GalaGen Logs Record 1999 Results

GalaGen Logs Record 1999 Results

ARDENHILLS, Minn.--Immune-enhancing food ingredient manufacturer GalaGen Inc. (NASDAQ:GGEN)reported record revenues for its fourth quarter and fiscal year ended Dec. 31,1999. The increase helped narrow the company's net loss by almost half lastyear's mark, as the company transitions into a consumer oriented business.

Sales for the year leaped to a record $3.2 million from $.9 million sold theprevious year, while gross profit more than almost quadrupled to $2.5 million in1999. Making a significant impact on the bottom line, operating expensesplummeted to 143 percent of sales from a 1998 high of 473 percent of sales. Thisled to a 1999 net loss of $2.6 million or $.26 per share, a vast improvementfrom $4.5 million or $.56 per share lost in 1998.

For the quarter, sales peaked at $1.1 million, up from $.7 million sold inthe comparable 1998 period, while gross profit almost doubled from one period tothe next. Operating expenses for the quarter fell dramatically to $.9 million or84 percent of sales from $1.1 million or 160 percent of sales logged in theequivalent 1998 period. As a result, net loss for the quarter was whittled to amere $4,000 or negligible cents per share from a net loss of $.8 million or $.10cents per share registered in the same 1998 quarter.

Company management expressed satisfaction with both financial and businessplanning results. "I am particularly encouraged by our success intransforming GalaGen into a consumer-focused organization founded on solidscience," said Robert Hoerr, chairman and chief technology officer."During the year, we built important new relationships with three top-tierconsumer products companies, we achieved national distribution of Proventraimmune-boosting dietary supplements, and we rounded out a strong leadershipteam."

Lookingahead, the company reported that its business model has been working very well."Through the upcoming year, we expect to pursue additional strategicpartnerships, continue our product development and test-market activities, andbuild awareness of and consumer preference for Proventra," said HenryCardello, president and recently appointed chief executive officer.

The company's three strategic partnerships reached in 1999 were with Novartis,the Hormel Health Labs subsidiary of Hormel Foods Corp. and the TropicanaProducts division of PepsiCo. In addition, its expansion to nationaldistribution during the year has placed its Proventra supplement in more than8,000 General Nutrition Centers and Rite Aid pharmacies throughout NorthAmerica.

For more information, conatact Frank Kuhar at (651) 634-4238.