ProPhase Labs Reports Financial Results for the Three and Nine

ProPhase Labs Reports Financial Results for the Three and Nine Months
Ended September 30, 2012 
DOYLESTOWN, PA -- (Marketwire) -- 11/14/12 --  ProPhase Labs (NASDAQ:
PRPH) (www.ProPhaseLabs.com) today reported net sales of $5.4 million
and $13.3 million for the three month and nine month periods ended
September 30, 2012, compared to net sales of $5.1 million and $10.0
million for the three month and nine month periods ended September
30, 2011. 
The Company realized net income for the three months ended September
30, 2012, of $1.1 million, or $0.07 per share, compared to net income
of $1.1 million, or $0.07 per share, for the three months ended
September 30, 2011. 
The Company incurred a net loss for the nine months ended September
30, 2012, of $1.5 million, or ($0.10) per share, compared to a net
loss of $877,000, or ($0.06) per share, for the nine months ended
September 30, 2011. 
Results for the nine months ended September 30, 2012 compared to the
nine months ended September 30, 2011 principally reflect the net
effect of (i) an increase in net sales of $3.3 million, offset by
(ii) an increase in sales and marketing expense of $1.7 million,
(iii) an increase of $610,000 in administration costs and (iv) an
increase in research and development costs of $461,000 primarily
attributable to the successful development of our new Cold-EEZE(R)
Daytime/Nighttime QuickMelts(R) and research costs related to our
Phusion Joint Venture.  
The revenue growth we realized for the first nine months of fiscal
2012, as compared to the first nine months of 2011, was in part
attributable to the success of our marketing efforts in late fiscal
2011 and early 2012. Our marketing strategies led to increased
consumer purchases in late fiscal 2011, as a consequence of which,
our retailers placed larger stock replenishment orders in the first
quarter of 2012 to maintain their inventory levels which were
depleted in late fiscal 2011. In addition, the timing, stocking and
ultimate level of demand of retailer purchases of our OTC cold remedy
products are affected by the change in the timing and the comparative
severity of the respective cold season as well as the effects of the
timing and scope of our marketing and promotional efforts to increase
consumer awareness and to influence purchaser decisions.  
Ted Karkus, ProPhase Labs' Chairman and CEO, stated, "In fiscal 2011,
our net sales for the year grew by approximately 20% versus the prior
year. For the first 9 months of 2012 our net sales have grown by more
than 30% year over year. While our growth is likely to fluctuate from
quarter to quarter due to factors beyond our control, including but
not limited to the severity of the cold and flu season, we are
clearly on track to report our second straight year of double digit
net sales growth. It is noteworthy that our team has accomplished
these results during a two year period in which the incidence of
upper respiratory illness declined and sales of cough/cold products
declined for many of our direct competitors.  
"Of course, we still have to wait and see how our loyal consumers of
Cold-EEZE(R) lozenges and potential new Cold-EEZE(R) consumers
respond to our new products and marketing campaign. However, if the
initial success in introducing our new products to our retail
customers is any indication of future results, we can all look
forward to continued success." 
Mr. Karkus concluded: "We are executing our core branding strategy:
we have rebuilt and are enhancing our distribution platform; we have
rebuilt and are expanding our flagship Cold-EEZE(R) brand; and we are
leveraging these successes with new products and effective marketing
strategies. We continue to believe that the long term strategy we are
following is the right one for our loyal long term shareholders."  
About ProPhase Labs 
ProPhase Labs is a diversified natural health medical science
company. It is a leading marketer of the Cold-EEZE(R) Cold Remedy
brand as well as other cold relief products. Cold-EEZE(R) zinc
gluconate lozenges are clinically proven to significantly reduce the
severity and duration of the common cold. Cold-EEZE(R) customers
include leading national retailers, chain food, drug and mass
merchandise stores, wholesalers and distributors, as well as
independent pharmacies. ProPhase Labs has several wholly owned
subsidiaries including a manufacturing unit, which consists of an FDA
registered facility to manufacture Cold-EEZE(R) lozenges and fulfill
other contract manufacturing opportunities. ProPhase also owns 50% of
Phusion Laboratories, LLC ("Phusion"). Phusion licenses a
revolutionary proprietary technology that has the potential to
improve the delivery and/or efficacy of many active ingredients or
compounds. Phusion will formulate and test products to exploit market
opportunities within ProPhase's robust over-the-counter distribution
channels. For more information visit us at www.ProPhaseLabs.com. 


 
                                                                            
                                                                            
                    ProPhase Labs, Inc. and Subsidiaries                    
              Condensed Consolidated Statements of Operations               
                  (in thousands, except per share amounts)                  
                                (unaudited)                                 
                                                                            
                        Three Months Ended           Nine Months Ended      
                   --------------------------- ---------------------------- 
                   September 30, September 30, September 30,  September 30, 
                        2012          2011          2012           2011     
                   ------------- ------------- -------------  ------------- 
                                                                            
Net sales          $       5,415 $       5,083 $      13,328  $       9,992 
                                                                            
Cost of sales              2,016         1,487         4,763          3,508 
                   ------------- ------------- -------------  ------------- 
                                                                            
Gross profit               3,399         3,596         8,565          6,484 
                   ------------- ------------- -------------  ------------- 
                                                                            
Operating                                                                   
 expenses:                                                                  
    Sales and                                                               
     marketing             1,035         1,158         5,032          3,376 
    Administrative         1,126         1,134         4,027          3,417 
    Research and                                                            
     development             165           198         1,055            594 
                   ------------- ------------- -------------  ------------- 
                           2,326         2,490        10,114          7,387 
                   ------------- ------------- -------------  ------------- 
                                                                            
Income (loss) from                                                          
 operations                1,073         1,106        (1,549)          (903)
                                                                            
Interest and other                                                          
 income                        1             4             6             26 
                   ------------- ------------- -------------  ------------- 
                                                                            
Income (loss)                                                               
 before income                                                              
 taxes                     1,074         1,110        (1,543)          (877)
                                                                            
Income tax                                                                  
 (benefit)                     -             -             -              - 
                                                                            
                   ------------- ------------- -------------  ------------- 
Net Income (loss)  $       1,074 $       1,110 $      (1,543) $        (877)
                   ============= ============= =============  ============= 
                                                                            
Basic income                                                                
 (loss) per share:                                                          
                   ------------- ------------- -------------  ------------- 
  Net income                                                                
   (loss)          $        0.07 $        0.07 $       (0.10) $       (0.06)
                   ============= ============= =============  ============= 
                                                                            
Diluted income                                                              
 (loss) per share:                                                          
                   ------------- ------------- -------------  ------------- 
  Net income                                                                
   (loss)          $        0.07 $        0.07 $       (0.10) $       (0.06)
                   ============= ============= =============  ============= 
                                                                            
Weighted average                                                            
 common shares                                                              
 outstanding:                                                               
    Basic                 14,836        15,113        14,804         14,901 
                   ============= ============= =============  ============= 
    Diluted               14,981        15,113        14,804         14,901 
                   ============= ============= =============  ============= 
                                                                            
                                                                            

 
                                                                            
                                                                            
                    ProPhase Labs, Inc. and Subsidiaries                    
                  Condensed Consolidated Balance Sheet Data                 
                               (in thousands)                               
                                 (unaudited)                                
                                                                            
                                                Sepetmber 30,  December 31, 
                                                    2012           2011     
                                               -------------- --------------
                                                                            
Cash and cash equivalents                      $        1,815 $        5,541
Accounts receivable                            $        4,172 $        3,219
Inventory                                      $        3,414 $        2,688
Total current assets                           $       10,505 $       13,195
Total assets                                   $       16,534 $       19,079
                                                                            
Total current liabilities                      $        6,643 $        7,853
Total stockholders' equity                     $        9,891 $       11,226

  
Press Only Contact
Jenny Miranda
5W Public Relations
Tel: (212) 584-4295
jmiranda@5wpr.com 
Investor Contact
Ted Karkus
Chairman and CEO
ProPhase Labs, Inc.
(215) 345-0919 x 0 
 
 
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