BUENA, NJ May 15, 2006 - IGI, INC. (AMEX: IG) a technology company focused on the development of custom products using the patented Novasome® delivery technology today announces highlights and earnings for first quarter of 2006.
IGI expects an increase in revenues for 2nd quarter 2006 compared to 1st quarter 2006
MIAJ anti-aging skin care line expects to launch June 2006.
Facility upgrades to include expanded capacity for in-house filling and contract manufacturing expected to be completed second half of 2006
Interest in development of new products for new and existing customers, including the expected launch of several new products throughout 2006
First Quarter 2006 Financial ResultsTotal revenues for quarter ended March 31, 2006 were $581,000, which represented a decrease of $194,000 from revenues of $775,000 in quarter ended March 31, 2005. Licensing and royalty income of $185,000 in the quarter ended March 31, 2006 decreased by $85,000 compared to quarter ended March 31, 2005. The decrease in royalty revenue was related to a decline in royalties from J&J and Estee Lauder in quarter ended March 31, 2006. The Company had a net loss of $452,000, or $(.04) per share, in quarter ended March 31, 2006 compared to a net loss of $183,000, or $(.02) per share, in quarter ended March 31, 2005.
Product sales of $366,000 in the quarter ended March 31, 2006 decreased $139,000, or 28%, compared to quarter ended March 31, 2005 due mainly to no product sales recorded for Estee Lauder for 2006 and a discontinuation of a product that the Company manufactured for a customer included in product sales for the quarter ended March 31, 2005. The Company also had R&D revenues in the amount of $30,000 for the quarter ended March 31, 2006 related to fees paid to the Company by Genesis Pharmaceutical for product development services in connection with their new product line expected to be launched in fourth quarter of 2006.
Cost of sales decreased by $146,000, or 35%, in quarter ended March 31, 2006 as compared to quarter ended March 31, 2005. As a percentage of product sales, cost of sales was 73% for the quarter ended March 31, 2006 and 82% for the quarter ended March 31, 2005. The decrease in cost of sales as a percentage of product sales relates to the change in the allocation of fixed overhead costs in 2006 and reduction of metal plating departmental expenses.
Selling, general and administrative expenses increased by $146,000, or 47%, from $311,000 in quarter ended March 31, 2005 to $457,000 in quarter ended March 31, 2006. As a percentage of revenues, selling, general and administrative expenses were 79% of revenues in the quarter ended March 31, 2006 compared to 40% for the quarter ended March 31, 2005. The increase in expenses was the result of higher legal fees of $48,000, higher sales & marketing expenses of $24,000, and a re-allocation of fixed overhead costs.
Product development and research expenses increased by $56,000 in quarter ended March 31, 2006, or 24%, compared to quarter ended March 31, 2005. The increase in product development and research expenses also relates to the re-allocation of fixed overhead costs and an increase in lab expenditures and outside testing fees for 2006.
Interest expense amounted to $42,000 (net of interest income) in quarter ended March 31, 2006 compared to interest income of $3,000 in quarter ended March 31, 2005. The Company had no interest expense in 2005 and only recorded interest income related to marketable securities and overnight investments of our daily cash balance. The interest expense in 2005 relates to the short term notes payable issued during 2005.
IGI is a company committed to growth by applying proprietary technologies to achieve cost-effective solutions for varied customer needs. IGI offers the patented Novasome® lipid vesicle encapsulation technology which contributes value-added qualities to cosmetics, skin care products, dermatological formulations and other consumer products, providing improved dermal absorption, low potential for irritations, controlled and sustained release as well as improved stability. IGI has licensed Novasome® lipid vesicle encapsulation technology to leading global dermatological and skin care companies including Johnson & Johnson Consumer Products, Inc., Estee Lauder Companies, Chattem Inc., Genesis Pharmaceutical, Inc. and Apollo Pharmaceutical, Inc. IGI recently sub-licensed the rights to obtain FDA approval for and market IGI's PTH (1-34) compound using Novasome® lipid vesicle encapsulation technology for psoriasis, which is slated for Phase II clinical trials, to Manhattan Pharmaceuticals, Inc. IGI is also exploring the licensing of the topical PTH (7-34) compound for the prevention/treatment of chemotherapy induced-alopecia in patients undergoing chemotherapy.
This report contains forward-looking statements relating to IGI's hopes and expectations for the future. For this purpose, any statements contained herein that are not statements of historical fact may be deemed to be forward-looking statements. Without limiting the foregoing, words such as "will," "possible," "one time," "provides an opportunity," "continue" and similar expressions are intended to identify forward-looking statements. Such statements involve a number of risks and uncertainties and actual future events and results could differ materially from those indicated by such forward-looking statements due to general economic conditions, and the risk factors detailed in IGI's periodic reports and registration statements filed with the Securities and Exchange Commission.
IGI, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except share and per share information)
(Unaudited)
|
|
Three months ended March 31,
|
|
|
2006 |
2005 |
|
|
Revenues: |
||
|
Product sales, net |
$ 366 |
$ 505 |
|
R&D revenues |
30 |
- |
|
Licensing and royalty income |
185 |
270 |
|
Total revenues |
581 |
775 |
|
|
||
|
Cost and expenses: |
|
|
|
Cost of sales |
267 |
413 |
|
Selling, general and administrative expenses |
457 |
311 |
|
Product development and research expenses |
291 |
235 |
|
Operating loss |
(434) |
(184) |
|
Interest (expense) income |
(42) |
3 |
|
Other income |
24 |
- |
|
|
|
|
|
Loss before provision for income taxes |
(452) |
(181) |
|
Provision for income taxes |
- |
(2) |
|
|
|
|
|
Net loss |
$ (452) |
$ (183) |
|
|
|
|
Basic and Diluted Loss Per Common Share |
|
|
|
Net loss per share |
$ (.04) |
$ (.02) |
|
|
|
|
Weighted Average of Common Stock and Common Stock Equivalents Outstanding |
|
|
|
Basic and Diluted |
12,632,604 |
11,681,524 |
|
|
|
|
|
March 31, 2006 (unaudited) |
December 31, 2005 * |
|||
|
|
|
|
||
ASSETS |
|
|
||
|
Current assets: |
||||
|
Cash and cash equivalents |
$ 167 |
$ 365 |
||
|
Restricted cash |
50 |
50 |
||
|
Accounts receivable, less allowance for doubtful accounts |
|
|
||
|
of $30 in 2006 and 2005 |
265 |
268 |
||
|
Licensing and royalty income receivable |
122 |
147 |
||
|
Inventories |
397 |
261 |
||
|
Prepaid expenses and other current assets |
181 |
83 |
||
|
Total current assets |
1,182 |
1,174 |
||
|
Property, plant and equipment, net |
2,833 |
2,909 |
||
|
License fee, net |
975 |
1,000 |
||
|
Other assets |
69 |
52 |
||
|
Total assets |
$ 5,059 |
$ 5,135 |
||
|
|
|
|
||
|
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
||
|
Current liabilities: |
|
|
||
|
Accounts payable |
$ 479 |
$ 350 |
||
|
Accrued expenses |
236 |
218 |
||
|
Income taxes payable |
- |
2 |
||
|
Note payable – related party |
1,060 |
1,015 |
||
|
Deferred income |
87 |
90 |
||
|
Total current liabilities |
1,862 |
1,675 |
||
|
Deferred income |
107 |
102 |
||
|
Total liabilities |
1,969 |
1,777 |
||
|
|
|
|||
|
Stockholders’ equity: |
|
|
||
|
Common stock, $.01 par value, 50,000,000 shares authorized; 14,709,852 and 14,484,519 shares issued in 2006 and 2005, respectively |
147 |
145 |
||
|
Additional paid-in capital |
25,255 |
25,073 |
||
|
Accumulated deficit |
(20,917) |
(20,465) |
||
|
Less treasury stock, 1,965,740 shares at cost |
(1,395) |
(1,395) |
||
|
Total stockholders’ equity |
3,090 |
3,358 |
||
|
Total liabilities and stockholders' equity |
$ 5,059 |
$ 5,135 |
||
* Derived from the audited December 31, 2005 financial statements
Contact:
IGI, Inc.
Frank Gerardi, 856-697-1441 ext. 102
www.askigi.com