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ProPhase Labs Reports Financial Results for the Fourth Quarter and Year Ended December 31, 2012

ProPhase Labs Reports Financial Results for the Fourth Quarter and Year Ended 
December 31, 2012 
DOYLESTOWN, PA -- (Marketwire) -- 03/26/13 --  ProPhase Labs, Inc.
(NASDAQ: PRPH) (www.ProPhaseLabs.com) today reported a net sales
increase of 21.7% to $9.1 million for the three months ended December
31, 2012 as compared to net sales of $7.5 million for the three
months ended December 31, 2011. 
The Company realized net income for the three months ended December
31, 2012, of $453,000, or $0.04 per share, compared to a net loss of
$1.8 million, or ($0.12) per share, for the three months ended
December 31, 2011. The improved financial results for the three
months ended December 31, 2012 as compared to three months ended
December 31, 2011 was due principally to (i) increased revenues, (ii)
the reduction in marketing expenditures as a consequence of the
fluctuation from period to period of the timing and scope of our
marketing initiatives and (iii) the $1.0 million settlement benefit
we realized due to the reduction of a previously recorded obligation
following resolution of a dispute with certain third parties during
the fourth quarter of 2012.  
For the year ended December 31, 2012, net sales increased 28.4% to
$22.4 million as compared to $17.5 million for the year ended
December 31, 2011. The Company incurred a net loss for the year ended
December 31, 2012, of $1.1 million, or ($0.07) per share, as compared
to a net loss of $2.7 million, or ($0.18) per share, for the year
ended December 31, 2011. 
Results for the year ended December 31, 2012 compared to the year
ended December 31, 2011 principally reflect the net effect of (i) an
increase in net sales of $4.9 million and (ii) the $1.0 million
settlement benefit, offset by (iii) an increase in sales and
marketing expense of $1.0 million, (iv) an increase of $1.1 million
in administration costs and (v) an increase in research and
development costs of $213,000 primarily attributable to the
successful development of our new Cold-EEZE(R) Daytime/Nighttime
QuickMelts(R).  
Ted Karkus, ProPhase Labs' Chairman and CEO, stated, "After net sales
bottomed in 2010 at $14.5 million, we developed and implemented a
long term strategy to increase the value of our company. This
strategy included: (a) improvem
ent in our core Cold-EEZE(R) lozenge
flavors and packaging; (b) improvement in our relationships with our
partners, i.e. the retailers who carry our products on their shelves;
(c) overhaul of our entire marketing and in-store merchandising
campaigns; (d) restructuring and downsizing of our staff as well as
the upgrading of virtually every vendor and advisor with whom we
conduct business. The net result has been an increase in net sales of
20.3% to $17.5 million in fiscal 2011 and a further increase of 28.4%
to $22.4 million in fiscal 2012. Over this two year period, net sales
have thus increased an impressive 54.5%. To the credit of our entire
ProPhase Labs team, these results were accomplished despite a
significant decline in the incidence of upper respiratory illness
over this time period." 
Mr. Karkus added, "Much like in 2012, our goal going forward is to
introduce new Cold-EEZE(R) branded products which efficiently
leverage our marketing dollars and leverage our strengthening
distribution platform. Also, as in 2012, our next generation of
Cold-EEZE(R) products (which we expect to be on shelves in the fall
of 2013) will not be new flavors of lozenges but rather Cold-EEZE(R)
products in new delivery forms that not only shorten the duration of
the common cold but also provide additional health benefits." 
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 vis
it us at www.ProPhaseLabs.com. 
Except for the historical information contained herein, this document
contains forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995. These statements involve a
number of risks and uncertainties, including the difficulty of the
acceptance and demand for our products, the impact of competitive
products and pricing, the timely development and launch of new
products, and the risk factors listed from time to time in our Annual
Report on Form 10-K, Quarterly Reports on Form 10-Q and any
subsequent SEC filings. 


 
                                                                            
                    PROPHASE LABS, INC. AND SUBSIDIARIES                    
              CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS               
                  (in thousands, except per share amounts)                  
                                                                            
                                                                            
                            Three Months Ended            Year Ended        
                               December 31,               Deember 31,       
                         ------------------------  ------------------------ 
                             2012         2011         2012         2011    
                         -----------  -----------  -----------  ----------- 
                         (unaudited)  (unaudited)                           
Net sales                $     9,079  $     7,460  $    22,406  $    17,453 
Cost of sales                  3,391        2,664        8,154        6,171 
                         -----------  -----------  -----------  ----------- 
Gross profit                   5,688        4,796       14,252       11,282 
                         -----------  -----------  -----------  ----------- 
                                                                            
Operating expenses:                                                         
   Sales and marketing         3,914        4,528        8,946        7,904 
   Administrative              2,100        1,607        6,127        5,028 
   Research and                                                             
    development                  246          494        1,301        1,088 
   Settlemnt benefit          (1,024)           -       (1,024)           - 
                         -----------  -----------  -----------  ----------- 
                               5,236        6,629       15,350       14,020 
                         -----------  -----------  -----------  ----------- 
                                                                            
Income (loss) from                                                          
 operations                      452       (1,833)      (1,098)      (2,738)
                                                                            
Interest and other income          1            2            7           28 
                         -----------  -----------  -----------  ----------- 
Income (loss) before                                                        
 income taxes                    453       (1,831)      (1,091)      (2,710)
Income tax (benefit)               -            -            -            - 
                         -----------  -----------  -----------  ----------- 
Net Income (loss)        $       453  $    (1,831) $    (1,091) $    (2,710)
                         ===========  ===========  ===========  =========== 
                                                                            
Basic income (loss) per                                                     
 share:                                                                     
                         -----------  -----------  -----------  ----------- 
 Net income (loss)       $      0.04  $     (0.12) $     (0.07) $     (0.18)
                         ===========  ===========  ===========  =========== 
                                                                            
Diluted income (loss) per                                                   
 share:                                                                     
                         -----------  -----------  -----------  ----------- 
 Net income (loss)       $      0.03  $     (0.12) $     (0.07) $     (0.18)
                         ===========  ===========  ===========  =========== 
                                                                            
Weighted average common                                                     
 shares outstanding:                                                        
   Basic                      14,914       14,609       14,843       14,817 
                         ===========  ===========  ===========  =========== 
   Diluted                    15,305       14,609       14,843       14,817 
                         ===========  ===========  ===========  =========== 
                                                                            
                                                                            
                                                                            
                PROPHASE LABS, INC. AND SUBSIDIARIES                
              CONDENSED CONSOLIDATED BALANCE SHEET DATA             
                           (in thousands)                           
                                                                    
                                                                    
                                                                    
                                        December 31,    December 31,
                                            2012            2011    
                                        ------------    ------------
                                                                    
Cash and cash equivalents               $        572    $      5,541
Accounts receivable                     $      5,409    $      3,219
Inventory                               $      2,051    $      2,688
Total current assets                    $     10,719    $     13,195
Total assets                            $     16,661    $     19,079
                                                                    
Total current liabilities               $      4,910    $      7,853
Other long term obligations             $        300    $          -
Total stockholders' equity              $     11,451    $     11,226

  
Press Only Contact 
Laura Maxey 
5W Public Relations 
Tel: (646) 452-6400 
lmaxey@5wpr.com 
Investor Contact
Ted Karkus
Chairman and CEO
ProPhase Labs, Inc. 
(215) 345-0919 x 0 
 
 
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