(PR NEWSWIRE) Gum Tech International Reports Third Quarter 1999 Results
Gum Tech International Reports Third Quarter 1999 Results
PHOENIX, Nov. 10 /PRNewswire/ -- Gum Tech International, Inc.
(Nasdaq: GUMM) reported consolidated third quarter net sales of $2.3 million,
up over 75% compared to the third quarter of 1998. The Company reported a
loss from operations of $223,000, the lowest in the past two years. The net
loss for common stock after financing costs was $795,000.
A summary of the Company's consolidated financial results for the third
quarter of 1999 follows:
1999 1998 1999 1998
($000's) 3rd Qtr. 3rd Qtr. YTD YTD
Net sales $2,269 $1,286 $6,633 $ 3,604
Cost of sales 1,420 1,000 4,550 2,815
Gross profit $849 $286 $2,083 $788
Operating expenses 917 545 2,912 4,535
Research and development 155 273 380 415
Income (Loss) from
operations $ (223) $(532) $ (1,209) $(4,162)
Interest and other
income 47 34 66 109
Interest expense 500 123 829 384
Net income (loss) $ (676) $(621) $ (1,972) $(4,436)
Preferred stock
dividends 119 0 150 0
Net income (Loss)
for common stock $ (795) $(621) $ (2,122) $ (4,436)
Net income (loss)
per share $ (.11) $ (.09) $ (.29) $ (.70)
Shares outstanding
(millions) 7.6 6.8 7.3 6.4
Gum Tech focused heavily in the third quarter on the launch of Zicam(TM),
the new cold remedy introduced this year by Gel Tech LLC. Gum Tech owns 60%
of Gel Tech LLC. "A substantial portion of our sales and gross profit for the
third quarter were attributable to Zicam(TM)," according to William Hemelt,
Gum Tech's Chief Financial Officer. "We are extremely pleased in achieving
widespread distribution of Zicam(TM) and expect significantly higher Zicam(TM)
sales in the fourth quarter. In fact, we have already received purchase
orders for Zicam(TM) three times greater than the amount sold in the third
quarter."
Hemelt also noted that much of the loss for the period was attributable to
interest and preferred dividend charges associated with Gum Tech's recent
financing with Citadel Investment Group. These costs, which include a
substantial non-cash component, will decline as Gum Tech redeems the debt and
preferred stock over the next year and a half.
Hemelt added, "We are also very pleased with our progress in this quarter
to secure additional partners for Gum Tech's chewing gum business. Our
strategy is to develop long-term strategic relationships with companies that
possess worldwide marketing and distribution capabilities that can assist us
in developing nicotine, dental and other functional gum categories. We are
excited about the prospects these discussions represent."
Hemelt noted results for the period from current gum operations were less
than expected. He attributed this to the seasonal nature of some of the
products as well as contributions by Gum Tech to support bonus pack and
sampling promotions by existing gum partners. He concluded, "Many of these
products are still relatively new, so we are doing everything we can to help
our partners ensure long-term success by building their brands."
Gum Tech develops, manufactures, and distributes specialty chewing gum
products designed to provide health benefits to customers. The company
partners with major food, pharmaceutical, or marketing companies to develop
and manufacture gum products under contract manufacturing agreements and
supports its own line of branded gums. Gum Tech operates one of the most
advanced chewing gum manufacturing plants in the U.S. and is the only
stainless steel gum manufacturing facility registered with the Food and Drug
Administration to manufacture gum with over-the-counter drug products. In
addition, Gum Tech is a 60% owner of Gel Tech LLC. Gel Tech LLC owns and
markets Zicam(TM), a homeopathic remedy for the common cold.
Gum Tech is located at 246 East Watkins Street, Phoenix, Arizona 85004.
E-mail: Brown@gum-tech.com.
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, as well as expectations regarding the ability to secure additional
partners for the Company's gum 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 the lack of market
acceptance for or uncertainties concerning the efficacy of Zicam(TM),
inability to meet increasing demand for Zicam(TM), inability to redeem debt
and preferred stock, and inability to secure additional contracts for the
Company's chewing gum operations. 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.
-0- 11/10/1999
/CONTACT: Brown Russell of Gum Tech International, Inc., 602-252-1617; or
Colleen Tiffany of Logan Consulting Group, Inc., 716-423-9388,
ctiffany@logan-group.com, Gum Tech International, Inc./
/Web site: gum-tech.com
(GUMM)
CO: Gum Tech International, Inc.
ST: Arizona, New York
IN:
SU: ERN
|
