Stellar Pharmaceuticals Inc.
OTC Bulletin Board : SLXCF

Stellar Pharmaceuticals Inc.

March 17, 2010 07:30 ET

Stellar Pharmaceuticals Profitable for 2009

LONDON, ONTARIO--(Marketwire - March 17, 2010) - Stellar Pharmaceuticals Inc. (OTCBB:SLXCF) ("Stellar" or "the Company"), a Canadian pharmaceutical developer and marketer of high quality, cost-effective products for select health care markets, today announced financial results for the year ended December 31, 2009. In this press release, all dollar amounts are expressed in Canadian currency and results are reported in accordance with United States generally accepted accounting principles (U.S. GAAP).

2009 Highlights

  • Revenues grew by 39.9%
  • Gross profit up 28.8%
  • Third consecutive year the Company has been cash-flow positive
  • 2009 Net Profit up $270,000 over 2008

For the twelve-month period ended December 31, 2009, Stellar's total revenues were $3,581,300. This compares to $2,559,400 in the same period in 2008 and was driven by 15.7% and 74.8% growth in Canadian and international sales, respectively. The gross margin percentage decreased to 66.6% in 2009 compared to 73.7% in 2008, largely as a result of the Company's continued strong growth in international sales where its margins are reduced. Net income for 2009, including $163,800 in non-cash stock options and amortization expenses (2008 – $140,200), was $238,900, or $0.01 per share, compared to a loss of $31,100, or ($0.01) per share, in 2008.

Stellar's strong financial performance allowed it to close the year in a solid financial position. As of December 31, 2009, the Company had cash and cash equivalents of $2,325,200. This was up from $2,106,000 at the end of 2008.

Peter Riehl, Stellar's President and Chief Executive Officer commented, "We are very pleased to show a profit for 2009 and a strong growth in our overall business, given the difficult economic environment that persisted for much of the year. Now, as we move forward into 2010, our focus will remain on building the Canadian business and expanding global licensing of Uracyst® and NeoVisc®. At the same time, we will continue to carefully manage our resources while pursuing opportunities for Stellar's future growth.

About Stellar Pharmaceuticals Inc.

Stellar has developed and is marketing direct in Canada, and in countries around the world through out-license agreements, three products based on its core polysaccharide technology: NeoVisc® and NeoVisc® Single Dose, for the symptomatic treatment of osteoarthritis; and Uracyst®, its patented technology for the treatment of interstitial cystitis (IC), an inflammatory disease of the urinary bladder wall. Both NeoVisc and Uracyst have their CE Mark certification for the European Community. Stellar also has an in-licensing agreement for NMP22® BladderChek®, a proteomics-based diagnostic test for the diagnosis and monitoring of bladder cancer. For more information, please visit the company's website at www.stellarpharma.com.

Forward-Looking Statements

This press release contains forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Readers are cautioned not to place undue reliance on these forward-looking statements. Actual results may differ materially from those indicated by these forward-looking statements as a result of risks and uncertainties impacting the Company's business including increased competition; the ability of the Company to expand its operations, to attract and retain qualified professionals, technological obsolescence; general economic conditions; and other risks detailed from time to time in the Company's filings.

STELLAR PHARMACEUTICALS INC.

BALANCE SHEETS

(Expressed in Canadian dollars)

December 31

ASSETS 2009     2008  
CURRENT              
Cash and cash equivalents $ 2,325,212     $ 2,105,966  
Accounts receivable, net of allowance of $nil (2008 - $nil)   293,565       549,055  
Inventories   721,061       364,551  
Taxes recoverable   1,501       212,445  
Loan receivable   15,818       18,369  
Prepaids, deposits and sundry receivables   163,698       130,515  
  Total current assets   3,520,855       3,380,901  
PROPERTY, PLANT AND EQUIPMENT   1,390,296       1,270,257  
OTHER ASSETS   114,553       65,495  
  Total assets $ 5,025,704     $ 4,716,653  
LIABILITIES              
CURRENT              
Accounts payable $ 228,367     $ 173,812  
Accrued liabilities   175,637       186,201  
Deferred revenues   2,890       1,749  
  Total current liabilities   406,894       361,762  
               
CONTINGENCIES AND COMMITMENTS              
               
SHAREHOLDERS' EQUITY              
CAPITAL STOCK              
AUTHORIZED                
Unlimited Non-voting, convertible redeemable and retractable preferred shares with no par value              
Unlimited Common shares with no par value              
               
ISSUED              
23,480,040 Common shares (2008 – 23,702,540)   8,183,638       8,261,403  
Nil Treasury shares (2008 – 147,500)         (51,625 )
  Additional Paid-in capital for cancelled Common shares         2,329  
  Additional Paid-in capital options - outstanding   89,562       35,965  
  Additional Paid-in capital options -  expired   724,127       722,372  
      8,997,327       8,970,444  
DEFICIT     (4,378,517 )     (4,615,553 )
  Total shareholders' equity   4,618,810       4,354,891  
  Total liabilities and shareholders' equity $ 5,025,704     $ 4,716,653  

STELLAR PHARMACEUTICALS INC.

STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

(Expressed in Canadian dollars)

FOR THE YEARS ENDED DECEMBER 31

  2009   2008  
             
PRODUCT SALES $ 3,000,062   $ 2,118,282  
ROYALTIES & LICENSING REVENUE   581,230     441,130  
  TOTAL REVENUE FROM ALL SOURCES   3,581,292     2,559,412  
COST OF PRODUCTS SOLD   1,001,871     556,401  
GROSS PROFIT   2,579,421     2,003,011  
EXPENSES            
  Selling, general and administrative   2,278,530     2,010,383  
  Research and development   18,107     62,727  
  Amortization of assets (non-manufacturing property, plant and equipment)   55,822     54,384  
    2,352,459     2,127,494  
INCOME (LOSS) FROM OPERATIONS   226,962     (124,483 )
INTEREST AND OTHER INCOME   11,962     83,741  
GAIN ON DISPOSAL OF EQUIPMENT       9,676  
NET INCOME (LOSS) AND COMPREHENSIIVE INCOME (LOSS) FOR THE YEAR (before tax)   238,924     (31,066 )
INCOME TAXES        
NET INCOME (LOSS) AND COMPREHENSIVE INCOME (LOSS) $ 238,924   $ (31,066 )
EARNINGS (LOSS) PER SHARE - Basic $ 0.01   $ (0.00 )
  - Diluted $ 0.01   $  
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING - Basic   23,498,889     23,801,450  
  - Diluted   23,599,170     23,801,450  

STELLAR PHARMACEUTICALS INC.

STATEMENTS OF CASH FLOWS

(Expressed in Canadian dollars)

FOR THE YEARS ENDED DECEMBER 31

  2009     2008  
CASH FLOWS USED IN OPERATING ACTIVITIES              
  Net income (loss) $ 238,924     $ (31,066 )
  Items not affecting cash              
    Amortization   108,492       126,556  
    Gain on disposal of equipment   ––       (9,676 )
    Write-down of property, plant & equipment   ––       2,656  
    Unrealized foreign exchange (gain) loss   24,203       (17,945 )
    Issuance of equity instruments for services rendered   55,352       13,618  
Change in non-cash operating assets and liabilities   26,143       (562,256 )
CASH FLOWS USED IN OPERATING ACTIVITIES   453,114       (478,113 )
               
CASH FLOWS PROVIDED BY (USED IN) INVESTING ACTIVITIES              
  Additions to property, plant and equipment   (155,630 )     (539,511 )
  Increase in other assets   (26,230 )     (11,420 )
  Proceeds from sale of equipment   ––       10,000  
CASH FLOWS USED IN INVESTING ACTIVITIES   (181,860 )     (540,931 )
               
CASH FLOWS USED IN FINANCING ACTIVITIES              
  Repurchase of common shares for cash   (30,357 )     (100,514 )
CASH FLOWS USED IN FINANCING ACTIVITIES   (30,357 )     (100,514 )
               
EFFECT OF EXCHANGE RATES ON CASH HELD IN FOREIGN CURRENCY   (21,650 )     14,398  
CHANGE IN CASH AND CASH EQUIVALENTS   219,246       (1,105,160 )
               
CASH AND CASH EQUIVALENTS, beginning of year   2,105,966       3,211,126  
CASH AND CASH EQUIVALENTS, end of year $ 2,325,212     $ 2,105,966  

Contact Information

  • Company Contact: Stellar Pharmaceuticals Inc.
    Peter Riehl
    President & CEO
    (519) 434-1540
    corpinfo@stellarpharma.com
    or
    Stellar Pharmaceuticals Inc.
    Arnold Tenney
    Chairman
    (416) 587-3200
    or
    Investor Contact: Kilmer Lucas Inc.
    Stephen Kilmer
    President
    (905) 690-2400 ext. 21
    stephen@kilmerlucas.com
    or
    Media Contact: Kilmer Lucas Inc.
    Leonard Zehr
    Managing Director
    (905) 690-2400 ext. 41
    len@kilmerlucas.com