EX-99.1 3 d63251_ex99-1.htm PRESS RELEASE EX-99.1

Exhibit 99.1

FOR IMMEDIATE RELEASE

CONTACT
Leonard Osser, Chairman and CEO
Stuart J. Wildhorn – President
Milestone Scientific Inc.
(973) 535-2717; (973) 535-2829 (Fax)
Web site: www.milesci.com

MILESTONE SCIENTIFIC, INC. ANNOUNCES YEAR END
RESULTS, INCLUDING 20% REVENUE INCREASE AND
IMPROVED FINANCIAL POSITION

LIVINGSTON, New Jersey, April 1, 2005 — Milestone Scientific Inc. (AMEX: MS), a developer, manufacturer and marketer of computer controlled local anesthetic delivery systems for medical and dental markets, today announced that 2004 net sales increased 20% to $4,751,186, compared with $3,971,707 in 2003.

This increase was primarily driven by a 25% expansion in domestic sales of CompuDent® systems and a 21% increase in worldwide sales of The Wand® handpieces. Gross profit remained strong at approximately 49% of sales despite some bundled pricing initiatives that were offered to customers towards the end of the year at lower margins. Net loss for the year ended December 31, 2004 increased to ($2,996,864), or $(0.33) per share, compared with a 2003 net loss of ($2,412,908), or $(0.52) per share. Working capital increased to $3,866,838 as of December 31, 2004, from $(2,921,737) at the end of 2003, as a result of a public offering of common stock and the issuance of equity securities in satisfaction of short-term debt, trade payables and accrued compensation in the first quarter of 2004.

“Our revenue growth in 2004, fueled by a fourth quarter sales increase of 56% over the comparable period in 2003, reflects the initial success of our expanded domestic sales force and heightened marketing activities,” commented Leonard Osser, Chairman and Chief Executive Officer of Milestone Scientific Inc. “These increased sales generated a gross margin of more than 60% in the fourth quarter. However, our net loss increased in 2004 as we incurred greater sales and marketing expenses in order to lay the groundwork for higher levels of future sales activity. It is our belief that 2005 and future years will benefit from the expenses incurred during 2004.”


“Since the end of the year, we have announced the very successful initial launch of our Ionic White™ enhanced technology consumer tooth whitening system through an infomercial program that our marketing partner aired regionally in 23 television markets throughout the U.S. We received an initial order for 500,000 Ionic White starter kits in March, and the infomercial program is scheduled to roll out nationwide in the second quarter.”

“When the Ionic White launch is combined with an improving sales outlook for our computer controlled dental injection products and our ongoing efforts to commercialize new products, including our CompuFlo™ technology for safely administering injections of local anesthetics and other medications, the outlook for 2005 is exciting to us,” continued Osser. “In order to assure adequate capital to pursue these various strategic initiatives in the most effective manner, we recently announced a $3 million private placement of common stock units (including warrants). Once all funds from this capital raise have been received, Milestone’s cash position should exceed $4.7 million.”

Milestone also announced that filing of its Annual Report on form 10-KSB for the year ended December 31, 2004 would be delayed a few days to allow subsequent event disclosure to be made of its previously announced $3.0 million private placement to institutional investors.

About Milestone Scientific, Inc.

Milestone Scientific is the developer, manufacturer and marketer of CompuMed® and CompuDent® computer controlled local anesthetic delivery systems for medical and dental applications. These systems are comprised of a microprocessor controlled drive unit and single patient use disposable handpieces. The Company recently announced its entry into the tooth whitening market through a third party mass-marketing organization. The consumer product is being marketed under the distributor’s trademark Ionic White™ and Stay White™. Milestone has also developed and patented its CompuFlo™ technology, which advances the delivery and removal of a wide array of fluids from the human body by providing real time displays of pressures, fluid densities and flow rates. In 2002, Milestone Scientific received United States patent protection on a safety engineered sharps technology that allows for fully automated true single-handed activation with needle anti-deflection and force-reduction capability. In 2003, Milestone received FDA Clearance to market SafetyWand®, which incorporates engineered sharps injury protection features to aid in the prevention of accidental needlesticks.

The Company is headquartered in Livingston, New Jersey, and its common stock trades on the American Stock Exchange under the symbol “MS”. For additional information, please visit the Company’s website at www.milesci.com.

This press release contains forward-looking statements regarding the timing and financial impact of the 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 on Form 10-KSB for the year ended December 31, 2003. 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.


MILESTONE SCIENTIFIC INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
December 31, 2004

ASSETS    
Current Assets:    
   Cash and cash equivalents $ 3,041,306  
   Accounts receivable , net of allowance for doubtful accounts of $24,903   421,339  
   Inventories   936,221  
   Advances to contract manufacturer   62,034  
   Prepaid expenses   104,562  
      Total current assets   4,565,462  
   Investment in distributor, at cost   69,956  
   Equipment, net   612,263  
   Patents, net   101,242  
   Other assets   20,408  
            Total assets $ 5,369,331  
  
LIABILITIES AND STOCKHOLDERS’ EQUITY    
Current Liabilities:    
   Accounts payable $ 474,075  
   Accrued expenses   224,549  
      Total current liabilities   698,624  
Deferred compensation payable to officer   150,000  
      Total liabilities   848,624  
  
Commitments and contingencies    
  
Stockholders’ Equity    
   Preferred stock, par value $.001; authorized 5,000,000 shares    
      8% Cumulative convertible preferred stock, par value $.001; authorized,    
      issued and outstanding, 25,365 shares   25  
   Common stock, par value $.001; authorized 50,000,000 shares; 9,824,287 shares    
      issued and 9,790,954 shares outstanding   9,824  
   Additional paid-in capital   52,618,913  
   Accumulated deficit   (47,196,539 )
   Treasury stock, at cost, 33,333 shares   (911,516 )
      Total stockholders’ equity   4,520,707  
            Total liabilities and stockholders’ equity $ 5,369,331  

See Notes to Consolidated Financial Statements


MILESTONE SCIENTIFIC INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
YEARS ENDED DECEMBER 31, 2004 AND 2003

   2004              2003  
  
Net sales $ 4,751,186   $ 3,971,707  
Cost of sales   2,415,826     2,003,139  
  
Gross profit   2,335,360     1,968,568  
  
Selling, general and administrative expenses   5,155,569     3,483,439  
Closing of Deerfield, IL facility   —     86,165  
Research and development expenses   187,992     131,015  
    5,343,561     3,700,619  
  
Loss from operations   (3,008,201 )   (1,732,051 )
  
Other income (expense)        
   Interest income   80,867     —  
   Interest expense   (69,530 )   (680,857 )
   Other income (expense), net   11,337     (680,857 )
  
Net loss   (2,996,864 )   (2,412,908 )
  
Dividends applicable to preferred stock   (2,029 )   —  
Net loss applicable to common stockholders $ (2,998,893 ) $ (2,412,908 )
  
Loss per share applicable to common stockholders - basic and diluted $ (0.33 ) $ (0.52 )
  
Weighted average shares outstanding - basic        
   and diluted   9,147,634     4,672,266  

See Notes to Consolidated Financial Statements


MILESTONE SCIENTIFIC INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
YEARS ENDED DECEMBER 31, 2004 AND 2003

   2004              2003  
  
Cash flows from operating activities:        
Net loss $ (2,996,864 ) $ (2,412,908 )
Adjustments to reconcile net loss to net cash used in operating activities:        
   Depreciation   50,920     26,101  
   Amortization of debt discount and deferred financing costs   51,003     289,119  
   Amortization of unearned advertising cost   —     20,000  
   Stock and options issued for compensation and consulting   29,048     —  
   Stock issued for interest on notes payable   2,700      
   Bad debt expense   1,593      
   Loss on disposal of fixed assets   —     11,248  
   Changes in operating assets and liabilities:        
      (Increase) in accounts receivable   (34,032 )   (149,465 )
      (Increase) in inventories   (509,510 )   (307,420 )
      Decrease in advances to contract manufacturer   166,463     159,438  
      Decrease (increase) in prepaid expenses   12,622     (52,232 )
      Decrease in other assets   6,933     4,992  
      (Decrease) increase in accounts payable   (1,015,516 )   905,750  
      (Decrease) increase in accrued interest   (83,532 )   391,738  
      Increase (decrease) in accrued expenses   139,303     (26,952 )
      (Decrease) increase in deferred compensation   (106,000 )   320,000  
         Net cash used in operating activities   (4,284,869 )   (820,591 )
  
Cash flows from investing activities:        
   Payment for capital expenditures   (350,529 )   (35,268 )
   Payment for intangible assets   (75,536 )   —  
   Payment for investment in distributor   (69,956 )   —  
         Net cash used in investing activities   (496,021 )   (35,268 )
  
Cash flows from financing activities:        
   Expenses relating to registering shares   —     (22,500 )
   Proceeds from (payment for) equity financing, net   7,868,919     (248,815 )
   Proceeds from note payable - officer/stockholder   —     180,537  
   Payments of note payable - officer/stockholder   (50,000 )   (122,322 )
   Proceeds from issuance of notes payable   —     900,000  
   Proceeds from exercised options       57,750  
   Proceeds from exercise of equity line, net of expenses       191,481  
   Payments for deferred financing activities       (86,678 )
      Net cash provided by financing activities   7,818,919     849,453  
  
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS   3,038,029     (6,406 )
Cash and cash equivalents at beginning of year   3,277     9,683  
Cash and cash equivalents at end of year $ 3,041,306   $ 3,277  
  
Supplemental disclosure of cash flow information:        
   Cash paid during the year for interest $ 99,359   $ —  
  
   Cash paid during the year for taxes $ —   $ —  

See Notes to Consolidated Financial Statements