Obagi Medical Products, Inc. (NASDAQ: OMPI), a leader in topical aesthetic and therapeutic skin health systems, today reported financial results for the fourth quarter and full-year ended December 31, 2012.
Net sales for the fourth quarter of 2012 were $30.3 million, compared with the prior year quarter’s sales of $30.6 million, reflecting a 5.3% increase in international product revenues that was offset by a decline in licensing fees and the planned reduction in sales to accounts identified to be re-selling to unauthorized internet retailers.
Net income for the fourth quarter of 2012 was $7.3 million, or $0.41 per diluted share. This compared with net income of $5.1 million, or $0.27 per diluted share, a year ago. Excluding the impact of an insurance related settlement and corporate advisory related expenses, non-GAAP net income for the fourth quarter of 2012 was $2.6 million, or $0.15 per diluted share. Please refer to the GAAP vs. non-GAAP reconciliation attached.
Operating expenses for the fourth quarter of 2012 were $11.6 million, down from $16.0 million for the same period last year, primarily due to the $8.4 million benefit of insurance proceeds. Included in operating expenses for the fourth quarter 2012 was $1.7 million for our e-Commerce and other growth initiatives, or an earnings per dilutive share impact of $0.06.Gross margin for the fourth quarter of 2012 was 77.7%, compared with 79.2% a year ago as a result of component inventory write offs and lower royalties from our Japanese licensing partner. The Company generated $13.6 million in cash flow from operations in the fourth quarter, which includes the benefit of insurance proceeds received in October 2012. This compared to $7.8 million a year ago. Total cash on hand at December 31, 2012 was $34.6 million. Al Hummel, the Company’s President and CEO, stated, “Obagi achieved solid performance for the fourth quarter, which reflected our continued focus on growing existing accounts and launching new products, even though we reduced sales to unauthorized discounted internet sites. In particular, performance of the Nu-Derm System improved, aided by the successful November launch of our novel moisturizer, Obagi Hydrate, and continued traction from the re-introduction of product sales in Texas.”