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Obagi Medical Products, Inc. (NASDAQ: OMPI), a leader in topical aesthetic and therapeutic skin health systems, today reported net income for the fourth quarter ended December 31, 2011 of $5.1 million, or $0.27 per diluted share, up significantly compared with $2.9 million, or $0.14 per diluted share a year earlier.
Net sales for the fourth quarter of 2011 totaled $30.6 million, up from $30.3 million a year ago. By geographic segment, net sales for 2011 reflected 11% growth in international markets and a slight decrease in domestic sales due to the Company’s suspension of shipments of hydroquinone products into Texas in April 2011.
In the fourth quarter of 2011, gross profit was $24.2 million, or 79.2% of total net sales, versus $23.9 million, or 79.0% of total net sales, a year ago. Operating expenses of $16.0 million were down approximately 16% compared with $19.0 million a year ago. This decrease in expenses was due to special charges incurred in the fourth quarter of 2010 related to the Zein Obagi litigation, severance for the prior CEO and costs associated with a secondary offering.
The Company generated $7.8 million in cash flow from operations in the fourth quarter, compared to $5.4 million a year ago. Total cash on hand at December 31, 2011 was $35.0 million. On March 6, 2012, the Company’s Board of Directors expanded its stock buyback program from an existing availability of $10.0 million to a $30.0 million authorization.
Full-Year 2011 Financial Summary:
Total net sales were $114.1 million, up from $112.8 million for 2010;
Generated net income of $10.0 million, or $0.54 per diluted share, compared with $9.5 million, or $0.44 per diluted share a year ago; and
On a non-GAAP basis net sales were $115.8 million and net income was $16.0 million, or $0.86 per diluted share, compared with $14.5 million, or $0.66 per diluted share for 2010. Please refer to the attached table to reconcile GAAP to non-GAAP financial measures.
Fourth Quarter 2011 and Subsequent Period Highlights:
Added 282 new accounts, bringing the total number of active accounts to 6,566 at year’s end, up slightly from a year ago;
Introduced ELASTIderm Eye Complete Complex Serum. Formulated with a proprietary bi-mineral complex and malonic acid, which in combination have been shown to improve the appearance of fine lines and wrinkles around the eye;
Launched a new and improved CLENZIderm M.D. Normal to Oily System, which includes Daily Care Foaming Cleanser (two percent salicylic acid), Pore Therapy (two percent salicylic acid) and Therapeutic Lotion (five percent benzoyl peroxide) for clear skin, fast. This new System is clinically proven to deliver clearer, healthier skin in just two weeks; and
Commenced investments for developing the e-Commerce and online pharmacy platform that will support existing and new doctors and end users by:
signing a Software License, Development and Services Agreement along with a Supply and Distribution Agreement with an experienced online pharmaceutical vendor for systems and services; and
developing a national fulfillment center in Salt Lake City.
Al Hummel, the Company’s President and CEO stated, “In 2011 our core business remained strong with demand for our market leading products solid and new product enhancements and introductions contributing to growth.