QGLY The Quigley (MM)

DOYLESTOWN, Pa., Aug. 5 /PRNewswire-FirstCall/ -- The Quigley Corporation, (NASDAQ:QGLY) http://www.quigleyco.com/ today reported net sales of $1.7 million for the second quarter ended June 30, 2009, compared to net sales of $2.1 million for the second quarter ended June 30, 2008. The net loss for the second quarter ended June 30, 2009 was $4.6 million, or ($0.36) per share, compared to a net loss of $2.9 million, or ($0.22) per share for the second quarter ended June 30, 2008. The net loss for the second quarter of 2009 includes approximately $2.4 million in costs incurred (primarily legal expenses) as a consequence of the proxy contest between differing slates of proposed boards of directors. Results for the second quarter of 2009 also reflect a reduction of research and development costs of $879,000 to $386,000, from $1,265,000 for the second quarter of 2008. The decrease in these costs was principally due to reduced clinical study related costs incurred as a result of the completion of the QR-333 Diabetic Neuropathy Phase IIb study, results of which were previously reported on July 22, 2009. For the six months ended June 30, 2009, net sales were $5.7 million, compared to net sales of $7.4 million for the six months ended June 30, 2008. The net loss for the six months ended June 30, 2009 was $6.8 million, or ($0.53) per share, compared to a net loss of $4.4 million, or ($0.35) per share for the six months ended June 30, 2008. The net loss for the six months ended June 30, 2009 includes the aforementioned charges of approximately $2.4 million related to the proxy contest. Research and development costs for the 2009 six month period ended June 30, 2009 were approximately $2.0 million less than the comparable 2008 period as a result of the completion of the Phase IIb Diabetic Neuropathy study. Additionally, the net loss for six months ended June 30, 2008 included a one-time aggregate benefit of $876,000 as a result of income from discontinued operations of $140,000 and a gain on the disposal of the health and wellness operations of $736,000. The gross margin for both the three and six month periods ended June 30, 2009, declined compared to the three and six month periods ended June 30, 2008 due to the negative effects on sales as a result of inventory management initiatives by the Company's retail customers and an increase in estimates for returns of products previously shipped with pending expiration dates pertaining to certain recent product additions. The 2009 periods also included additional charges to cost of sales for obsolete inventory. Quigley Pharma, a wholly-owned subsidiary of the Company, recently announced the final results from its Phase IIb double-blind, placebo-controlled, study of topical compound QR-333 for the treatment of symptomatic diabetic peripheral neuropathy. The study was completed with fewer than expected evaluable patients and there were nominal trends, but no statistical differences, between active and placebo groups for the primary and secondary endpoints measuring efficacy. However, the final and comprehensive conclusions revealed the compound is safe and well tolerated and a significant improvement for efficacy in sural nerve conduction velocity and amplitude was unexpectedly found in a sub-set of the patient population. This finding may indicate a potential benefit of the compound as a disease modifying agent which may potentially broaden the therapeutic market opportunity. Additional clinical work would be required to provide more detail to the potential for disease modification. There can be no assurance the Company will undertake additional clinical studies or that the results thereof would lead to a marketable product that can achieve regulatory approvals. "I am deeply committed to building a stronger, more efficient and profitable Company. As a shareholder with a significant personal investment in the Company, my interests are aligned with the interests and concerns of every shareholder," said Ted Karkus, Chairman and CEO. "On the OTC front, we are in the process of reviewing our entire marketing strategy for Cold-EEZE . Our distribution to retailers across the country remains strong. However, a preliminary analysis suggests that we should be achieving higher sales per store per year. To that end, we have hired a top New York marketing agency on a consulting basis to assist us in increasing our retail sales and distribution. We are currently reviewing strategies to improve our product packaging, product positioning and the Cold-EEZE message to consumers. Additionally, while we will endeavor to expand our OTC new product pipeline as a source of future growth, the Company's prior roll-out of new products has led to write-offs rather than profits. This must stop. Future new product roll-outs will be preceded by methodical, step-by-step planning and improved marketing strategies to reduce the significant and costly risks experienced with prior new product launches." Mr. Karkus went on to say, "Quigley Pharma has engaged an independent consultant to conduct a thorough review of the entire research and development portfolio of potential products. We are currently assessing various strategic initiatives to determine the best course of action for the future of the Company and our shareholders." About The Quigley Corporation The Quigley Corporation (NASDAQ:QGLY) (http://www.quigleyco.com/) is a diversified natural health medical science company. Its Cold Remedy segment is a leading marketer and manufacturer of the Cold-EEZE family of lozenges and sugar free tablets clinically proven to significantly reduce the severity and duration of the common cold. Cold-EEZE customers include leading national wholesalers and distributors, as well as independent and chain food, drug and mass merchandise stores and pharmacies. The Quigley Corporation has several wholly owned subsidiaries including Quigley Manufacturing Inc., which consists of an FDA approved facility to manufacture Cold-EEZE lozenges and fulfill other contract manufacturing opportunities, and Quigley Pharma, Inc., (http://www.quigleypharma.com/), which conducts research in order to develop and commercialize a pipeline of patented botanical and naturally derived potential prescription drugs. Forward-Looking Statements Certain statements in this press release are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 and involve known and unknown risk, uncertainties and other factors that may cause the Company's actual performance or achievements to be materially different from the results, performance or achievements expressed or implied by the forward-looking statement. Factors that impact such forward-looking statements include, among others, changes in worldwide general economic conditions, changes in interest rates, government regulations, and worldwide competition. (Tables Follow) Condensed Consolidated Statements of Operations (unaudited) The following represents condensed financial statements (in thousands, except per share data): Three-Months Three-Months Six-Months Six-Months Ended Ended Ended Ended June 30, June 30, June 30, June 30, 2009 2008 2009 2008 ($) ($) ($) ($) -------------------------------------------------- Net Sales 1,748 2,068 5,734 7,373 Gross profit 291 898 2,643 4,467 Sales & marketing expenses 792 566 2,816 2,799 Administrative expenses 3,743 2,030 6,032 4,538 Research & development 386 1,265 634 2,675 Income taxes (benefit) - - - - Income (Loss) from: Continuing operations (4,625) (2,879) (6,824) (5,324) Discontinued operations - - - 876 Net Income (Loss) (4,625) (2,879) (6,824) (4,448) Basic/Diluted income (loss) per share: Continuing Operations ($0.36) ($0.22) ($0.53) ($0.42) Discontinued Operations - - - $0.07 Net Loss ($0.36) ($0.22) ($0.53) ($0.35) Basic/Diluted weighted average common shares outstanding 12,914,395 12,861,800 12,911,389 12,860,616 Selected Condensed Consolidated Balance Sheet Data The following represents condensed financial data (in thousands) at June 30, 2009 and December 31, 2008: 2009 2008* ($) ($) (unaudited) --------- --------- Cash & cash equivalents 9,217 11,957 Accounts receivable, net 153 4,524 Inventory 3,100 3,001 Total current assets 13,641 20,666 Total assets 16,495 24,369 Total current liabilities 5,528 6,595 Total stockholders' equity 10,967 17,774 * Derived from December 31, 2008 audited Financial Statements CONTACT: Ted Karkus Carl Hymans Chairman of the Board, CEO G.S. Schwartz & Co. (215) 345-0919 ext. 114 (212) 725-4500 ext. 304 mailto:@schwartz.com DATASOURCE: The Quigley Corporation CONTACT: Ted Karkus, Chairman of the Board, CEO, The Quigley Corporation, +1-215-345-0919 ext. 114; mailto: Hymans, G.S. Schwartz & Co., +1-212-725-4500 ext. 304, Web Site: http://www.quigleyco.com/

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