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Derma Sciences Reports Third Quarter 2012 Financial Results

Stocks in this article: DSCI

Financial Results

Net sales for the third quarter of 2012 were $19,649,773, compared with $15,845,934 for the third quarter of 2011, an increase of 24%. This reflects 67% growth in sales of advanced wound care products to $6,829,168 from $4,077,575 in the third quarter of 2011. Third quarter advanced wound care product sales include $1,787,396 from the operations of MedEfficiency, Inc. (MedEfficiency), which the Company acquired during the second quarter of 2012. Excluding sales of MedEfficiency products from both periods, sales of advanced wound care products grew 36%. Sales of traditional wound care products increased 9% to $12,820,605, compared with $11,768,359, driven by higher first-aid product sales and the replenishment of distributor inventories in Canada that were drawn down during the first half of 2012.

Gross profit for the third quarter of 2012 was $6,908,174 or 35.2% of net sales, up from $4,749,619, or 30.0% of net sales, for the third quarter of 2011. The increase in gross margin reflects increased sales of higher-margin advanced wound care products, which accounted for 35% of net sales for the quarter compared with 26% of net sales in the same period last year.

Selling, general and administrative expense for the third quarter of 2012 was $8,058,441, compared with $5,141,548 for the third quarter of 2011. The increase was principally due to higher sales, marketing and administrative expenditures associated with advanced wound care growth initiatives.

Research and development expense for the third quarter of 2012 was $1,923,670, compared with $200,541 in the third quarter of 2011, reflecting expenses associated with preparing for the DSC127 Phase 3 program.

The net loss for the third quarter of 2012 was $3,055,006 or $0.24 per share, compared with a net loss for the third quarter of 2011 of $789,257 or $0.08 per share. Higher compensation and benefit costs, incremental growth-related sales, marketing and administrative costs, and higher research and development expenses were principally responsible for the larger net loss.

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