EXHIBIT 99.1
QUGILEY
CONTACT:
Carl Hymans Carl Fonash
G.S. Schwartz & Co. The Quigley Corporation
(212) 725-4500 (267) 880-1111
carlh@schwartz.com fonash@quigleyco.com
QUIGLEY INCREASES REVENUES FOR THE FOURTH QUARTER AND FISCAL YEAR
- PROFITABILITY CONTINUES IN 2004 WHILE INVESTING $3.2 MILLION IN R&D -
DOYLESTOWN, PA. - FEBRUARY 24, 2005 - THE QUIGLEY CORPORATION (NASDAQ: QGLY)
today reported net sales of $17.8 million, an increase of 8.3%, for the fourth
quarter ended December 31, 2004, compared to $16.4 million reported for the same
period in 2003. For the year ended December 31, 2004, net sales were $43.9
million, an increase of 5.9%, compared to $41.5 million in 2003.
Net sales of the Company's Cold Remedy segment increased 10.1% for the fourth
quarter of 2004 as compared to 2003. Net sales of the Health and Wellness
segment decreased 9.4% during the quarter, due to a decline in the number of
active domestic independent representatives, which was partially offset by an
increase of 14.1% in this segment's European sales as compared to 2003.
The increase in net sales for the year ended December 31, 2004 reflects an 11.5%
increase in the Company's Cold Remedy segment and also reflects a 3.2% decrease
in net sales for the Health and Wellness segment, which were offset by this
segment's gains in international distribution of 135.4%. Even though the
incidence of colds during 2004 were fewer than the previous year, the Company's
Cold Remedy net sales increase for the year ended December 31, 2004 reflects the
success of expanded targeted advertising, marketing initiatives and new product
extensions of COLD-EEZE(R), which have generated greater consumer awareness and
purchasing of our products.
Net income for the fourth quarter ended December 31, 2004 was $2.0 million, or
$0.13 per share, compared to net income of $2.5 million, or $0.17 per share, for
the same period last year. Net income for the year ended December 31, 2004 was
$453,000, or $0.03 per share, compared to a net income of $675,000, or $0.05 per
share, for the same period last year. During the fourth quarter and year ended
December 31, 2004, the Company incurred research and development costs of
$837,000 and $3.2 million, respectively, as compared to $766,000 and $3.4
million, for the comparable periods of 2003. Additionally, net income margins by
segments for the year 2004 are relatively consistent with net income margins
attained in 2003.
Gross profit margins for the quarter and year ended December 31, 2004 remained
relatively unchanged as compared with the same periods last year. Net income for
the fourth quarter and year ended December 31, 2004 were primarily driven by
profit gains from the increased sales, which were offset by an increase of $1.0
million in advertising costs. The fiscal year results were also affected by a
$178,000 increase in other income, which was offset by a charge to gross profit
margins of $1.4 million, or $0.09 per share, related to the discontinuation of
the Company's COLD-EEZE(R) Cold Remedy Nasal Spray product. This charge includes
a $672,000 write-off of nasal spray inventory and a $680,000 reduction to net
sales resulting from anticipated customer returns of the product.
No tax or tax benefits to reduce income or losses are provided for the quarters
and year ended December 31, 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
years' taxable income.
On October 1, 2004, the Company acquired the assets of JoEL, Inc., encompassing
inventory, land, buildings, machinery and equipment of two manufacturing
facilities, located in Lebanon and Elizabethtown, Pennsylvania for approximately
$5.1 million. The facilities are FDA approved and have been the exclusive
manufacturing sites of the Company's COLD-EEZE(R) lozenge since its launch in
1995. The purchase of the manufacturing facilities allowed for the establishment
of Quigley Manufacturing Inc., which protects the proprietary manufacturing
process of COLD-EEZE(R) and is anticipated to improve cost efficiencies as
volume production increases and allow for the manufacture of other brands.
Guy J. Quigley, Chairman, President and Chief Executive Officer stated, "We are
pleased with our results for 2004 which reflect increased sales of our core
products and greater market penetration of our COLD-EEZE(R) Cold Remedy products
which enabled us to further fund pharmaceutical research and development. In
addition to increasing annual revenue, gross margins for the year would have
increased without the previously mentioned $1.4 million one-time costs
associated with a product discontinuation.
"We expect that our recently introduced new or improved products including
COLD-EEZE(R) Bubble Gum and COLD-EEZE(R) 'Green-Tea with honey' lozenges will
garner greater consumer acceptance and enhance product sales. We will continue
to develop products that appeal to adults as well as a younger demographic,
which could represent a significant opportunity for expansion in market
penetration and future growth.
"The main core of our Health and Wellness Company, our Supergreens(TM) line of
products developed by Dr. Robert O. and Shelley Redford Young, continues to move
forward with loyal distributors. The Company is also excited by the launch of an
exclusive skin care line under the BEVERLY SASSOON brand name to diversify this
segment's product offerings.
"We also remain focused on expanding our wholly-owned Ethical Pharmaceuticals
subsidiary, Quigley Pharma, which is developing natural-source prescription
medicinals for Diabetic Neuropathy, Systemic Radiation, Influenza A, and
Rheumatoid Arthritis. We continue moving forward with our development and
testing phases of ethical pharmaceutical drugs and are confident that this
segment of our business will be a source of future growth for the Company,"
concluded Mr. Quigley.
The following is a list of formulations currently in the Quigley Pharm pipeline
and an update on their progress:
DIABETIC NEUROPATHY -- QR 333: Per the FDA's instructions at the last Pre-IND
Meeting for the continued development of this drug; the compound is undergoing a
series of toxicity studies to support the safety of this naturally derived
compound for the relief of symptoms of diabetic peripheral neuropathy, prior to
beginning a human Phase IIB dose ranging study. The company expects the toxicity
studies to be completed by June 2005. The company hopes to begin pivotal studies
on this compound in 2005.
SYSTEMIC RADIATION -- QR336: There were encouraging results seen in a
preliminary non-GLP animal study of this naturally derived radio protective
compound against ionizing radiation. A pre-IND meeting was held at the FDA in
October of 2004 with the Division of Medical Imaging and Radiopharmaceutical
Drug Products. A GLP controlled animal study of the QR 336 formulation for the
Radioprotection/Treatment of Radiation Lethality Induced by Four MeV Photons in
the C3H Mouse will begin this year after a short series of experiments to
further define the compound's method of action.
INFLUENZA A -- QR435: Retroscreen LTD. at The University of London has started a
final animal model influenza study in preparation for a proposed human Proof Of
Concept Study to start in mid-2005. The study "Prophylactic potential of
different QR-435 antiviral nasal spray formulations in the Influenza
A/Panama/2007/99 (H3N2) virus ferret transmission model" will determine if there
is any efficacy or safety issues with different dose forms of this naturally
derived broad-spectrum anti-viral compound.
VIRUCIDAL COMPOUND -- QR437: Ongoing pre-clinical research activities include:
the completion of a second in vitro experiment to determine virucidal or
virustatic properties against the HIV virus by QR437. The results of the first
in vitro study determined that this naturally derived compound has significant
dose dependant virucidal properties with a probable rapid mode of action. This
type of compound might be used with condoms or intravaginal, oral and other
topical dose forms as a first line defense against infection. Ongoing plans for
this compound are pending; the company expects to announce next steps some time
in 2005.
ARTHRITIS COMPOUND - QR-440: Quigley Pharma is also conducting research on its
previously announced patented compound for the treatment of rheumatoid arthritis
and similar diseases.
AVIAN FLU COMPOUND - QR-441: One positive pre-clinical in vitro study on Avian
Flu, demonstrating antiviral activity when tested in a virustatic test. Ongoing
plans for this compound are pending; the company expects to announce next steps
some time in 2005.
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 Year Year
Ended Ended Ended Ended
December 31, 2004 December 31, 2003 December 31, 2004 December 31, 2003
($) ($) ($) ($)
-----------------------------------------------------------------------------
Net Sales 17,750 16,391 43,947 41,499
Gross profit 9,278 9,064 20,375 20,011
Sales & marketing expenses 3,767 2,728 7,140 6,166
Administrative expenses 2,701 3,043 9,820 9,844
Research & development 837 766 3,233 3,366
Income taxes (Benefit) -- -- -- --
Income (Loss) from:
Continuing operations 1,970 2,542 453 729
Discontinued operations -- -- -- (54)
Net income 1,970 2,542 453 675
Continuing operations $0.13 $0.17 $0.03 $0.05
Discontinued operations -- -- -- --
Net income $0.13 $0.17 $0.03 $0.05
Diluted weighted average common shares
outstanding: 14,602,716 15,036,895 14,449,334 14,910,246
Consolidated Balance Sheets (Unaudited)
- ---------------------------------------
The following represents condensed financial data (in thousands) at December 31:
2004 2003
($) ($)
-------- --------
Cash & cash equivalents 14,366 11,392
Accounts receivable, net 6,376 7,862
Inventory 3,455 3,753
Total current assets 24,961 23,740
Total assets 31,530 26,270
Total current liabilities 7,109 5,483
Long-term debt 2,464 --
Total stockholders' equity 21,902 20,787