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Derma Sciences Reports Third Quarter 2012 Financial Results

For more information please visit www.dermasciences.com .

Forward-Looking Statements

Statements contained in this news release that are not statements of historical fact may be deemed to be forward-looking statements. Without limiting the generality of the foregoing, words such as "may," "will," "expect," "believe," "anticipate," "intend," "could," "estimate" or "continue" are intended to identify forward-looking statements. Readers are cautioned that certain important factors may affect the Company's actual results and could cause such results to differ materially from any forward-looking statements that may be made in this news release or that are otherwise made by or on behalf of the Company. Factors that may affect the Company's results include, but are not limited to, product demand, market acceptance, impact of competitive products and prices, product development, completion of an acquisition, commercialization or technological difficulties, the success or failure of negotiations and trade, legal, social and economic risks. Additional factors that could cause or contribute to differences between the Company's actual results and forward-looking statements include but are not limited to, those discussed in the Company's filings with the U.S. Securities and Exchange Commission.

 
DERMA SCIENCES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
         
  Three Months Ended
September 30,
    2012   2011
Net Sales $ 19,649,773     $ 15,845,934  
Cost of sales     12,741,599       11,096,315  
Gross Profit     6,908,174       4,749,619  
Operating Expenses      
Selling, general and administrative   8,058,441       5,141,548  
Research and development     1,923,670       200,541  
Total operating expenses     9,982,111       5,342,089  
Operating loss     (3,073,937 )     (592,470 )
Other (income) expense, net:      
Interest (income) expense   (2,454 )     44,470  
Loss on debt extinguishment   -       176,101  
Other (income) expense, net     (66,781 )     58,537  
Total other (income) expense, net     (69,235 )     279,108  
Loss before income taxes   (3,004,702 )     (871,578 )
Income tax expense (benefit)     50,304       (82,321 )
Net Loss   $ (3,055,006 )   $ (789,257 )
Net loss per common share - basic & diluted   $ (0.24 )   $ (0.08 )
Shares used in computing net loss per common share– basic & diluted     12,875,476       10,474,637  
 
 
         
Nine Months Ended
September 30,
    2012   2011
Net Sales $ 52,536,938     $ 46,096,813  
Cost of sales     34,554,029       32,291,998  
Gross Profit     17,982,909       13,804,815  
Operating Expenses      
Selling, general and administrative   23,646,715       14,824,887  
Research and development     4,553,697       494,935  
Total operating expenses     28,200,412       15,319,822  
Operating loss     (10,217,503 )     (1,515,007 )
Other (income) expense, net:      
Interest (income) expense   (13,304 )     259,899  
Loss on debt extinguishment   -       176,101  
Other income, net     (65,596 )     (56,213 )
Total other (income) expense, net     (78,900 )     379,787  
Loss before income taxes   (10,138,603 )     (1,894,794 )
Income tax benefit     (1,752,647 )     (7,179 )
Net Loss   $ (8,385,956 )   $ (1,887,615 )
Net loss per common share - basic & diluted   $ (0.69 )   $ (0.23 )
Shares used in computing net loss per common share– basic & diluted     12,068,520       8,175,516  
 
 
DERMA SCIENCES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
         
September 30, December 31,
2012 2011
ASSETS        
Current Assets      
Cash and cash equivalents $ 10,895,234     $ 17,110,350  
Short-term investments   4,725,000       5,225,000  
Accounts receivable, net   6,933,992       6,267,839  
Inventories   14,482,733       10,530,721  
Prepaid expenses and other current assets     1,987,313       2,099,197  
Total current assets   39,024,272       41,233,107  
Long-term investments   -       249,000  
Equipment and improvements, net   3,378,765       3,489,194  
Identifiable intangible assets, net   15,525,240       6,403,044  
Goodwill   14,527,673       7,119,726  
Other assets     141,537       129,821  
Total Assets   $ 72,597,487     $ 58,623,892  
LIABILITIES AND STOCKHOLDERS’ EQUITY        
Current Liabilities      
Accounts payable $ 4,771,026     $ 3,999,993  
Accrued expenses and other current liabilities     2,901,545       2,377,634  
Total current liabilities   7,672,571       6,377,627  
Long-term liabilities   262,598       252,684  
Deferred tax liability     1,693,745       1,146,047  
Total Liabilities     9,628,914       7,776,358  
Stockholders’ Equity      
Convertible preferred stock, $.01 par value; 1,468,750 shares
authorized; issued and outstanding 73,332 shares at September 30,
2012 and December 31, 2011 (liquidation preference of
$3,222,368 at September 30, 2012)   733       733  
Common stock, $.01 par value; shares authorized 25,000,000;
issued and outstanding 12,957,923 at September 30, 2012
and 10,577,632 at December 31, 2011   129,579       105,776  
Additional paid-in capital   97,708,900       77,374,821  
Accumulated other comprehensive income –
cumulative translation adjustments   1,651,644       1,502,531  
Accumulated deficit     (36,522,283 )     (28,136,327 )
Total Stockholders’ Equity     62,968,573       50,847,534  
Total Liabilities and Stockholders’ Equity   $ 72,597,487     $ 58,623,892  




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