Sunday 31 January 2016
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Top Losers: Derma Sciences, (NASDAQ:DSCI), Freshpet, (NASDAQ:FRPT), Digital Ally, (NASDAQ:DGLY)

Top Losers: Derma Sciences, (NASDAQ:DSCI), Freshpet, (NASDAQ:FRPT), Digital Ally, (NASDAQ:DGLY)

– in Business & Finance


During Thursday’s afternoon trade, Shares of Derma Sciences Inc. (NASDAQ:DSCI), declined -28.04% to $4.03.

Derma Sciences, declares the termination of its Phase 3 clinical trials with aclerastide (DSC127) for diabetic foot ulcer healing. This action is based on futility determinations conducted by the Data Monitoring Committee (DMC) for the planned, pre-specified interim analyses regarding the primary efficacy endpoint of confirmed complete wound closure of the target ulcer within 12 weeks of the start of treatment. The decision to end the studies followed the recommendation by the DMC to stop enrollment in the studies. The DMC also stated that there were no safety concerns attributed to aclerastide.

“We are very disappointed with the findings of the analyses of the DMC, but are grateful for the support and commitment from the participating patients and the study investigators,” said Edward J. Quilty, chairman and chief executive officer of Derma Sciences. “We have stopped further enrollment and initiated an orderly termination of the aclerastide trials and program, which we believe will be substantially complete by year end. We are also halting all development work with DSC127 in scar reduction and radiation dermatitis.”

The development program termination eliminates a projected cash burn of about $5 million per quarter in 2016. As of September 30, 2015 Derma Sciences had $49.4 million of cash and cash equivalents and $12.0 million of long-term investments. The Company’s primary focus is to continue to grow its advanced wound care net sales and improvement gross margins. The Derma Sciences Board of Directors and senior administration are committed to a path of profitable growth and positive operating cash flow in 2016, counting assessing all aspects of the Company’s operations and infrastructure that could enhance shareholder value.

Derma Sciences, Inc. operates as a tissue regeneration company in the wound care market. Its Advanced Wound Care segment offers MEDIHONEY dressings for managing non-chronic and hard-to-heal wounds, counting chronic ulcers, burns, and post-operative wounds; TCC-EZ system for patients with diabetic foot ulcers; AMNIOEXCEL for tissue repair, reconstruction, and replacement; and AMNIOMATRIX that is used as a wound covering in the treatment of localized tissue defects.

Shares of Freshpet, Inc. (NASDAQ:FRPT), declined -24.97% to $6.28, during its current trading session.

Freshpet, stated financial results for its third quarter ended September 30, 2015.

Third Quarter 2015 Financial Highlights Contrast to Prior Year Period

  • Net sales were $30.6 million, up 35.8%
  • Adjusted EBITDA raised $1.2 million to $2.3 million
  • Freshpet Fridges raised 13.1% to 14,670 from 12,970

Year to Date Fiscal 2015 Financial Highlights Contrast to Prior Year Period

  • Net sales were $86.0 million, up 38.1%
  • Adjusted EBITDA raised $5.5 million to $7.1 million

Third Quarter 2015

Net sales raised 35.8% to $30.6 million contrast to $22.5 million in the third quarter of 2014. Net sales for the third quarter of 2015 was driven by raised velocity across all channels and comprises $1.8 million associated with the Company’s Freshpet Baked test product. The Company also practiced an improvement in Freshpet Fridges, to 14,670 from 12,970 in the third quarter of 2014.

Gross profit was $14.0 million, or 45.9% of net sales, contrast to $10.9 million, or 48.3% of net sales for the same quarter last year. The decrease in gross profit margin was due to lower margin contribution from the Company’s Freshpet Baked test product, which reduced third quarter 2015 gross margin by about 100 basis points. In addition, manufacturing throughput constraints associated new product innovation in addition to start-up costs from the implementation of new manufacturing processes further reduced gross margin by about 140 basis points.

Freshpet, Inc. manufactures and markets natural fresh foods, refrigerated meals, and treats for dogs and cats in the United States and Canada. The company offers its products under the Freshpet, Dognation, and Dog Joy names. It sells its products through various classes of retail, counting grocery, mass, club, pet specialty, and natural. Freshpet, Inc. was incorporated in 2004 and is headquartered in Secaucus, New Jersey.

Finally, Digital Ally Inc. (NASDAQ:DGLY), dropped -23.84%, and is now trading at $5.72.

Digital Ally, declared its operating results for the third quarter and first nine months of 2015.

Third Quarter Highlights and Subsequent Events

  • Total revenue raised 9% to about $5.1 million in the third quarter of 2015, contrast with about $4.7 million in the quarter ended September 30, 2014.
  • The Company shipped seven orders in excess of $100,000 each during the most recent quarter, for a total of $1.3 million, contrast with two individual orders surpassing $100,000 each in the year-earlier quarter. The Company’s average order size raised to about $3,185 for in the third quarter of 2015, from $2,760 in the prior-year quarter.
  • International revenue reduced to $3,151 (less than 1% of total revenue) during the most recent quarter, a level that was disappointing and below expectations. The recent strength of the US dollar as contrast to foreign currencies, and specifically as contrast to the Mexican peso has been a noteworthy issue for international revenues.
  • Gross profit margin approximated 40.0% of total revenue in the third quarter of 2015, contrast with 52.8% in the prior-year quarter. The reduction in gross profit margin relative to the prior-year quarter was primarily due to administration’s decision to upgrade the connectors contained in the camera cable assembly to address functionality and reliability concerns on the FirstVU HD product, partially offset by a 9% improvement in revenue relative to the third quarter of 2014. The Company also raised its inventory reserve in the most recent quarter due to higher levels of older versions of certain products held by customers that were advance cross shipped. Administration believes the FirstVU HD connector upgrade, which was implemented to all deployed units, will resolve a cable assembly issue and that gross margins should return to more normal levels in future quarters. The Company’s long-term aim is to maintain gross margins of 60% or greater, as a percentage of revenue.
  • Selling, general and administrative (“SG&A”) expenses raised 19% from year-earlier levels.
  • The Company’s operating loss raised 106% to ($2,140,785) for the quarter ended September 30, 2015, contrast with an operating loss of ($1,040,559) for the quarter ended September 30, 2014.
  • A net loss of ($2,141,163), or ($0.45) per share, was recorded in the third quarter of 2015, contrast with a net loss of ($6,402,558), or ($2.32) per share, in the corresponding period of the previous year.
  • On a non-GAAP basis, the Company recorded an adjusted net loss of ($1,517,619), or ($0.32) per share, in the most recent quarter, contrast with a non-GAAP adjusted net loss of ($643,326), or ($0.23) per share, in the three months ended September 30, 2014.

Digital Ally, Inc. produces digital video imaging and storage products for use in law enforcement, security, and commercial applications in the United States and internationally. Its digital audio/video recording, storage, and other products comprise an in-car, digital audio/video system that is integrated into a rear view mirror designed for law enforcement vehicles and commercial fleets, such as ambulances, taxis, and buses; and a weather-resistant mobile digital video recording system for use in motorcycles, ATV’s, and boats.