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Press Release
Stellar Pharmaceuticals Reports Second Quarter 2010 Financial Results
LONDON, ONTARIO -- (MARKET WIRE) -- Aug 06, 2010 -- Stellar Pharmaceuticals Inc. (OTCBB: SLXCF) ("Stellar" or "the Company"), a Canadian pharmaceutical developer and marketer of high quality, cost-effective products for select health care markets, today announced financial results for the quarter ended June 30, 2010. In this press release, all dollar amounts are expressed in Canadian currency and results are reported in accordance with United States generally accepted accounting principles (U.S. GAAP).
Q2-2010 Highlights
- Revenues grew by 16.9%% - Gross profit up 31.6% - Net Profit up 119.1%For the three-month period ended June 30, 2010, Stellar's total revenues were $1,255,811 as compared to $1,074,294 in the same period in 2009. Solid growth for all products in the Canadian market, as well as strong growth for Uracyst® in international markets, combined with the revenues from licensing income, resulted in the Company showing a profit for the three month period ended June 30, 2010, of $360,800. This is more than twice the $164,694 profit that was generated in the same period in 2009.
Peter Riehl, Stellar's President and Chief Executive Officer, commented, "This is one of the highest levels of quarterly profitability achieved in the Company's history. Now, as we move forward into the second half of 2010, our focus will remain on building the Canadian business and expanding global licensing of Uracyst® and NeoVisc®. At the same time, we will continue to carefully manage our resources as we grow."
About Stellar Pharmaceuticals Inc.
Stellar has developed and is marketing direct in Canada and in countries around the world through out-license agreements two products based on its core polysaccharide technology: NeoVisc®, for the treatment of osteoarthritis; and Uracyst®, its patented technology for treatment of interstitial cystitis/painful bladder syndrome, an inflammatory disease of the urinary bladder wall. Stellar also has in-licensing agreement for the distribution and sale of NMP22® BladderChek®, a proteomics-based diagnostic test for the diagnosis and monitoring of bladder cancer. For more information, please visit the company's website at www.stellarpharma.com.
Forward-Looking Statements
This press release contains forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Readers are cautioned not to place undue reliance on these forward-looking statements. Actual results may differ materially from those indicated by these forward-looking statements as a result of risks and uncertainties impacting the Company's business including increased competition; the ability of the Company to expand its operations, to attract and retain qualified professionals, technological obsolescence; general economic conditions; and other risks detailed from time to time in the Company's filings.
CONDENSED INTERIM FINANCIAL STATEMENTS
STELLAR PHARMACEUTICALS INC.
BALANCE SHEETS
(Expressed in Canadian dollars)
As at
As at June December
30, 2010 31, 2009
(Unaudited)
ASSETS
CURRENT 2010 2009
------------ ------------
Cash and cash equivalents $ 1,799,486 $ 2,325,212
Accounts receivable, net of allowance of $nil
(2009 - $nil) 740,238 293,565
Inventories 687,203 721,061
Taxes recoverable - 1,501
Loan receivable 15,814 15,818
Prepaids, deposits and sundry receivables 145,152 163,698
------------ ------------
Total current assets 3,387,893 3,520,855
PROPERTY, PLANT AND EQUIPMENT, net 1,567,598 1,390,296
OTHER ASSETS 124,722 114,553
------------ ------------
Total assets $ 5,080,213 $ 5,025,704
------------ ------------
------------ ------------
LIABILITIES
CURRENT
Accounts payable $ 125,322 $ 228,367
Accrued liabilities 89,300 175,637
Deferred revenues 7,237 2,890
Taxes Payable 1,917 -
------------ ------------
Total current liabilities 223,776 406,894
------------ ------------
CONTINGENCIES AND COMMITMENTS
SHAREHOLDERS' EQUITY
CAPITAL STOCK
AUTHORIZED
Unlimited Non-voting, convertible, redeemable
and retractable preferred shares with no par
value
Unlimited Common shares with no par value
ISSUED
23,585,040 Common shares (2009 - 23,480,040) 8,291,429 8,183,638
Additional Paid-in capital options -
outstanding 106,160 89,562
Additional Paid-in capital options - expired 724,127 724,127
------------ ------------
9,121,716 8,997,327
DEFICIT (4,265,279) (4,378,517)
------------ ------------
Total shareholders' equity 4,856,437 4,618,810
------------ ------------
Total liabilities and shareholders' equity $ 5,080,213 $ 5,025,704
------------ ------------
------------ ------------
STELLAR PHARMACEUTICALS INC.
CONDENSED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
(Expressed in Canadian Dollars)
(Unaudited)
For the Three Month Period For the Six Month Period
Ended June 30 Ended June 30
2010 2009 2010 2009
-------------- ------------- ------------- -------------
-------------- ------------- ------------- -------------
PRODUCT SALES $ 811,752 $ 914,126 $ 1,361,262 $ 1,458,545
ROYALTY AND
LICENSING REVENUES 444,059 160,168 472,426 388,265
-------------- ------------- ------------- -------------
TOTAL REVENUES
FROM ALL SOURCES 1,255,811 1,074,294 1,833,688 1,846,810
COST OF PRODUCTS
SOLD 280,717 333,082 484,474 488,034
-------------- ------------- ------------- -------------
GROSS PROFIT 975,094 741,212 1,349,214 1,358,776
-------------- ------------- ------------- -------------
EXPENSES
Selling, general
and
administrative 592,585 562,941 1,160,517 1,140,996
Research and
development 9,683 1,803 35,954 7,411
Amortization (non-
manufacturing
property, plant
and equipment) 13,660 13,703 27,320 27,401
-------------- ------------- ------------- -------------
615,928 578,447 1,223,791 1,175,808
-------------- ------------- ------------- -------------
INCOME FROM
OPERATIONS 359,166 162,765 125,423 182,968
INTEREST AND OTHER
INCOME 1,610 1,929 3,123 6,903
LOSS ON DISPOSAL OF
EQUIPMENT - - (15,308) -
-------------- ------------- ------------- -------------
INCOME AND
COMPREHENSIVE
INCOME FOR THE
PERIOD BEFORE
INCOME TAXES 360,776 164,694 113,238 189,871
Current income tax
expense (29,300) - (29,300) -
Future income tax
recovery 29,300 - 29,300 -
-------------- ------------- ------------- -------------
NET INCOME AND
COMPREHENSIVE
INCOME FOR THE
PERIOD 360,776 164,694 113,238 189,871
DEFICIT, beginning
of period (4,626,055) (4,590,376) (4,378,517) (4,615,553)
-------------- ------------- ------------- -------------
DEFICIT, end of
period $ (4,265,279) $ (4,425,682) $ (4,265,279) $ (4,425,682)
-------------- ------------- ------------- -------------
-------------- ------------- ------------- -------------
EARNINGS PER SHARE -
basic $ 0.02 $ 0.01 $ 0.00 $ 0.01
-------------- ------------- ------------- -------------
-------------- ------------- ------------- -------------
WEIGHTED AVERAGE
NUMBER OF
COMMON SHARES
OUTSTANDING 23,485,535 23,495,040 23,482,802 23,816,387
-------------- ------------- ------------- -------------
-------------- ------------- ------------- -------------
EARNINGS PER SHARE -
diluted $ 0.02 $ 0.01 $ 0.00 $ 0.01
-------------- ------------- ------------- -------------
-------------- ------------- ------------- -------------
WEIGHTED AVERAGE
NUMBER OF
COMMON SHARES
OUTSTANDING 23,487,751 23,495,040 23,483,571 23,816,387
-------------- ------------- ------------- -------------
-------------- ------------- ------------- -------------
STELLAR PHARMACEUTICALS INC.
STATEMENTS OF CASH FLOWS
(Expressed in Canadian dollars)
(Unaudited)
For the Three Month
Period For the Six Month Period
Ended June 30 Ended June 30
2010 2009 2010 2009
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
CASH FLOWS FROM (USED
IN) OPERATING
ACTIVITIES -
Net income for the
period $ 360,776 $ 164,694 $ 113,238 $ 189,871
Items not affecting cash
Amortization 30,794 33,118 57,579 68,112
Current income tax
expense (29,300) - (29,300) -
Future income tax
recovery 29,300 - 29,300 -
Loss on disposal of
equipment - - 15,308 -
Issuance of equity
instruments for
services rendered 4,000 - 4,000 -
Stock-based
compensation 17,443 - 51,390 -
Change in non-cash
operating asset and
liabilities (434,961) (593,295) (575,882) (390,251)
------------ ------------ ------------ ------------
CASH FLOWS FROM (USED
IN) OPERATING
ACTIVITIES (21,948) (395,483) (334,367) (132,268)
------------ ------------ ------------ ------------
CASH FLOWS FROM (USED
IN) INVESTING
ACTIVITIES -
Additions to property,
plant and equipment (40,290) (43,938) (262,142) (44,135)
Increase to other
assets (2,833) (19,274) (10,847) (26,231)
Proceeds from sale of
equipment - - 12,630 -
------------ ------------ ------------ ------------
CASH FLOWS USED IN
INVESTING ACTIVITIES (43,123) (63,212) (260,359) (70,366)
------------ ------------ ------------ ------------
CASH FLOWS USED IN
FINANCING ACTIVITIES -
Stock options
exercised 69,000 - 69,000 -
Re-purchase of Common
shares for cash - - - (21,292)
------------ ------------ ------------ ------------
CASH FLOWS USED IN
FINANCING ACTIVITIES 69,000 - 69,000 (21,292)
------------ ------------ ------------ ------------
CHANGE IN CASH AND CASH
EQUIVALENTS 3,929 (458,695) (525,726) (223,926)
CASH AND CASH
EQUIVALENTS, Beginning
of period 1,795,557 2,340,735 2,325,212 2,105,966
------------ ------------ ------------ ------------
CASH AND CASH
EQUIVALENTS, End of
period $ 1,799,486 $ 1,882,040 $ 1,799,486 $ 1,882,040
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
Contacts: Company Contact: Stellar Pharmaceuticals Inc. Peter Riehl President & CEO (519) 434-1540 corpinfo@stellarpharma.com Stellar Pharmaceuticals Inc. Arnold Tenney Chairman (705) 445-9505 Investor Contact: Kilmer Lucas Inc. Stephen Kilmer President (905) 690-2400 ext. 21 stephen@kilmerlucas.com Media Contact: Kilmer Lucas Inc. Leonard Zehr Managing Director (905) 690-2400 ext. 41 len@kilmerlucas.com