FRISBY TECHNOLOGIES, INC. (NASDAQ – FRIZ), the developer of patented COMFORTEMP®, the leading brand of dynamic climate control materials, today announced that total revenues for the three months ended March 31, 2002 decreased by $377,000 to $1,584,000 from $1,961,000 for the three months ended March 31, 2001. The majority of the decrease in revenue was in the consumer market segments, which the Company believes is attributable to the continuing global downturn in the consumer apparel, outdoor footwear and sporting goods markets. These shortfalls were partially offset by increased revenues by the Company’s majority-owned European affiliate, Schoeller Frisby Technologies, GmbH (“SFT”), based in Switzerland, whose sales increased approximately $157,000 for the three months ended March 31, 2002 as compared to the comparable prior year period. The SFT sales increase can be attributed to new product introductions into markets outside those of apparel and footwear, including the bedding and medical brace markets.
Operating expenses decreased $204,000 to $1,445,000 for the three months ended March 31, 2002, compared to $1,649,000 for the three months ended March 31, 2001. The majority of the decrease resulted from continued efforts to employ more cost-effective methods of advertising and promotion coupled with lower amortization and equipment leasing expenses.
As a result, the Company’s net loss for the three months ended March 31, 2002 increased to $1,283,000 or $0.15 per diluted share compared to a net loss of $1,161,000 or $0.17 per diluted share for the three months ended March 31, 2001. The increased net loss resulted from a decrease in gross profit margin coupled with lower product sales partially offset by a decrease in operating expenses compared to the same period in 2001.
The Company also announced that its Annual Meeting of Stockholders is scheduled for June 18, 2002 in Greensboro, North Carolina.
In commenting on the first quarter’s results, Greg Frisby, Chairman and Chief Executive Officer stated, “We are encouraged that there are emerging signs that business conditions are improving for the Company. Customer demand has been stronger than we expected entering 2002, particularly so in Europe where sales by SFT were up more than 20% compared to the first quarter of 2001. Further, both in the U.S. and abroad, we have successfully secured new business in large target markets outside of our traditional base of apparel and footwear, such as the bedding market. We also expect to announce soon the addition of high-profile customers in our core markets whose national brands of apparel and footwear will use COMFORTEMP® materials within their products this fall.”
Duncan Russell, President and Chief Operating Officer added, “During the first quarter of 2002, the Company performed to its internal plan in all key measures of operational performance. We expected to face challenges in domestic COMFORTEMP sales and, in fact, revenue tracked slightly ahead of plan and operating expense was lower than reflected in the plan.”
Frisby is a global leader in the development of dynamic thermal management solutions for the apparel, footwear and sporting goods, packaging, home furnishings, healthcare and electronic industries. COMFORTEMP temperature balancing foams, fabrics, leathers and gels can be found in products from major consumer and industrial brands worldwide. For more information, contact Frisby Technologies at 877-444-COMFORT, visit www.comfortemp.com, or join the Frisby electronic news distribution list by sending your email address to firstname.lastname@example.org.
Certain statements in this press release are forward-looking in nature and relate to the Company’s plans, objectives, estimates and goals. Words such as “expects,” “anticipates,” “intends,” “plans,” “projects,” “forecasts,” “believes,” and “estimates,” and variations of such words and similar expressions, identify such forward-looking statements. Such statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and speak only as of the date of this report. The statements are based on current expectations, are inherently uncertain, are subject to risks and uncertainties and should be viewed with caution. Actual results and experience may differ materially from those expressed or implied by the forward-looking statements as a result of many factors, including, without limitation, those set forth under "Business -- Additional Factors that may Affect the Company’s Business and Future Results" in the Company’s most recent Annual Report on Form 10-KSB and under “Risk Factors” in the Company’s Registration Statement on Form S-3/A filed with the Securities and Exchange Commission on May 6, 2002 and, in addition, the level of acceptance of the Company's thermal management products by consumers and industrial partners both domestically and internationally and the Company's ability to identify, develop and market new products, to develop, maintain or expand relationships with capable suppliers, to protect its intellectual property adequately and to secure capital as and when needed. The Company makes no commitment to update any forward-looking statement or to disclose any facts, events, or circumstances after the date hereof that may affect the accuracy of any forward-looking statement.
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