 |
|
|
327 |
|
|
|
|
|
|
|
|
Loss from continuing
operations before income taxes |
|
(1,467 |
) |
|
(3,663 |
) |
Income tax benefit
(provision) from continuing operations |
|
(103 |
) |
|
1,421 |
|
Loss from continuing
operations |
|
(1,570 |
) |
|
(2,242 |
) |
|
|
|
|
|
|
|
Discontinued
operations: |
|
|
|
|
|
|
Income from
discontinued operations |
|
- |
|
|
530 |
|
Gain (loss) on sale of
discontinued operations, net of taxes |
|
(170 |
) |
|
42,301 |
|
Income (loss) from
discontinued operations |
|
(170 |
) |
|
42,831 |
|
|
|
|
|
|
|
|
Net income (loss) |
$ |
(1,740 |
) |
$ |
40,589 |
|
|
|
|
|
|
|
|
Other comprehensive
income (loss): |
|
|
|
|
|
|
Unrealized gain loss on
marketable securities |
|
54 |
|
|
(78 |
) |
Total comprehensive
income (loss) |
|
(1,686 |
) |
|
40,511 |
|
|
|
|
|
|
|
|
Basic earnings (loss)
per share: |
|
|
|
|
|
|
Loss from continuing
operations |
$ |
(0.14 |
) |
$ |
(0.14 |
) |
Income (loss) from
discontinued operations |
|
(0.01 |
) |
|
2.75 |
|
Net
income (loss) |
$ |
(0.15 |
) |
$ |
2.61 |
|
|
|
|
|
|
|
|
Diluted earnings (loss)
per share: |
|
|
|
|
|
|
Loss from continuing
operations |
$ |
(0.14 |
) |
$ |
(0.14 |
) |
Income (loss) from
discontinued operations |
|
(0.01 |
) |
|
2.73 |
|
Net
income (loss) |
$ |
(0.15 |
) |
$ |
2.59 |
|
|
|
|
|
|
|
|
Weighted average common
shares outstanding: |
|
|
|
|
|
|
Basic |
|
11,396 |
|
|
15,565 |
|
Diluted |
|
11,396 |
|
|
15,696 |
|
|
|
PROPHASE LABS, INC. &
SUBSIDIARIES |
CONDENSED CONSOLIDATED BALANCE SHEET
DATA |
(in thousands) |
|
|
December 31 2018 |
|
December 31 2017 |
|
|
|
|
|
|
Cash and cash
equivalents |
$ |
1,554 |
|
$ |
3,173 |
|
Marketable securities,
available for sale |
$ |
6,687 |
|
$ |
18,765 |
|
Accounts receivable,
net |
$ |
2,968 |
|
$ |
1,945 |
|
Inventory |
$ |
1,903 |
|
$ |
1,531 |
|
Total current
assets |
$ |
18,238 |
|
$ |
28,417 |
|
Total assets |
$ |
20,737 |
|
$ |
33,659 |
|
|
|
|
|
|
|
|
Total current
liabilities |
$ |
4,233 |
|
$ |
1,812 |
|
Total stockholders’
equity |
$ |
16,504 |
|
$ |
31,847 |
|
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