EXHIBIT 99.1
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Press Release
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Source: Stellar Pharmaceuticals Inc.
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Stellar Pharmaceuticals Reports First Quarter 2011 Financial Results
LONDON, ONTARIO — May 16, 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 quarter ended March 31, 2011. 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).
For the three month period ended March 31, 2011, Stellar's total revenues were $634,000 as compared to $577,900 for the same period in 2010. The Company noted that the increase in total revenues was driven by a 52.2% growth in product sales to international markets, while the Canadian market sales experienced a 1.7% decrease in product sales. Gross margin as a percentage of sales increased to 73.0% for the quarter end March 31, 2011, from 64.7% for the same period ended March 31, 2010.
Operating expenses for the first quarter of 2011, increased $161,100, to $769,000 compared with $607,900 for the first quarter of 2010. In addition to increased business development expenses, factors also contributing to the increase in operating expenses were several non-cash transactions. These non-cash transactions included the following:
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●
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share option expense in the first quarter of 2011 of $63,800, (includes $21,700 related to options which fully vested upon the retirement of an officer of the Company) compared to $33,900 during the same period in 2010;
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amortization expense in the first quarter of 2011 of $12,100 compared to $26,800 during the same period in 2010;
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warranty liability expense in the first quarter of 2011 of $39,300 related to the re-valuation of warrants, compared to $nil during the same period in 2010; and
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foreign currency exchange expense in the first quarter of 2011 of $45,600, compared to $20,200 during the same period in 2010.
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Net loss from continuing operations for the three month period ended March 31, 2011 was $302,900 or $0.01 per share, compared to $247,500 or $0.01 per share in the first quarter of 2010.
At March 31, 2011 the Company had $3.7 million in cash and cash equivalents, a decrease of $0.6 million over the December 31, 2010 balance of $4.4 million. The primary reason for the decrease was a $0.4 million retirement payout to an executive office of the Company.
Arnold Tenney, Stellar's President and Chief Executive Officer, commented, "Stellar ended the first quarter of 2011, in a strong financial position, with an increase of 9.7% in total revenues, no short or long tem debt and working capital of $4.5 million. We continue to evaluate all opportunities at supporting growth and improving our position both in Canada and international markets.”
Stellar Q1 2011 Results
Page 2 of 5
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.
CONTACTS:
Company Contact
Arnold Tenney
President & CEO
Stellar Pharmaceuticals Inc.
(519) 434-1540
email – arnoldt@stellarpharma.com
Stellar Q1 2011 Results
Page 3 of 5
STELLAR PHARMACEUTICALS INC.
CONDENSED INTERIM BALANCE SHEETS
(Expressed in Canadian dollars)
(Unaudited)
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CURRENT
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As at March 31,
2011
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As at December 31,
2010
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|||||||
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Cash and cash equivalents
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$
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3,738,181
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$
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4,352,285
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|||||
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Accounts receivable, net of allowance of $nil (2010 - $nil)
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355,769
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493,370
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|||||||
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Inventories
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795,775
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611,676
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|||||||
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Taxes recoverable
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28,233
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-
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|||||||
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Loan receivable
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15,814
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15,814
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|||||||
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Prepaids, deposits and sundry receivables
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120,151
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99,433
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|||||||
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Total current assets
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5,053,923
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5,572,578
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|||||||
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PROPERTY, PLANT AND EQUIPMENT, net
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1,543,097
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1,568,729
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|||||||
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OTHER ASSETS
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142,142
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139,287
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|||||||
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Total assets
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$
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6,739,162
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$
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7,280,594
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|||||
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LIABILITIES
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|||||||||
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CURRENT
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|||||||||
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Accounts payable
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$
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106,854
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$
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236,420
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|||||
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Accrued liabilities
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348,129
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557,735
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|||||||
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Deferred revenues
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833
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8,645
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Product returns liability
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112,500
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112,500
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Total current liabilities
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568,316
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915,300
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LONG TERM WARRANT LIABILITY
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256,069
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216,823
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|||||||
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Total liabilities
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824,385
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1,132,123
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CONTINGENCIES AND COMMITMENTS
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|||||||||
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SHAREHOLDERS’ EQUITY
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|||||||||
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CAPITAL STOCK
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|||||||||
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AUTHORIZED
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|||||||||
| Unlimited Non-voting, convertible redeemable and retractable | |||||||||
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preferred shares with no par value
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|||||||||
| Unlimited Common Shares with no par value | |||||||||
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ISSUED
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|||||||||
| 24,585,040 Common Shares (2010 – 24,585,040) |
9,055,982
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9,055,982
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|||||||
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Shares to be issued
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5,466
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-
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Additional Paid-in capital options - outstanding
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213,293
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211,781
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|||||||
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Additional Paid-in capital options - expired
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795,740
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733,517
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10,070,481
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10,001,280
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DEFICIT
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(4,155,704
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)
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(3,852,809
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)
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|||||
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Total shareholders’ equity
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5,914,777
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6,148,471
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|||||||
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Total liabilities and shareholders’ equity
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$
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6,739,162
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$
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7,280,594
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Stellar Q1 2011 Results
Page 4 of 5
STELLAR PHARMACEUTICALS INC.
CONDENSED INTERIM STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS AND DEFICITS
(Expressed in Canadian dollars)
(Unaudited)
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For the Three Month Period
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||||||||
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Ended March 31,
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||||||||
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2011
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2010
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PRODUCT SALES
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$
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631,276
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$
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549,510
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ROYALTIES & LICENSING REVENUE
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2,766
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28,369
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||||||
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TOTAL REVENUE FROM ALL SOURCES
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634,042
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577,879
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||||||
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COST OF PRODUCTS SOLD
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171,396
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203,757
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||||||
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GROSS PROFIT
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462,646
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374,122
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EXPENSES
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||||||||
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Selling, general and administrative
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704,055
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567,932
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Change in warranty liability
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39,246
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-
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Research and development
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13,678
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26,270
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Amortization of assets (non-manufacturing property, plant and equipment)
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12,062
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13,663
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769,041
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607,865
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|||||||
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LOSS FROM OPERATIONS
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(306,395
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)
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(233,743
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)
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INTEREST AND OTHER INCOME
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3,500
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1,513
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LOSS ON DISPOSAL OF EQUIPMENT
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-
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(15,308
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)
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NET LOSS AND COMPREHENSIVE LOSS FOR THE PERIOD
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(302,895
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)
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(247,538
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)
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DEFICIT, beginning of period
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(3,852,809
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)
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(4,378,517
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)
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DEFICIT, end of period
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$
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(4,155,704
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)
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(4,626,055
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)
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LOSS PER SHARE - Basic and diluted
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$
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(0.01
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)
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$
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(0.01
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)
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WEIGHTED AVERAGE NUMBER OF COMMON
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||||||||
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SHARES OUTSTANDING - Basic and diluted
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24,585,040
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23,480,040
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Stellar Q1 2011 Results
Page 5 of 5
STELLAR PHARMACEUTICALS INC.
CONDENSED INTERIM STATEMENTS OF CASH FLOWS
(Expressed in Canadian dollars)
(Unaudited)
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For the Three Month Period
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||||||||
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Ended March 31,
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||||||||
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2011
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2010
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|||||||
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CASH FLOWS USED IN OPERATING ACTIVITIES
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||||||||
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Net loss
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$
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(302,895
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)
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$
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(247,538
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)
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Items not affecting cash
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||||||||
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Amortization
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26,722
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26, 785
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Loss on disposal of equipment
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––
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15,308
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Stock-based compensation
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63,735
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33,947
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Change in warrant liability
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39,246
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––
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||||||
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Issuance of equity instruments for services rendered
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5,466
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––
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||||||
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Change in non-cash operating assets and liabilities
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(442,435
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)
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(140,920
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)
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CASH FLOWS USED IN OPERATING ACTIVITIES
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(610,161
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)
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(312,419
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)
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CASH FLOWS PROVIDED BY (USED IN) INVESTING ACTIVITIES
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||||||||
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Additions to property, plant and equipment
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––
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(221,853
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)
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Increase in other assets
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(3,943
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)
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(8,014
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)
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Proceeds from sale of equipment
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––
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12,630
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||||||
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CASH FLOWS USED IN INVESTING ACTIVITIES
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(3,943
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)
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(217,237
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)
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CHANGE IN CASH AND CASH EQUIVALENTS
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(614,104
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)
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(529,655
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)
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CASH AND CASH EQUIVALENTS, beginning of period
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4,352,285
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2,325,212
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||||||
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CASH AND CASH EQUIVALENTS, end of period
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$
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3,738,181
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$
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1,795,557
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#####