Stellar Pharmaceuticals Inc.
OTCQB : SLXCF

Stellar Pharmaceuticals Inc.

March 31, 2011 08:31 ET

Stellar Pharmaceuticals Profitable for 2010; Revenues Up 32% & Net Profit Up 120%

LONDON, ONTARIO--(Marketwire - March 31, 2011) - Stellar Pharmaceuticals Inc. (OTCQB: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, 2010. 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).

2010 Highlights

  • Revenues grew by 32.3%
  • Fourth consecutive year the Company has been cash-flow positive
  • Net profit up 120% over 2009

For the twelve-month period ended December 31, 2010, Stellar's total revenues were $4,737,300. This compares to $3,581,300 for the same period in 2009, representing an increase of 32.3%. 

International revenues from all sources, including licensing fees for the 12 month period ended December 31, 2010, were up 55.6% compared to the same period in 2009. These revenues included $1,851,100 in licensing fees related to license agreements. NeoVisc sales for the twelve month period ended December 31, 2010, however, were down 64.1%, compared to the same period in 2009 due to a significant decline in European market sales. 

Total Canadian market product sales increased 7.8% with increases of 4.3% in NeoVisc sales, 22.1% in Uracyst sales and 10.1% in BladderChek sales.

Net income for 2010, including $270,442 in non-cash stock options and amortization expenses (2009 – $163,800), was $525,700, or $0.02 per share, compared to $238,900, or $0.01 per share, in 2009. This profit was achieved despite the Company recording $596,500 in aggregate one-time expenses in the fourth quarter of 2010, including $401,000 in a retirement payout, $120,300 for expired products and $75,200 for product returns.

Stellar's strong financial performance allowed it to close the year in a strong financial position. As of December 31, 2010, the Company had cash and cash equivalents of $4,352,300. This was up from $2,325,200 at the end of 2009. The Company remains debt free.

Arnold Tenney, Stellar's President and Chief Executive Officer commented, "We are very pleased to have built upon our record of achieving a substantial increase in profit. This is especially true in light of the significant one-time charges that were recorded this year. The Company's objective is to continue to pursue opportunities in licensing new products within Canada and out licensing NeoVisc and Uracyst throughout the world."

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 2010   2009  
CURRENT        
Cash and cash equivalents $ 4,352,285   $ 2,325,212  
Accounts receivable, net of allowance of $nil (2009 - $nil)   493,370     293,565  
Inventories   611,676     721,061  
Taxes recoverable   -     1,501  
Loan receivable   15,814     15,818  
Prepaids, deposits and sundry receivables   99,433     163,698  
  Total current assets   5,572,578     3,520,855  
PROPERTY, PLANT AND EQUIPMENT, net   1,568,729     1,390,296  
OTHER ASSETS   139,287     114,553  
  Total assets $ 7,280,594   $ 5,025,704  
LIABILITIES            
CURRENT            
Accounts payable $ 236,420   $ 228,367  
Accrued liabilities   557,735     175,637  
Deferred revenues   8,645     2,890  
Product returns liability   112,500     -  
  Total current liabilities   915,300     406,894  
             
LONG TERM WARRANT LIABILITY   216,823     -  
  Total liabilities   1,132,123     406,894  
             
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            
24,585,040 Common Shares (2009 – 23,480,040)   9,055,982     8,183,638  
  Additional Paid-in capital options - outstanding   211,781     89,562  
  Additional Paid-in capital options - expired   733,517     724,127  
    10,001,280     8,997,327  
DEFICIT   (3,852,809 )   (4,378,517 )
  Total shareholders' equity   6,148,471     4,618,810  
  Total liabilities and shareholders' equity $ 7,280,594   $ 5,025,704  
 
 
STELLAR PHARMACEUTICALS INC.
STATEMENTS OF OPERATIONS
(Expressed in Canadian dollars)
FOR THE YEARS ENDED DECEMBER 31
 
  2010 2009
         
PRODUCT SALES $ 2,714,935 $ 3,000,062
ROYALTIES & LICENSING REVENUE   2,022,383   581,230
  TOTAL REVENUE FROM ALL SOURCES   4,737,318   3,581,292
COST OF PRODUCTS SOLD   947,069   1,001,871
EXPIRED PRODUCTS   120,328  
PRODUCT RETURNS ALLOWANCE   75,160  
GROSS PROFIT   3,594,761   2,579,421
EXPENSES        
  Selling, general and administrative *   2,488,278   2,278,530
  Retirement payout   401,000  
  Change in warrant liability   10,048  
  Loss on disposal of equipment   15,308  
  Research and development   115,471   18,107
  Amortization of assets (non-manufacturing property, plant and equipment)   49,720   55,822
    3,079,825   2,352,459
INCOME FROM OPERATIONS   514,936   226,962
INTEREST AND OTHER INCOME   10,772   11,962
NET INCOME FOR THE YEAR (before tax)   525,708   238,924
INCOME TAXES    
NET INCOME $ 525,708 $ 238,924
EARNINGS PER SHARE        
  - Basic $ 0.02 $ 0.01
  - Diluted $ 0.02 $ 0.01
WEIGHTED AVERAGE NUMBER OF COMMON        
SHARES OUTSTANDING        
  - Basic   23,767,369   23,498,889
  - Diluted   23,767,369   23,498,889
 
 
STELLAR PHARMACEUTICALS INC.
STATEMENTS OF CASH FLOWS
(Expressed in Canadian dollars)
FOR THE YEARS ENDED DECEMBER 31
 
  2010   2009  
CASH FLOWS PROVIDED BY OPERATING ACTIVITIES            
  Net income $ 525,708   $ 238,924  
  Items not affecting cash            
  Amortization   104,042     108,492  
  Loss on disposal of equipment   15,308     ––  
  Unrealized foreign exchange (gain) loss   ––     24,203  
  Issuance of equity instruments for services rendered   4,000     ––  
  Change in warrant liability   10,048     ––  
  Stock-based compensation   166,400     55,352  
  Change in non-cash operating assets and liabilities   483,754     26,143  
CASH FLOWS PROVIDED BY OPERATING ACTIVITIES   1,309,260     453,114  
             
CASH FLOWS PROVIDED BY (USED IN) INVESTING ACTIVITIES            
  Additions to property, plant and equipment   (307,920 )   (155,630 )
  Increase in other assets   (27,224 )   (26,230 )
  Proceeds from sale of equipment   12,630     ––  
CASH FLOWS PROVIDED BY INVESTING ACTIVITIES   (322,514 )   (181,860 )
             
CASH FLOWS PROVIDED BY FINANCING ACTIVITIES            
  Repurchase of Common Shares for cash   ––     (30,357 )
  Stock options exercised   69,000     ––  
  Issuance costs   (42,273 )   ––  
  Private placement units issued for cash   1,013,600     ––  
CASH FLOWS PROVIDED BY FINANCING ACTIVITIES   1,040,327     (30,357 )
             
EFFECT OF EXCHANGE RATES ON CASH HELD IN
FOREIGN CURRENCY
  ––     (21,650 )
CHANGE IN CASH AND CASH EQUIVALENTS   2,027,073     219,246  
             
CASH AND CASH EQUIVALENTS, beginning of year   2,325,212     2,105,966  
CASH AND CASH EQUIVALENTS, end of year $ 4,352,285   $ 2,325,212  

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