ProPhase Labs Reports Financial Results for the Three and Nine Months Ended September 30, 2013

ProPhase Labs Reports Financial Results for the Three and Nine Months Ended 
September 30, 2013 
DOYLESTOWN, PA -- (Marketwired) -- 11/13/13 --  ProPhase Labs, Inc.
(NASDAQ: PRPH) (www.ProPhaseLabs.com) today reported its net sales
increased $534,000 to $5.9 million for the three months ended
September 30, 2013 compared to $5.4 million for the three months
ended September 30, 2012. The Company realized net income of $1.2
million for the three months ended September 30, 2013, or $0.08 per
share, compared to net income of $1.1 million, or $0.07 per share,
for the three months ended September 30, 2012.  
Results for the third quarter of 2013 compared to the third quarter
of 2012 principally reflect the net effect of (i) an increase in
gross profit of $418,000, offset by (ii) an increase in research and
development costs of $16,000, (iii) an increase in sales and
marketing expenses of $56,000 and (iv) an increase of $183,000 in
administration costs due principally to an increase in legal and
professional costs.  
The Company's sales are derived principally from its over-the-counter
("OTC") cold remedy products. As a consequence, a significant portion
of our business is highly seasonal, which causes major variations in
operating results from quarter to quarter.  
The Company generated net sales for the nine months ended September
30, 2013 of $15.4 million, an increase of $2.1 million, or 15.8%,
compared to $13.3 million for the nine months ended September 30,
2012. The Company incurred a net loss for the nine months ended
September 30, 2013, of $193,000, or ($0.01) per share, compared to a
net loss of $1.5 million, or ($0.10) per share, for the nine months
ended September 30, 2012. 
Results for the nine months ended September 30, 2013 compared to the
nine months ended September 30, 2012 principally reflect the net
effect of (i) an increase in net sales of $2.1 million, (ii) a
decrease in research and development costs of $469,000, offset by
(iii) an increase in sales and marketing expense of $131,000 and (iv)
an increase of $503,000 in administration costs due principally to an
increase in legal and professional costs.  
The revenue growth we realized for the first nine months of fiscal
2013, as compared to the first nine months of 2012, was in part
attributable to the success of our marketing efforts to increase
consumer awareness to the benefits of Cold-EEZE(R) Cold Remedy
products and generate increased demand for Cold-EEZE(R). 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, "Our strategic
focus to grow our top line revenues for our flagship Cold-EEZE(R)
brand continues to be realized by our Company. We are achieving
growth through increased demand for our Cold-EEZE(R) Cold Remedy line
of products. This includes several successful national rollouts of
our new premium products which include new delivery forms --
lozenges, oral sprays and QuickMelts(R) -- to shorten the duration of
the common cold. We are efficiently leveraging our marketing dollars
and leveraging our distribution platform with our product line
expansion initiatives.  
We are ultimately impacted by the incidence of upper respiratory
illness which is off to a slower start for the 2013-2014 cold season.
However, we are well positioned to meet the needs of our retail
partners and Cold-EEZE(R) consumers. In July 2013, we began shipping
two new additions to our QuickMelts(R) delivery form: Cold-EEZE(R)
Cold Remedy Plus Natural Immune Support + Natural Energy and
Cold-EEZE(R) Cold Remedy Plus Natural Immune Support. These new
products are not new flavors of lozenges but rather Cold-EEZE(R)
products in new delivery forms that shorten the duration of the
common cold as well as provide additional immune support health
benefits. As evidenced in our most recent financial results, we
continue to make excellent progress toward our long term strategy of
increasing the value of the Cold-EEZE(R) Cold Remedy brand and the
value of our Company to the benefit of all 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
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. 
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. & 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, 
                      2013           2012           2013           2012     
                 -------------  -------------  -------------  ------------- 
                                                                            
Net sales        $       5,949  $       5,415  $      15,430  $      13,328 
                                                                            
Cost of sales            2,132          2,016          5,346          4,763 
                 -------------  -------------  -------------  ------------- 
                                                                            
Gross profit             3,817          3,399         10,084          8,565 
                 -------------  -------------  -------------  ------------- 
                                                                            
Operating                                                                   
 expenses:                                                                  
  Sales and                                                                 
   marketing             1,091          1,035          5,163          5,032 
  Administration         1,309          1,126          4,530          4,027 
  Research and                                                              
   development             181            165            586          1,055 
                 -------------  -------------  -------------  ------------- 
                         2,581          2,326         10,279         10,114 
                 -------------  -------------  -------------  ------------- 
                                                                            
Income (loss)                                                               
 from operations         1,236          1,073           (195)        (1,549)
                                                                            
Interest and                                                                
 other income                -              1              2              6 
                 -------------  -------------  -------------  ------------- 
                                                                            
Income (loss)                                                               
 before income                                                              
 taxes                   1,236          1,074           (193)        (1,543)
                                                                            
Income tax                                                                  
 (benefit)                   -              -              -              - 
                                                                            
                 -------------  -------------  -------------  ------------- 
Net income                                                                  
 (loss)          $       1,236  $       1,074  $        (193) $      (1,543)
                 =============  =============  =============  ============= 
                                                                            
Basic income                                                                
 (loss) per                                                                 
 share:                                                                     
                 -------------  -------------  -------------  ------------- 
  Net income                                                                
   (loss)        $        0.08  $        0.07  $       (0.01) $       (0.10)
                 =============  =============  =============  ============= 
                                                                            
Diluted income                                                              
 (loss) per                                                                 
 share:                                                                     
                 -------------  -------------  -------------  ------------- 
  Net income                                                                
   (loss)        $        0.08  $        0.07  $       (0.01) $       (0.10)
                 =============  =============  =============  ============= 
                                                                            
Weighted average                                                            
 common                                                                     
shares                                                                      
 outstanding:                                                               
    Basic               15,860         14,836         15,819         14,804 
                 =============  =============  =============  ============= 
    Diluted             16,307         14,981         15,819         14,804 
                 =============  =============  =============  ============= 
                                                                            
                                                                            
                                                                            
                     PROPHASE LABS, INC. & SUBSIDIARIES                     
                  CONDENSED CONSOLIDATED BALANCE SHEET DATA                 
                               (in thousands)                               
                                 (unaudited)                                
                                                                            
                                                                            
                                                September 30,   December 31,
                                                     2013           2012    
                                                -------------  -------------
                                                                            
Cash and cash equivalents                       $         751  $         572
Accounts receivable                             $       4,445  $       5,409
Inventory                                       $       3,273  $       2,051
Total current assets                            $      10,579  $      10,719
Total assets                                    $      16,667  $      16,661
                                                                            
Total current liabilities                       $       4,741  $       4,910
Other long term obligations                     $         300  $         300
Total stockholders' equity                      $      11,626  $      11,451

  
Press Only Contact 
Laura Maxey 
5W Public Relations 
Tel: (212) 452-6400 
lmaxey@5wpr.com  
Investor Contact
Ted Karkus
Chairman and CEO
ProPhase Labs, Inc. 
(215) 345-0919 x 0 
 
 
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