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Press Release
Stellar Pharmaceuticals Reports Third Quarter 2010 Financial Results
LONDON, ONTARIO -- (MARKET WIRE) -- Nov 09, 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 September 30, 2010. In this press release, all dollar amounts are expressed in Canadian currency rounded to the nearest hundredth. These results are reported in accordance with United States generally accepted accounting principles (U.S. GAAP).
For the three-month period ended September 30, 2010, Stellar's total revenues from all sources were $2,236,900 as compared to $826,900 in the same period in 2009. The Company noted that total revenues in for the third quarter of 2010, were positively impacted by a milestone payment from Watson Pharma, Inc. of $1,345,200 related to the issuance of the Company's Uracyst® high-dose patent in the United States. With respect to product sales, the Company experienced solid growth for all products in the Canadian market as well as strong growth for Uracyst® in international markets. International NeoVisc® sales, however, declined primarily as a result of a negative economic situation in Eastern Europe. Stellar's net profit for the three-month period ended September 30, 2010 was $1,380,800. This result compares to a profit of $25,900 that was generated in the same period in 2009.
Stellar ended the quarter in a strong financial position, with no debt and working capital of $4,599,100. This amount does not include the gross proceeds of US$1,000,000 from a non-brokered private placement of 1,000,000 Units of the Company that was completed in October 2010. Each unit consists of one Common Share and warrants to purchase up to 1,500,000 additional Common Shares.
Peter Riehl, Stellar's President and Chief Executive Officer, commented, "We entered 2010 with a strong focus on building Canadian sales and expanding global partnerships for our two lead products, Uracyst® and NeoVisc®. By virtually any measure that focus has delivered improved operating performance over the previous year. Now, as we move through the fourth quarter, we will continue to execute our growth strategy while carefully managing our expenses."
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.
STELLAR PHARMACEUTICALS INC.
BALANCE SHEETS
(Expressed in Canadian dollars)
As at As at
September 30, December 31,
2010 2009
(Unaudited)
ASSETS
CURRENT
Cash and cash equivalents $ 3,274,412 $ 2,325,212
Accounts receivable, net of allowance of $nil
(2009 - $nil) 608,513 293,565
Inventories 799,825 721,061
Taxes recoverable 5,998 1,501
Loan receivable 15,814 15,818
Prepaids, deposits and sundry receivables 125,000 163,698
------------------------------
Total current assets 4,829,562 3,520,855
PROPERTY, PLANT AND EQUIPMENT, net 1,574,899 1,390,296
OTHER ASSETS 129,999 114,553
------------------------------
Total assets $ 6,534,460 $ 5,025,704
------------------------------
------------------------------
LIABILITIES
CURRENT
Accounts payable $ 134,847 $ 228,367
Accrued liabilities 91,173 175,637
Deferred revenues 4,473 2,890
------------------------------
Total current liabilities 230,493 406,894
------------------------------
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 (December 31, 2009 -
23,480,040) 8,291,429 8,183,638
Additional Paid-in capital options
- outstanding 172,849 89,562
Additional Paid-in capital options
- expired 724,127 724,127
------------------------------
9,188,405 8,997,327
DEFICIT (2,884,438) (4,378,517)
------------------------------
Total shareholders' equity 6,303,967 4,618,810
------------------------------
Total liabilities and
shareholders' equity $ 6,534,460 $ 5,025,704
------------------------------
------------------------------
STELLAR PHARMACEUTICALS INC.
CONDENSED STATEMENTS OF OPERATIONS, COMPREHENSIVE INCOME AND DEFICIT
(Expressed in Canadian Dollars)
(Unaudited)
For the Three Month Period For the Nine Month Period
Ended September 30 Ended September 30
2010 2009 2010 2009
------------------------------------------------------------
PRODUCT SALES $ 690,881 $ 811,684 $ 2,052,144 $ 2,270,229
ROYALTY AND
LICENSING
REVENUES 1,546,044 15,233 2,018,472 403,498
------------------------------------------------------------
TOTAL REVENUES
FROM ALL
SOURCES 2,236,925 826,917 4,070,616 2,673,727
COST OF PRODUCTS
SOLD 235,334 275,710 719,809 763,744
------------------------------------------------------------
GROSS PROFIT 2,001,591 551,207 3,350,807 1,909,983
------------------------------------------------------------
EXPENSES
Selling,
general and
administrative 566,371 505,391 1,726,890 1,646,388
Research and
development 45,606 9,009 81,560 16,420
Amortization
(non-
manufacturing
property,
plant and
equipment) 11,600 14,488 38,919 41,888
------------------------------------------------------------
623,577 528,888 1,847,369 1,704,696
------------------------------------------------------------
INCOME FROM
OPERATIONS 1,378,014 22,319 1,503,438 205,287
INTEREST AND
OTHER INCOME 2,827 3,559 5,949 10,462
LOSS ON DISPOSAL
OF EQUIPMENT - - (15,308) -
------------------------------------------------------------
INCOME AND
COMPREHENSIVE
INCOME FOR THE
PERIOD BEFORE
INCOME TAXES 1,380,841 25,878 1,494,079 215,749
NET INCOME AND
COMPREHENSIVE
INCOME FOR THE
PERIOD 1,380,841 25,878 1,494,079 215,749
DEFICIT,
beginning of
period (4,265,279) (4,425,682) (4,378,517) (4,615,553)
------------------------------------------------------------
DEFICIT, end of
period $ (2,884,438) $ (4,399,804) $ (2,884,438) $ (4,399,804)
------------------------------------------------------------
EARNINGS PER
SHARE - basic $ 0.06 $ 0.00 $ 0.06 $ 0.01
------------------------------------------------------------
WEIGHTED AVERAGE
NUMBER OF
COMMON SHARES
OUTSTANDING -
BASIC 23,585,040 23,493,736 23,517,256 23,505,241
------------------------------------------------------------
EARNINGS PER
SHARE - diluted $ 0.06 $ 0.00 $ 0.06 $ 0.01
------------------------------------------------------------
WEIGHTED AVERAGE
NUMBER OF
COMMON SHARES
OUTSTANDING -
DILUTED 23,594,579 23,493,736 23,518,390 23,505,241
------------------------------------------------------------
STELLAR PHARMACEUTICALS INC.
STATEMENTS OF CASH FLOWS
(Expressed in Canadian dollars)
(Unaudited)
For the Three Month Period For the Nine Month Period
Ended September 30 Ended September 30
2010 2009 2010 2009
CASH FLOWS FROM
(USED IN) OPERATING
ACTIVITIES -
Net income for the
period $ 1,380,841 $ 25,878 $ 1,494,079 $ 215,749
Items not affecting
cash
Amortization 21,474 15,770 79,053 83,885
Loss on disposal
of equipment - - 15,308 -
Issuance of equity
instruments for
services rendered - - 4,000 -
Stock-based
compensation 66,689 - 118,079 -
Change in non-cash
operating asset
and liabilities 39,974 65,698 (535,908) (322,815)
--------------------------------------------------------
CASH FLOWS (USED IN)
OPERATING
ACTIVITIES 1,508,978 107,346 1,174,611 (23,181)
--------------------------------------------------------
CASH FLOWS FROM
(USED IN) INVESTING
ACTIVITIES -
Additions to
property, plant
and equipment (28,052) (66,899) (290,194) (112,776)
Increase to other
assets (6,000) - (16,847) (26,231)
Proceeds from sale
of equipment - - 12,630 -
--------------------------------------------------------
CASH FLOWS USED IN
INVESTING
ACTIVITIES (34,052) (66,899) (294,411) (139,007)
--------------------------------------------------------
CASH FLOWS USED IN
FINANCING
ACTIVITIES -
Stock options
exercised - - 69,000 -
Re-purchase of
Common shares for
cash - (9,293) - (30,584)
--------------------------------------------------------
CASH FLOWS FROM
(USED IN) FINANCING
ACTIVITIES - (9,293) 69,000 (30,584)
--------------------------------------------------------
CHANGE IN CASH AND
CASH EQUIVALENTS 1,474,926 31,154 949,200 (192,772)
CASH AND CASH
EQUIVALENTS,
Beginning of
period 1,799,486 1,882,040 2,325,212 2,105,966
--------------------------------------------------------
CASH AND CASH
EQUIVALENTS,
End of period $ 3,274,412 $ 1,913,194 $ 3,274,412 $ 1,913,194
--------------------------------------------------------
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