EXHIBIT 99.1
Carl Hymans Carl Fonash
G.S. Schwartz & Co. The Quigley Corporation
(212) 725-4500 (267) 880-1111
carlh@schwartz.com fonash@quigleyco.com
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QUIGLEY REPORTS FIRST QUARTER RESULTS
--NET SALES INCREASED 22%; COLD REMEDY SEGMENT NET SALES UP 40%--
DOYLESTOWN, PA. - APRIL 28, 2005 - THE QUIGLEY CORPORATION (NASDAQ: QGLY) today
reported net sales of $11.8 million for the first quarter of 2005, a 22.4%
increase over the $9.6 million reported for the same period in 2004.
The increase in net sales for the first quarter of 2005 reflects a 39.7%
increase in the Company's Cold Remedy segment. Net sales of the Health and
Wellness segment include an increase of 15.8% in the segment's European sales as
compared to 2004. This increase partially offset an overall decrease in Health
and Wellness segment sales of 9% for the first quarter, due to a decline in the
number of active domestic independent representatives. Net sales also reflects
$1 million from the Company's Contract Manufacturing segment which has no
comparable amount in 2004 as operations of this segment were part of the
acquisition of the facilities that manufactured COLD-EEZE(R) during the fourth
quarter of 2004.
The Company's Cold Remedy net sales continued to far outpace the growth in its
category even as the incidence of colds during the quarter were greater than the
comparable period in 2004. The continued expansion of the Cold Remedy segment
reflects strategic advertising and marketing initiatives; new product extensions
of COLD-EEZE(R); and an increase in consumer acceptance, as indicated in a
recent analysis demonstrating an expanded household penetration.
Guy J. Quigley, Chairman, President and Chief Executive Officer said, "We are
very pleased with our overall results for the first quarter which include a
major increase in sales and a significant reduction in the net loss for the
period. We continued to generate increased sales and greater market penetration
for our COLD-EEZE(R) Cold Remedy products, expanded our European Health and
Wellness sales, and recognized the benefits of our acquisition of the assets of
JoEL, Inc., which provided facilities for the manufacture of other brands and
contributed $1 million in sales for the quarter. We are well positioned to
further increase sales of our core products and garner greater market
penetration of our COLD-EEZE(R) cold remedy products."
The net loss for the first quarter of 2005 was $155,000, or ($0.01) per share,
compared to a net loss of $782,000, or ($0.07) per share, for the same period
last year. Gross profit percentage margins for the Cold Remedy and Health and
Wellness segments for the quarter were relatively consistent with margins
attained for the same period in 2004, while gross profit percentage margins were
substantially lower for the Contract Manufacturing segment than our other
operating segments. During the quarter, the Company incurred research and
development costs of $1.1 million as compared to $947,000 for the same period
last year.
The reduced net loss for the quarter compared with the same period last year was
primarily due to the gross profit gains of the Cold Remedy segment. These gains
were partially offset by increases in marketing, administrative, and research
and development costs associated with Quigley Pharma's clinical studies.
Additionally, net income margins for the Cold Remedy segment were profitable in
2005 as compared to a loss for the same period in 2004 with a marginal
contribution by the Contract Manufacturing segment. Net income margins for the
Health and Wellness segment were relatively consistent with margins attained for
the same period in 2004.
No tax benefits to reduce losses are provided for the quarters ended March 31,
2005 and 2004, respectively, as the Company is in a net operating loss
carry-forward position from the cumulative effect of deductions attributed to
options, warrants and unrestricted stock from previous year's taxable income.
"The significant net loss reduction for the first quarter reflects, in part, our
ability to manufacture and market our cold remedy products with greater cost
efficiencies and enhanced volume production. We continue to invest in research
and development of Quigley Pharma. For example, Quigley Pharma recently
completed a double-blind placebo controlled study of its QR-340 Scar Formula in
which initial results demonstrated that the formula was safe, effective and
outperformed Mederma(R), the top selling scar appearance formula in the
commercial marketplace," noted Mr. Quigley.
"We continue to implement strategic initiatives to generate growth and increase
profitability. We are committed to increasing sales of our core products and
capitalizing on the growing consumer demand for our COLD-EEZE(R) Cold Remedy
products. In addition, we remain focused on expanding our wholly-owned Ethical
Pharmaceutical subsidiary, Quigley Pharma, 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 Pharma
pipeline:
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.
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 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 start this year, and predicated upon positive results will be
followed by a second animal study.
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 hopes to begin
pivotal studies on this compound in 2005.
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.
Quigley Pharma is also conducting research on their previously announced
patented compound for the treatment of rheumatoid arthritis and similar
diseases.
It has conducted 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
Ended Ended
March 31, 2005 March 31, 2004
($) ($)
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Net Sales 11,753 9,606
Gross profit 5,703 4,520
Sales & marketing expenses 1,835 1,623
Administrative expenses 2,995 2,750
Research & development 1,068 947
Income taxes (Benefit) -- --
Net loss (155) (782)
Diluted loss per share:
Net loss ($0.01) ($0.07)
Diluted weighted average common shares outstanding: 11,654,796 11,510,687
Consolidated Balance Sheets (Unaudited)
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The following represents condensed financial data (in thousands) at March 31,
2005 and December 31, 2004:
2005 2004
($) ($)
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Cash & cash equivalents 16,481 14,366
Accounts receivable, net 3,270 6,376
Inventory 3,417 3,455
Total current assets 24,186 24,961
Total assets 30,488 31,530
Total current liabilities 6,284 7,109
Long-term debt 2,357 2,464
Total stockholders' equity 21,788 21,902