Helix BioMedix first quarter revenue up 90% to $680,000

May 11 2012

Helix BioMedix, Inc. (OTCQB: HXBM), a developer of bioactive peptides, today announced financial results for the first quarter ended March 31, 2012.

“The first quarter reflects continued execution across our business lines. Revenue improved significantly from the prior year quarter, driven by growth in both license activity and sales of peptide and consumer products. Sales to NuGlow continued to increase, driven by higher customer adoption.”

First Quarter 2012 Financial and Business Highlights

• Revenue increased 90% to $680,000, compared to $358,000 for the same period in 2011.
• The year-over-year increase in revenue reflected a 120% increase in consumer product sales to NuGlow Cosmaceuticals, LLC, an affiliated company, an 87% increase in peptide and consumer product sales to non-affiliates and an 84% increase in licensing revenue.
• Net loss decreased to $582,000, compared to $710,000 for the same period in 2011.
• The company strengthened its capital resources through a $2.0 million line of credit with JP Morgan Chase Bank, N.A.

First Quarter 2012 Results

Total revenue for the first quarter of 2012 was $680,000, compared to $358,000 for the first quarter of 2011. The 90% year-over-year increase in revenue included an 87% growth in peptide and consumer product sales to non-affiliates, reflecting a higher volume of peptide utilizations by our ingredient distributors as well as stronger demand for our skin care products. License revenue increased 84% compared to the prior year, driven by higher volumes with licensees. Sales to NuGlow Cosmaceuticals, LLC, an affiliated company, increased 120% to $113,000 in the first quarter of 2012, reflecting ramped up sales of NuGlow products to target consumers.

Gross profit for the first quarter of 2012 was $471,000, compared to $237,000 for the first quarter of 2011, representing an increase of 99%. The improved gross profit was derived from higher royalties as well as growth in sales of peptides and consumer products.

Commenting on the results, R. Stephen Beatty, President and Chief Executive Officer of Helix BioMedix, stated, "The first quarter reflects continued execution across our business lines. Revenue improved significantly from the prior year quarter, driven by growth in both license activity and sales of peptide and consumer products. Sales to NuGlow continued to increase, driven by higher customer adoption."

Total operating expenses were $1.0 million for the first quarter, compared to $963,000 in the prior year period. Marketing and business development expenses increased 48% year-over-year due to higher advertising costs and stock-based compensation expenses. Research and development decreased by 61% compared to the prior year period, reflecting reduced R&D staffing and lower research expenses recorded in the quarter.

Net loss for the first quarter of 2012 was $582,000, or $(0.01) per share, compared to a net loss of $710,000, or $(0.01) per share, for the first quarter of 2011. The decrease in net loss for 2012 compared to the prior year reflects revenue growth combined with continued operating expense controls as Helix BioMedix product volumes and license utilization have increased.

As of March 31, 2012, cash and cash equivalents were $1.2 million, compared to $1.7 million at December 31, 2011. The decrease in cash was due primarily to cash used in operations during the quarter. In addition, a $2.0 million line of credit with JP Morgan Chase Bank, N.A. was established in March 2012 on the company's behalf by its largest stockholder with JP Morgan Chase Bank, N.A. The line of credit has a maturity date of July 1, 2013 but will automatically renew until July 1, 2014 unless terminated by JP Morgan at least 14 days prior to the maturity date, at which time the company may draw up to the balance remaining on the line of credit. Amounts outstanding under the line of credit bears an interest rate of 0.75% per annum and are due and payable on or before July 1, 2014.

Beatty concluded, "Helix BioMedix continues to build on its improved market position, broadened distribution channels and increased customer base. We have closely controlled operating expenses as revenue ramped over the past year, but we anticipate higher patent expenses related to the nationalization process of new patent grants during the remainder of the year. We are working closely with our customers and partners to further expand utilization of our peptides and provide greater support for their new product development and sales efforts. We look forward to continued progress in 2012."