KINDERHOOK, N.Y.--(BUSINESS WIRE)--American Bio Medica Corporation (OTCQB:ABMC) today announced financial results for the three and nine months ended September 30, 2013, and commented on the recent death of its former CEO Stan Cipkowski; Cipkowski passed away unexpectedly on October 31, 2013.
Cipkowski was the founder of ABMC and the inventor of the Company’s first product line, the Rapid Drug Screen®. “Stan was one-of-a-kind and a visionary who made an unforgettable mark on the drug testing industry and on the lives of the many colleagues he inspired and influenced, and family and friends he loved and enjoyed.” said Melissa A. Waterhouse, interim Chief Executive Officer, and a long-time colleague of Mr. Cipkowski. "Stan was a dedicated and passionate executive of ABMC for over 30 years, and he will be missed greatly.”
Day to day operations of the Company remained unaffected as Waterhouse was appointed as Chief Financial Officer & Chief Executive Officer on an interim basis on October 30, 2013 after the Company became aware that Mr. Cipkowski was no longer able to serve the Company. Waterhouse continued, “Through our continuation plan, business functions at ABMC continue to run smoothly and I want to assure our customers, investors, vendors and creditors that our objective is to move the company forward. ”
The Company is also reporting its results of operations for the third quarter 2013. Net sales for the third quarter of 2013 were $2,257,000, compared to $2,283,000 in the third quarter of 2012, representing a decrease of $26,000, or 1.1%. For the nine months ended September 30, 2013, net sales were $6,762,000, compared to $7,041,000 for the nine months ended September 30, 2012, representing a decrease of $279,000, or 4.0%.
The Company reported an operating loss of $(286,000) in the third quarter of 2013, compared to an operating loss of $(229,000) in the third quarter of 2012. Net loss for the third quarter of 2013 was $(213,000), or $(0.01) per share, compared to a net loss of $(264,000), or $(0.01) per share in the third quarter of 2012. Operating loss for the nine months ended September 30, 2013 was $(860,000), compared to an operating loss of $(427,000) in the nine months ended September 30, 2012. Net loss for the nine months ended September 30, 2013 was $(933,000), or $(0.04) per share, compared to a net loss of $(546,000), or $(0.03) per share in the nine months ended September 30, 2012.
Waterhouse stated, “While we continue to experience sales declines, it does appear that to date in 2013, the rate of decline has improved. From an expense standpoint, while FDA compliance costs were at unprecedented levels in the third quarter due to expenses related to our oral fluid marketing clearance application filed in September 2013; we do not expect expenses at this level going forward. Also, in August 2013, we implemented a number of additional expense and personnel cuts, as well as a salary and commission deferral program. The salary deferral program consists of a 20% salary deferral for executive officers and senior management. While we felt some impact of these reductions in the third quarter 2013, full impact is being felt here in the fourth quarter.”
Waterhouse continued, “The unexpected not substantially equivalent determination by FDA this month (related to our OralStat product) is expected to have a negative impact on sales levels for the near future, but we are already discussing our application with FDA through legal counsel and regulatory consultants so we may take actions to resubmit a new 510(k) marketing application as quickly as possible. Within the next few months, we expect to receive benefits from the key man insurance policy we maintained on Mr. Cipkowski, and this will allow us to move forward with actions to obtain marketing clearance and to commercialize a new urine-based product for clinical and possibly consumer markets. In the meantime, and we will continue to focus on sales to physicians and pain management clinics, with our CLIA waived Rapid TOX product line, as well as refocusing our sales efforts of OralStat to the forensic and international markets.”
For more information on ABMC or its drug testing products, please visit www.abmc.com.
About American Bio Medica Corporation
American Bio Medica Corporation develops, manufactures and markets accurate, cost-effective immunoassay test kits, primarily point of collection tests for drugs of abuse. The Company and its worldwide distribution network target the workplace, government, corrections, clinical and educational markets. ABMC’s Rapid Drug Screen, Rapid ONE®, RDS® InCup®, Rapid TOX® and Rapid TOX Cup® II test for the presence or absence of drugs of abuse in urine, while OralStat® and Rapid STAT™ test for the presence or absence of drugs of abuse in oral fluids. ABMC’s Rapid Reader® is a compact, portable device that, when connected to any computer, interprets the results of an ABMC drug screen, and sends the results to a data management system, enabling the test administrator to easily manage their drug testing program.
This release may contain forward-looking statements. These forward-looking statements involve risks and uncertainties that could cause actual results to differ, and such differences could be material. Such risks and uncertainties include, but are not limited to, risks and uncertainties related to the following: continued acceptance of our products, increased levels of competition in our industry, acceptance of new products, product development, compliance with regulatory requirements, including but not limited to our ability to obtain marketing clearance on our OralStat product, intellectual property rights, our dependence on key personnel, third party sales and suppliers, trading in our common shares may be subject to “penny stock” rules, our history of recurring net losses and our ability to continue as a going concern. There can be no assurance that the Company will be successful in addressing such risks and uncertainties and the Company assumes no duty to update any forward-looking statements based upon actual results. Investors are strongly encouraged to review the section entitled “Risk Factors” in the Company's annual report on Form 10-K for the year ended December 31, 2012, quarterly reports on Form 10-Q, and other periodic reports on file with the Securities and Exchange Commission for a discussion of risks and uncertainties that could affect operating results and the market price of the Company's common shares.
(condensed financial tables follow)
| AMERICAN BIO MEDICA CORPORATION | ||||||||||||||||||
| Condensed Statements of Operations | ||||||||||||||||||
| (unaudited) | ||||||||||||||||||
| For the three | For the three | For the nine | For the nine | |||||||||||||||
| months ended | months ended | months ended | months ended | |||||||||||||||
| September 30, 2013 | September 30, 2012 | September 30, 2013 | September 30, 2012 | |||||||||||||||
| Net sales | $ | 2,257,000 | $ | 2,283,000 | $ | 6,762,000 | $ | 7,041,000 | ||||||||||
| Cost of goods sold | 1,351,000 | 1,392,000 | 4,101,000 | 4,145,000 | ||||||||||||||
| Gross profit | 906,000 | 891,000 | 2,661,000 | 2,896,000 | ||||||||||||||
| Operating expenses: | ||||||||||||||||||
| Research and development | 315,000 | 54,000 | 493,000 | 162,000 | ||||||||||||||
| Selling and marketing | 412,000 | 453,000 | 1,378,000 | 1,503,000 | ||||||||||||||
| General and administrative | 465,000 | 613,000 | 1,650,000 | 1,658,000 | ||||||||||||||
| Total operating expenses | 1,192,000 | 1,120,000 | 3,521,000 | 3,323,000 | ||||||||||||||
| Operating loss | (286,000 | ) | (229,000 | ) | (860,000 | ) | (427,000 | ) | ||||||||||
| Other income / (expense) | 70,000 | (35,000 | ) | (75,000 | ) | (121,000 | ) | |||||||||||
| Loss before tax | (216,000 | ) | (264,000 | ) | (935,000 | ) | (548,000 | ) | ||||||||||
| Income tax (expense) / benefit | 3,000 | 0 | 2,000 | 2,000 | ||||||||||||||
| Net loss | $ | (213,000 | ) | $ | (264,000 | ) | $ | (933,000 | ) | $ | (546,000 | ) | ||||||
| Basic & diluted loss per common share | $ | (0.01 | ) | $ | (0.01 | ) | $ | (0.04 | ) | $ | (0.03 | ) | ||||||
| Weighted average shares outstanding – basic and diluted |
22,166,336 |
21,833,003 |
22,128,623 |
21,833,003 |
||||||||||||||
(Condensed Balance Sheets follow)
| American Bio Medica Corporation | ||||||||||
| Condensed Balance Sheets | ||||||||||
| September 30, | December 31, | |||||||||
|
2013
(unaudited) |
2012 | |||||||||
| ASSETS | ||||||||||
| Current Assets | ||||||||||
| Cash and cash equivalents | $ | 63,000 | $ | 89,000 | ||||||
|
Accounts receivable, net of allowance for doubtful accounts of |
952,000 |
810,000 |
||||||||
|
Inventory, net of allowance for slow moving and obsolete inventory |
2,176,000 |
2,571,000 |
||||||||
| Prepaid expenses and other current assets | 63,000 | 50,000 | ||||||||
| Total current assets | 3,254,000 | 3,520,000 | ||||||||
| Property, plant and equipment, net | 1,135,000 | 1,192,000 | ||||||||
| Debt issuance costs, net | 95,000 | 29,000 | ||||||||
| Patents | 27,000 | 24,000 | ||||||||
| Other assets | 14,000 | 14,000 | ||||||||
| Total assets | $ | 4,525,000 | $ | 4,779,000 | ||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||||
| Current liabilities | ||||||||||
| Accounts payable | $ | 762,000 | $ | 1,016,000 | ||||||
| Accrued expenses and other current liabilities | 268,000 | 174,000 | ||||||||
| Wages payable | 277,000 | 231,000 | ||||||||
| Line of credit, net of debt discount | 863,000 | 321,000 | ||||||||
| Current portion of long-term debt | 1,288,000 | 1,404,000 | ||||||||
| Total current liabilities | 3,458,000 | 3,146,000 | ||||||||
| Other liabilities | 147,000 | 145,000 | ||||||||
| Related party note | 124,000 | 124,000 | ||||||||
| Total liabilities | 3,729,000 | 3,415,000 | ||||||||
| COMMITMENTS AND CONTINGENCIES | ||||||||||
| Stockholders’ Equity: | ||||||||||
| Common stock | 222,000 | 218,000 | ||||||||
| Additional paid-in capital | 19,851,000 | 19,490,000 | ||||||||
| Accumulated deficit | (19,277,000 | ) | (18,344,000 | ) | ||||||
| Total stockholders’ equity | 796,000 | 1,364,000 | ||||||||
| Total liabilities and stockholders’ equity | $ | 4,525,000 | $ | 4,779,000 | ||||||