Zila, Inc. Reports Fiscal 2007 Fourth Quarter and Full Year Results.PHOENIX -- In the Income Statement table of the earnings release dated October 15, 2007, for the three months ended July 31, 2007, the General and administrative figure should read 5,574 (sted 1,743) and the Research and development figure should read 1,743 (sted 5,574). The corrected release reads: ZILA, INC inc - /ink/ increment, i.e. increase by one. Especially used by assembly programmers, as many assembly languages have an "inc" mnemonic. Antonym: dec. . REPORTS FISCAL 2007 FOURTH QUARTER AND FULL YEAR RESULTS Zila, Inc. (Nasdaq:ZILA) reported its financial results for the fiscal 2007 fourth quarter and full year ended July 31, 2007. For all periods presented, financial results include results of operations for Professional Dental Technologies, Inc. ("Pro-Dentec"), which was acquired on November 28, 2006, and exclude results of operations for businesses that were divested during fiscal 2007, which are now accounted for in discontinued operations Discontinued operations Divisions of a business that have been sold or written off and that no longer are maintained by the business. . Zila divested its nutraceuticals business unit and Peridex([R]) brand in the fiscal 2007 first quarter and fourth quarter, respectively. Fiscal 2007 Financial Results Net revenues increased 921% to approximately $28.8 million compared with net revenues of approximately $2.8 million for fiscal 2006. This growth was largely driven by our acquisition of Pro-Dentec, as well as its effect on ViziLite([R]) Plus revenues. ViziLite Plus revenues grew by 143% to $6.6 million, primarily as a result of Zila's improved ability to directly sell ViziLite([R])Plus to dental offices through Pro-Dentec's national sales organization. In the fourth quarter of fiscal 2006 and the first quarter of 2007, ViziLite([R]) Plus net revenues fell as the company modified its primary channel of distribution in anticipation of the Pro-Dentec acquisition. * Gross profit as a percentage of net revenues was 59% compared with 32% for fiscal 2006. Prior year's gross profit reflects the company's distributor-only business model as well as the impact of discounts and incentives offered in support of the launch of ViziLite([R]) Plus. * Marketing and selling expenses were $14.4 million compared with $5.6 million in fiscal 2006 primarily reflecting the acquisition of the Pro-Dentec selling and marketing capabilities, including its dedicated national sales force. To a lesser extent, marketing and selling expenses grew due to the company's continuing efforts to establish ViziLite([R]) Plus as the standard of care for dental offices in the detection of oral abnormalities. * General and administrative expenses were $15.1 million compared with $10.5 million for fiscal 2006. Approximately $3.6 million of this increase related to general and administrative expenses for Pro-Dentec, including approximately $0.5 million in expenses associated with the operational integration of this business. In addition, in the fourth quarter of fiscal 2007, the company incurred $1.9 million in costs related to restructuring restructuring - The transformation from one representation form to another at the same relative abstraction level, while preserving the subject system's external behaviour (functionality and semantics). and streamlining its operations. * Research and development expenses increased 6% to $7.5 million from $7.2 million in fiscal 2006. Research and development expenses primarily were comprised of costs for the OraTest OraTest® ENT A toluidine blue mouthrinse for detecting oral cancer, specifically SCC which accounts for 95% of oral CA. See Oral cancer, Toluidin blue. ([R]) regulatory program. * Depreciation and amortization expenses increased 106% to $2.9 million from $1.4 million for fiscal 2006, primarily due to the acquisition of Pro-Dentec and its related property, plant, equipment and amortizable am·or·tize tr.v. am·or·tized, am·or·tiz·ing, am·or·tiz·es 1. To liquidate (a debt, such as a mortgage) by installment payments or payment into a sinking fund. 2. intangible assets Intangible Asset An asset that is not physical in nature. Notes: Examples are things like copyrights, patents, intellectual property, and goodwill. These are the opposite of tangible assets. . * Interest expense increased to $7.4 million from $1.9 million for fiscal 2006. The increase includes a non-cash loss of approximately $3.6 million for the write-off Write-Off A reduction in the value of an asset or earnings by the amount of an expense or loss. Companies are able to write off certain expenses that are required to run the business, or have been incurred in the operation of the business and detract from retained revenues. of unamortized debt financing Debt Financing When a firm raises money for working capital or capital expenditures by selling bonds, bills, or notes to individual and/or institutional investors. In return for lending the money, the individuals or institutions become creditors and receive a promise to repay costs and debt discount related to the credit facility. * Loss from continuing operations continuing operations Parts of a business that are expected to be maintained as an ongoing segment of an overall business operation. Income and losses from continuing operations are reported separately if any segments have been discontinued during the was $23.0 million, or $0.41 per common share, which included restructuring costs of $1.9 million and a non-cash loss of $3.6 million related to the retirement of the credit facility. This compares with loss from continuing operations of $26.0 million, or $0.57 per common share, in fiscal 2006. Income from discontinued operations was $9.8 million, or $0.18 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. common share, largely due to gains from the divestitures of the company's nutraceuticals business and Peridex([R]) brand. In fiscal 2006, loss from discounting operations was $3.3 million, or $0.07 per common share. * Cash and cash equivalents at July 31, 2007 grew to $14.9 million from $4.0 million at July 31, 2006. Working capital was $14.3 million at July 31, 2007 compared to $(6.9) million at July 31, 2006. The negative working capital at July 31, 2006 resulted from the classification of the outstanding balance under the credit facility as a current obligation. Fiscal 2007 Fourth Quarter Results * Net revenues were $10.4 million compared with net revenues of $0.1 million in the fourth quarter of fiscal 2006 and $10.9 million in the fiscal 2007 third quarter. Net revenues were down in the fiscal 2007 fourth quarter compared with the fiscal 2007 third quarter due to seasonality of the company's business. Net revenues for ViziLite Plus were $2.7 million, an increase of 8%, compared with $2.5 million for the third quarter of fiscal 2007. The growth in net revenues for the fourth quarter of fiscal 2007 compared to the prior year was largely driven by the acquisition of Pro-Dentec and the positive impact of direct selling Direct selling is the marketing of products or services to consumers through sales tactics including presentations, demonstrations, and phone calls. It is sometimes also considered to be a sale that does not utilize a "middle man" such as a retail outlets, distributors or brokers. on ViziLite([R])Plus revenues. * Gross profit as a percentage of net revenues for both the fiscal 2007 fourth quarter and third quarter was 61%. * Loss from continuing operations was $5.8 million, or $0.09 per common share, compared to a loss from continuing operations of $7.9 million, or $0.17 per common share, in the prior year fourth quarter. In fiscal 2007 fourth quarter, the company restructured and streamlined its operations to reduce future overhead costs overhead costs see fixed costs. by approximately $3.0 million and incurred approximately $1.9 million of additional general and administrative costs administrative costs, n.pl the overhead expenses incurred in the operation of a dental benefits program, excluding costs of dental services provided. for severance The act of dividing, or the state of being divided. The term severance has unique meanings in different branches of the law. Courts use the term in both civil and criminal litigation in two ways: first, when dividing a lawsuit into two or more parts, and second, when , professional fees, and settlement costs. Income from discontinued operations was $3.3 million, or $0.05 per diluted common share, due primarily to the gain on the divestiture The breakup of AT&T. By federal court order, AT&T divested itself on January 1, 1984 of its 23 operating companies, which became known as the Regional Bell Operating Companies (RBOCs). of the Peridex([R]) brand. This compares to a loss from discontinued operations of $1.2 million, or $0.03 per common share, in the fiscal 2006 fourth quarter. Fiscal 2007 Business Highlights * Transitioned to a company dedicated to the prevention, detection and treatment of oral diseases, with a primary oral cancer focus, by acquiring Pro-Dentec and divesting two non-core business units. * Modified the terms of the senior secured convertible notes on August 13, 2007 to, among other things, improve liquidity, by reducing the required minimum cash, deferring the EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) A metric used to show a company's profitability, but not its cash flow. EBITDA became popular in the 1980s to show the potential profitability of leveraged buyouts, but has become covenant and allowing future interest to be paid in kind with common stock. * Restructured and streamlined the company's organizational structure  This article has no lead section.To comply with Wikipedia's lead section guidelines, one should be written. to reduce overhead costs by approximately $3.0 million annually. * Concluded that the incremental Additional or increased growth, bulk, quantity, number, or value; enlarged. Incremental cost is additional or increased cost of an item or service apart from its actual cost. market potential for OraTest([R]), considering the availability of ViziLite([R]) Plus with TBlue630[TM] and uncertain outcomes of the current study, does not justify the incremental costs Costs which are additional costs to the Service appropriations that would not have been incurred absent support of the contingency operation. See also financial management. with continuing the program in its current form. "With this strategic re-direction of the Company, we now posses the operational capabilities to realize the market opportunity for ViziLite Plus in oral cancer screening. I look forward to supporting Frank Bellizzi and the rest of the Zila Management team in carrying out the fiscal 2008 business plan and increasing shareholder value," stated David R. Bethune, Executive Chairman of Zila. Conference Call Dial-In Information The Company will host a teleconference and webcast, which is scheduled to begin at 1:30 p.m. PT (4:30 p.m. ET) on October 16, 2007. To participate in the teleconference, please call toll-free by dialing (800) 218-0530 (domestic) or (303) 262-2211 (international) approximately 10 minutes prior to the above start time. You may also listen to the teleconference live via the Internet by visiting the "Event Calendar" in the "News" section of Zila's website, www.zila.com. For those unable to attend, the website will host an archive of the call. A telephonic replay will be available for approximately 48 hours following the conclusion of the call by dialing (800) 405-2236 (domestic) or (303) 590-3000 (international), and entering passcode 11098923. About Zila, Inc. Zila, Inc. is a specialty pharmaceutical company dedicated to the prevention, detection and treatment of oral diseases, with a primary focus on oral cancer. ViziLite([R]) Plus, the company's flagship product A primary product of a company, which is typically why the company was founded and/or what made it well known. For example, MS-DOS, Windows and the Microsoft Office suite have been flagship products of Microsoft. CorelDRAW is a flagship product of Corel Corporation. , is rapidly enhancing the standard of care for the early detection of oral abnormalities that could lead to cancer. In addition, Zila designs, manufactures and markets a suite of proprietary products sold exclusively and directly to dental professionals for periodontal disease Periodontal Disease Definition Periodontal diseases are a group of diseases that affect the tissues that support and anchor the teeth. Left untreated, periodontal disease results in the destruction of the gums, alveolar bone (the part of the jaws where , including the Rota-dent([R]) Professional Powered Brush, the Pro-Select([R]) Platinum ultrasonic ultrasonic /ul·tra·son·ic/ (-son´ik) beyond the upper limit of perception by the human ear; relating to sound waves having a frequency of more than 20,000 Hz. ul·tra·son·ic adj. 1. scaler and a portfolio of oral pharmaceutical products for both in-office and home-care use. This press release contains forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These forward-looking statements are based largely on Zila's expectations or forecasts of future events, can be affected by inaccurate assumptions and are subject to various business risks and known and unknown uncertainties, a number of which are beyond the Company's control. Therefore, actual results could differ materially from the forward-looking statements contained herein. A wide variety of factors could cause or contribute to such differences and could adversely impact revenue, profitability, cash flows and capital needs. There can be no assurance that the forward-looking statements contained in this press release will, in fact, transpire or prove to be accurate. For a more detailed description of these and other cautionary factors that may affect Zila's future results, please refer to Zila's Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. for its fiscal year ended July 31, 2007. For more information about the company and its products, please visit www.zila.com. [TABLE OMITTED] [TABLE OMITTED] |
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