Star Scientific, Inc. (NASDAQ:STSI) registers sales increase amid legal problems

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Dallas, Texas 09/09/2013 (Financialstrend) – Star Scientific, Inc. (NASDAQ:STSI), which sells the anitoxidant supplement Anatabloc, has registered income of $2.5 million for the third quarterly period as against $1.4 earnings registered during the corresponding period of last year. The optimistic earnings was positive news for a firm, which recently has witnessed net losses augmentation owing to legal charges connected to several probes.

The firm stated that 2nd quarter sale facts augmentation of 74% was attributable completely to augmented Anatabloc sales volume.  Net sales for 6 month period ending June 30, 2013, remained at $5.0 million, a 100% augmentation as against $2.5 million for the corresponding period of last year.

GNC sales zoom

During the quarterly period of 2013, Star Scientific started to add additional marketing dollars behind advertising its product on GNC store tables.  The firm stated that these augmented expenses helped in registering an increase of 20% in GNC sales, and led to some cannibalism of its web sales that have superior margins.  Long term, the firm stated that it considers that this shift will cause lower client acquirement cost and overall augmented net sales because of higher sales volume.

Gross profits stood at $1 million for the three month period ended June 30, 2013 as against gross profits of $700,000 during the corresponding period of last year.

Legal charges weigh heavy

The overall picture was less optimistic, though. Net losses increased even with the expanded sales volume.  The net loss for the second quarterly period of this year was $8.7 million as against a net loss of $8 million for the corresponding period of the last year. The net loss for 6 month period ended June 30, 2013, remained at $16.9 million as against a net loss of $13.2 million for the similar period in 2012.

The firm attributed the augmented losses to advanced legal feeds associating to an ongoing inquiry of the company’s link to Virginia Governor Bob McDonnell.

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