Full Press Release Details
ImmuCell Announces Preliminary 2016 Financial Results
PORTLAND, ME -- (Marketwired - February 09, 2017) - ImmuCell Corporation (NASDAQ: ICCC), a growing animal health company that is developing, manufacturing and selling products that improve health and productivity in the dairy and beef industries, today announced unaudited financial results for the year ended December 31, 2016.
Fourth Quarter and Fiscal Year 2016 Overview:
-- Sales for the year ended December 31, 2016 totaled $9.5 million,
compared to $10.2 million during the previous year, a 7% decline.
TOTAL ANNUAL PRODUCT SALES
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For the Years Ended Sales (Decrease)/Increase
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12-31-2016 $ 9.5 million (7%)
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12-31-2015 $ 10.2 million 35%
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12-31-2014 $ 7.6 million 26%
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12-31-2013 $ 6.0 million 11%
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12-31-2012 $ 5.4 million
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Compound Annual Growth Rate 15.4%
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-- Sales for the fourth quarter of 2016 totaled $2.2 million, compared to
$2.7 million during the fourth quarter of 2015, an 18% decline.
-- On a sequential basis, sales during the fourth quarter of 2016 grew 12%,
compared to the third quarter ended September 30, 2016.
-- Company has reported positive net operating income for 10 consecutive
Financial results for fourth quarter and full year 2016 were impacted by the return to the market of a competitive product that was largely off the market from late 2014 to the middle of 2015. Market conditions in the dairy and beef industries, including milk pricing and prices for bull calves, were stronger during 2015 than in 2016. Despite lower 2016 sales, revenue since 2012 has grown at a 15.4% compounded annual rate.
Sales of the First Defense product line (the Company's lead product) decreased by 19% and 7% during the three-month and twelve-month periods ended December 31, 2016, respectively, in comparison to the same periods during the prior year. Despite these declines, sales of First Defense have increased during 21 of the past 25 quarters in comparison to the same quarters of the immediately preceding year.
The new level of sales demand established during 2015 exceeded the Company's production capacity and available inventory, resulting in a backlog of First Defense orders. Investments to increase liquid processing production capacity by 50% were completed during the fourth quarter of 2015, and investments to increase freeze-drying production capacity by 100% were completed at the end of the first quarter of 2016. This capacity expansion allowed the Company to significantly reduce the backlog of orders as of June 30, 2016 and to eliminate it as of September 30, 2016. The prolonged period of order backlog (which began early in 2015 and extended through the middle of 2016) disrupted normal shipping patterns.
"The manufacturing issues that impacted our performance during 2016 are behind us," commented Bobbi Jo Brockmann, Vice President of Sales and Marketing. "We are off to a strong start to the new year. With inventory back to our target level, we are re-engaging customers lost during the period of scarce product supply and acquiring more new customers. This makes us optimistic about the long-term health of our business."
The Company continues to make significant progress towards its product development objective of adding a rotavirus claim to its product line during 2017, which would be the first calf level product to offer this unique breadth of claims. The Company is currently working to establish USDA claims for its gel tube formulation of First Defense Technology . With its increased production capacity, the Company has begun to seek additional distributor partnerships to bring First Defense into new international territories.
Other Income Statement Data for Fourth Quarter:
-- Net operating income was $119,000 and $461,000 during the three-month
periods ended December 31, 2016 and 2015, respectively. The fourth
quarter of 2016 was the tenth consecutive quarter of positive net
-- Net operating income was $890,000 and $2.1 million during the years
ended December 31, 2016 and 2015, respectively;
-- Net income was $30,000, or less than $0.01 per diluted share, during the
fourth quarter of 2016 compared to net income of $289,000, or $0.09 per
diluted share, during the fourth quarter of 2015; and
-- Net income was $508,000, or $0.12 per diluted share, during the year
ended December 31, 2016 compared to net income of $1.2 million, or $0.38
per diluted share, during the year ended December 31, 2015.
Balance Sheet Data for Fourth Quarter:
-- Cash, cash equivalents, short-term investments and long-term investments
increased to $10.6 million at December 31, 2016 (excluding approximately
$343,000 held temporarily in escrow against certain construction
performance requirements) from $6.5 million at December 31, 2015;
-- Net working capital increased to $12.3 million at December 31, 2016 from
$7.1 million at December 31, 2015; and
-- Stockholders' equity increased to $19.7 million at December 31, 2016
from $10.6 million at December 31, 2015.
During the third quarter of 2016, the Company initiated construction of its $20 million pharmaceutical facility to produce Nisin, the active ingredient in Mast Out , a novel treatment for subclinical mastitis in lactating dairy cows. Approximately $3.3 million was capitalized on this project as of December 31, 2016, of which approximately $1.2 million was recorded in accounts payable as of December 31, 2016. Spending on this project is expected to be largely complete by September 30, 2017. The objective is to complete the construction and equipment installation and qualification by the end of 2017 to maintain the timeline leading to anticipated FDA approval in 2019.
During the fourth quarter of 2016, the Company closed on a private placement of 659,880 shares of common stock to 19 institutional and accredited investors at $5.25 per share, raising gross proceeds of $3.5 million. The net proceeds were approximately $3.2 million after deducting placement agent fees and other expenses incurred in connection with the equity financing. The Company now has 4,847,390 common shares outstanding. These funds, together with additional equity raised during the first quarter of 2016, are expected to be invested in the Nisin production facility.
"Our groundbreaking product innovation is unlike all other antibiotic treatments on the market today that are used subject to milk discard requirements," commented Michael F. Brigham, President and CEO. "Currently, mastitis, which costs the dairy industry about $2 billion per year, is treated with traditional antibiotic products, and treatment is generally reserved for clinical infections when the cow produces non-saleable milk. The "zero milk discard" product feature of Mast Out would make earlier treatment of sick cows economically feasible, while these cows are still producing saleable milk. No other product can provide this kind of value proposition."
Nisin is a bacteriocin that is not used in human medicines and would not contribute to the growing concern that the widespread use of antibiotics could encourage the growth of antibiotic-resistant bacteria ("superbugs").
Interested parties can access the conference call by dialing (844) 855-9502 or (412) 317-5499 at 4:30 PM ET today. A teleconference replay of the call will be available for three days at (877) 344-7529 or (412) 317-0088, confirmation #10100949.
ImmuCell Corporation's (NASDAQ: ICCC) purpose is to create scientifically-proven and practical products that improve animal health and productivity in the dairy and beef industries. ImmuCell has developed products that provide significant, immediate immunity to newborn dairy and beef livestock. The Company is developing a novel treatment for mastitis, the most significant cause of economic loss to the dairy industry. Press releases and other information about the Company are available at: (http://www.immucell.com).
Condensed Statements of Income
For the Three-Month For the Twelve-Month
Periods Ended Periods Ended
December 31, December 31,
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(In thousands, except per
share amounts) 2016 2015 2016 2015
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(Unaudited) (Unaudited) (Unaudited)
Product sales $ 2,214 $ 2,694 $ 9,544 $ 10,229
Costs of goods sold 995 1,037 4,123 3,978
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Gross margin 1,219 1,657 5,421 6,251
Sales, marketing and
administrative expenses 846 865 3,287 2,894
Product development expenses 254 331 1,244 1,235
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Operating expenses 1,100 1,196 4,531 4,129
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NET OPERATING INCOME 119 461 890 2,122
Other expenses, net 51 31 132 59
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INCOME BEFORE INCOME TAXES 68 430 758 2,063
Income tax expense 38 141 250 850
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NET INCOME $ 30 $ 289 $ 508 $ 1,213
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Weighted average common
Basic 4,704 3,055 4,226 3,042
Diluted 4,804 3,175 4,336 3,166
NET INCOME PER SHARE:
Basic $ 0.01 $ 0.09 $ 0.12 $ 0.40
Diluted $ 0.01 $ 0.09 $ 0.12 $ 0.38
Selected Balance Sheet Data
As of December 31, As of December 31,
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Cash, cash equivalents, short-term and $10,624(1) $6,534
long-term investments
Net working capital 12,289 7,078
Total assets 24,697 14,540
Stockholders' equity $19,722 $10,614
(1) This balance does not include approximately $343,000 being held