Advanced Tissue Sciences Announces Third Quarter Financial Results.Business Editors and Health/Medical Writers BIOWIRE2K LA JOLLA La Jolla (lə hoi`yə), on the Pacific Ocean, S Calif., an uninc. district within the confines of San Diego; founded 1869. The beautiful ocean beaches, in particular La Jolla shores and Black's Beach, and sea-washed caves attract visitors and , Calif.--(BUSINESS WIRE)--Nov. 13, 2002 Advanced Tissue Sciences, Inc. (OTC OTC See: Over-the-counter. OTC See over-the-counter market (OTC). BB: ATISQ) today announced its financial results for the third quarter ended September 30, 2002. Total revenues for the quarter were $5.0 million compared to $10.3 million for the same quarter last year. However the third quarter of 2001 included a $5.0 million milestone for achieving 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. approval of Dermagraft(R). Total revenues for the nine months ended September 30, 2002 were $16.0 million compared to $20.7 million for the nine months ended September 30, 2001. The company reported a net loss to common stockholders for the three months ended September 30, 2002 of $10.4 million or $0.14 per share compared to $1.7 million or $0.03 per share for the three months ended September 30, 2001. The company also reported a net loss to common stockholders for the nine months ended September 30, 2002 of $26.7 million or $0.37 per share compared to $19.3 million or $0.30 per share for the nine months ended September 30, 2001. The Dermagraft joint venture reported sales of TransCyte(R) and Dermagraft(R) to customers of $2.5 million for the third quarter of 2002, compared to $1.1 million in the same quarter last year. Dermagraft sales in the most recent quarter were $1.3 million compared to $0.1 million for the same period in 2001. As of September 30, 2002, the company had cash and cash equivalents of $3.1 million. Subsequent Events Subsequent to September 30, the company announced the filing on October 10, 2002 for reorganization under Chapter 11 of the U.S. Bankruptcy Code Bankruptcy Code may refer to:
A type of proceeding pursuant to federal Bankruptcy of the company's assets in connection with the reorganization. At the same time, the company also announced the resignation of Arthur J. Benvenuto, who was chairman, president and chief executive officer, and Gail K. Naughton, Ph.D. who was vice chairman. Both resignations are effective immediately. The board appointed Mark J. Gergen as chief restructuring restructuring - The transformation from one representation form to another at the same relative abstraction level, while preserving the subject system's external behaviour (functionality and semantics). officer to oversee the sale of the company's assets. Gergen was the company's chief financial and development officer and previously served as vice president of corporate development and general counsel. The board also appointed Andrew J. Buckland as acting chief financial officer to assist in the liquidation. Buckland was the company's executive director of finance and chief accounting officer. The Company also announced today that it intends to file a Form 12b-25 notification of late filing with the Securities and Exchange Commission for its quarterly report on Form 10-Q Form 10-Q See 10-Q. . The preparation and completion of the Form 10-Q has required an unexpectedly substantial amount of time, primarily due to the complexities surrounding the company's filing of a voluntary petition of bankruptcy and the decision to undertake an orderly liquidation. Accordingly, additional time is required to complete the preparation of the Form 10-Q. The company intends to file its Form 10-Q for the quarter ended September 30, 2002, on or before the close of business on November 19, 2002. Statements in this press release that are not strictly historical may be "forward-looking" statements, which involve risks and uncertainties. Actual results may differ materially from those described in this press release due to risks and uncertainties that exist in the company's decision to liquidate To pay and settle the amount of a debt; to convert assets to cash; to aggregate the assets of an insolvent enterprise and calculate its liabilities in order to settle with the debtors and the creditors and apportion the remaining assets, if any, among the stockholders or owners of the including, without limitation, uncertainties related to the company's ability to effect an orderly wind-down of its operations, the retention of the necessary personnel, the company's ability to formulate formulate /for·mu·late/ (for´mu-lat) 1. to state in the form of a formula. 2. to prepare in accordance with a prescribed or specified method. a plan of liquidation, the possible amendment, delay in implementation or termination of any proposed plan of liquidation, the ability of the company to find a buyer or buyers for its assets, the amounts to be realized in connection with the proposed sale of the company's assets, approval by the bankruptcy court bankruptcy court n. the specialized Federal court in which bankruptcy matters under the Federal Bankruptcy Act are conducted. There are several bankruptcy courts in each state, and each one's territory covers several counties. of the company's proposed plan of liquidation when formulated, including the sale of assets to Smith & Nephew NEPHEW, dom. rel. The son of a person's brother or sister. Amb. 514; 1 Jacob's Ch. R. 207. , the timing and amount of payments, if any, to security holders, the quotation of the company's shares on the OTC Bulletin Board OTC Bulletin Board An electronic quotation listing of the bid and asked prices of OTC stocks that do not meet the requirements to be listed on the NASDAQ stock-listing system. , a history of operating losses operating loss The excess of operating expenses over revenue. As with operating income, operating losses exclude revenues and expenses from operations that are not considered a regular part of the business. Also called deficit. Compare operating income. and accumulated ac·cu·mu·late v. ac·cu·mu·lat·ed, ac·cu·mu·lat·ing, ac·cu·mu·lates v.tr. To gather or pile up; amass. See Synonyms at gather. v.intr. To mount up; increase. deficits, potential write-offs and other charges, and the company's reliance on collaborative relationships, as well as other risks detailed from time to time in publicly available filings with the Securities and Exchange Commission including, without limitation, Advanced Tissue Sciences' 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 31, 2001 and the company's quarterly reports on Form 10-Q for the quarters ended March 31, 2002 and June 30, 2002. The company undertakes no obligation to release publicly the results of any revisions to these 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. to reflect events or circumstances arising after the date hereof here·of adv. Of this. hereof Adverb Formal or law of or concerning this Adv. 1. hereof - of or concerning this; "the twigs hereof are physic" . This caution is made under the safe harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. provisions 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. Financials Follow:
Advanced Tissue Sciences, Inc.
Condensed Consolidated Statements of Operations
(In millions, except per share amounts)
(Unaudited)
Three Months Nine Months
Ended Ended
----- -----
September 30, September 30,
2002 2001 2002 2001
---- ---- ---- ----
Revenues:
Joint venture contracts(1) $4.8 $4.1 $14.2 $13.1
Product sales to third parties -- 0.8 -- 1.2
Contracts and fees:
Milestones(3) -- 5.0 -- 5.0
Other 0.2 0.4 1.8 1.4
---- ---- ---- ----
Total revenues 5.0 10.3 16.0 20.7
---- ---- ---- ----
Costs and expenses:
Joint venture contracts(1) 4.8 3.6 14.0 12.3
Cost of goods sold(2) 0.4 1.3 1.6 2.7
Research and development 3.6 2.0 9.4 6.2
Selling, general and
administrative(3) 3.2 2.2 9.1 9.9
---- ---- ---- ----
Total costs and expenses 12.0 9.1 34.1 31.1
---- ---- ---- ----
Income (loss) from operations
before equity in losses of
joint ventures (7.0) 1.2 (18.1) (10.4)
Equity in losses of joint
ventures (3.0) (2.9) (8.0) (9.2)
---- ---- ---- ----
Loss from operations (10.0) (1.7) (26.1) (19.6)
Other income (expense), net (0.4) -- (0.6) 0.3
---- ---- ---- ----
Net loss applicable to common
stock $(10.4) $(1.7) $(26.7) $(19.3)
==== ==== ==== ====
Basic and diluted loss per
common share $(.14) $(.03) $(.37) $(.30)
==== ==== ==== ====
Weighted average shares
(millions) 73.16 73.15 73.15 64.20
==== ==== ==== ====
Condensed Consolidated Balance
Sheets
(In millions)
September, December
30 31,
2002 2001
---- ----
(Unaudited)
Assets:
Cash, cash equivalents and
short-term investments $ 3.1 $ 30.0
Inventory(2) 8.2 6.6
Other current assets 4.1 8.1
Property, net 9.7 11.0
Other assets 6.1 6.2
--- ---
Total assets $31.2 $61.9
=== ===
Liabilities and stockholders'
equity:
Current liabilities $12.7 $14.1
Long-term liabilities 3.9 5.8
Stockholders' equity 14.6 42.0
--- ---
Total liabilities and
stockholders' equity $31.2 $61.9
=== ===
Footnotes (1) Joint venture contract revenues include sales of Dermagraft(R) and TransCyte(R) to the Dermagraft Joint Venture at cost, and reimbursement Reimbursement Payment made to someone for out-of-pocket expenses has incurred. for research and administrative expenses incurred by the company on behalf of the Dermagraft and NeoCyte Joint Ventures. Each of the joint ventures is between the company and Smith & Nephew plc. (2) Cost of goods sold Cost of goods sold The total cost of buying raw materials, and paying for all the factors that go into producing finished goods. cost of goods sold includes costs associated with collagen collagen (kŏl`əjən), any of a group of proteins found in skin, ligaments, tendons, bone and cartilage, and other connective tissue. Cells called fibroblasts form the various fibers in connective tissue in the body. and NouriCel start-up manufacturing and related product development. At September 30, 2002, collagen work-in-process and finished goods inventory at cost exceeded net estimated realizable value, based upon the price at which we expect to sell the collagen to Inamed, by $0.8 million. Collagen inventory has therefore been written down by $0.3 million in the three months ended September 30, 2002 and $0.8 million in the nine-month periods ended September 30, 2002. (3) In September of 2001, we recognized a $5.0 million milestone payment from Smith & Nephew which became due on September 30th, on the approval by the U.S. Food and Drug Administration of a Premarket Approval premarket approval Medical devices A scientific and regulatory review by the FDA to ensure the safety and effectiveness of a Class III device, before its approval for marketing. See Advisory panel, Medical device. Application for Dermagraft in the treatment of chronic foot ulcers Ulcers (Digestive) Definition In general, an ulcer is any eroded area of skin or a mucous membrane, marked by tissue disintegration. In common usage, however, ulcer usually is used to refer to disorders in the upper digestive tract. in patients with diabetes. No milestone payments have been recognized in 2002. (4) Selling, general and administrative includes a non-cash gain of $0.7 million in the nine months ended September 30, 2002, and a non-cash expense Noun 1. non-cash expense - an expense (such as depreciation) that is not paid for in cash disbursal, disbursement, expense - amounts paid for goods and services that may be currently tax deductible (as opposed to capital expenditures) of $0.2 million for the comparable period in 2001, related to a variable stock option. For the quarter ended September 30, 2001, non-cash gain related to the variable stock option was $0.8 million, while for the quarter ended September 30, 2002 there was no gain or loss. As a result of the variable option treatment, variability in the market price of the company's common stock can result in significant increases and decreases in compensation expense from period to period. |
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