May 14, 1999 12:59
Gum Tech Reports Record $2.45 Million in First Quarter Sales
PHOENIX, May 14 /PRNewswire/ -- Gum Tech International, Inc. (Nasdaq: GUMM) reported that first
quarter 1999 net sales rose to $2.45 million, up over 120% from the first quarter 1998 and up 47%
over the fourth quarter of 1998. The company reported a loss of $568,000 for the quarter, significantly
improved from the losses reported for both the first and fourth quarters of 1998.
First quarter sales attributable to Gum Operations totaled almost $2.1 million with a net loss of
$427,000. First quarter sales for ZICAM(TM), the cold remedy marketed by the Gel Tech LLC joint
venture, reached almost $370,000, with a net loss of $140,000.
"Sales for the quarter came primarily from sales of gum to Heritage, Ranir, Breath Asure, and
PharmaGreen, as well as our initial revenues from sales of ZICAM(TM)," said William Hemelt, Gum
Tech's Chief Financial Officer. "We are very encouraged by our continued progress in increasing net
sales and significantly reducing our net losses."
"The initial rollouts of the Breath Asure and Ranir dental gums over the last few months, as well as
Heritage's AcuTrim(R) gum, have gone well. We are currently developing new gums for a number of
potential customers, as well as formulating new gums for existing ones," added Hemelt. "For
example, we are developing new gums for both Heritage and Breath Asure. Of course, developing
new products and bringing them to market always takes time."
Hemelt continued, "The initial test marketing of ZICAM(TM) during the quarter was very promising.
We anticipate that increasing sales of ZICAM(TM) will start to be reflected on our bottom line
beginning in the third quarter and continuing throughout next year's cold season. ZICAM(TM)
represents a significant opportunity for Gum Tech during the next year. Annual sales in the cough
and cold category total more than $3 billion in the United States alone. Gel Tech is planning an
aggressive marketing campaign for the upcoming 1999 cold season designed to capture some of
those sales."
Hemelt concluded, "We are working to close the financing with Citadel Investment Group in the very
near future. The financing will enable us to fund the next stage of the Gel Tech LLC joint venture, as
well as capital expenditures for further improving our production efficiency, and continued work on our
nicotine gum project. Bringing a nicotine gum to market as rapidly as possible is one of the
company's top priorities."
A summary of the company's financial results for the first quarter of 1999 follows:
1999 1998 1998 ($000's) 1st Qtr 4th Qtr 1st Qtr
Net Sales $2,446 $1,669 $1,104
Cost of Sales 1,841 1,542 790
Gross Profit 605 127 314
Operating Expenses 951 1,629 3,269
Research and Development 120 252 114
Income (Loss) from operations (466) (1,754) (3,069)
Interest and other income 9 19 43
Interest Expense (110) (90) (124)
Provision (benefit) for
income taxes 0 0 0
Net Income (Loss) $(568) $(1,825) $(3,150)
Net Income (Loss) per share ($0.08) ($0.27) ($0.54)
Shares Outstanding (millions) 7.0 6.8 5.9
Gum Tech develops, manufactures, and distributes specialty chewing gum products designed to
provide health benefits to consumers. 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.
Gum Tech is located at 246 East Watkins Street, Phoenix, Arizona 85004. (NASDAQ: GUMM),
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. 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 less than anticipated demand for the Company's chewing gum
products, lack of market acceptance for or uncertainties concerning the efficacy of ZICAM, 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 rival gum manufacturers,
unavailability of third-party material products at reasonable prices, inventory obsolescence due to
shifts in market demand, and material litigation involving product liabilities and consumers issues.
SOURCE Gum Tech International, Inc.
/CONTACT: Colleen Tiffany of The Logan Consulting Group, Inc.,
716-244-7660, ctiffany@logan-group.com, for Gum Tech International, Inc.; or
Brown Russell of Gum Tech International, Inc., 602-252-1617,
brown@gum-tech.com/
/Web site: gum-tech.com
(GUMM) |
