Akorn, Inc. Reports Third Quarter 2005 Financial Results; Expands Business Development Activities.BUFFALO GROVE Buffalo Grove A village of northeast Illinois, a suburb of Chicago. Population: 43,300. , Ill. -- Akorn, Inc. (AMEX AMEX See: American Stock Exchange :AKN AKN King Salmon Airport (Alaska) AKN Altona-Kaltenkirchen-Neumünster (public transportation system in the north of Hamburg, Germany) AKN Net Cargo Ship (Auxiliary, Cargo, Net) ) today announced 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 $11.0 million for the third quarter ended September September: see month. 30, 2005 vs. $15.4 million in the comparable prior year period. The revenue shortfall Shortfall The amount by which the capital required to fulfill a financial obligation exceeds available capital. Notes: Shortfall risk is often combated with an efficient hedging strategy created by a fund, group, institution, or individual. as compared to last year's third quarter was primarily due to IC-Green and Cyanide cyanide (sī`ənīd'), chemical compound containing the cyano group, -CN. Cyanides are salts or esters of hydrogen cyanide (hydrocyanic acid, HCN) formed by replacing the hydrogen with a metal (e.g., sodium or potassium) or a radical (e.g. Antidote antidote Remedy to counteract the effects of a poison or toxin. Administered by mouth, intravenously, or sometimes on the skin, it may work by directly neutralizing the poison; causing an opposite effect in the body; binding to the poison to prevent its absorption, kit sales. IC-Green sales last year were positively impacted by stocking orders in anticipation of a planned manufacturing room shutdown shut·down n. A cessation of operations or activity, as at a factory. shutdown Noun the closing of a factory, shop, or other business Verb shut down for upgrade renovations by our third party contract manufacturer and Cyanide kit sales were positively impacted by one-time one-time adj. 1. or one·time a. Occurring or undertaken only once: a one-time winner in 1995. b. government orders. For the third quarter ended September 30, 2005, the Company realized a gross profit of $3.7 million. On a year-over-year basis, Akorn improved its cash flow from operations Cash flow from operations A firm's net cash inflow resulting directly from its regular operations (disregarding extraordinary items such as the sale of fixed assets or transaction costs associated with issuing securities), calculated as the sum of net income plus noncash expenses . Net cash provided by (used in) operating activities for the third quarter and nine months ended September 30, 2005 were $2.7 million and $0.6 million, vs. ($0.7) million and ($1.9) million in the comparable prior year periods. Highlights for the Third Quarter 2005 include: --The receipt of a Public Pre-Solicitation Notice from the Department of Health and Human Services Noun 1. Department of Health and Human Services - the United States federal department that administers all federal programs dealing with health and welfare; created in 1979 Health and Human Services, HHS (HHS HHS Department of Health and Human Services. ) for the procurement The fancy word for "purchasing." The procurement department within an organization manages all the major purchases. of Calcium-DTPA and Zinc-DTPA. In early October October: see month. 2005, the Pre-Solicitation Notice was supplemented by a Request for Proposal (RFP (Request For Proposal) A document that invites a vendor to submit a bid for hardware, software and/or services. It may provide a general or very detailed specification of the system. 1. (business) RFP - Request for Proposal. 2. ). The RFP provides for initial order quantities of 450,000 units of DTPA DTPA diethylenetriamine pentaacetic acid; see pentetic acid. DTPA diethylenetriamine penta-acetic acid. as well as an option to purchase an additional one million units of DTPA. --The Food and Drug Administration (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. ) conducted an inspection in August 2005 of the Decatur Decatur. 1 City (1990 pop. 48,761), seat of Morgan co., N Ala., on the Tennessee River; inc. 1826. It has shipyards, port traffic, and diverse industries, including steel manufacturing. , IL manufacturing facility. At the conclusion of this inspection, a Form 483 Notice of Findings was issued. The inspection results remain under review by the FDA. --The signing of a consulting agreement with Drs. Elias Elias (ēlī`əs), Greek form of Elijah. Reichel Reichel is a German surname and may refer to:
Brandon, city (1991 pop. 38,567), SW Man., Canada, on the Assiniboine River. The business center of the wheat-raising area of SW Manitoba, Brandon has an extensive trade in farm products and machinery. Busbee to develop AK-1015, a unique formulation formulation /for·mu·la·tion/ (for?mu-la´shun) the act or product of formulating. American Law Institute Formulation of a therapeutic agent for ophthalmic ophthalmic /oph·thal·mic/ (of-thal´mik) ocular (1). oph·thal·mic adj. Of or relating to the eye; ocular. Ophthalmic Pertaining to the eye. surgeries or office-based procedures. --The renewal of a Credit Agreement with LaSalle Bank LaSalle Bank Corporation is the holding company for LaSalle Bank N.A. and LaSalle Bank Midwest N.A. With $116 billion in assets, it is headquartered at 135 South LaSalle Street in Chicago, Illinois. National Association. The renewal extends the existing Agreement for an additional three years and increases the Revolving Commitment amount from $5.0 million to $10.0 million. Arthur Arthur, king of Britain: see Arthurian legend. Arthur king and hero of Scotland, Wales, and England. [Arthurian Legend: Parrinder, 28] See : Heroism S. Przybyl, Akorn's President and Chief Executive Officer stated, "We continue to work on our primary business objectives:
1. The procurement of a contract for Ca-DTPA and Zn-DTPA from the
Department of Health and Human Services. We expect to obtain a
signed contract and to begin shipping product in the fourth
quarter of 2005.
2. The continued investment and expansion in new product
development through external strategic partnerships. We
currently have nine partnerships that have developed and are
developing a total of 88 drug products, projected for market
launch over the next two to five years.
3. The validation of our state-of-the-art lyophilization
facility. We expect to complete the validation of the facility
by December 31, 2005 and begin media fills in the first
quarter of 2006.
4. The regulatory clearance of our Decatur, IL manufacturing
facility. We were inspected by the FDA in August 2005, and the
FDA review of that inspection is ongoing with a final
resolution expected in the fourth quarter of 2005.
5. The continued improvement of our business model. In our drive
to profitability, we continue to generate positive cash flow
from operations. Our current ratio has improved to 2.30, and
we expect to be in a position to retire our remaining debt
instruments from our balance sheet by the end of the first
quarter of 2006."
About Akorn, Inc. Akorn, Inc. manufactures and markets sterile sterile /ster·ile/ (ster´il) 1. unable to produce offspring. 2. aseptic. ster·ile adj. 1. Not producing or incapable of producing offspring. 2. specialty pharmaceuticals. Akorn has manufacturing facilities located in Decatur, Illinois
Materials in this press release may contain information that includes or is based upon 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 Securities Litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. Reform Act of 1995. Forward-looking statements give our expectations or forecasts of future events. You can identify these statements by the fact that they do not relate strictly to historical or current facts. They use words such as "anticipate," "estimate," "expect," "project," "intend," "plan," "believe," and other words and terms of similar meaning in connection with a discussion of future operating or financial performance. In particular, these include statements relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc future steps we may take, prospective products, future performance or results of current and anticipated products, sales efforts, expenses, the outcome of contingencies Contingencies (ISSN 1048-9851) is the bimonthly magazine of the American Academy of Actuaries, providing a large and diverse readership with general interest and technical articles on a wide range of issues related to the actuarial profession. such as legal proceedings All actions that are authorized or sanctioned by law and instituted in a court or a tribunal for the acquisition of rights or the enforcement of remedies. , and financial results. Any or all of our forward-looking statements here or in other publications may turn out to be wrong. They can be affected by inaccurate assumptions or by known or unknown risks and uncertainties. Many such factors will be important in determining our actual future results. Consequently, no forward-looking statement can be guaranteed. Our actual results may vary materially, and there are not guarantees about the performance of our stock. Any forward-looking statements represent our expectations or forecasts only as of the date they were made and should not be relied upon as representing our expectations or forecasts as of any subsequent date. We undertake no obligation to correct or update any forward-looking statements, whether as a result of new information, future events or otherwise, even if our expectations or forecasts change. You are advised, however, to consult any further disclosures we make on related subjects in our reports filed with the SEC. In particular, you should read the discussion in the section entitled en·ti·tle tr.v. en·ti·tled, en·ti·tling, en·ti·tles 1. To give a name or title to. 2. To furnish with a right or claim to something: "Cautionary Statement Regarding Forward-Looking Statements" in our most recent 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. , as it may be updated in subsequent reports filed with the SEC. That discussion covers certain risks, uncertainties and possibly inaccurate assumptions that could cause our actual results to differ materially from expected and historical results. Such factors include, but are not limited to, risks and uncertainties relating to the resolution of the FDA compliance issues at our Decatur, Illinois manufacturing facility. Other factors besides those listed there could also adversely affect our results.
AKORN, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
IN THOUSANDS
(UNAUDITED)
SEPTEMBER 30, DECEMBER 31,
2005 2004
------------- -------------
ASSETS
CURRENT ASSETS
Cash and cash equivalents $2,024 $4,110
Trade accounts receivable (less
allowance for doubtful accounts of
$189 and $435 respectively) 1,821 6,582
Inventories 10,751 10,421
Prepaid expenses and other current
assets 1,364 1,280
------------- -------------
TOTAL CURRENT ASSETS 15,960 22,393
PROPERTY, PLANT AND EQUIPMENT, NET 30,680 31,893
OTHER LONG-TERM ASSETS
Intangibles, net 10,560 11,618
Other 45 1,018
------------- -------------
TOTAL OTHER LONG-TERM ASSETS 10,605 12,636
------------- -------------
TOTAL ASSETS $57,245 $66,922
============= =============
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Current installments of debt and debt
in default $2,850 $3,590
Trade accounts payable 2,118 5,397
Accrued compensation 665 499
Accrued expenses and other liabilities 1,315 1,674
------------- -------------
TOTAL CURRENT LIABILITIES 6,948 11,160
LONG-TERM LIABILITIES
Long-term debt, less current
installments 4,699 6,790
Other 1,879 1,646
------------- -------------
TOTAL LONG-TERM LIABILITIES 6,578 8,436
------------- -------------
TOTAL LIABILITIES 13,526 19,596
------------- -------------
SHAREHOLDERS' EQUITY
Common stock, no par value --
150,000,000 shares authorized;
26,455,780 and 25,132,684 shares
issued and outstanding at September
30, 2005 and December 31, 2004,
respectively 64,134 59,571
Series A Preferred Stock, $1.00 par
value, 257,172 shares authorized and
issued, 242,172 shares outstanding at
September 30, 2005 and December 31,
2004 26,942 25,787
Series B Preferred Stock, $1.00 par
value, 170,000 shares authorized,
141,000 shares issued, 120,800
outstanding at September 30, 2005 and
138,500 outstanding at December 31,
2004 11,998 13,109
Warrants to acquire common stock 13,905 14,160
Accumulated deficit (73,260) (65,301)
------------- -------------
TOTAL SHAREHOLDERS' EQUITY 43,719 47,326
------------- -------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $57,245 $66,922
============= =============
AKORN, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
IN THOUSANDS, EXCEPT PER SHARE DATA
(UNAUDITED)
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
2005 2004 2005 2004
--------- --------- --------- ---------
Revenues $10,985 $15,388 $33,744 $38,124
Cost of sales 7,317 8,614 21,881 24,012
--------- --------- --------- ---------
GROSS PROFIT 3,668 6,774 11,863 14,112
Selling, general and
administrative expenses 3,894 4,068 10,961 10,218
Amortization and write-down of
intangibles 353 311 1,157 2,871
Research and development
expenses 1,438 438 4,203 1,150
--------- --------- --------- ---------
TOTAL OPERATING EXPENSES 5,685 4,817 16,321 14,239
--------- --------- --------- ---------
OPERATING INCOME (LOSS) (2,017) 1,957 (4,458) (127)
Interest expense (595) (996) (1,705) (3,709)
Gain related to dispute
settlements -- 1,582 -- 1,582
Gain on Retirement of Debt -- -- 1,212 --
--------- --------- --------- ---------
INCOME (LOSS) BEFORE
INCOME TAXES (2,612) 2,543 (4,951) (2,254)
Income tax provision (benefit) 2 (44) 17 (42)
--------- --------- --------- ---------
NET INCOME (LOSS) (2,614) 2,587 (4,968) (2,212)
Preferred stock dividends and
adjustments (1,015) (33,318) (2,991) (33,318)
--------- --------- --------- ---------
NET LOSS AVAILABLE TO
COMMON STOCKHOLDERS $(3,629) $(30,731) $(7,959) $(35,530)
========= ========= ========= =========
NET LOSS PER SHARE:
BASIC AND DILUTED $(0.14) $(1.49) $(0.31) $(1.76)
========= ========= ========= =========
SHARES USED IN COMPUTING NET
LOSS PER SHARE:
BASIC AND DILUTED 26,203 20,605 25,804 20,230
========= ========= ========= =========
AKORN, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
IN THOUSANDS
(UNAUDITED)
NINE MONTHS ENDED
SEPTEMBER 30
2005 2004
--------- ---------
OPERATING ACTIVITIES
Net loss $(4,968) $(2,212)
Adjustments to reconcile net loss to net cash
used in operating activities:
Depreciation and amortization 4,927 3,054
Amortization of deferred financing costs 72 1,184
Amortization of debt discounts 876 1,009
Write-down of long lived assets -- 1,849
Gain related to dispute settlements -- (1,582)
Prepayments to Strides Arcolab Limited (1,500) (1,250)
Gain on Retirement of Debt (1,212) --
Non-cash expenses related to preferred stock -- 1,064
Non-cash stock compensation expense 273 --
Changes in operating assets and liabilities:
Trade accounts receivable 4,761 (4,498)
Inventories (330) (695)
Prepaid expenses and other current assets 480 (122)
Trade accounts payable (3,279) 356
Accrued expenses and other liabilities 502 (36)
--------- ---------
NET CASH PROVIDED BY (USED IN) OPERATING
ACTIVITIES 602 (1,879)
INVESTING ACTIVITIES
Purchases of property, plant and equipment (744) (611)
Purchase of intangible assets (75) (60)
Proceeds from the sale of investment -- 2,000
--------- ---------
NET CASH PROVIDED BY (USED IN) INVESTING
ACTIVITIES (819) 1,329
FINANCING ACTIVITIES
Repayment of long-term debt (253) (6,650)
Repayment of NeoPharm Debt (2,500) --
Net borrowings (payments) under lines of credit -- (1,400)
Net proceeds from Series B offering -- 13,044
Proceeds from Warrants 150 --
Proceeds under stock option and stock purchase
plans 734 1,007
--------- ---------
NET CASH PROVIDED BY (USED IN) FINANCING
ACTIVITIES (1,869) 6,001
--------- ---------
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (2,086) 5,451
Cash and cash equivalents at beginning of period 4,110 218
--------- ---------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $2,024 $5,669
========= =========
Amount paid for interest (net of capitalized
interest) $397 $408
Amount paid/(refunded) for income taxes 72 (44)
|
|
||||||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion