Helix BioMedix second quarter revenue decreases 32% to $471,000

Aug 3 2012

Helix BioMedix, Inc. (OTCQB: HXBM), a developer of bioactive peptides, today announced financial results for the second quarter ended June 30, 2012.

Second Quarter 2012 Financial and Business Highlights

• Revenue decreased 32% to $471,000 for the second quarter of 2012, compared to $693,000 for the second quarter of 2011.
• The decrease in revenue reflected declines in peptide and consumer product sales, primarily due to order and manufacturing timing, partially offset by increased license fees.
• Net loss was $668,000 for the second quarter of 2012, compared to $625,000 for the same period in 2011.
• Revenue for the first half of 2012 increased 10% to $1,151,000 compared to $1,051,000 for the first half of 2011. The company anticipates continued growth in the second half of the year.
• In July, the company launched Apothederm™ Acne Clarifying Treatment, a new category to the line that complements the brand's anti-aging and skin brightening products.

Second Quarter 2012 Results

Total revenue for the second quarter of 2012 was $471,000, compared to $693,000 for the second quarter of 2011. Revenue in the second quarter reflected declines in peptide and consumer product sales and sales to NuGlow Cosmaceuticals, LLC (NuGlow), an affiliated company, due to the timing of manufacturing and delivery, partially offset by growth in license fees. For the first six months of 2012, revenue increased 10% to $1,151,000 compared to $1,051,000 in the first half of 2011. License fees in the first half of 2012 increased 45%, peptide and consumer product sales decreased 10% and sales to NuGlow declined 2%.

Gross profit for the second quarter of 2012 was $306,000, compared to $340,000 for the second quarter of 2011. Gross margin improved to 65% compared to 49% in the second quarter of 2011, driven by a larger revenue contribution from license fees and better cost of revenue management. For the first six months of 2012, gross profit increased 35% to $777,000, compared to $577,000 in 2011.

Commenting on the results, R. Stephen Beatty, President and Chief Executive Officer of Helix BioMedix, stated, "License fees in the second quarter continued to grow while peptide and consumer product related sales were impacted by the timing of customer orders and manufacturing cycles. Revenue growth for the first six months is up 10% over last year and we anticipate continued growth for the remainder of the year due to our ongoing business development programs and increasing peptide utilization by our customers and partners. We also continued to closely manage product and operating costs, while investing in our marketing and patent efforts to secure future growth opportunities."

Total operating expenses were up less than 1% to $890,000 for the second quarter of 2012, compared to $882,000 in the prior year period.

Net loss for the second quarter of 2012 was $668,000, or $(0.01) per share, compared to a net loss of $625,000, or $(0.01) per share, for the second quarter of 2011. For the first half of 2012, net loss was $1,250,000, or ($0.03) per share, compared to $1,335,000, or ($0.03) per share for the first six months of 2011. The decrease in net loss for the first half of 2012 compared to the same period in the prior year was primarily attributable to growth in license utilization and improved gross profit.

As of June 30, 2012, cash and cash equivalents were $739,000, compared to $1,689,000 at December 31, 2011. The decrease in cash was due primarily to cash used in operations. As previously announced, the company has entered into a $2.0 million line of credit agreement with JP Morgan Chase Bank. The line is currently untapped and available to the company.

Beatty concluded, "Helix BioMedix has successfully improved market penetration with our key customers over the past several years, resulting in strong product and license fee growth. We continue to work aggressively with our customers and partners to maximize utilization of our products, while simultaneously addressing patent and intellectual property matters necessary to protect our key assets. We remain well positioned to grow for the remainder of 2012 and look forward to continued improvement as we work to increase utilization of our peptide products with our customers and consumers."

The company is also announcing the launch of its Apothederm™ Acne Clarifying Treatment. The new product is positioned as a four-in-one treatment that helps to reduce the appearance of blemishes and help prevent future breakouts while helping clean-up sebum and minimize pore size. The clinically tested formulation uses the company's patented SmartPeptide™ oligopeptide-10, based on the skin's natural defense system, in combination with salicylic acid to provide gentle, yet effective action. The product is being promoted to physicians, medical spas and select specialty retailers.

Source Helix BioMedix, Inc.