Imagenetix, Inc. Reports Third Quarter 2010 Results

SAN DIEGO, Feb. 9 /PRNewswire-FirstCall/ -- Imagenetix, Inc. (OTC Bulletin Board: IAGX) announced today results for the three and nine months ended December 31, 2009. Net sales decreased 15% for the third quarter of fiscal year 2010 to $1,765,000 from $2,084,000 for the same period of last year.  For the nine months ended December 31, 2009, net sales decreased 12% to $5,368,000 from $6,134,000 for the same period of last year.  

Net loss for the third quarter was $294,000 or $.03 per share compared to break even for the same period of the prior fiscal year.  Net loss for the nine months ended December 31, 2009, was $156,000 or $0.01 per share compared to net profit of $786,000 or $0.07 per share for the same period of last year.  

Commenting on the results of the third quarter, Mr. William Spencer, Imagenetix Chief Executive Officer said: "We are encouraged by the increase in sales in the Food, Drug and Mass Market segments of our business for Celadrin, our joint health product and BioGuard, our recently introduced immune boosting probiotic for the promotion of ear, nose and throat health.  During the third quarter, revenue from this segment increased by $733,000 compared to the previous year.   We anticipate expanding television advertising in concert with store expansion to increase awareness of both Celadrin and BioGuard.   We believe this marketing program for the mass market segment will continue to result in improved sales."

About Imagenetix

Imagenetix, based in San Diego, California, is an innovator of scientifically tested, natural-based, proprietary, bioceutical products developed to enhance human health on a global basis.  Imagenetix develops and formulates propriety over-the-counter topical creams, skincare products and nutritional supplements to be marketed globally through multiple channels of distribution.  In addition, the company develops patentable compounds for entering into licensing agreements with pharmaceutical partners.  Imagenetix is the creator of Celadrin®.  Please visit, www.celadrin.com, www.bioguardhealth.com or www.imagenetix.net.

Certain matters in this news release are forward-looking statements which are subject to risks and uncertainties that could cause actual results to vary materially from those projected.  Such risks and uncertainties include, but are not limited to, adverse fluctuations in future operating results due to a number of economic, competitive, and other factors, including, among other things, the size and timing of customer contracts, new or increased competition, changes in market demand, and seasonality of purchases of the company's products and services.  Additional information with respect to these and other factors, which could materially affect the company and its operations, are included in the company's SEC filings, including its Form 10-K for the year ended March 31, 2009.

    
    
                                Imagenetix, Inc.                            
                 Condensed Consolidated Statements of Operations            
                                  (Unaudited)                              
                      (In thousands, except per share data)                 
                                                                            
                                               Three Months    Nine Months  
                                                  Ended           Ended    
                                               December 31,    December 31, 
                                               ------------    ------------ 
                                               2009    2008    2009    2008 
                                               ----    ----    ----    ---- 
                                                                            
    Net sales                                $1,765  $2,084  $5,368  $6,134 
      Cost of sales                             878   1,019   2,973   3,380 
                                             ------   -----   -----   ----- 
    Gross profit                                887   1,065   2,395   2,754 
                                             ------   -----   -----   ----- 
    Gross profit percent                       50.3%   51.1%   44.6%   44.9%
                                                                            
    Operating expenses:                                                     
      General and administrative                573     565   1,956   1,590 
      Payroll expense                           325     249     849     842 
      Consulting expense                        434     256   1,009     845 
                                                ---     ---   -----     --- 
    Operating expenses                        1,332   1,070   3,814   3,277 
                                                                            
    Operating income (loss)                    (445)     (5) (1,419)   (523)
      Other income                                3       5       6      23 
      Settlement income                           -       -   1,250   1,785 
      Interest expense                            -       -      (2)     (1)
                                                ---     ---     ---     --- 
    Income (loss) before income taxes          (442)      -    (165)  1,284 
    Income tax expense (benefit)               (148)      -      (9)    498 
                                               ----    ----    ----    ---- 
                                                                            
    Net income (loss)                         $(294)     $-   $(156)   $786 
                                              -----   -----   -----    ---- 
                                                                            
    Income (loss) per share:                                                
      Basic                                  $(0.03)     $-  $(0.01)  $0.07 
      Diluted                                $(0.03)     $-  $(0.01)  $0.07 
                                                                            
    Weighted average common shares
     outstanding:                             
      Basic                                  11,011  11,011  11,011  10,985 
      Diluted                                11,011  11,011  11,011  11,009 

    
    
                              Imagenetix, Inc.                        
                   Condensed Consolidated Balance Sheets             
                                (Unaudited)                           
                               (In thousands)                         
                                                                     
                                                                
                                                      December  March 
                                                      31, 2009 31, 2009
                                                      -------- --------
    Assets:                                                          
      Current assets:                                                
        Cash and cash equivalents                      $1,528  $1,226
        Accounts receivable, net                        1,338   1,096
        Inventories, net                                  967   1,337
        Prepaid expenses and other current                           
         assets                                           166     109
        Deferred tax asset                                550     535
                                                          ---     ---
          Total current assets                          4,549   4,303
                                                                     
      Property and equipment, net                          91     116
      Long-term prepaid expenses                           21      30
      Other assets                                        114     134
                                                                     
                                                       ------  ------
          Total assets                                 $4,775  $4,583
                                                       ------  ------
                                                                     
    Liabilities and stockholders' equity:                            
      Current liabilities:                                           
        Accounts payable                                 $537    $274
        Accrued liabilities                                72      81
        Income tax payable                                  -      70
        Customer deposits                                  28      59
        Contract payable                                  107      43
        Short term license payable                          -       3
                                                          ---     ---
          Total current liabilities                       744     530
                                                                     
      Stockholders' equity                              4,031   4,053
                                                       ------  ------
          Total liabilities and stockholders'                        
           equity                                      $4,775  $4,583
                                                       ------  ------

SOURCE Imagenetix, Inc.