HAYWARD, Calif.--(BUSINESS WIRE)--Feb. 17, 2004--IMPAX
Laboratories, Inc. (Nasdaq:IPXL) today reported financial results for
the three and twelve months ended December 31, 2003.
Revenues for the fourth quarter of 2003 were $16,829,000, up more
than 100% compared with total revenues of $8,400,000 in the prior
year's fourth quarter, and compared with total revenues of $16,497,000
in the third quarter of 2003. The year-over-year increase for the
fourth quarter was primarily due to shipments of over-the-counter
(OTC) Loratadine and Pseudoephedrine Sulfate (5mg/120mg) 12-hour
Extended Release Tablets and Flavoxate Hydrochloride 100mg Tablets
(which began shipping during the fourth quarter of 2003), and higher
sales of Fludrocortisone Tablets, Minocycline Capsules, and the LIPRAM
product family. Included in the 2003 fourth quarter revenues was
$3,500,000 representing the reversal of part of the refundable deposit
from Teva under its strategic alliance agreement related to its
exercise of the exclusivity option for certain products. On a
sequential-quarter basis, sales were impacted by lower OTC product
shipments. As a result of an increased manufacturing pace during the
quarter, there was a temporary reduction in production of OTC products
as additional resources were put in place to sustain a higher level of
manufacturing output going forward. OTC production is now back to full
capacity and demand for these products has continued to be strong. In
addition, inventory has been built in preparation for anticipated new
product launches.
The net loss for the 2003 fourth quarter was $5,102,000, or
$(0.09) per share, compared with a net loss of $3,471,000, or $(0.07)
per share, in the prior-year fourth quarter. Net loss for the 2003
fourth quarter was negatively impacted by $2,365,000, or approximately
$(0.04) per share, due to a significant number of batches being
written-off, primarily related to anticipated new product launches.
Additionally, during the third quarter a substantial number of
manufacturing personnel were added in order to increase output in
preparation for expected new product launches. The impact of this
increase was felt during the 2003 fourth quarter in higher unabsorbed
manufacturing costs. In addition to higher spending in manufacturing,
there was also higher spending in research and development as new
applications continued to be filed with the FDA, and higher sales and
general administrative costs. The net loss for the fourth quarter of
2002 was favorably impacted by the reversal of $1,595,000 net interest
on the refundable deposit from Teva.
For the twelve months ended December 31, 2003, the Company
reported total revenues of $58,818,000, up more than 139% when
compared with total revenues of $24,515,000 in the previous year. The
year-over-year annual increase was primarily due to the introduction
of OTC Loratadine and Pseudoephedrine Sulfate (5mg/120mg) 12-hour
Extended Release Tablets and Flavoxate Hydrochloride 100mg Tablets
during 2003 after receiving approval from the U.S. Food and Drug
Administration ("FDA"), and higher sales of Fludrocortisone Tablets,
Minocycline Capsules, and the LIPRAM product family. Also included in
the 2003 revenues was $3,500,000 representing the reversal of part of
the refundable deposit from Teva related to its exercise of the
exclusivity option for certain products.
The net loss for the twelve months ended December 31, 2003, was
$14,207,000, or $(0.28) per share, compared with a net loss of
$20,040,000, or $(0.42) per share, in the previous year. Net loss
narrowed due to increased sales, which partially offset increases in
manufacturing expenses, research and development, and other operating
expenses. Unrestricted cash, cash equivalents, and short-term
investments were $15.5 million at December 31, 2003, compared to $10.2
million at December 31, 2002. In December 2003, we transferred the $25
million revolving credit facility and term loan from Congress
Financial to Wachovia Bank N.A., thereby securing better terms and
conditions. As of January 15, 2004, our refundable deposit obligation
to Teva was satisfied in full due to a combination of common stock
issued to Teva, and achievement of a milestone amount due to Teva's
exercise of the exclusivity option for certain products. Recently, the
holders of the Mandatorily Redeemable Convertible Preferred Stock
which was issued in March 2000, converted their entire 75,000
preferred shares into 1,500,000 shares of common stock.
"We achieved record sales this past year as we benefited from the
work of previous years through the receipt of FDA approvals, launches
of new products, both on our own as well as with our partners, and the
resolution of several patent lawsuits," said Barry R. Edwards, Chief
Executive Officer. "Our fourth quarter product sales were off
sequentially as we had lower OTC product shipments while we put the
manufacturing resources in place to allow us to sustain a higher level
of manufacturing output going forward. We are pleased that we have
been able to build inventories of products anticipated to be launched
in early 2004 and will continue our efforts to expand our
manufacturing capacity and capabilities."
Larry Hsu, Ph.D., President, added: "We are very pleased that our
development team reached the high end of our goal in 2003 by filing
eight applications: six Abbreviated New Drug Applications (`ANDAs')
and two Investigative New Drug (`IND') applications. This marks the
fourth straight year that we have filed eight applications. Once
again, for 2004, we expect to be able to file at least six new
applications with the FDA."
IMPAX currently has twenty applications pending at the FDA,
including five applications tentatively approved, that address,
according to NDC Health, approximately $6.8 billion in U.S. branded
product sales for the twelve months ended December 31, 2003. Fifteen
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 Twelve Months Ended
December 31, December 31,
(unaudited) (unaudited)
2003 2002 2003 2002
Net sales $ 13,131 $ 7,998 $ 53,565 $ 23,758
Other revenues(a) 3,698 402 5,253 757
Total revenues 16,829 8,400 58,818 24,515
Cost of sales 13,325 6,218 43,769 18,492
Gross profit 3,504 2,182 15,049 6,023
Research and
development 4,890 4,355 17,195 16,254
Less: Teva
reimbursements (10) (219) (257) (705)
Research and
development, net 4,880 4,136 16,938 15,549
Selling expenses 945 835 2,497 2,836
General and
Administrative 2,650 2,203 9,176 8,396
Other operating
income (expense),
net 2 3 27 (36)
Net loss from
operations (4,969) (4,989) (13,535) (20,794)
Interest income 81 104 280 644
Interest
expense(b) (214) 1,414 (952) 110
Net loss $ (5,102) $ (3,471) $ (14,207) $ (20,040)
Net loss per share
(basic and
diluted) $ (0.09) $ (0.07) $ (0.28) $ (0.42)
Weighted average
common shares
outstanding 54,208,856 47,867,379 51,346,587 47,444,364
(a) The Other Revenues for the quarter and twelve months ended
December 31, 2003, included $3,500,000 in reversal of part of the
refundable deposit from Teva under its strategic alliance
agreement related to its exercise of the exclusivity agreement for
certain products.
(b) The interest expense for the quarter and twelve months ended
December 31, 2002, included the reversal of the interest on the
refundable deposit from Teva, as follows:
Q-4 2002 Year 2002
Reversal of Interest on Refundable Deposit $2,190,000 $ 876,000
Other Interest (181,000) (565,000)
Less: Amounts Previously Capitalized (595,000) (201,000)
Total Interest Expense $1,414,000 $ 110,000
IMPAX LABORATORIES, INC.
CONDENSED BALANCE SHEETS
(in thousands)
December 31, December 31,
2003 2002
(unaudited) (unaudited)
ASSETS
Cash, cash equivalents and short-
term investments $ 15,505 $ 10,219
Restricted cash(a) 10,000 10,000
Accounts receivable, net 9,885 6,524
Inventory 28,479 10,478
Property, plant and equipment, net 38,132 37,065
Goodwill and intangibles, net 27,953 28,337
Other assets 2,752 1,780
Total assets $ 132,706 $ 104,403
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities $ 42,365 $ 23,248
Long-term debt, net of current
portion 8,854 9,105
Refundable deposit(b) 5,000 22,000
Other liabilities 2,879 1,486
Mandatorily redeemable convertible
preferred stock(c) 7,500 7,500
Stockholders' equity 66,108 41,064
Total liabilities and
stockholders' equity $ 132,706 $ 104,403
(a) Collateral for the $25 million revolving credit facility and term
loan with Congress Financial until December 2003, and thereafter
with Wachovia Bank N.A.
(b) As of January 15, 2004, our refundable deposit obligation to Teva
was satisfied in full due to a combination of common stock issued
to Teva and achievement of a milestone amount due to Teva's
exercise of the exclusivity option for certain products.
(c) Recently, the holders of the Mandatorily Redeemable Convertible
Preferred Stock converted their entire 75,000 preferred shares
into 1,500,000 shares of common stock.
CONTACT: Company Contacts:
IMPAX Laboratories, Inc.
Barry R. Edwards, 215-289-2220, Ext. 1771
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.