Milestone Scientific Achieves Net Profitability in First Quarter 2010

May 13, 2010 10:19am

Net Income Totaled $84,000 on Revenues of $2.56 Million; Company Posts Nearly $250,000 in Positive Cash Flow from Operations

PISCATAWAY, N.J., May 13 /PRNewswire-FirstCall/ -- Milestone Scientific Inc. (OTC Bulletin Board: MLSS), the recognized leader in advanced injection technologies, today announced its financial and operational results for the three months ended March 31, 2010.

"2010 has started off remarkably strong, marked by Milestone achieving its first quarterly net profit from operations in 12 years. Robust sales, higher profit margins and reduced expenses all contributed to our positive performance and helped to fuel strong positive cash flow for our Company. We are enormously proud of these financial accomplishments and are working very hard to make 2010 a profitable year," stated Leonard Osser, Chief Executive Officer of Milestone.

Financial Highlights When Comparing Three Months Ended March 31, 2010 with Three Months Ended March 31, 2009:

Net income totaled $84,000, or $0.01 earnings per basic and diluted share, reflecting a notable improvement on a net loss of $562,000, or $0.05 loss per basic and diluted share.
Revenues climbed 16% to $2.56 million from $2.20 million.
- International sales rose 85% to $1.34 million from $726,000.
- U.S. sales declined 19% to $1.20 million from $1.48 million.
- Disposable handpiece sales increased 39% to $1.94 million, up from $1.40 million.
- Sales of instruments decreased 24% to $600,000 from $792,000.
Gross profit margin improved, rising to 65% from 58%.
Total operating expenses declined 9% to $1.63 million from $1.80 million.

During the first three months of 2010, Milestone generated net cash of $248,000 from its operating activities, compared to using $200,000 in its operations during the same period in 2009. As of March 31, 2010, Milestone had $2.15 million in cash and accounts receivables, working capital of $1.94 million, and total shareholders' equity of $2.92 million. Based on the Company's history of losses, the financial statements continue to carry a going concern qualification.

Continuing, Osser added, "With the recently announced issuance of a Notice of Allowance from the U.S. Patent and Trademark Office for our self-administered, computer-controlled injection system, we intend to begin aggressively pursuing collaborative opportunities with major pharmas and medical technology companies to develop and commercialize what we believe can be a truly disruptive self-injection device for those requiring routine injections for treatment of chronic diseases. This is an exciting and potentially meaningful opportunity for Milestone and one that should greatly complement our other product development efforts in the medical arena."

Milestone's executive management team will host a teleconference this afternoon, Thursday, May 13, 2010, beginning at 4:15 PM Eastern Time, and invites all interested parties to join them in a discussion regarding the Company's financial results, corporate progression and other meaningful developments. The conference call can be accessed via telephone by dialing toll free 1-888-846-5003. For those unable to participate at that time, a replay of the teleconference can be accessed domestically by dialing toll free 1-800-406-7325 and entering the passcode 4293219. The replay will be available for 90 days.

FINANCIAL CHARTS TO FOLLOW MILESTONE SCIENTIFIC INC. CONDENSED BALANCE SHEET
	March 31, 2010	December 31, 2009
	(Unaudited)
ASSETS
Current Assets:
Cash and cash equivalents	$ 1,218,027	$ 1,029,129
Accounts receivable, net of allowance for doubtful accounts of $5,000	931,218	1,063,742
Inventories	965,341	804,736
Advances to contract manufacturer, current	733,183	151,995
Prepaid expenses and other current assets	496,240	254,501
Total current assets	4,344,009	3,304,103
Advances to contract manufacturer, non current	326,020	311,230
Investment in distributor, at cost	76,319	76,319
Furniture, Fixtures & Equipment net of accumulated depreciation of $414,280
as of March 31 ,2010 and $395,630 as of December 31, 2009	78,546	77,353
Patents, net of accumulated amortization of $231,950 as of March 31, 2010
and $211,539 as of December 31, 2009	966,600	947,315
Other assets	116,309	133,674
Total assets	$ 5,907,803	$ 4,849,994

LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable	$ 1,951,678	$ 1,154,013
Accrued interest - 6% note, current	92,000	$ -
Accrued expenses and other payable	363,338	524,017
Total current liabilities	2,407,016	1,678,030

Long-term Liabilities:
Accrued Interest - 6% note, non current	61,573	92,000
Accrued Interest - 12% note, non current	76,431	-
Notes Payable-net of discount of $10,458 and $11,157, respectively	439,542	438,843
Total long-term liabilities	577,546	530,843

Commitments and Contingencies

Stockholders' Equity
Common stock, par value $.001; authorized 50,000,000 shares; 14,811,807 shares issued
692,498 shares to be issued and 14,778,474 shares outstanding as of March 31, 2010;
14,781,296 shares issued, 692,498 shares to be issued, and 14,747,962 shares outstanding
as of December 31, 2009	15,502	15,472
Additional paid-in capital	62,498,787	62,300,619
Accumulated deficit	(58,679,532)	(58,763,454)
Treasury stock, at cost, 33,333 shares	(911,516)	(911,516)
Total stockholders' equity	2,923,241	2,641,121
Total liabilities and stockholders' equity	$ 5,907,803	$ 4,849,994

MILESTONE SCIENTIFIC INC. RESULTS OF OPERATIONS (Unaudited)

Product sales, net	$ 2,562,578	$ 2,204,819
Cost of products sold	900,712	916,550
Gross profit	1,661,866	1,288,269
Selling, general and administrative expenses	1,541,702	1,728,815
Research and development expenses	88,464	67,622
Total operating expenses	1,630,166	1,796,437
Income (loss) from operations	31,700	(508,168)
Other income (expense)
Other income	61,916	-
Interest expense	(9,343)	(47,403)
Amortization of debt issuance	(699)	(7,875)
Interest income	348	1,804
Total other income (expenses)	52,222	(53,474)
Net income (loss) applicable to common stockholders	$ 83,922	$ (561,642)
Net income (loss) per share applicable to common stockholders -
Basic	$ 0.01	$ (0.05)
Diluted	$ 0.01	$ (0.05)
Weighted average shares outstanding and to be issued -
Basic	13,875,278	12,458,115
Diluted	14,320,821	12,458,115

MILESTONE SCIENTIFIC INC. CONDENSED STATEMENT OF CASH FLOWS (Unaudited)
Net income (loss)	$ 83,922	$ (561,642)
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Depreciation expense	18,651	15,503
Amortization of patents	20,410	18,281
Amortization of debt discount	699	7,875
Common stock and options issued for compensation, consulting
and vendor services	124,718	220,992
Changes in operating assets and liabilities:
Decrease (Increase) in accounts receivable	132,524	(172,787)
(Increase) Decrease in inventories	(160,605)	72,226
(Increase) Decrease to advances to contract manufacturer	(595,978)	125,160
(Increase) to prepaid expenses and other current assets	(168,259)	(10,920)
Decrease in other assets	17,365	-
Increase in accounts payable	797,665	248,622
(Decrease) in accrued expenses	(22,675)	(163,567)
Net cash provided by (used in) operating activities	248,437	(200,257)
Cash flows from investing activities:
Purchases of property and equipment	(19,844)	(30,131)
Payment for patents rights	(39,695)	(12,609)
Net cash used in investing activities	(59,539)	(42,740)

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS	188,898	(242,997)
Cash and cash equivalents at beginning of period	1,029,129	743,665
Cash and cash equivalents at end of period	$ 1,218,027	$ 500,668
Supplemental disclosure of cash flow information:
Income taxes paid	$ 4,146	$ 3,597
Interest paid	$ 24,000	$ -
Shares issued to employees in lieu of cash compensation	$ 7,500	$ 125,324
Shares issued to settle accounts payable	$ 43,000	$ 42,000

About Milestone Scientific Inc.

Headquartered in Piscataway, New Jersey, Milestone Scientific is engaged in pioneering advanced computer-controlled injection technologies for the medical and dental markets; and currently sells its award-winning products through a global distribution network serving North America, Asia, Africa and Europe. For more information on the STA System and other innovative Milestone products, please visit the Company's web sites found at www.milestonescientific.com and www.STAis4U.com.

Safe Harbor Statement

This press release contains forward-looking statements regarding the timing and financial impact of Milestone's ability to implement its business plan, expected revenues and future success. These statements involve a number of risks and uncertainties and are based on assumptions involving judgments with respect to future economic, competitive and market conditions and future business decisions, all of which are difficult or impossible to predict accurately and many of which are beyond Milestone's control. Some of the important factors that could cause actual results to differ materially from those indicated by the forward-looking statements are general economic conditions, failure to achieve expected revenue growth, changes in our operating expenses, adverse patent rulings, FDA or legal developments, competitive pressures, changes in customer and market requirements and standards, and the risk factors detailed from time to time in Milestone's periodic filings with the Securities and Exchange Commission, including without limitation, Milestone's Annual Report for the year ended December 31, 2009. The forward looking-statements in this press release are based upon management's reasonable belief as of the date hereof. Milestone undertakes no obligation to revise or update publicly any forward-looking statements for any reason.

FOR MORE INFORMATION, PLEASE CONTACT:
Elite Financial Communications Group
*Dodi Handy, President and CEO (Twitter: @dodihandy***)
*For Media Inquiries: Kathy Addison, Director, Elite Media Group (Twitter: @kathyaddison***)
407-585-1080 or via email at *[email protected]*

SOURCE Milestone Scientific Inc.