UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

 

FORM 8-K

 

CURRENT REPORT

 

Pursuant to Section 13 or 15(d) of

The Securities Exchange Act of 1934

 

 

 

Date of Report (Date of earliest event reported): July 30, 2015

 

PROPHASE LABS, INC.

(Exact name of Company as specified in its charter)

 

Delaware   0-21617   23-2577138

(State or other

jurisdiction of incorporation)

 

(Commission

File Number)

 

(I.R.S. Employer

Identification No.)

 

621 N. Shady Retreat Road

Doylestown, PA

 

 

18901

(Address of principal executive offices)   (Zip Code)

 

Company’s telephone number, including area code: (215) 345-0919

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the Company under any of the following provisions (see General Instruction A.2. below):

 

  [  ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
     
  [  ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
     
  [  ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
     
  [  ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 

 

 
 

 

Item 2.02 Results of Operations and Financial Condition.

 

On August 12, 2015, ProPhase Labs, Inc. issued a press release announcing its financial results for the three months and six months ended June 30, 2015. A copy of the press release is furnished as Exhibit 99.1 to this Form 8-K.

 

The information in this report, including Exhibit 99.1, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, nor shall it be incorporated by reference in any registration statement filed under the Securities Act of 1933, as amended, unless specifically identified therein as being incorporated by reference therein.

 

Item 9.01 Financial Statements and Exhibits.

 

(d) Exhibits

 

No.   Description
     
99.1   Press Release dated August 12, 2015

 

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SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the Company has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

  ProPhase Labs, Inc.
     
  By: /s/ Robert V. Cuddihy, Jr.
    Robert V. Cuddihy, Jr.
    Chief Operating Officer and
    Chief Financial Officer

 

Date: August 12, 2015

 

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INDEX TO EXHIBITS

 

Number   Description
     
99.1   Press Release issued August 12, 2015

 

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EXHIBIT 99.1

 

ProPhase Labs Reports Financial Results

for the Three and Six Months Ended June 30, 2015

 

DOYLESTOWN, Pennsylvania – August 12, 2015. ProPhase Labs, Inc. (NASDAQ: PRPH, www.ProPhaseLabs.com) today reported its net sales were $2.2 million for the three months ended June 30, 2015, as compared to net sales of $1.8 for the three months ended June 30, 2014. The Company realized a net loss for the three months ended June 30, 2015 of $1.6 million, or ($0.10) per share, compared to a net loss of $3.1 million, or ($0.19) per share, for the three months ended June 30, 2014.

 

The Company’s sales are principally derived from its over-the-counter (“OTC”) health care and cold remedy products. As a consequence, a significant portion of our business is highly seasonal, which causes significant variations in operating results from quarter to quarter. The three months ended June 30 is historically our lowest sales period due to the seasonality of our business.

 

Results for the second quarter of 2015 compared to the second quarter of 2014 principally reflect the net effect of (i) an increase in net sales of $394,000, (ii) a decrease in administration costs of $1.2 million due principally to a decrease in professional and legal costs related to certain, now resolved, litigation matters and (iii) a decrease in sales and marketing expenses of $142,000.

 

The Company generated net sales for the six months ended June 30, 2015 of $8.1 million, as compared to $8.0 million for the six months ended June 30, 2014. The Company incurred a net loss for the six months ended June 30, 2015 of $2.9 million, or ($0.18) per share, compared to a net loss of $3.9 million, or ($0.24) per share, for the six months ended June 30, 2014.

 

The financial results for the six months ended June 30, 2015 as compared to the six months ended June 30, 2014 reflect the net effect of (i) an increase in net sales of $83,000, (ii) a decrease in administration costs of $699,000 due principally to a decrease in professional and legal costs related to certain, now resolved, litigation matters, (iii) a decrease in sales and marketing expenses of $327,000 as a consequence of the fluctuation from period to period of the timing and scope of our marketing initiatives and (iv) a decrease in research and development expenditures of $71,000.

 

Ted Karkus, the CEO of the Company, stated, “Our product development efforts have been largely focused on successfully leveraging the Cold-EEZE® brand. To this end, we anticipate that three new product line extensions will be available on retail shelves in the fourth quarter of 2015, (i) Cold-EEZE® Multi-Symptom Relief for Cold and Flu lozenges, (ii) Cold-EEZE® Daytime and Nighttime Multi-Symptom Relief in liquid forms for each of adults and children, and (iii) Cold-EEZEÒ Natural Allergy Relief caplets for indoor and outdoor allergies. Two additional Cold-EEZE® branded products will be introduced to the trade in February of 2016.”

 

Mr. Karkus continued, “In addition to the continued development and commercialization of new Cold-EEZE® branded products, we are also continuing the process of implementing a series of development and pre-commercialization initiatives in the dietary supplement category. We are exploring various ways to introduce these new dietary supplement products to consumers which may include Direct Response TV. While no assurance can be made that our new product efforts will be successful, we continue to anticipate that one or more products in this new category will begin shipping before year end fiscal 2015 or early 2016. Furthermore, over time we may need to raise additional funds through debt financing or equity financing to support all of these strategic initiatives and to provide additional working capital.”

 

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About ProPhase Labs

 

ProPhase Labs is a diversified natural health medical science company. It is a leading marketer of the Cold-EEZE® Cold Remedy brand as well as other cold relief products. Cold-EEZE® Cold Remedy zinc gluconate lozenges are clinically proven to significantly reduce the duration of the common cold. Cold-EEZE® Cold Remedy customers include leading national chain, regional, specialty and local retail stores. ProPhase Labs has several wholly owned subsidiaries including a manufacturing unit, which consists of an FDA registered facility to manufacture Cold-EEZE® Cold Remedy lozenges and fulfill other contract manufacturing opportunities. For more information visit us at www.ProPhaseLabs.com.

 

Except for the historical information contained herein, this document contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements involve a number of risks and uncertainties, including the difficulty of the acceptance and demand for our products, the impact of competitive products and pricing, the timely development and launch of new products, and the risk factors listed from time to time in our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and any subsequent SEC filings

 

Press Only Contact   Investor Contact
Constantine Panagiotatos   Ted Karkus, Chairman and CEO
DKC Public Relations   ProPhase Labs, Inc.
Tel: (212) 981-5124   (215) 345-0919 x 0
ConstantinePanagiotatos@dkcnews.com    

 

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PROPHASE LABS, INC. & SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share amounts)

(unaudited)

 

   Three Months Ended   Six Months Ended 
   June 30, 2015   June 30, 2014   June 30, 2015   June 30, 2014 
                 
Net sales  $2,191   $1,797   $8,051   $7,968 
                     
Cost of sales   1,184    1,005    3,382    3,196 
                     
Gross profit   1,007    792    4,669    4,772 
                     
Operating expenses:                    
Sales and marketing   710    852    3,522    3,849 
Administration   1,591    2,804    3,612    4,311 
Research and development   272    273    480    551 
    2,573    3,929    7,614    8,711 
                     
Loss from operations   (1,566)   (3,137)   (2,945)   (3,939)
                     
Interest income, net   -    (1)   (1)   (3)
                     
Loss before income tax   (1,566)   (3,138)   (2,946)   (3,942)
                     
Income tax   -    -    -    - 
                     
Net loss  $(1,566)  $(3,138)  $(2,946)  $(3,942)
                     
Basic and diluted loss per share:                    
Net loss  $(0.10)  $(0.19)  $(0.18)  $(0.24)
                     
Weighted average common shares outstanding:                    
Basic and diluted   16,020    16,944    15,956    16,709 

 

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PROPHASE LABS, INC. & SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEET DATA

(in thousands)

(unaudited)

 

   June 30, 2015   December 31, 2014 
           
Cash and cash equivalents  $3,761   $2,926 
Accounts receivable  $1,245   $5,836 
Inventory  $3,705   $3,292 
Total current assets  $9,179   $13,458 
Total assets  $12,039   $16,057 
           
Total current liabilities  $3,577   $5,241 
Other long term obligations  $100   $100 
Total stockholders' equity  $8,362   $10,716 

 

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