ProPhase Labs, Inc. (NASDAQ: PRPH, www.ProPhaseLabs.com) today
reported net sales of $1.7 million for the three months ended June
30, 2019 compared to net sales of $3.2 million for the three months
ended June 30, 2018.
The Company incurred a net loss for the three
months ended June 30, 2019, of $1.2 million, or ($0.11) per share,
compared to a net loss of $260,000, or ($0.02) per share, for the
three months ended June 30, 2018.
Results for the second quarter of 2019 compared
to the second quarter of 2018 principally reflect the net effect of
(i) a decrease in net sales of $1.5 million due to a decrease in
shipments and (ii) an increase in sales and marketing costs of
$107,000, offset by a decrease in administrative costs of $108,000
due principally to a decrease in legal and professional costs.
The Company generated net sales for the six
months ended June 30, 2019 of $4.0 million, a decrease of $2.6
million, or 39.4%, as compared to $6.6 million for the six months
ended June 30, 2018.
The Company incurred a net loss for the six
months ended June 30, 2019 of $2.3 million, or ($0.19) per share,
compared to a net loss of $216,000, or ($0.02) per share, for the
six months ended June 30, 2018.
Results for the six months ended June 30, 2019
compared to the six months ended June 30, 2018 principally reflect
the net effect of (i) a decrease in net sales of $2.6 million and
(ii) an increase in sales and marketing costs of $201,000, offset
by a decrease in administrative costs of $123,000 due principally
to a decrease in legal and professional costs.
Mr. Karkus stated, “Over the past year, we
succeeded in hiring new, talented senior management for Pharmaloz
Manufacturing, our wholly owned manufacturing facility. Pharmaloz
is in the process of purchasing additional equipment to expand our
production capacity and capabilities. We believe there is a
continuing trend for retailers to seek to grow their private label
businesses at the expense of branded products. Our forward planning
includes making sure we are and remain well-positioned to grow our
private label manufacturing business with retailers.”
Mr. Karkus also noted, “During the quarter ended
June 30, 2019, our ProPhase Digital Media subsidiary completed the
optimization phase for digital distribution of our lead product,
Legendz XL®. However, the resultant sales have been below levels we
are satisfied with to date. We are therefore in the process of
restructuring this division, decreasing overhead and potentially
partnering this division with other companies. At the same time, we
are in the process of seeking to develop an e-commerce platform
with experienced retailers.”
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
recently received orders from an additional major retail drug chain
as well as a large supermarket chain. We are also starting to
penetrate the convenience store channel. We are pleased with the
progress we have made to date in achieving a critical mass of
retailers for our lead dietary supplement, Legendz XL®. However,
the successful 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. This follows the
model we successfully executed for our prior Cold-EEZE® brand.”
Mr. Karkus concluded, “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 our plans to expand our
production capacity and capabilities at Pharmaloz, our plans with
respect to ProPhase Digital Media, the implementation of our
dietary supplement strategy, and potential acquisition
opportunities. 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. and
SubsidiariesCondensed Consolidated Statements of
Operations(in thousands, except per share
amounts)(unaudited)
|
|
For the Three Months Ended |
|
|
For the Six Months Ended |
|
|
|
June 30, 2019 |
|
|
June 30, 2018 |
|
|
June 30, 2019 |
|
|
June 30, 2018 |
|
Net sales |
|
$ |
1,651 |
|
|
$ |
3,186 |
|
|
$ |
3,969 |
|
|
$ |
6,594 |
|
Cost of sales |
|
|
1,390 |
|
|
|
1,928 |
|
|
|
3,188 |
|
|
|
3,910 |
|
Gross profit |
|
|
261 |
|
|
|
1,258 |
|
|
|
781 |
|
|
|
2,684 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales and marketing |
|
|
342 |
|
|
|
235 |
|
|
|
608 |
|
|
|
407 |
|
Administration |
|
|
1,092 |
|
|
|
1,200 |
|
|
|
2,296 |
|
|
|
2,419 |
|
Research and development |
|
|
95 |
|
|
|
87 |
|
|
|
189 |
|
|
|
174 |
|
Total operating expenses |
|
|
1,529 |
|
|
|
1,522 |
|
|
|
3,093 |
|
|
|
3,000 |
|
Loss from operations |
|
|
(1,268 |
) |
|
|
(264 |
) |
|
|
(2,312 |
) |
|
|
(316 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest income, net |
|
|
30 |
|
|
|
4 |
|
|
|
61 |
|
|
|
100 |
|
Net loss |
|
$ |
(1,238 |
) |
|
$ |
(260 |
) |
|
$ |
(2,251 |
) |
|
$ |
(216 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other comprehensive
income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unrealized gain on marketable
debt securities |
|
|
8 |
|
|
|
68 |
|
|
|
23 |
|
|
|
25 |
|
Total comprehensive loss |
|
$ |
(1,230 |
) |
|
$ |
(192 |
) |
|
$ |
(2,228 |
) |
|
$ |
(191 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic loss per share |
|
$ |
(0.11 |
) |
|
$ |
(0.02 |
) |
|
$ |
(0.19 |
) |
|
$ |
(0.02 |
) |
Diluted loss per share |
|
$ |
(0.11 |
) |
|
$ |
(0.02 |
) |
|
$ |
(0.19 |
) |
|
$ |
(0.02 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common shares
outstanding: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
11,560 |
|
|
|
11,339 |
|
|
|
11,558 |
|
|
|
11,237 |
|
Diluted |
|
|
11,560 |
|
|
|
11,339 |
|
|
|
11,558 |
|
|
|
11,237 |
|
ProPhase Labs, Inc. and
SubsidiariesCondensed Consolidated Balance
Sheets (in
thousands)(unaudited)
|
|
June 30, 2019 |
|
|
December 31, 2018 |
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
1,049 |
|
|
$ |
1,554 |
|
Marketable debt securities,
available for sale |
|
$ |
4,685 |
|
|
$ |
6,687 |
|
Accounts receivable, net |
|
$ |
738 |
|
|
$ |
2,968 |
|
Inventory, net |
|
$ |
2,026 |
|
|
$ |
1,903 |
|
Total current assets |
|
$ |
13,429 |
|
|
$ |
18,238 |
|
Total assets |
|
$ |
15,799 |
|
|
$ |
20,737 |
|
|
|
|
|
|
|
|
|
|
Total current liabilities |
|
$ |
956 |
|
|
$ |
4,233 |
|
Total non-current
liabilities |
|
$ |
191 |
|
|
$ |
- |
|
Total stockholders'
equity |
|
$ |
14,652 |
|
|
$ |
16,504 |
|
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