Gum Tech International Reports Profitable Fourth Quarter, Nets Thirteen Cents a Share
PR Newswire - February 01, 2000 10:58
First Profitable Quarter Due to Increased Zicam Sales
PHOENIX, Feb. 1 /PRNewswire/ -- Gum Tech International, Inc. (Nasdaq: GUMM) reported consolidated fourth quarter net sales of $8.9 million, almost 400% greater than third quarter 1999. Net sales for Zicam(TM) totaled $8 million. The company earned 13 cents a share (unaudited) based on 8.8 million shares on a fully diluted basis.
According to William Hemelt, Gum Tech's Chief Financial Officer, "The demand for Zicam(TM) during the quarter was tremendous after our formal launch on November 1, 1999. Two months after the launch, according to sales data, Zicam(TM) was in the top 2% of the cough and cold category. We are pleased with our initial success, which was achieved without the benefit of a major marketing campaign. To generate increased sales, we plan to aggressively market Zicam(TM) with a major marketing campaign. The campaign began January 31, 2000, and will run for the remainder of the cold season. We also plan on beginning international distribution in the near future."
Hemelt continued, "Our earnings would have been higher, but we incurred some one-time non-cash charges associated with redeeming a good portion of our debt with Citadel. Our gross margin on Zicam(TM) remained high. We were also able to keep operating expenses to a minimum, since our successful PR launch mitigated the need for extensive advertising during the period."
"Scientific support for Zicam(TM)'s unparalleled ability to reduce the duration and severity of the common cold continues to grow," Hemelt concluded, noting that results from a recent independent clinical study (released February 1, 2000) confirm the initial findings of internal clinical research on Zicam(TM).
Gum Tech specializes in the development of unique and innovative systems for the delivery of bioactive compounds, particularly in the area of functional chewing gums. In addition, Gum Tech is 60% owner of Gel Tech LLC, a joint venture between Gum Tech and BioDelivery Technologies, Inc. Gel Tech LLC owns and markets Zicam(TM), a homeopathic remedy for the common cold.
Gum Tech Forward-Looking Statement:
This news release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements regarding the company's anticipated growth in business and future results of operations. These forward-looking statements are based on the company's expectations and are subject to a number of risks and uncertainties, many of which cannot be predicted or quantified and are beyond the company's control. Future events and actual results could differ materially from those set forth in, contemplated by, or underlying the forward-looking statements. Factors that could cause actual results to differ materially from the company's expectations include unfavorable results from clinical trials regarding the efficacy of Zicam(TM), uncertainties concerning the efficacy of Zicam(TM), lack of market acceptance for Zicam(TM), the inability of the company to generate additional sales based upon planned marketing campaigns, a decrease in the level of reorders from existing customers, financial difficulties encountered by one or more of the company's principal customers, difficulties in obtaining additional capital for marketing, research and development, and other expenses, the possibility of material charges incurred as a result of prior activities, aggressive pricing and marketing efforts by competitors, unavailability of third-party material products at reasonable prices, inventory obsolescence due to shifts in market demand, and possible litigation involving product liabilities and consumers issues. There can be no assurance that sales of Zicam(TM) will continue to grow, particularly in view of the company's plan to pursue a major marketing campaign, or that the company can maintain profitability, especially after the cold season. Other factors that could cause actual results to differ materially from the company's expectations are described in the company's reports filed pursuant to the Securities Exchange Act of 1934.
SOURCE Gum Tech International, Inc. |
