Adaltis Inc. (Adaltis), a Canada based medical devices company, has reported revenues of CAD24.5 million for the full year of 2008, compared with the revenue of CAD23.4 million in the previous year-end. It has reported net loss of CAD41.4 million, or CAD0.45 per share, for the full year of 2008, compared with the net loss of CAD38.9 million, or CAD0.63 per share, in the previous year-end.
Increased sales of $1.0 million in our infectious disease product lines were partially offset by a decrease of $0.5 million in sales of Eclectica” as a result of our strategic decision to slow-down the worldwide launch in late 2007. Foreign exchange fluctuations had an overall favorable impact of $0.6 million on our revenue. Over the subsequent year we have focused on implementing necessary product improvements that culminated in a controlled re-launch in September 2008.
For the fourth quarter 2008, revenue amounted to $7.5 million, a $1.8 million or 31.6% increase over the $5.7 million recorded in the corresponding quarter in 2007. The increase was mainly attributable to higher sales in China.
Net loss for continuing operations for the year was $ 37.0 million compared to a loss of $36.6 million last year.
The net loss for the year includes $9.9 million of special charges including a $2.3 million expense of pension cost as a result of recent financial market underperformance, a $2.8 million restructuring charge related to the decision to focus on operations and management in China, a $3.6 million write-down of our investment in asset-backed commercial paper, and a write down of intangible assets of $0.6 million related to disposal of our lower-margin businesses in Asia.
Net loss for the fourth quarter was $14.6 million compared to a loss of $18.2 million for the same period in 2007. The loss of $14.6 million included special non-cash charges of $5.1 million.
“In my brief tenure here at Adaltis, I have been impressed by the quality of our products and the strength of our people. After the sale of our non-core business in Europe and Hong Kong, and with the subsequent restructuring in Europe, we are now singularly focused on our vision to become a leading provider of immunoassay diagnostic systems in emerging markets, with a specific focus on China”, said Peter Bambic, president and chief executive officer of Adaltis.
Bambic added “With most of the key management team now located together in Shanghai, and with the team now entirely focused on pursuing our IVD strategy, we are optimistic about the future prospects of the business. We are excited about the breadth and strength of our existing product line and the results of our focused relaunch of EclecticaTM which provides significant growth potential for the Corporation”.
During 2008, we took significant steps to streamline our operations and focus on profitability. Our effort was based on right-sizing the operations and focusing the organization on our mission to become a leading IVD product provider in emerging markets, without ruling out the possibility of entering specific developed markets where there is a strong product and profitability fit. The execution of our 2008 plan revolved around four main objectives: (i) disposal of certain assets of our European operations and streamlining our European and Canadian organizations, (ii) concentration of our senior management team in China, (iii) focusing our Asian organization on our core IVD product lines, and (iv) completion and validation of the improvements to Eclectica” to effect the commercial re-launch of the instrument.
Cost of Sales and Rental Income
For the year ended December 31, 2008, cost of sales and rental income was $23.2 million compared to $24.2 million in 2007, a decrease of $1.0 million or 4.1%.
Selling and administrative expenses were $22.0 million in 2008, compared to $19.2 million in 2007, an increase of $2.8 million or 14.6%.
Research and Development Expenses
Research and development expenses were $3.3 million in 2008 compared to $4.7 million in 2007, a decrease of $1.4 million or 29.8%.
Financial expenses were $3.2 million in 2008 compared to $2.6 million in 2007, an increase of $0.6 million or 23.1%.
Stock-based compensation expense, a non-cash item, was $0.4 million for 2008, a decrease of $0.4 million compared to last year.
Foreign Exchange Loss (Gain)
The foreign exchange loss for 2008 was $ 2.9 million compared to a $0.7 million gain for 2007.