HAYWARD, Calif.--(BUSINESS WIRE)--Aug. 4, 2004--IMPAX
Laboratories, Inc. (NASDAQ:IPXL) today reported financial results for
the three and six months ended June 30, 2004.
Total revenues for the second quarter of 2004 were $30.8 million,
more than double total revenues of $14.1 million in the prior year's
second quarter, and down sequentially from total revenues of $38.9
million in the first quarter of 2004. The year-over-year increase was
primarily due to shipments of our generic versions of Wellbutrin(R) SR
(Bupropion Hydrochloride) 100 mg and 150 mg Controlled Release
Tablets, and Declomycin(R) (Demeclocycline Hydrochloride) 150 mg and
300 mg Tablets, which commenced during the first quarter of 2004;
Zyban(R) (Bupropion Hydrochloride) and Sinemet(R) CR
(Carbidopa/Levodopa) Extended Release Tablets, which commenced during
the second quarter of 2004; and higher over-the-counter (OTC) product
revenues. The sequential quarter decline was due to timing of product
shipments and pipeline filling, particularly as related to the launch
of Bupropion Hydrochloride in the first quarter. During the 2004
second quarter, IMPAX's revenues from sales of Bupropion Hydrochloride
products, through our strategic alliance agreements with Teva and
Andrx, were approximately $8.1 million, compared with $23.9 million in
the first quarter. In addition, in the first quarter the Company
recognized revenue of $2.5 million from Teva related to the refundable
deposit under its strategic alliance agreement.
Net income for the 2004 second quarter was $572,000, or $0.01 per
fully diluted share, compared with a net loss of $2,284,000, or
$(0.05) per share, in the prior year's second quarter, and net income
of $9,048,000, or $0.15 per fully diluted share, in the first quarter
of 2004.
Gross margin for the 2004 second quarter was $12.3 million, or
approximately 39.9% of total revenues, compared with gross margin of
$4.7 million, or approximately 33.7% of total revenues, in the prior
year's second quarter and down sequentially from $20.3 million, or
approximately 52.3%, of total revenues in the first quarter of 2004.
The year-over-year increase in the gross margin percentage was
primarily due to the introduction of new products since last year with
higher margins, such as Bupropion Hydrochloride, Demeclocycline
Hydrochloride, Flavoxate, and Carbidopa/Levodopa. The decrease in the
gross margin percentage from the first quarter of 2004 was primarily
due to changes in product mix: higher OTC product revenues with lower
margins and lower Bupropion Hydrochloride sales with higher margins in
the second quarter, and the $2.5 million first quarter revenue from
Teva related to the refundable deposit. Research and development
expense for the 2004 second quarter of $7.6 million was approximately
$3.3 million higher than the 2003 second quarter, and approximately
$1.1 million higher than the 2004 first quarter, primarily due to
higher professional fees related to patents and patent litigation
costs, higher personnel costs, biostudies, clinical studies, and new
product introduction costs.
For the six months ended June 30, 2004, the Company reported total
revenues of $69.7 million compared with total revenues of $25.5
million in the comparable period of the previous year. Net income for
the first half of 2004 was $9.6 million, or $0.16 per fully diluted
share, compared with a net loss of $5.5 million, or $(0.11) per share,
for the first half of 2003.
Unrestricted cash, cash equivalents, and short-term investments
were $98.6 million at June 30, 2004, compared to $15.5 million at
December 31, 2003. The increase in cash balance was primarily due to a
private placement of $95 million aggregate principal amount of 1.250%
convertible senior subordinated debentures that closed during the
second quarter of 2004 and continuing profitable operations.
"We continued our transformation to profitability with our second
consecutive profitable quarter," said Barry R. Edwards, Chief
Executive Officer of IMPAX. "Although our profit was more modest this
quarter than during the first quarter, owing to shipment timing, lower
gross margins primarily due to changes in product mix, and research
and development expense, we continue to see the benefits of past
research efforts as highlighted by final FDA approval for our generic
versions of Sinemet CR, Zyban, and Proamatine received during the
quarter.
"Our new distribution agreement with Leiner Health Products for
Loratadine products, subsequent to the quarter's end, increases our
commercial outlets for OTC products," Mr. Edwards continued.
IMPAX currently has 13 applications pending at the FDA, including
five tentatively approved, which address approximately $4.9 billion in
U.S. product sales for the 12 months ended June 30, 2004, based on
NDCHealth data. Ten of these filings were made under Paragraph IV of
the Hatch-Waxman Amendments.
IMPAX Laboratories, Inc. is a technology-based specialty
pharmaceutical company applying its formulation expertise and drug
delivery technology to the development of controlled-release and
specialty generics in addition to the development of branded products.
IMPAX markets its generic products through its Global Pharmaceuticals
division and intends to market its branded products through the IMPAX
Pharmaceuticals division. Additionally, where strategically
appropriate, IMPAX has developed marketing partnerships to fully
leverage its technology platform. IMPAX Laboratories is headquartered
in Hayward, and has a full range of capabilities in its Hayward and
Philadelphia facilities. For more information, please visit the
Company's Web site at: www.impaxlabs.com.
"Safe Harbor" statement under the Private Securities Litigation
Reform Act of 1995:
To the extent any statements made in this news release contain
information that is not historical, these statements are
forward-looking in nature and express the beliefs and expectations of
management. Such statements are based on current expectations and
involve a number of known and unknown risks and uncertainties that
could cause IMPAX's future results, performance, or achievements to
differ significantly from the results, performance, or achievements
expressed or implied by such forward-looking statements. Such risks
and uncertainties include, but are not limited to, IMPAX's ability to
obtain sufficient capital to fund its operations, the difficulty of
predicting FDA filings and approvals, consumer acceptance and demand
for new pharmaceutical products, the impact of competitive products
and pricing, IMPAX's ability to successfully develop and commercialize
pharmaceutical products, IMPAX's reliance on key strategic alliances,
the uncertainty of patent litigation, the availability of raw
materials, the regulatory environment, dependence on patent and other
protection for innovative products, exposure to product liability
claims, fluctuations in operating results, and other risks detailed
from time to time in IMPAX's filings with the Securities and Exchange
Commission. Forward-looking statements speak only as to the date on
which they are made, and IMPAX undertakes no obligation to update
publicly or revise any forward-looking statement, regardless of
whether new information becomes available, future developments occur,
or otherwise.
IMPAX LABORATORIES, INC.
STATEMENTS OF OPERATIONS
(dollars in thousands, except share and per share data)
Three Months Ended Six Months Ended
June 30, June 30,
2004 2003 2004 2003
Net sales $ 30,304 $ 13,460 $ 66,126 $ 24,526
Revenue from
reversal of
refundable
deposit from Teva -- -- 2,500 --
Other revenues 541 607 1,072 966
Total revenues 30,845 14,067 69,698 25,492
Cost of sales 18,537 9,321 37,087 17,468
Gross margin 12,308 4,746 32,611 8,024
Research and
development 7,667 4,347 14,171 8,102
Less: Teva
payments (78) (22) (89) (154)
Research and
development, net 7,589 4,325 14,082 7,948
Selling expenses 711 438 1,437 1,006
General and
administrative
expenses 3,117 2,083 6,468 4,205
Other operating
income (expense),
net 4 10 11 21
Income (loss) from
operations 895 (2,090) 10,635 (5,114)
Interest income 271 70 327 112
Interest expense (564) (264) (836) (495)
Income (loss)
before income
taxes $ 602 $ (2,284) $ 10,126 $ (5,497)
Provision for
income taxes 30 -- 506 --
Net income (loss) 572 (2,284) 9,620 (5,497)
Net income (loss)
per share
Basic $ 0.01 $ (0.05) $ 0.17 $ (0.11)
Diluted $ 0.01 $ (0.05) $ 0.16 $ (0.11)
Weighted average
common shares
outstanding
Basic 58,152,703 50,608,445 57,543,768 49,250,049
Diluted 62,417,454 50,608,445 61,808,519 49,250,049
IMPAX LABORATORIES, INC.
CONDENSED BALANCE SHEETS
(in thousands)
June 30, December 31,
2004 2003
(unaudited) (unaudited)
ASSETS
Cash, cash equivalents, and short-
term investments $ 98,556 $ 15,505
Restricted cash(a) 0 10,000
Accounts receivable, net 23,340 9,885
Inventory 37,102 28,479
Property, plant and equipment, net 42,511 38,132
Goodwill and intangibles, net 27,761 27,953
Other assets 6,536 2,752
Total assets $235,806 $132,706
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities $ 40,946 $ 42,365
Long-term debt, net of current
portion 7,507 8,854
Refundable deposit from Teva 0 5,000
Convertible debentures 95,000 0
Deferred revenues and other
liabilities 2,768 2,879
Mandatorily redeemable convertible
preferred stock 0 7,500
Stockholders' equity 89,585 66,108
Total liabilities and stockholders'
equity $235,806 $132,706
(a) Represents cash held as collateral for the $25 million revolving
credit facility and term loan with Wachovia Bank N.A. The
restriction was removed by Wachovia Bank N.A. in the 2004 second
quarter.
CONTACT: Company Contacts:
IMPAX Laboratories, Inc.
Barry R. Edwards, 215-933-0323, Ext. 4360
Larry Hsu, 510-476-2000, Ext. 1111
Cornel C. Spiegler, 215-289-2220, Ext. 1706
www.impaxlabs.com
or
Investor Relations Contacts:
Lippert/Heilshorn & Associates, Inc.
Kim Sutton Golodetz, 212-838-3777 (kgolodetz@lhai.com)
Bruce Voss, 310-691-7100 (bvoss@lhai.com)
www.lhai.com
SOURCE: IMPAX Laboratories, Inc.