EXHIBIT 99.1
QUIGLEY
Carl Hymans
G.S. Schwartz & Co.
(212) 725-4500
carlh@schwartz.com
QUIGLEY AMENDS THIRD QUARTER RESULTS
--Earnings per share: $0.23 for the Quarter; $0.08 for Nine Months--
DOYLESTOWN, PA. - NOVEMBER 14, 2005 - THE QUIGLEY CORPORATION (NASDAQ: QGLY)
today reported that net sales for the third quarter of 2005 increased 58.1% to
$15.3 million from $9.7 million reported for the third quarter of 2004. For the
nine months ended September 30, 2005, net sales increased 37.1% to $35.9
million, compared to $26.2 million reported for the nine months ended September
30, 2004.
Net sales for the third quarter of 2005 reflect an 85.1% increase in the
Company's Cold Remedy segment compared to the third quarter of 2004. In
addition, net sales also benefited from an 11.6% increase in the Company's
Health and Wellness operation for the third quarter of 2005 compared to the
third quarter last year. International sales for the Health and Wellness segment
increased 86.2% for the third quarter of 2005 and domestic sales remained
relatively unchanged from the third quarter last year. Net sales also reflect
$830,000 generated from the Company's Contract Manufacturing segment which has
no comparable amount in 2004, as operations of this segment were part of the
fourth quarter 2004 acquisition of the facilities that manufactured
COLD-EEZE(R).
For the third consecutive quarter, the Company's Cold Remedy net sales continued
to far outpace the growth in its category as the further expansion of the Cold
Remedy segment reflects the success of strategic advertising and marketing
initiatives; new product extensions of COLD-EEZE(R); and a notable increase in
consumer acceptance and expanded household penetration.
The increase in net sales for the nine months reflects a 60.4% increase in the
Company's Cold Remedy segment with the Health and Wellness segment remaining
relatively unchanged. In addition, the Company's Health and Wellness
international sales for the nine months increased 44.4% reflecting the continued
expansion of international distribution. The rise in international distribution
offset a decrease in domestic Health and Wellness segment sales that occurred
during the first half of 2005. Net sales for 2005 also reflect $3.2 million from
the Company's Contract Manufacturing segment, which has no comparable amount in
2004.
Guy J. Quigley, Chairman, President and Chief Executive Officer said, "We are
very pleased with the increases in sales for the quarter and nine-month periods,
which lend further credence to the success of our ongoing initiatives to garner
additional market penetration of our COLD-EEZE(R) Cold Remedy products and
greater expansion of our international sales for the Health and Wellness
segment. Our strategic plans are to generate increasing sales, expand market
share, and enhance acceptance of our core COLD-EEZE(R) products among a broad
array of consumers including the growing geriatric population of people over
sixty-five years of age who represent a new expanding opportunity for our
COLD-EEZE(R) products."
A recent independent double-blind placebo-controlled study, found the
Cold-Eeze(R) Zinc Gluconate Glycine formula to be an extremely safe course of
therapy to reduce the duration of the common cold when administered to a
geriatric population medically diagnosed with one or more health conditions. The
study found no adverse effects with the wide range of concomitant medications,
both prescription (Rx) and over-the-counter (OTC), that the seniors
participating in the study reported taking.
Net income for the third quarter ended September 30, 2005 was $3.0 million, or
$0.23 per share compared to $177,000, or $0.01 per share, for the same period
last year. Net income for the nine months ended September 30, 2005 was $1.1
million, or $0.08 per share, compared to a net loss of $1.5 million, or ($0.13)
per share, for the same period last year. Net income gains for the three and
nine months ended September 30, 2005 and 2004 are principally attributed to the
significant increase in cold-remedy sales, which has a greater gross profit
margin and fewer fixed costs than the other operating segments. Results for the
three and nine months ended September 30, 2005 and 2004 also include research
and development costs of $1.0 million and $627,000 and $2.9 million and $2.4
million, respectively.
Gross profit percentage margins for the Cold Remedy segment for the quarter and
nine months ended September 30, 2005 increased due to; increased cold remedy
sales volume; the expiration in May 2005 of the founder's commission and to the
discontinuation of a cold remedy product, which reflected a charge of $1.4
million during the third quarter of 2004. This charge included a $422,000
write-off for inventory and a $974,000 reduction in net sales resulting from
anticipated customer returns of the product. The gross profit percentage margins
for the Health and Wellness declined due to inventory obsolescence and other
charges. Gross profit gains of the Cold Remedy segment for the quarter and nine
months ended September 30, 2005 were offset by decreases in Health and Wellness
gross profit including substantially lower gross profit margins for the Contract
Manufacturing segment, which is significantly lower than the other operating
segments.
In addition to the foregoing net changes in gross profit, net income for the
quarter and nine months ended September 30, 2005 as compared with the net income
for the quarter and net loss for the nine months ended September 30, 2004, was
impacted by increased operating costs of all business segments, including
non-manufacturing operating costs of the contract manufacturing in current
operations rather than being carried as inventory.
No tax provisions or tax benefits to reduce income or losses are provided for
the quarter and nine month periods ended September 30, 2005 and 2004, 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.
Mr. Quigley continued, "We are pleased with the progress of our Pharma products
segment including two pre-clinical toxicity studies which determined that
QR-333, our topical compound for the treatment of diabetic neuropathy, is safe
for topical application. In addition, further positive In-Vitro study results
supported conclusions of previous animal study findings that our potential
broad-spectrum anti-inflammatory, all natural, botanical compound, QR440, can
inhibit inflammatory cell recruitment and delayed type hypersensitivity.
We are encouraged by the positive results revealed by the further testing of
QR-333 and QR440 as we continue to make significant progress in bringing our
compounds to market," concluded Mr. Quigley.
The following is a list of formulations currently in the Quigley Pharma
pipeline:
Diabetic Neuropathy - QR333: A patented topical compound that extends through
March 2021 is being tested to treat people that suffer from diabetic peripheral
neuropathy, which can affect 60 to 70 percent of the 15.7 million diabetics in
the country.
Systemic Radiation - QR336: A patented compound that extends through November
2021 is being investigated to potentially reduce the effects of radiation
exposure.
Arthritis - QR440: A patented naturally-derived compound that extends through
April 2023 is being developed for the treatment of arthritis and related
inflammatory disorders as arthritis can afflict 40 million people in the US; 350
million worldwide.
Influenza A - QR435: A test compound with potentially broad anti-viral
properties for applications such as Influenza A&B in an intranasal delivery.
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, September 30, September 30, September 30,
2005 2004 2005 2004
($) ($) ($) ($)
------------------ ----------------- --------------- ---------------
Net Sales 15,320 9,691 35,917 26,198
Gross profit 8,294 3,800 17,031 11,097
Sales & marketing expenses 1,452 916 4,354 3,373
Administrative expenses 2,898 2,314 8,879 7,119
Research & development 1,030 627 2,939 2,395
Income taxes (Benefit) -- -- -- --
Net income (loss) 2,999 177 1,054 (1,517)
Diluted income (loss) per share:
Net income (loss) $ 0.23 $ 0.01 $ 0.08 ($ 0.13)
Diluted weighted average common shares outstanding: 13,316,660 14,107,313 13,285,422 11,511,858
Consolidated Balance Sheets (Unaudited)
- ---------------------------------------
The following represents condensed financial data (in thousands) at September
30, 2005 and December 31, 2004:
2005 2004
($) ($)
------- -------
Cash & cash equivalents 12,173 14,366
Accounts receivable, net 8,530 6,376
Inventory 3,998 3,455
Total current assets 25,660 24,961
Total assets 31,543 31,530
Total current liabilities 7,351 7,109
Long-term debt 1,143 2,464
Total stockholders' equity 22,996 21,902