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Exhibit 99.1
CONTACT:
David K. Waldman/John W. Heilshorn Carl Fonash
Lippert Heilshorn & Associates The Quigley Corporation
(212) 838-3777 (267) 880-1111
DWALDMAN@LHAI.COM
QUIGLEY REPORTS THIRD QUARTER RESULTS
- Company Provides Updates on Status of Pharmaceutical Pipeline -
DOYLESTOWN, PA. - OCTOBER 28, 2004 - THE QUIGLEY CORPORATION (NASDAQ: QGLY)
today reported net sales of $9.7 million for the third quarter of 2004, compared
to $9.9 million reported for the same period in 2003. For the nine-months ended
September 30, 2004, net sales were $26.2 million, compared to $25.1 million in
2003.
Net sales of the Company's Cold Remedy segment increased 8.3% for the third
quarter of 2004 as compared to 2003. Net sales of the Health and Wellness
segment decreased 11.4% during the quarter, due to a decline in the number of
active domestic independent representatives and reductions for summer vacation
activities, which was partially offset by an increase in European sales as
compared to 2003. The increase in net sales for the nine months reflects a 13.2%
increase in the Company's Cold Remedy and also reflects relatively unchanged
sales of Health and Wellness segment. The Company's Cold Remedy net sales
increased for the nine months, as a result of continued strategic advertising,
marketing initiatives, and new product extensions of Cold-EEZE(R). The Company's
Health and Wellness revenues for the nine months were relatively unchanged even
as distribution continues to expand internationally.
Net income for the third quarter ended September 30, 2004 was $177,000, or $0.01
per share, compared to net income of $134,000, or $0.01 per share, for the same
period last year. Net loss for the nine-months ended September 30, 2004 was $1.5
million, or ($0.13) per share, compared to a net loss of $1.9 million, or
($0.16) per share, for the same period last year. During the third quarter and
nine-months ended September 30, 2004, the Company incurred research and
development costs of $627,000 and $2.4 million, respectively.
Net income for the quarter or net loss for the nine-months ended September 30,
2004 improved as compared with the same periods last year, primarily driven by
gross profit gains and operating costs savings from the Cold Remedy segment and
increases in other income, which were offset by a charge of $1.4 million related
to the discontinuation of the Company's Cold-EEZE(R) Cold Remedy Nasal Spray
product. The charge includes a $422,000 write-off of nasal spray inventory and a
$974,000 reduction to net sales resulting from anticipated customer returns of
the product. At this time, the Company does not anticipate any additional future
effects related to the discontinuation of the Company's Cold-EEZE(R) Cold Remedy
Nasal Spray product.
No tax or tax benefits to reduce income or losses are provided for the quarters
and nine-months ended September 30, 2004 and 2003, since the Company is in a net
operating loss carry-forward position, which is from the cumulative effect of
deductions attributed to options, warrants and unrestricted stock from previous
year's taxable income.
Guy J. Quigley, Chairman, President and Chief Executive Officer stated, "We
continue to increase market penetration of our Cold-EEZE(R) Cold Remedy
products, including our new COLD-EEZE(R) bubble gum and COLD-EEZE(R) `green-tea
with lemon' lozenges. Although the Cold-EEZE(R) Cold Remedy Nasal Spray has not
met our expectations, we are quite pleased with the performance of our core
products and are reallocating our resources accordingly. Additionally, within
our Health and Wellness segment, we are adding an exclusive new skincare product
line promoted by a well known celebrity, details of which will be announced in
the near future."
Mr. Quigley continued, "During the quarter, several compounds in our pipeline
have shown positive preliminary results. We have also received guidance, through
pre-IND meetings, from the U.S. Food and Drug Administration regarding the next
steps for permission to further study QR-333 and QR-336."
The Company provides the following updates to its pharmaceutical pipeline:
DIABETIC NEUROPATHY (QR-333)
The FDA has provided guidance at a pre-IND meeting for the company's QR-333
compound. The formulation will be entering into a series of toxicity studies in
order to support the safety of this naturally derived compound for the relief of
symptoms of diabetic peripheral neuropathy. Despite its composition of
all-natural botanical ingredients, the FDA views this compound as a chemical
entity that requires animal model safety data.
RADIATION EXPOSURE (QR-336)
At a recent pre-IND meeting with the FDA, the company's pre-clinical research
plan, to conduct an audited and inspected Good Laboratory Practice (GLP) animal
study at The University for the Uniform Health Services in Bethesda MD, was
reviewed and guidance was provided by the agency. Previous positive indications
in a preliminary non-GLP animal study necessitated this meeting. QR-336 is a
naturally derived compound that indicated in previously conducted non GLP
studies to protect against a lethal dose of ionizing radiation in an animal
model.
INFLUENZA (QR-435)
Retroscreen LTD. at The University of London will be conducting a final animal
model influenza study in preparation for a proposed human proof-of-concept
study. The study will determine if there is any efficacy or safety issues with
different dose forms of this naturally derived broad-spectrum anti-viral
compound.
ARTHRITIS (QR-440)
As previously announced, Quigley Pharma is also moving forward to establish
clinical testing for the treatment of arthritis for this naturally derived
compound.
The Quigley Corporation makes no representation that the US Food and Drug
Administration or any other regulatory agency will grant an Investigational New
Drug ("IND") or take any other action to allow its formulations to be studied or
marketed. Furthermore, no claim is made that potential medicine discussed herein
is safe, effective, or approved by the Food and Drug Administration.
Additionally, data that demonstrates activity or effectiveness in animals or in
vitro tests do not necessarily mean the formula test compound, referenced herein
will be effective in humans. Safety and effectiveness in humans will have to be
demonstrated by means of adequate and well controlled clinical studies before
the clinical significance of the formula test compound is known. Readers should
carefully review the risk factors described in filings the Company files from
time to time with the Securities and Exchange Commission.
The Quigley Corporation (Nasdaq: QGLY, http://www.Quigleyco.com) is a leading
developer and marketer of diversified health products including the COLD-EEZE(R)
family of patented zinc gluconate glycine (ZIGG(TM)) lozenges and sugar free
tablets. COLD-EEZE is the only (ZIGG) lozenge proven in two double-blind studies
to reduce the duration of the common cold from 7.6 to 4.4 days or by 42%. In
addition to Over-The-Counter (OTC) products, the Company has formed Quigley
Pharma Inc. (http://www.QuigleyPharma.com ), a wholly owned ethical
pharmaceutical subsidiary, to introduce a line of naturally-derived patented
prescription drugs. The Quigley Corporation's customers include leading national
wholesalers and distributors, as well as independent and chain food, drug and
mass merchandise stores and pharmacies.
FORWARD-LOOKING STATEMENTS
Certain statements in this press release are "forward-looking statements" within
the meaning of the Private Securities Litigation Reform Act of 1995 and involve
known and unknown risk, uncertainties and other factors that may cause the
Company's actual performance or achievements to be materially different from the
results, performance or achievements expressed or implied by the forward-looking
statement. Factors that impact such forward-looking statements include, among
others, changes in worldwide general economic conditions, changes in interest
rates, government regulations, and worldwide competition.
(Tables Follow)
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
The following represents condensed financial data (in thousands) except per share data:
Three-Months Three-Months Nine Months Nine Months
Ended Ended Ended Ended
September 30, 2004 September 30, 2003 September 30, 2004 September 30, 2003
($) ($) ($) ($)
------------------ ------------------ ------------------ ------------------
Net Sales 9,691 9,912 26,198 25,108
Gross profit 3,800 4,488 11,097 10,948
Sales & marketing expenses 915 1,096 3,373 3,439
Administrative expenses 2,314 2,047 7,119 6,801
Research & development 627 1,230 2,395 2,599
Income taxes (Benefit) -- -- -- --
Income (loss) from:
Continuing operations 177 134 (1,517) (1,813)
Discontinued operations -- -- -- (55)
Net income (loss) 177 134 (1,517) (1,868)
Diluted income (loss) per share:
Continuing operations $0.01 $0.01 ($0.13) ($0.16)
Discontinued operations -- -- -- --
Net income (loss) $0.01 $0.01 ($0.13) ($0.16)
Diluted weighted average common
shares outstanding: 14,119,535 14,397,286 11,511,858 11,464,105
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
- ---------------------------------------
The following represents condensed financial data (in thousands) September 30, 2004 and December 31, 2003:
2004 2003
($) ($)
------ ------
Cash & cash equivalents 11,703 11,392
Accounts receivable, net 3,968 7,862
Inventory 4,270 3,753
Total current assets 20,556 23,740
Total assets 22,842 26,270
Total current liabilities 3,759 5,483
Total stockholders' equity 19,024 20,787