BUENA, N.J.--(BUSINESS WIRE)--May 20, 2005--IGI, Inc. (AMEX:IG - News) announced today its first quarter financial and operational results.
Recent Developments:For the first quarter of 2005, total revenues were $775,000, which represented a decrease of $212,000 from revenues of $987,000 in 2004. Product sales of $505,000 in 2005 decreased $350,000, or 41%, compared to 2004 while licensing and royalty revenues of $270,000 in 2005 increased $138,000 or 105% compared to 2004. The difference in product sales vs. royalty revenues relates to a change in business with Estee Lauder in accordance with the new license agreement. The decrease in product sales was offset by increased sales of existing and new products to Genesis, Interwood Marketing and Albrian International Corporation.
Cost of sales increased by $64,000, or 18%, in 2005 as compared to 2004. As a percentage of product sales, cost of sales increased from 41% in 2004 to 82% in 2005. The increase in the costs of sales is a result of products being sold with a lower gross margin and a $92,000 expense related to the metal finishing line that was also included for this quarter.
Selling, general and administrative expenses decreased by $118,000, or 28%, from $429,000 in 2004 to $311,000 in 2005. These expenses were 40% of revenues for 2005 compared to 43% in 2004. The decrease is primarily due to a reduction of salaries and travel and entertainment expenditures in 2005.
Product development and research expenses increased by $22,000 in 2005, or 10%, compared to 2004. There are many new projects being undertaken by the research and development department as a result of new agreements signed in 2004.
Interest income amounted to $3,000 in 2005 compared to interest income of $9,000 in 2004. The decrease in interest income was a direct result of the decrease in our cash balance.
The Company reported a net loss attributable to common stock of $183,000, or $(.02) per share in 2005, compared to net income attributable to common stock of $3,000, or $(.00) per share in 2004.
"The Company's cost cutting initiatives that began last year have resulted in a minimal loss. The anticipated revenue reduction is attributed to the removal of the exclusivity agreement with our largest customer. This action is allowing the Company to offer our technology to a wide range of new customers in the United States, Europe and Asia, and should result in sustained revenue increases by the end of the year. We will give a more detailed report on today's 10:00 AM conference call and at our Annual Shareholder meeting on Monday, May 23, 2005", stated Frank Gerardi, Chairman,
IGI is a company committed to growth by applying proprietary technologies to achieve cost-effective solutions for varied customer needs. IGI offers the patented NovasomeŽ nano-vesicular, transdermal delivery technology which contributes value-added qualities to cosmetics, skin care products, dermatological formulations and other consumer products, providing improved dermal absorption, controlled and sustained release as well as improved stability and greater ease of formulation. IGI has licensed NovasomeŽ nano-vesicular delivery technology to leading global dermatological and skin care companies including Johnson & Johnson Consumer Products, Inc., Estee Lauder Corporation, Chattem Inc., Genesis Pharmaceutical, Inc. and Apollo Pharmaceutical, Inc., and recently sub-licensed the rights to obtain FDA approval for and market IGI's PTH (1-34) compound using NovasomeŽ nano-vesicular delivery technology for psoriasis, which is slated for Phase II clinical trials, to Tarpan 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,
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2005 2004
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Revenues:
Product sales, net $ 505 $ 855
Licensing and royalty income 270 132
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Total revenues 775 987
Cost and expenses:
Cost of sales 413 349
Selling, general and administrative
expenses 311 429
Product development and research
expenses 235 213
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Operating profit (loss) (184) (4)
Interest income 3 9
----------- -----------
Income before provision for income taxes (181) 5
Provision for income taxes (2) (2)
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Net income(loss) $ (183) $ 3
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Basic Earnings (Loss) Per Common Share
Net income (loss) per share $ (.02) $ -
Diluted Earnings (Loss) Per Common Share
Net income (loss) per share $ (.02) $ -
Weighted Average of Common Stock and Common
Stock Equivalents Outstanding
Basic 11,681,524 11,447,253
Diluted 11,681,524 12,018,279
IGI, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands, except share and per share information)
March 31, Dec. 31,
2005 2004
(unaudited)
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ASSETS
Current assets:
Cash and cash equivalents $ 329 $ 380
Restricted cash 50 50
Marketable securities 328 377
Accounts receivable, less allowance for
doubtful accounts of $10 in 2005
and 2004 259 306
Licensing and royalty income receivable 205 155
Inventories 320 247
Prepaid expenses and other current assets 69 8
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Total current assets 1,560 1,523
Property, plant and equipment, net 3,169 3,168
Other assets 36 39
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Total assets $ 4,765 $ 4,730
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable 319 157
Accrued payroll 13 16
Other accrued expenses 255 243
Income taxes payable 4 5
Deferred income 207 180
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Total current liabilities 798 601
Deferred income 105 121
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Total liabilities 903 722
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Stockholders' equity:
Common stock, $.01 par value, 50,000,000
shares authorized; 13,703,720 and
13,547,520 shares issued in 2005 and
2004, respectively 137 135
Additional paid-in capital 24,551 24,467
Accumulated deficit (19,350) (19,167)
Accumulated other comprehensive loss (81) (32)
Less treasury stock, 1,965,740 shares at
cost in 2005 and 2004 (1,395) (1,395)
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Total stockholders' equity 3,862 4,008
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Total liabilities and
stockholders' equity $ 4,765 $ 4,730
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