Deal to cut payables
helps Mera post
profitable quarter
Mera Pharmaceuticals Inc., benefiting from an agreement to reduce its accounts payable by about $300,000, posted net income of $93,779 in its fiscal 2004 second quarter. A year ago, Mera had a net loss of $435,474.
But the Kona-based nutritional supplement company still had an operating loss for the period, according to a filing yesterday with the Securities and Exchange Commission. Mera narrowed its operating loss to $205,997 from $406,392 in the fiscal second quarter of 2003.
"The steady and significant progress the company has made in its business fundamentals is very encouraging to me and we're looking to not only continue that trend but to accelerate it in future quarters," Mera's Chief Executive Daniel Beharry said.
Beharry said the resolution of the accounts payable was a compromise of disputed claims. He did not disclose the identities of the parties.
Mera, known as Aquasearch Inc. before emerging from Chapter 11 reorganization in September 2002, has lost $2.8 million since exiting bankruptcy and $25.1 million since it was founded in 1988.
Revenues rose 22.8 percent in the quarter ended April 30 to $161,999 from $131,884 as product sales jumped 315 percent to $117,099 from $28,207. Mera attributed the product gain to a general increase in demand and sales of raw materials that were not made in the year-ago quarter.
"Sales made through the company's retail sales channel result from large orders place through brokers, which in turn supply the demand at the retail outlet level," the filing said. "The timing of such orders can significantly affect the revenues that are recognized -- or not recognized -- in any given quarter."
As a result, the company said, the rate of product sales in any quarter doesn't necessarily reflect the rate at which product sales are occurring. It said a more predictable rate will be established as the company's product, AstaFactor, is placed into more retail outlets.
The company received no royalty revenue in the quarter after receiving $43,608 in royalties in the year-earlier period. Mera stopped getting royalty income in January.
Mera said it reduced its total operating expenses fell more than 40 percent to $317,085 from $531,716 largely due to cost-cutting measures.