Able Laboratories Reports 2002 Second Quarter Results.Business Editors & Health/Medical Writers SOUTH PLAINFIELD South Plainfield, borough (1990 pop. 20,489), Middlesex co., NE N.J.; inc. 1926. It is the seat of several research and consulting firms and has plants that make chemicals, plastics, spices and flavorings, cosmetics, rubber products, pigments, electrical machinery, , N.J.--(BW HealthWire)--July 31, 2002 Able Laboratories, Inc. (OTCBB OTCBB See OTC Bulletin Board (OTCBB). :ABLA ABLA Asia Business Leader Awards ABLA American Belgian Laekenois Association ABLA American Blind Lawyers Association ABLA American Business Law Association ABLA Asheville Business Leaders Association (Asheville, NC) ) (BSE See Bombay Stock Exchange. BSE See Boston Stock Exchange (BSE). :AAB AAB ABN Amro Bank AAB Association of Applied Biologists (UK) AAB American Association of Bioanalysts AAB Army Air Base AaB Aalborg Boldspilklub (Danish Soccer Club) AAB All-to-All Broadcast ): -- The Company announced that its shareholders approved a one-for-fifteen reverse stock split of the Company's common stock. The reverse split became effective on June 3rd. Able Labs' common stock began trading on a post-split basis under the new ticker symbol, ABLA. The reverse split did not affect any stockholder's proportionate interest in Able Labs. -- Able completed a private placement of units, issuing an aggregate of $2,300,000 in 12% unsecured promissory notes, as well as warrants to purchase 170,200 shares of common stock at a purchase price of $5.10 per share. Able used the proceeds of the transaction to pay the lenders, and thereby eliminate its guarantee of $2,250,000 in 13.5% secured subordinated debt of its former distribution subsidiary. The new financing resulted in unsecured notes payable of $2.3 million along with $2.25 million in secured subordinated note receivable on Able's balance sheet. -- The Company announced that it presented at the UBS Warburg Global Specialty Pharmaceuticals Conference on June 6th. -- During the second quarter of 2002, the Company invested $640,000 in new equipment and plant improvements. -- The company leased an additional 25,000 square feet of warehousing space. -- Total employees increased from 175 at the end of the first quarter 2002 to 209 at the end of second quarter 2002. Able Laboratories, Inc. (OTCBB:ABLA) (BSE:AAB) today announced financial results for the three months ended June June: see month. 30, 2002. For the second quarter of 2002, the Company reported net sales Net Sales The amount a seller receives from the buyer after costs associated with the sale are deducted. Notes: This amount is calculated by subtracting the following items from gross sales: merchandise returned for credit, allowances for damaged or missing goods, freight of $12.5 million, a 34% increase from net sales of $9.3 million reported in the 2002 first quarter and net income of $2.3 million, an increase of 38% over the 2002 first quarter. The sequential One after the other in some consecutive order such as by name or number. increase in net sales is primarily due to increased customer base and multiple product purchases by those customers. The second quarter 2002 cost of sales was $6.6 million, resulting in gross margins of 47%. This compares with cost of sales of $5.0 million, and 46% gross margins reported in the prior quarter. The slight increase in gross margins is due to increased volume resulting in better absorption absorption [Lat.,=sucking from], taking of molecules of one substance directly into another substance. It is contrasted with adsorption, in which the molecules adhere only to the surface of the second substance. of fixed overhead costs overhead costs see fixed costs. . Research and development expenses increased 67% to $1.7 million in the second quarter of 2002 from $1.0 million for the prior quarter. The Company continues on its aggressive product development schedule, which included several additional bio-studies conducted to develop new generic drugs generic drug, a drug sold or prescribed under the nonproprietary name of its active ingredients or under a generally descriptive name rather than under a brand or trade name. . As a result, there are 17 ANDAs currently pending approval at the FDA FDA abbr. Food and Drug Administration FDA, n.pr See Food and Drug Administration. FDA, n.pr the abbreviation for the Food and Drug Administration. . Selling, general and administrative expenses for the 2002 second quarter increased to $1.8 million from $1.5 million in the prior quarter. However, SG&A accounted for 14% of net sales, compared with 17% of net sales in the prior quarter. This improvement resulted from increased sales and increased operating efficiencies at Able Laboratories. As a result of the above factors, the Company reported net income for the 2002 second quarter of $2.3 million, or $0.19 basic earnings per share, compared with net income of $1.7 million, or $0.14 basic earnings per share, in the first quarter of 2002. Diluted earnings per share diluted earnings per share An earnings measure calculated by dividing net income less preferred stock dividends for a period by the average number of shares of common stock that would be outstanding if all convertible securities were converted into shares of increased to $0.15 per share for the 2002 second quarter compared to $0.10 per share for the 2002 first quarter. The Company had cash and cash equivalents of $3.2 million and working capital of $8.3 million as of June 30, 2002. "We are making inroads inroads Noun, pl make inroads into to start affecting or reducing: my gambling has made great inroads into my savings inroads npl to make inroads into [+ into several new customers and are also successful in increasing the breadth Breadth The percentage of assets or stocks advancing relative to those unchanged or declining. Also the number of independent forecasts available per year. A stock picker forecasting returns to 100 stocks every quarter exhibits a breadth of 400, assuming each forecast is of the product line purchased by several of our current customers," commented Jay Wadekar, President of Able Laboratories. "We will continue to focus on developing niche niche: see ecology. niche Smallest unit of a habitat that is occupied by an organism. A habitat niche is the physical space occupied by the organism; an ecological niche is the role the organism plays in the community of organisms found in the products where we believe we will face lesser competition and better margins," Mr. Wadekar added. Second Quarter 2002 -- Corporate Highlights -- The Company announced that its shareholders approved a one-for-fifteen reverse stock split of the Company's common stock. The reverse split became effective on June 3rd. Able Labs' common stock began trading on a post-split basis under the new ticker symbol, ABLA. The reverse split did not affect any stockholder's proportionate interest in Able Labs. -- Able completed a private placement of units, issuing an aggregate of $2,300,000 in 12% unsecured promissory notes, as well as warrants to purchase 170,200 shares of common stock at a purchase price of $5.10 per share. Able used the proceeds of the transaction to pay the lenders, and thereby eliminate its guarantee of $2,250,000 in 13.5% secured subordinated debt of its former distribution subsidiary. The new financing resulted in unsecured notes payable of $2.3 million along with $2.25 million in secured subordinated note receivable on Able's balance sheet. -- The Company announced that it presented at the UBS Warburg Global Specialty Pharmaceuticals Conference on June 6th. -- During the second quarter of 2002, the Company invested $640,000 in new equipment and plant improvements. -- The company leased an additional 25,000 square feet of warehousing space. -- Total employees increased from 175 at the end of the first quarter 2002 to 209 at the end of second quarter 2002. Conference Call Information Able Laboratories has scheduled a conference call and web cast regarding this announcement to be held today, beginning at 10:30 a.m. Eastern Time (7:30 a.m. Pacific Time). To participate in the live call via telephone, please call 888/803-8295. A telephone replay will be available for 48 hours following the call by dialing 800/642-1687, and entering reservation A clause in a deed of real property whereby the grantor, one who transfers property, creates and retains for the grantor some right or interest in the estate granted, such as rent or an Easement ,a right of use over the land of another. number 5067818. Individuals interested in listening to the conference call via the Internet Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the may do so by visiting the web site www.ablelabs.com. A replay will be available on the web site for 90 days. Able Laboratories is a developer and manufacturer of generic Generic Describes the characteristics and/or experience of the total universe of a coupon of MBS sector type; that is, in contrast to a specific pool or collateral group, as in a specific CMO issue. pharmaceuticals. Since March 2001, Able has received 14 ANDA ANDA abbr. abbreviated new drug application approvals. The Company has completed its transition to focus its activities on generic drug development, manufacturing and sales. Further information on Able may be found on the Company's web site, www.ablelabs.com Except for historical facts, the statements in this news release, as well as oral statements or other written statements made or to be made by Able Laboratories, Inc., are forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. within the meaning of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995 and involve risks and uncertainties. For example, statements about the Company's operations, capital-raising transactions and financial accounting, the current or expected market size for its products, the success of current or future product offerings, the research and development efforts and the Company's ability to file for and obtain U.S. Food and Drug Administration approvals for future products, are forward-looking statements. Forward-looking statements are merely the Company's current predictions of future events. The statements are inherently uncertain, and actual results could differ materially from the statements made herein. There is no assurance that the Company will achieve the sales levels that will make its operations profitable or that ANDA filings and approvals will be completed and obtained as anticipated. For a description of additional risks, and uncertainties, please refer to the Company's filings with the Securities and Exchange Commission, including its Annual Report on Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. for the year ended December December: see month. 31, 2001 and its Form 10-Q Form 10-Q See 10-Q. for the three months ended March 31, 2002. The Company assumes no obligation to update its forward-looking statements to reflect new information and developments.
ABLE LABORATORIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
ASSETS
June 30, December 31,
2002 2001
----------- -----------
Current assets:
Cash and cash equivalents $3,153,176 $1,155,266
Accounts receivable, net
of allowances of
$13,073,203 and $8,116,822 1,432,103 4,646,203
Inventory 9,695,243 4,718,909
Prepaid expenses and other current assets 548,699 783,482
Total current assets 14,829,221 11,303,860
Property and equipment, net 6,068,505 4,495,511
Other assets:
Investment in RxBazaar securities -- 1,040,000
RxBazaar note receivable 1,993,403 --
Debt financing costs, net
of accumulated amortization 175,406 182,606
Cash deposits with bond trustee 488,583 505,095
Deposits and other assets 153,202 110,617
Total other assets 2,810,594 1,838,318
$23,708,320 $17,637,689
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Notes payable and current
portion of long-term debt $244,000 $586,807
Accounts payable and accrued expenses 6,314,833 4,568,443
Total current liabilities 6,558,833 5,155,250
Long-term debt, less current portion 4,055,734 2,290,500
Deferred gain on sale of subsidiary -- 1,296,597
Total liabilities 10,614,567 8,742,347
Stockholders' equity:
Preferred stock, $.01 par value,
10,000,000 shares authorized,
59,650 shares of Series Q in 2002
and 67,910 shares of Series L
and Q in 2001 (liquidation
value $5,965,000 and $6,791,000) 597 679
Common stock, $.01 par value,
25,000,000 shares authorized,
11,585,304 and 11,301,976 shares
issued and outstanding 115,853 113,020
Additional paid-in capital 80,154,530 80,011,072
Accumulated deficit (67,177,227) (71,229,429)
Total stockholders' equity 13,093,753 8,895,342
$23,708,320 $17,637,689
ABLE LABORATORIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ended Six Months Ended
----------------------- -----------------------
June 30, June 30, June 30, June 30,
2002 2001 2002 2001
----------- ---------- ----------- ----------
Sales, net $12,499,578 $3,530,737 $21,803,569 $7,457,032
Cost of sales 6,568,183 2,847,911 11,583,015 5,479,578
Gross profit 5,931,395 682,826 10,220,554 1,977,454
Operating expenses:
Selling, general and
administrative 1,803,048 1,093,099 3,347,967 2,910,802
Research and
development 1,707,792 569,508 2,727,855 1,009,246
Total operating
expenses 3,510,840 1,662,607 6,075,822 3,920,048
Operating income
(loss) 2,420,555 (979,781) 4,144,732 (1,942,594)
Other income (expense):
Interest and financing
expense (113,925) (278,892) (194,232) (765,830)
Loss on investment
securities -- -- -- (50,000)
Miscellaneous income 42,850 123,430 101,702 159,686
Other income
(expense), net (71,075) (155,462) (92,530) (656,144)
Net income (loss) 2,349,480 (1,135,243) 4,052,202 (2,598,738)
Less returns to preferred
stockholders:
Beneficial conversion
features -- 170,833 -- 1,960,832
Dividends paid
and accrued 120,006 119,615 246,876 156,780
Net income (loss)
applicable to
common stock $2,229,474 $(1,425,691) $3,805,326 $(4,716,350)
Net income (loss) per share:
Basic $0.19 $(0.19) $0.33 $(0.64)
Diluted $0.15 $(0.19) $0.25 $(0.64)
Weighted average shares outstanding:
Basic 11,524,018 7,651,144 11,460,762 7,391,645
Diluted 16,097,317 7,651,144 16,272,780 7,391,645
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