ImmuCell Corp. (ICCC, Financial) filed Amended Quarterly Report for the period ended 2012-03-31.
Immucell Corporation has a market cap of $11.5 million; its shares were traded at around $3.8 with a P/E ratio of 144.6 and P/S ratio of 2.6.
The gross margin as a percentage of product sales was 59% and 56% during the three-month periods ended March 31, 2012 and 2011, respectively. The gross margin as a percentage of product sales was 56% and 53% during the twelve-month periods ended March 31, 2012 and 2011, respectively. Our annual objective for gross margin percentage is approximately 50%, and our gross margin as a percentage of product sales has been maintained moderately above that target during the periods being reported. Our gross margin percentages were 55%, 52% and 53% for the years ended December 31, 2011, 2010 and 2009, respectively. We expect some fluctuations in gross margin percentages from quarter to quarter. We believe that a number of factors can cause our costs to be variable. Biological yields from the raw material used in the production of First DefenseÒ do fluctuate over time. Like most manufacturers in the U.S., we have been experiencing increases in the cost of raw materials that we purchase. Product mix also affects gross margin in that we earn a higher gross margin on First DefenseÒ and a lower gross margin on Wipe OutÒ Dairy Wipes. We had held our selling prices without significant increase for approximately the seven-year period ended December 31, 2007, believing that we could benefit more from higher unit sales volume than through a higher average selling price per unit. During the first quarter of 2008, we implemented a modest increase to the selling price of First DefenseÒ and have held that selling price without increase since then. Changes in the gross margin on product sales are summarized in the following table for the respective periods (in thousands, except for percentages):
During the three-month period ended March 31, 2012, sales and marketing expenses increased by 18%, or $37,000, to $241,000 in comparison to the same period in 2011, aggregating 14% and 13% of product sales during the three-month periods ended March 31, 2012 and 2011, respectively. This increase was expected and planned given our strategic decision to invest in additional sales and marketing efforts. This investment may have created, at least in part, our recent increase in product sales. Our current budgetary objective is to maintain the ratio of product selling expenses to product sales below 20% for the full year 2012.
Our income before income taxes was $271,000 during the three-month period ended March 31, 2012 in contrast to a loss before income taxes of ($31,000) during the three-month period ended March 31, 2011. Our income tax expense (benefit) was 43% and 27% of our income (loss) before income taxes during the three-month periods ended March 31, 2012 and 2011, respectively. Our net income for the three-month period ended March 31, 2012 was $155,000, or $0.05 per share, in contrast to a net loss of ($23,000), or ($0.01) per share, during the three-month period ended March 31, 2011. This improvement in our financial performance, which we anticipated, is primarily attributable to increased gross margin from sales of First Defense® and lower product development expenses.
During the third quarter of 2010, we agreed to terms of certain credit facilities with TD Bank, N.A. aggregating up to approximately $2,100,000, which are secured by substantially all of our assets. These credit facilities are comprised of a $1,000,000 ten-year mortgage loan, a $600,000 fifty-four month note and a $500,000 line of credit. Proceeds from the $1,000,000 mortgage were received during the third quarter of 2010. Proceeds from the $600,000 note were received during the first quarter of 2011. The $500,000 line of credit is available as needed. We believe that this debt financing (together with available cash and gross margin from ongoing product sales) provides us with sufficient funding to finance our working capital requirements while completing the first submissions to the FDA of all Technical Sections pertaining to Mast OutÒ. We chose debt financing because we believe that in this market environment, the option to generate funds through the sale of equity securities at an acceptable level of stockholder dilution is very unlikely.
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Immucell Corporation has a market cap of $11.5 million; its shares were traded at around $3.8 with a P/E ratio of 144.6 and P/S ratio of 2.6.
Highlight of Business Operations:
Product sales increased by approximately 10%, or $161,000, to $1,717,000 during the three-month period ended March 31, 2012 in comparison to $1,556,000 during the same period in 2011. During the three-month period ended March 31, 2012, domestic sales increased by 8%, or $105,000, and international sales increased by 19%, or $56,000, in comparison to the same period in 2011. Product sales increased by approximately 14%, or $642,000, to $5,273,000 during the twelve-month period ended March 31, 2012, in comparison to $4,630,000 during the twelve-month period ended March 31, 2011.The gross margin as a percentage of product sales was 59% and 56% during the three-month periods ended March 31, 2012 and 2011, respectively. The gross margin as a percentage of product sales was 56% and 53% during the twelve-month periods ended March 31, 2012 and 2011, respectively. Our annual objective for gross margin percentage is approximately 50%, and our gross margin as a percentage of product sales has been maintained moderately above that target during the periods being reported. Our gross margin percentages were 55%, 52% and 53% for the years ended December 31, 2011, 2010 and 2009, respectively. We expect some fluctuations in gross margin percentages from quarter to quarter. We believe that a number of factors can cause our costs to be variable. Biological yields from the raw material used in the production of First DefenseÒ do fluctuate over time. Like most manufacturers in the U.S., we have been experiencing increases in the cost of raw materials that we purchase. Product mix also affects gross margin in that we earn a higher gross margin on First DefenseÒ and a lower gross margin on Wipe OutÒ Dairy Wipes. We had held our selling prices without significant increase for approximately the seven-year period ended December 31, 2007, believing that we could benefit more from higher unit sales volume than through a higher average selling price per unit. During the first quarter of 2008, we implemented a modest increase to the selling price of First DefenseÒ and have held that selling price without increase since then. Changes in the gross margin on product sales are summarized in the following table for the respective periods (in thousands, except for percentages):
During the three-month period ended March 31, 2012, sales and marketing expenses increased by 18%, or $37,000, to $241,000 in comparison to the same period in 2011, aggregating 14% and 13% of product sales during the three-month periods ended March 31, 2012 and 2011, respectively. This increase was expected and planned given our strategic decision to invest in additional sales and marketing efforts. This investment may have created, at least in part, our recent increase in product sales. Our current budgetary objective is to maintain the ratio of product selling expenses to product sales below 20% for the full year 2012.
Our income before income taxes was $271,000 during the three-month period ended March 31, 2012 in contrast to a loss before income taxes of ($31,000) during the three-month period ended March 31, 2011. Our income tax expense (benefit) was 43% and 27% of our income (loss) before income taxes during the three-month periods ended March 31, 2012 and 2011, respectively. Our net income for the three-month period ended March 31, 2012 was $155,000, or $0.05 per share, in contrast to a net loss of ($23,000), or ($0.01) per share, during the three-month period ended March 31, 2011. This improvement in our financial performance, which we anticipated, is primarily attributable to increased gross margin from sales of First Defense® and lower product development expenses.
During the third quarter of 2010, we agreed to terms of certain credit facilities with TD Bank, N.A. aggregating up to approximately $2,100,000, which are secured by substantially all of our assets. These credit facilities are comprised of a $1,000,000 ten-year mortgage loan, a $600,000 fifty-four month note and a $500,000 line of credit. Proceeds from the $1,000,000 mortgage were received during the third quarter of 2010. Proceeds from the $600,000 note were received during the first quarter of 2011. The $500,000 line of credit is available as needed. We believe that this debt financing (together with available cash and gross margin from ongoing product sales) provides us with sufficient funding to finance our working capital requirements while completing the first submissions to the FDA of all Technical Sections pertaining to Mast OutÒ. We chose debt financing because we believe that in this market environment, the option to generate funds through the sale of equity securities at an acceptable level of stockholder dilution is very unlikely.
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