Encorium Doubles Loss in Q2, Continues Effort to Sell European Subsidiary
Encorium’s losses continued to grow in the second quarter, increasing $604,000 to $1.3 million or $(0.06) per diluted share, compared with a net loss of $665,000, or $(0.03) per diluted share for the same period last year.
Net revenue for the quarter also plunged to $4.5 million, a 23.37% drop compared with last year’s quarter. Year-to-date revenues were $9.02 million, down from $11.32 million in 2008.
The Wayne, Pa.-based contract research organization (CRO) entered into a non-binding letter of intent to sell its European subsidiary, Encorium Oy, in May, but that sale has yet to materialize. As part of the company’s financial results released Monday night, Encorium said it does not expect this transaction to close until the fourth quarter. In the event the sale does not go through, the CRO said it will seek strategic alternatives, including an attempt to secure additional financing.
“If we are unable to secure additional financing on terms acceptable to us and on a timely basis, we may significantly reduce our operating costs, which may include the cessation of operations in some countries or seek stockholder approval to liquidate and dissolve. Any decision to liquidate and dissolve the company may occur at any point during or before the first quarter of 2010. It is unclear whether there would be funds available for distribution to our stockholders in these instances,” Encorium said in a press release.
Encorium completed the sale of its U.S. operations to Pierrel Research USA last month.