Alcide Corporation Generates Revenue of $5.8 Million and Profits of $435,000, or $0.16 Per Share; Food Safety Sales Rise 22% in Second Quarter Fiscal 2003.Business Editors/Health/Medical Writers REDMOND Redmond, city (1990 pop. 35,800), King co., W Wash., a suburb of Seattle, on Lake Sammamish; inc. 1912. Its economy centers around computer software (Microsoft Corp. , Wash.--(BUSINESS WIRE)--Jan. 14, 2003 Alcide Corporation (Nasdaq:ALCD ALCD Association of Law Costs Draftsmen ALCD Analogue Libraries on Low-Cost CMOS Digital Process (ESPRIT Project 8030) ) today reported strong growth in food safety sales as its animal health and surface disinfectants channel shows improvement in its fiscal 2003 second quarter, ended Nov. 30, 2002. Second quarter highlights include: -- Sales of SANOVA(R) food antimicrobial increased 22% versus the second quarter last year to $3.5 million. -- The number of meat and poultry processing operations using SANOVA increased 37% to 48 compared to 35 at Nov. 30, 2001. -- Animal Health and Disinfectant sales increased 32% over first fiscal quarter, with a 63% increase internationally. -- Canada approved the use of SANOVA on red meat carcasses. -- UDDERgold(R) 5-Star, the next-generation barrier teat dip was launched at World Dairy Expo in October -- Interest in SANOVA treatment for both beef parts and trim and beef carcasses has increased as a result of prominent contaminated beef recalls and consequent tighter USDA regulations to control E-coli 0157:H7 For the quarter, Alcide earned $435,000, or $0.16 per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share, on revenues of $5.8 million. In the second quarter a year ago, Alcide earned $439,000, or $0.16 per diluted share, on revenues of $5.7 million. In the first six months of the fiscal year, Alcide generated net income of $497,000, or $0.19 per share, on revenues of $10.8 million compared to $760,000, or $0.28 per share, on revenues of $11.1 million in the like period a year earlier. "Second quarter sales results show strong growth in our food safety business and a steady revival in our animal health segment," said Joseph A. Sasenick, chairman and chief executive officer. The Company will host a conference call at 2:00 pm EST EST electroshock therapy. EST abbr. electroshock therapy (11:00 am PST PST Paroxysmal supraventricular tachycardia, see there ) on Jan. 15, 2003. Interested parties should check the website at www.alcide.com SANOVA(R) Food Safety Eight new processing operations were added in the first half of fiscal 2003. Seven additional operations are under construction in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. , of which two were signed in the past few weeks. During the second quarter, Alcide's patented antimicrobial antimicrobial /an·ti·mi·cro·bi·al/ (-mi-kro´be-al) 1. killing microorganisms or suppressing their multiplication or growth. 2. an agent with such effects. intervention A procedure used in a lawsuit by which the court allows a third person who was not originally a party to the suit to become a party, by joining with either the plaintiff or the defendant. process was approved by the Canadian Canadian (kənā`dēən), river, 906 mi (1,458 km) long, rising in NE New Mexico. and flowing E across N Texas and central Oklahoma into the Arkansas River in E Oklahoma. Health authorities for carcass carcass, carcase 1. the body of an animal killed for meat. The head, the legs below the knees and hocks, the tail, the skin and most of the viscera are removed. The kidneys are left in and in most instances the body is split down the middle through the sternum and the vertebral disinfection disinfection, n the process of destroying pathogenic organisms or rendering them inert. disinfection, full oral cavity, n a procedure used to reduce active periodontal disease, usually completed within a certain short time frame. expanding market opportunities for North American North American named after North America. North American blastomycosis see North American blastomycosis. North American cattle tick see boophilusannulatus. red meat processors serving Canadian consumers. John Richards John D. Richard Q.C. (born July 30, 1934) is the Chief Justice of Canada's Federal Court of Appeal. Richard was born in Ottawa and received a Bachelor of Arts degree in Political Science from the University of Ottawa in 1955, followed by his law studies at Osgoode Hall Law , president, attributes the recent and pending expansion of SANOVA use in the red meat industries to three factors. According to according to prep. 1. As stated or indicated by; on the authority of: according to historians. 2. In keeping with: according to instructions. 3. Richards Rich·ards , Dickinson Woodruff 1895-1973. American physician. He shared a 1956 Nobel Prize for developing cardiac catheterization. , "satisfied customers are spreading the word to both their suppliers and associates. In addition, there have been several prominent recalls of ground beef contaminated contaminated, v 1. made radioactive by the addition of small quantities of radioactive material. 2. made contaminated by adding infective or radiographic materials. 3. an infective surface or object. with E-coli 0157:H7 which, in turn, has led directly to SANOVA agreements with two major beef processing operations. Lastly, the USDA USDA, n.pr See United States Department of Agriculture. has tightened controls over both grinding grinding, process by which surface material is removed from an object, usually metal, by the abrasive action of a rotating wheel or a moving belt that contains abrasive grains. operations and slaughter slaughter 1. the killing of animals for the preparation of meat for human consumption. Many methods are used. See also emergency slaughter, captive bolt pistol, carbon dioxide anesthesia, jewish slaughter, muslim slaughter, pithing, puntilla, shechita, sikh slaughter. 2. operations in response to the heightened concern about the prevalence of E-coli 0157:H7 contamination." Richards went on to say that "the new red meat installations will be subject to performance validation See validate. validation - The stage in the software life-cycle at the end of the development process where software is evaluated to ensure that it complies with the requirements. and this will lengthen length·en tr. & intr.v. length·ened, length·en·ing, length·ens To make or become longer. length  en·er n. the time to system installation and revenue
generation. We are confident that SANOVA will meet or exceed the
performance criteria."Sales of SANOVA food antimicrobial to the poultry poultry, domesticated fowl kept primarily for meat and eggs; including birds of the order Galliformes, e.g., the chicken, turkey, guinea fowl, pheasant, quail, and peacock; and natatorial (swimming) birds, e.g., the duck and goose. and red meat industries increased 22% to $3.5 million compared to $2.9 million in the second fiscal quarter last year. Year-to-date Year-to-date (YTD) The period beginning at the start of the calendar year up to the current date. , sales of SANOVA rose 23% to $6.9 million compared to $5.6 million in the first six months a year ago. At the end of the quarter, 38 pre-chill poultry operations and 3 post-chill operations had SANOVA installations in place. In addition, 7 red meat plants had SANOVA operations in place. Three of the poultry operations and 2 of the red meat processing plants did not contribute significant revenue during the quarter either for operational reasons or because of economic conditions within the meat and poultry industries. Kere Kemp n. 1. Coarse, rough hair in wool or fur, injuring its quality. , the Company's chief science officer, commented that "the long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. growth prospect for SANOVA will be enhanced by expansion of the business into international markets. In addition to the Canadian approval for red meat carcasses, we have also been told verbally by the Chilean authorities that SANOVA will be broadly approved in Chile for use on red meat carcasses, parts and trim, poultry carcasses, produce and importantly, farm-raised fish. Chile is the second largest fish exporter in the world and provides more than half of the farm-raised salmon consumed con·sume v. con·sumed, con·sum·ing, con·sumes v.tr. 1. To take in as food; eat or drink up. See Synonyms at eat. 2. a. in the United States. In addition to improving the safety of fresh fish for consumers, SANOVA substantially increases the shelf-life of farm-raised fish and this is particularly meaningful to producers and retailers. Registration documents for use of SANOVA on fish were also submitted in the United States and Canada during the past quarter." Registration approval is a prerequisite pre·req·ui·site adj. Required or necessary as a prior condition: Competence is prerequisite to promotion. n. to introduction of SANOVA in all markets. Animal Health and Surface Disinfectants The mid-October launch of UDDERgold 5-Star, providing new benefits for dairy farmers Dairy Farmers is one of Australia's largest and oldest dairy manufacturers, established in 1900, supplying products to local and international markets such as eastern Europe, the Middle East and Asia. , and changes in several distributor relationships served to depress de·press v. 1. To lower in spirits; deject. 2. To cause to drop or sink; lower. 3. To press down. 4. To lessen the activity or force of something. net sales Net Sales The amount a seller receives from the buyer after costs associated with the sale are deducted. Notes: This amount is calculated by subtracting the following items from gross sales: merchandise returned for credit, allowances for damaged or missing goods, freight in the Animal Health and Surface Disinfectant disinfectant, agent that destroys disease-causing microorganisms and their spores. Disinfectants, or germicides, are sometimes considered to be substances applied to inanimate bodies, whereas antiseptics, not so potent, are agents that kill microbes on living things. segment of Alcide's business. "Many customers and distributors chose to reduce inventory of the older product and delayed orders in anticipation of the newer product. Reception of the new UDDERgold 5-Star product has been good," said James Winter, corporate VP, general manager Animal Health. "One of our largest domestic distributors reports that 95% of their consumers in the western states, when given the choice of UDDERgold 5-Star or UDDERgold Plus, are choosing the new 5-Star formulation formulation /for·mu·la·tion/ (for?mu-la´shun) the act or product of formulating. American Law Institute Formulation . UDDERgold 5-Star provides increased color retention for better application monitoring and improved mastitis mastitis (măstī`tĭs), inflammation of the breast. Mastitis most commonly occurs in nursing mothers between the first and third weeks after childbirth, usually of the first child. protection between milkings. These added benefits represent strong value for farmers, particularly since we did not increase our pricing." "The Company's transition to a new distributor, Agri-Lloyd, in the United Kingdom has been smooth. Second quarter international sales are back up to par," added Winter. International sales for the second quarter were $1.3 million, equal to year ago levels, and up 63% from the first quarter this year. Second quarter Animal Health and Surface Disinfectant sales were $2.0 million, down 29% from $2.8 million in the second quarter a year ago. Year-to-date Animal Health and Disinfectant sales dropped 34% to $3.7 million from $5.5 million in the first six months a year ago. "According to the USDA, milk prices received by dairy farmers were down 12% in 2002. Price declines significantly impact dairy industry profit margins. Consequently, some farmers are electing to use less effective and less expensive alternatives, which we believe accounts for most of the remaining decline in sales," said Winter. "We anticipate demand should improve when the dairy industry rebounds." Balance Sheet Alcide's balance sheet remains strong with no long-term debt Long-Term Debt Loans and financial obligations lasting over one year. Notes: For example debts obligations such as bonds and notes which have maturities greater than one year would be considered long-term debt. and $2 million outstanding on its short-term Short-term Any investments with a maturity of one year or less. short-term 1. Of or relating to a gain or loss on the value of an asset that has been held less than a specified period of time. line of credit, bringing the company's total debt-to-equity ratio Total debt-to-equity ratio A capitalization ratio comparing current liabilities plus long-term debt to shareholders' equity. to 10.7% compared to 11.7% a year ago. Its current ratio was 3.4 to 1 at Nov. 30, 2002, compared to 2.0 to a year ago. About Alcide Alcide Corporation develops and markets unique biocidal bi·o·cid·al adj. Of or relating to an agent that is destructive to living organisms. biocidal (bī´ōsī´d products based on its patented technology. Alcide currently sells anti-infective an·ti-in·fec·tive adj. Capable of preventing or counteracting infection. n. An anti-infective agent or drug. anti-infective 1. counteracting infection. 2. a substance that counteracts infection. products to the animal health market, disinfecting products to medical industries and SANOVA antimicrobial for controlling food borne pathogens and spoilage spoilage decomposition; said of meat, milk, animal feeds especially ensilage. microorganisms Microorganisms Microscopic organisms, such as bacteria, viruses, algae and fungi. Mentioned in: Animal Bite Infections on poultry, red meat and fruits and vegetables. This earnings report includes forward looking statements which involve risk and uncertainty including, without limitation, risk of dependence on third party suppliers, market acceptance of and demand for the Company's products, distribution capabilities, recovery of dairy industry pricing and margins and the timing of such a recovery, if any, and development of technology and regulatory approval thereof.
Alcide Corporation Unaudited Condensed Consolidated Balance Sheets
Assets: Nov. 30, 2002 May 31, 2002
------------- ------------
Current assets:
Cash and cash equivalents $ 2,240,456 $ 2,847,581
Accounts receivable - trade 4,140,841 2,849,103
Inventory 1,955,211 1,823,691
Deferred and prepaid income taxes 246,813 434,200
Spare parts 826,573 652,620
Prepaid expenses and other current
assets 217,830 412,118
------------- ------------
Total current assets 9,627,724 9,019,313
------------- ------------
Equipment and leasehold improvements:
SANOVA plant assets 16,450,310 14,376,961
Construction in progress 2,254,881 3,009,716
Office equipment 562,812 553,539
Laboratory, manufacturing equipment
and vehicles 520,761 451,824
Leasehold improvements 73,483 73,483
Less: Accumulated depreciation and
amortization (7,889,826) (6,118,278)
------------- ------------
Total equipment and leasehold
improvements, net 11,972,421 12,347,245
Goodwill 478,807 478,807
Other assets 16,430 19,968
------------- ------------
Total Assets $22,095,382 $21,865,333
============= ============
Liabilities and Shareholders' Equity:
Current liabilities:
Accounts payable $461,174 $743,514
Accrued expenses 390,816 626,953
Line of credit payable 2,000,000 2,000,000
------------- ------------
Total current liabilities 2,851,990 3,370,467
Deferred tax liability 379,840 94,837
Other long-term liabilities --- 26,346
------------- ------------
Total Liabilities 3,231,830 3,491,650
------------- ------------
Commitments and Contingencies
Redeemable Class "B" Preferred Stock
- noncumulative convertible
$.01 par value: authorized
10,000,000 shares; issued and
outstanding: November 30, 2002
- 63,675; May 31, 2002 - 68,425 167,145 179,614
------------- ------------
Shareholders' equity:
Class "A" Preferred Stock - no par value,
authorized 1,000 shares; issued and
outstanding: November 30, 2002 - 138;
May 31, 2002 - 138 18,636 18,636
Common Stock - $.01 par value; authorized
100,000,000 shares; issued:
November 30, 2002 - 3,032,126; May
31, 2002 - 3,031,292 30,321 30,313
Common treasury stock at cost
November 30, 2002 - 375,959; May 31,
2002 - 375,959 (7,144,721) (7,144,721)
Additional paid-in capital 21,392,164 21,386,417
Retained earnings 4,400,007 3,903,424
------------- ------------
Total Shareholders' Equity 18,696,407 18,194,069
------------- ------------
Total Liabilities and Shareholders' Equity $22,095,382 $21,865,333
============= ============
Alcide Corporation Unaudited Condensed Consolidated Statements Of
Operations
For the Three Months For the Six Months
Ended November 30, Ended November 30,
--------------------------------------------------
2002 2001 2002 2001
---------- ---------- ----------- -----------
Revenue:
Net sales $5,547,795 $5,731,980 $10,563,590 $11,131,810
License revenue 230,757 --- 260,154 ---
---------- ---------- ----------- -----------
Total revenue 5,778,552 5,731,980 10,823,744 11,131,810
Expenditures:
Cost of goods
sold 3,086,117 2,959,125 5,891,395 5,729,825
Research and
development
expense 563,334 863,894 1,153,959 1,403,814
Consulting
expense to
related parties 15,000 19,000 30,000 44,000
Selling, general
and
administrative
expense 1,444,043 1,239,395 2,979,417 2,819,565
---------- ---------- ----------- -----------
Total
expenditures 5,108,494 5,081,414 10,054,771 9,997,204
---------- ---------- ----------- -----------
Operating income 670,058 650,566 768,973 1,134,606
Interest income 6,201 24,317 14,068 52,133
Interest expense (16,805) (21,854) (37,853) (46,958)
Other income 9,645 21,689 18,784 28,939
---------- ---------- ----------- -----------
Income before
provision for
income taxes 669,099 674,718 763,972 1,168,720
Provision for income
taxes 234,185 236,150 267,390 409,051
---------- ---------- ----------- -----------
Net income $ 434,914 $ 438,568 $ 496,582 $ 759,669
========== ========== =========== ===========
Basic earnings per
common share $ .16 $ .17 $ .19 $ .29
========== ========== =========== ===========
Diluted earnings per
common share and
equivalents $ .16 $ .16 $ .19 $ .28
========== ========== =========== ===========
Weighted average
common stock and
dilutive potential
common stock
outstanding:
Basic 2,656,167 2,642,535 2,656,094 2,636,298
Diluted 2,677,684 2,717,691 2,683,300 2,727,872
Alcide Corporation Unaudited Condensed Consolidated
Statements of Cash Flows
For the Six Months
Ended November, 30
----------------------
2002 2001
----------------------
Cash Flows from Operating Activities:
Net income $496,582 $759,669
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation 1,783,149 1,279,929
Amortization of investment premiums --- 483
Tax benefit from exercise of stock options --- 73,262
Deferred income taxes 267,390 359,008
Common stock issued to employee stock
ownership plan --- 138,444
Decrease (increase) in assets:
Accounts receivable - trade (1,291,738)(1,382,318)
Inventory (131,520) (38,047)
Prepaid income taxes 205,000 72,380
Spare parts (173,953) (136,556)
Prepaid expenses and other current assets 194,288 182,486
Other assets 3,539 13,954
Increase (decrease) in liabilities:
Accounts payable (282,340) 413,992
Accrued expenses (236,137) (96,637)
Other long-term liabilities (26,346) ---
----------------------
Net cash provided by operating activities 807,914 1,640,049
----------------------
Cash Flows from Investing Activities:
Sale of investments --- 500,770
Acquisition of equipment, net (1,408,325)(3,521,262)
----------------------
Net cash used in investing activities (1,408,325)(3,020,492)
----------------------
Cash Flows from Financing Activities:
Redemption of Class "B" Preferred Stock (12,469) (10,763)
Borrowing on line of credit --- 1,000,000
Exercise of stock options 5,755 80,782
----------------------
Net cash (used in) provided by financing
activities (6,714) 1,070,019
----------------------
Net decrease in cash and cash equivalents (607,125) (310,424)
Cash and cash equivalents at beginning of
period 2,847,581 839,103
----------------------
Cash and cash equivalents at end of period $2,240,456 $528,679
======================
Supplemental Disclosures of Cash Flow
Information:
Cash paid during the period for income taxes --- $10,000
Cash paid during the period for interest $37,853 $46,958
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