DOYLESTOWN, Pa., March 3 /PRNewswire-FirstCall/ -- The Quigley Corporation (Nasdaq: QGLY - News) today reported net sales of $13.6 million, for the fourth quarter ended December 31, 2007, compared to $14.2 million reported for the same period in 2006. For the year ended December 31, 2007, net sales were $39.5 million compared to $42.1 million reported for the same period in 2006.
The fourth quarter ended December 31, 2007 reflects a net sales decrease for the Company''s Cold Remedy segment of $600,000 and for the year ended December 31, 2007, a net sales increase for the Company''s Cold Remedy segment of $900,000, respectively, as compared to the same periods of 2006. These changes during 2007 include a price increase and inaugural sales of two new COLD-EEZE® branded line extensions that commenced on July 2, 2007 totaling $4.3 million. The impact of these initiatives were offset by changes in seasonal purchase patterns by our customers that can occur when comparing quarters of different years, and according to industry analysts, 2007 has resulted in the least incidence of colds by consumers in the last eight years.
Despite the aforementioned occurrences offsetting sales gains, the Company believes in the viability of the COLD-EEZE brand to garner acceptance among consumers who want Natural Common Cold remedies that demonstrate proven clinical efficacy and safety. As part of ongoing initiatives to generate future growth, the introduction of two new COLD-EEZE brand extensions, Organix(TM) Cough and Sore Throat Drops and COLD-EEZE Immune Support Complex-10 (ISC-10) will enable consumers to choose two new options to support their health during the Cold and Flu Season.
Organix Cough and Sore Throat Drops is a proprietary product manufactured in the Company''s certified organic manufacturing facility, the first facility of its kind to obtain USDA organic certification. COLD-EEZE ISC-10 will compete in the growing immune boosting dietary supplement marketplace and features a proprietary blend of 10 important immune supporting nutrients, minerals and herbs shown to support proper immune system functioning. Both of these new products are currently being sold in many major market retailers.
The Health and Wellness segment net sales declined by $4.1 million for the year ended December 31, 2007, which reflects the continued reduction in the number of active independent distributor representatives, and litigation with the sponsor of the Company''s product line in this segment.
Net income for the fourth quarter ended December 31, 2007 was $1.7 million, or $0.12 per share compared to net income of $1.2 million, or $0.09 per share, for the same period last year. Net loss for the twelve-months ended December 31, 2007 was $2.5 million, or ($0.19) per share, compared to a net loss of $1.7 million, or ($0.14) per share, for the same period last year.
The increase in net income for the fourth quarter ended December 31, 2007 is principally attributed to decreased operating expenses for both the Cold Remedy and Health and Wellness segments, which were offset by increases in research and development costs for the pharmaceutical segment.
The increase in net loss for the twelve-months ended December 31, 2007 is principally attributed to increased research and development costs for the pharmaceutical segment to $6.5 million from $3.8 million and a reduction in gross profits from the Health and Wellness operating segment. These increases to net loss were lessened somewhat by improvement in other operating expenses and Cold Remedy gross profits from related increases in net sales and other efficiencies.
As previously announced today by The Quigley Corporation, it completed the sale on February 29, 2008 of its wholly owned subsidiary, Darius International Inc. ("Darius"), which constitutes the Health and Wellness segment, to InnerLight Holdings, Inc. The terms of the agreement include a purchase price of $1 million in cash without guarantees, warranties or indemnifications for the stock of Darius and its subsidiaries. The unaudited net book value of Darius at December 31, 2007 and 2006 approximate $124,000 and $2.4 million, respectively. Darius'' net sales for 2007 and 2006 approximate $11.2 million and $15.3 million, respectively with a net loss for 2007 and 2006 approximating $600,000 and $1.2 million, respectively.
Over the last few years, net sales of the Health and Wellness segment have declined significantly resulting in continued losses, which is due to the continued reduction in the number of active independent distributor representatives, and the effects of ongoing litigation with the sponsor of its product line.
As the Company continues to review its current structure, ownership of Darius is no longer a benefit since losses by this segment have been a drain for the ongoing research and development costs associated with the ethical pharmaceutical segment. Also, separating this segment will help streamline the structure of the Company, which will focus on continuing operations in OTC product marketing and pharmaceutical research.
Pharmaceutical research and development costs associated with clinical studies for QR-333, including the Phase II(b), an investigational new drug for treating conditions associated with diabetic peripheral neuropathy, increased significantly during 2007 to $4.7 million from $1.9 million invested in 2006.
