ProPhase Labs Reports Financial Results for the Fourth Quarter and Year Ended December 31, 2013

ProPhase Labs Reports Financial Results for the Fourth Quarter and Year Ended 
December 31, 2013 
DOYLESTOWN, PA -- (Marketwired) -- 03/27/14 --  ProPhase Labs, Inc.
(NASDAQ: PRPH) (www.ProPhaseLabs.com) today reported a net sales
increase of 5.8% to $9.6 million for the three months ended December
31, 2013 as compared to net sales of $9.1 million for the three
months ended December 31, 2012. 
The Company realized net income for the three months ended December
31, 2013, of $597,000, or $0.04 per share, compared to net income of
$453,000, or $0.04 per share, for the three months ended December 31,
2012. The improved financial results for the three months ended
December 31, 2013 as compared to three months ended December 31, 2012
were due principally to the net effect of (i) increased revenues and
improved gross margin, (ii) reduction in administrative expenses,
offset by (iii) an increase in marketing expenditures as a
consequence of the fluctuation from period to period of the timing
and scope of our marketing initiatives and implementation of our
improved marketing plans.  
For the year ended December 31, 2013, net sales increased 11.7% to
$25.0 million as compared to $22.4 million for the year ended
December 31, 2012. The Company generated net income for the year
ended December 31, 2013, of $405,000, or $0.03 per share, as compared
to a net loss of $1.1 million, or ($0.07) per share, for the year
ended December 31, 2012. 
The Company generated net income for the year ended December 31, 2013
compared to a net loss for the year ended December 31, 2012
principally as a result of the net effect of (i) an increase in net
sales of $2.6 million, (ii) improved gross margin, (iii) reduced
administrative costs of $234,000, and research and development costs
of $477,000, offset by (iv) an increase in sales and marketing
expense of $592,000, and (iv) elimination of the one-time settlement
benefit of $1.0 million realized in Fiscal 2012.  
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 grow our sales revenues and thereby increase
the value of the Cold-EEZE(R) brand and the value of our company to
the benefit of all shareholders. Despite the relatively weak
incidence of upper respiratory illness over the past 3 years, our
sales have grown consistently. As a result of our improved marketing
plans and the introduction of new, well researched and well received
products, our sales growth has been outpacing the general cough/cold
category and also has increased on a percentage basis more than our
competitors."  
Mr. Karkus added, "We are proud to announce that the effective
implementation of our business plan has enabled the Company to report
its first profitable fiscal year since 2005. Our goals for 2014 are
to continue to follow this successful strategy. We plan to introduce
another new premium Cold-EEZE(R) product (which we expect to be
available nationally in the fall of 2014) which will constitute our
QuickMelt delivery form that will not only shorten the duration of
the common cold but will also provide additional attractive health
benefits. Looking beyond 2014, our strategy will be to introduce
products both inside and outside of the cough/cold category to
leverage our strong distribution platform and expertise." 
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) Cold Remedy
zinc gluconate lozenges are clinically proven to significantly reduce
the duration of the common cold. Cold-EEZE(R) Cold Remedy 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) Cold Remedy 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. and Subsidiaries                    
              Condensed Consolidated Statements of Operations               
                  (in thousands, except per share amounts)                  
                                                                            
                                                                            
                            Three Months Ended                              
                               December 31,         Year Ended December 31, 
                         ------------------------  ------------------------ 
                             2013         2012         2013         2012    
                         -----------  -----------  -----------  ----------- 
                         (unaudited)  (unaudited)                           
                                                                            
Net sales                $     9,602  $     9,079  $    25,032  $    22,406 
Cost of sales                  3,015        3,391        8,361        8,154 
                         -----------  -----------  -----------  ----------- 
Gross profit                   6,587        5,688       16,671       14,252 
                         -----------  -----------  -----------  ----------- 
                                                                            
Operating expenses:                                                         
  Sales and marketing          4,375        3,914        9,538        8,946 
  Administration               1,374        2,100        5,893        6,127 
  Research and                                                              
   development                   238          246          824        1,301 
  Settlement benefit               -       (1,024)           -       (1,024)
                         -----------  -----------  -----------  ----------- 
                               5,987        5,236       16,255       15,350 
                         -----------  -----------  -----------  ----------- 
                                                                            
Income (loss) from                                                          
 operations                      600          452          416       (1,098)
                    
                                                        
Interest and other                                                          
 income                            -            -            2            7 
Interest expense                  (3)           1          (13)           - 
                         -----------  -----------  -----------  ----------- 
Income (loss) before                                                        
 income taxes                    597          453          405       (1,091)
                                                                            
Income tax (benefit)               -            -            -            - 
                                                                            
                         -----------  -----------  -----------  ----------- 
Net income (loss)        $       597  $       453  $       405  $    (1,091)
                         ===========  ===========  ===========  =========== 
                                                                            
                                                                            
                         -----------  -----------  -----------  ----------- 
Basic income (loss) per                                                     
 share                   $      0.04  $      0.04  $      0.03  $     (0.07)
                         ===========  ===========  ===========  =========== 
                                                                            
                         -----------  -----------  -----------  ----------- 
Diluted income (loss)                                                       
 per share               $      0.04  $      0.03  $      0.03  $     (0.07)
                         ===========  ===========  ===========  =========== 
                                                                            
Weighted average common                                                     
 shares outstanding:                                                        
  Basic                       15,895       14,914       15,839       14,843 
                         ===========  ===========  ===========  =========== 
  Diluted                     16,428       15,305       16,276       14,843 
                         ===========  ===========  ===========  =========== 
                                                                            
                                                                            
                                                                            
                                                                            
                    ProPhase Labs, Inc. and Subsidiaries                    
                 Condensed Consolidated Balance Sheet Data                  
                               (in thousands)                               
                                                                            
                                                                            
                                               December 31,    December 31, 
                                                   2013            2012     
                                             --------------- ---------------
                                                                            
Cash and cash equivalents                    $         1,638 $           572
Accounts receivable                          $         5,319 $         5,409
Inventory                                    $         2,521 $         2,051
Total current assets                         $        11,279 $        10,719
Total assets                                 $        17,420 $        16,661
                                                                            
Total current liabilities                    $         4,624 $         4,910
Other long term obligations                  $           200 $           300
Total stockholders' equity                   $        12,596 $        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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