ProPhase Labs Reports Financial Results for the Three Months Ended March 31, 2019
May 14 2019 - 7:00AM
ProPhase Labs, Inc. (NASDAQ: PRPH, www.ProPhaseLabs.com) today
reported net sales of $2.3 million for the three months ended March
31, 2019, compared to net sales of $3.4 million for the three
months ended March 31, 2018.
The Company incurred a net loss for the three
months ended March 31, 2019, of $1.0 million, or ($0.09) per share,
compared to a net income of $43,000 or $0.00 per share, for the
three months ended March 31, 2018.
Results for the first quarter of 2019 compared
to the first quarter of 2018 principally reflect the net effect of
(i) a decrease in net sales of $1.1 million due to a decrease in
shipments, (ii) an aggregate increase in sales and marketing and
research and development costs of $101,000, offset by (iii) a
decrease in administrative costs of $15,000.
Mr. Karkus stated, “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 plans with respect to the digital
distribution of our new product Legendz XL® and our goals with
respect to future marketing by 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. and Subsidiaries |
Condensed Consolidated Statements of
Operations |
(in thousands, except per share amounts) |
(unaudited) |
|
|
|
For the Three Months ended |
|
March 31, 2019 |
|
March 31, 2018 |
Net sales |
$ |
2,318 |
|
|
$ |
3,407 |
|
Cost of sales |
|
1,798 |
|
|
|
1,982 |
|
Gross profit |
|
520 |
|
|
|
1,425 |
|
|
|
|
|
Operating expenses: |
|
|
|
Sales and marketing |
|
266 |
|
|
|
172 |
|
Administration |
|
1,204 |
|
|
|
1,219 |
|
Research and development |
|
94 |
|
|
|
87 |
|
Total operating expenses |
|
1,564 |
|
|
|
1,478 |
|
Loss from operations |
|
(1,044 |
) |
|
|
(53 |
) |
|
|
|
|
Interest income, net |
|
31 |
|
|
|
96 |
|
Net income
(loss) |
$ |
(1,013 |
) |
|
$ |
43 |
|
|
|
|
|
Other comprehensive income
(loss): |
|
|
|
Unrealized gain (loss) on
marketable debt securities |
|
15 |
|
|
|
(43 |
) |
Total comprehensive loss |
$ |
(998 |
) |
|
$ |
- |
|
|
|
|
|
Basic earnings (loss) per
share |
$ |
(0.09 |
) |
|
$ |
- |
|
Diluted earnings (loss) per
share |
$ |
(0.09 |
) |
|
$ |
- |
|
|
|
|
|
Weighted average common shares
outstanding: |
|
|
|
Basic |
|
11,557 |
|
|
|
11,130 |
|
Diluted |
|
11,557 |
|
|
|
11,413 |
|
|
|
|
|
|
ProPhase Labs, Inc. and Subsidiaries |
Condensed Consolidated Balance Sheet Data |
(in thousands) |
(unaudited) |
|
|
March 31, |
|
December 31, |
|
2019 |
|
2018 |
|
|
|
|
Cash and cash equivalents |
$ |
2,450 |
|
|
$ |
1,554 |
|
Marketable debt securities,
available for sale |
$ |
4,229 |
|
|
$ |
6,687 |
|
Accounts receivable, net |
$ |
788 |
|
|
$ |
2,968 |
|
Inventory |
$ |
1,611 |
|
|
$ |
1,903 |
|
Total current assets |
$ |
14,126 |
|
|
$ |
18,238 |
|
Total assets |
$ |
16,572 |
|
|
$ |
20,737 |
|
|
|
|
|
Total current liabilities |
$ |
870 |
|
|
$ |
4,233 |
|
Total stockholders'
equity |
$ |
15,702 |
|
|
$ |
16,504 |
|
|
|
|
|
|
|
|
|
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