Helix BioMedix, Inc. (OTCQB: HXBM), a developer of bioactive peptides, today announced financial results for the company's third quarter ended September 30, 2011.
Third Quarter 2011 Highlights
- Revenue for the third quarter of 2011 increased by 321% to $395,000, compared to $94,000 for the same period in 2010.
- Revenue for the first nine months of 2011 increased by 193% to $1.45 million, compared to $494,000 for the same period in 2010.
- Recognized consumer product sales to NuGlow Cosmaceuticals, LLC (NuGlow), an affiliated company, was $117,000, compared to no sales in the prior year period. The balance of deferred product sales to NuGlow was $318,000 at September 30, 2011.
- Net loss for the third quarter of 2011 decreased to $606,000, compared to $1.1 million in the same period in 2010.
Third Quarter 2011 Results
Revenue for the third quarter of 2011 was $395,000, compared to $94,000 for the third quarter of 2010 and $693,000 for the second quarter of 2011. Revenue for the first nine months of 2011 increased to $1.45 million compared to $494,000 for the first nine months of 2010.
At September 30, 2011, the balance of deferred gross profit derived from sales to NuGlow was $172,000, generated from $318,000 in deferred revenue, which will be recognized by Helix BioMedix when NuGlow delivers the associated products to its third-party customers.
Commenting on the results, R. Stephen Beatty, President and Chief Executive Officer of Helix BioMedix, stated, "We continued to generate strong year-over-year results based on increased peptide utilization by our license partners and continued strong sales of our consumer products, including sales to NuGlow. For the first nine months of 2011, revenue from license fees and peptide and consumer products sales to unrelated parties have more than doubled compared to the same period in the prior year. With the addition of $356,000 in consumer product sales to NuGlow to date this year, we are enjoying a strong improvement in our operating results as we continue to successfully execute our consumer-focused strategy."
Gross margin for the third quarter of 2011 was 68%, compared to 69% for the third quarter of 2010 and 49% for the second quarter of 2011. The sequential increase in gross margin reflected the larger revenue contribution from licensing fees, which typically have a higher gross margin as compared to peptide and consumer product sales.
License fees in the third quarter of 2011 increased by 269% year-over-year to $177,000. The increase was due to higher sales and the conversion of a licensee from semi-annual to quarterly reporting. Peptide and consumer product sales increased by 121% for the same period to $101,000 due to increased sales to existing customers. The company recorded $117,000 in sales to NuGlow in the third quarter of 2011, compared to $188,000 in the second quarter of 2011 and no sales in the prior year third quarter.
Net loss for the third quarter of 2011 was $606,000, or $(0.01) per share, compared to a net loss of $1.1 million, or $(0.04) per share, in the third quarter of 2010 and a net loss of $625,000, or $(0.01) per share, in the second quarter of 2011. The reduction in net loss from 2010 to 2011 reflected higher revenue and gross profit, lower operating expenses and a reduction in interest expense due to the elimination of the company's debt in the fourth quarter of 2010.
As of September 30, 2011, cash and cash equivalents were $2.1 million, representing a decrease of $1.9 million from $4.0 million at December 31, 2010, due primarily to cash used in operations during the first nine months of 2011.
Beatty concluded, "We are very pleased with the financial results to date. We have recorded more than $1.4 million in revenue through the first nine months of the year compared to $852,000 for the full year of 2010, which positions us to potentially more than double our business in 2011. Helix BioMedix peptides are increasingly being used in consumer products for the U.S., U.K. and other international markets, which has been a meaningful growth driver of our license business. We also continue to aggressively expand our consumer product sales and work closely with all of our partners to maximize these opportunities. We look forward to reporting a strong fourth quarter to conclude our record year."