Your right GUMM investors are enthuasistic, about what I'm not sure....Increasing financing cost? Increasing dilution? Increasing loss per share? This stock is a POS
biz.yahoo.com
Wednesday November 10, 6:09 pm Eastern Time
Company Press Release
SOURCE: Gum Tech International, Inc.
Gum Tech International Reports Third Quarter 1999 Results
PHOENIX, Nov. 10 /PRNewswire/ -- Gum Tech International, Inc. (Nasdaq: GUMM - news) 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.
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