LOS ANGELES, Nov. 20, 2006 (PRIMEZONE) -- Vertical Branding, Inc. (OTCBB:VBDG), an innovative consumer products, branding, marketing, and distribution company, reported today the Company's financial results for the quarter ended September 30, 2006, showing dramatic improvement over results in the same period in 2005.
Consolidated revenues for the three months ended September 30, 2006 were $5.3 million, representing an increase of $4.1 million, or 342% over the same period in 2005. The Retail Distribution business contributed $1.2 million to revenues since its inception on August 1, 2006, and the Company's Direct to Consumer marketing operations contributed $3.9 million to the 3rd Quarter 2006 revenues. The balance of the increase in revenues was due to the real estate operations that Vertical Branding acquired in a transaction in November 2005.
The gross profit for the three months ended September 30, 2006 was $2.6 million representing a 476% growth over the same period in 2005. The increase in gross profit was attributable to the increase in sales and an increase in the profit margins on the products sold.
Consolidated revenues were $12.4 million for the nine months ended September 30, 2006, representing a sharp increase of $6.6 million, or 88% as compared to the same period in 2005. The Company attributes its growth in revenues to the proceeds from the 10% secured convertible financing that closed in August and September 2006. The funding allowed the company to successfully launch new products and invest in media advertising in its Direct Response Marketing business. The funding also enabled the Company to acquire the Retail Distribution business on August 1, 2006. Due to these reasons, EBITDA, non-cash stock-based compensation and loss from discontinued operations was $90,000 for the quarter ended September 30, 2006 compared to (i) a loss of $0.9 million for the same period in 2005, and (ii) a loss of $1.4 million for the three months ended June 30, 2006.
The Company reported an overall loss for the quarter of $.471 Million compared to a loss in Q3 of 2005 of $.915 Million. However, these results reflect a narrowing loss for the same period a year ago by almost 50%.
"We are very happy with the results of this quarter as an indication of the direction our business is heading. The contributions of our Retail division and strong sales in our direct to consumer segment reflect that our products are selling well and at good margins," said, Nancy Duitch, CEO of Vertical Branding, Inc.
"We have worked very hard to integrate our Retail division into our overall operations and to continue to bring high quality products with strong consumer appeal to market. This quarter's results represent to us a significant turning point in our operations and our ability to build a product brand through direct to consumer advertising and then successfully extend its distribution into Retail," said Alan H. Gerson, President and C.O.O.
About Vertical Branding, Inc.
Vertical Branding, Inc. (OTCBB:VBDG) is a consumer products, branding, marketing, and distribution company. The Company takes an integrated vertical marketing approach to brand building utilizing a variety of media channels, including television, online media, and print advertising. The Company also has established retail, catalog, and international product distribution channels to drive consumer sales. The Company's focus is on finding appealing and high quality products that meet a real need in the marketplace with emphasis on the beauty, personal care, and house ware product categories.
Information Regarding Forward-Looking Statements
Except for historical information contained herein, the statements in this Press Release are forward-looking statements that are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements involve known and unknown risks and uncertainties, which may cause our actual results in future periods to differ materially from forecasted results. These risks and uncertainties include, among other things, product demand, market competition, and risks inherent in our operations. These and other risks are described in our filings with the Securities and Exchange Commission.