Animas Corporation Reports Financial Results for the First Quarter 2005.WEST CHESTER West Chester, borough (1990 pop. 18,041), seat of Chester co., SE Pa., W of Philadelphia; inc. 1799. Primarily residential, West Chester was long the trade and processing center for an agricultural region that is now mainly suburbs. , Pa. -- Animas Corporation (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on :PUMP pump, device to lift, transfer, or increase the pressure of a fluid (gas or liquid) or to create a vacuum in an enclosed space by the removal of a gas (see vacuum pumps under vacuum). ) today announced financial results for the first quarter ended March 31, 2005. First Quarter's Highlights --Net revenues of $19.3 million, representing an increase of 67% from adjusted net revenues for Q1 '04 (See table for reconciliation of adjusted to reported numbers). --Successful launch of the IR 1250 pump in the U.S. market. --Growth of international net revenues from $0.9 million in Q1 '04 to $3.4 million in 2005. International revenues now represent 18% of the total business, compared to 8% of adjusted net revenues in Q1 '04. --SG&A expenses as a percent of net revenues of 56%, compared to 73% of adjusted net revenues in Q1 '04. --Adjusted net loss of $1.1 million, including a charge of $326,000 associated with earlier-announced recall of the IR 1250 pump, compared to an adjusted net loss of $3.4 million in Q1 '04. --Consummation of the acquisition of certain assets from Cygnus, including all of their intellectual property and most of the company's fixed assets fixed assets npl → activo sg fijo fixed assets npl → immobilisations fpl fixed assets fix npl → . "Our first quarter revenues reflect our increasing momentum in the insulin pump insulin pump n. A portable device for people with diabetes that injects insulin at programmed intervals in order to regulate blood sugar levels. market and the overwhelming market acceptance of the IR 1250 insulin pump in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. and the IR 1200 pump outside the U.S.," said Kathy Kathy is a feminine first name. It may refer to: In sports:
v. bod·ed, bod·ing, bodes v.tr. 1. To be an omen of: heavy seas that boded trouble for small craft. 2. well for a strong 2005. Our new technologies should allow us to maintain this leadership position." FINANCIAL HIGHLIGHTS Net revenues: Net revenues for Q1 '05 totaled $19.3 million, compared to $11.6 million of adjusted net revenues and $4.8 million of net revenues in Q1 '04, representing increases of 67% and 300%, respectively. Three factors contributed to these increases in net revenues: first, the positive reception of the IR 1250 pump launch in the U.S.; second, the positive international market response to the IR 1200 pump; and third, increased sales of ancillary Subordinate; aiding. A legal proceeding that is not the primary dispute but which aids the judgment rendered in or the outcome of the main action. A descriptive term that denotes a legal claim, the existence of which is dependent upon or reasonably linked to a main claim. supplies. Gross margin: First quarter gross margin was $11.3 million, or 58% of net revenues, up from a 56% adjusted gross margin percentage in Q1 '04, reflecting reduced cost of ancillary supplies and 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. Gross margin in Q1 '05 was adversely affected by the higher proportion of revenues stemming stemming - stemmer from international sales, as well as increased warranty An assurance, promise, or guaranty by one party that a particular statement of fact is true and may be relied upon by the other party. Warranties are used in a variety of commercial situations. In many instances a business may voluntarily make a warranty. reserve charges. Research and development (or "R&D") expenses: First quarter R&D expenses were $1.7 million, compared to $1.4 million in Q1 '04. This sum does not include current development activities at Debiotech on the micropump or microneedle microneedle /mi·cro·nee·dle/ (mi?kro-ne´d'l) a fine glass needle used in micromanipulation. microneedle a fine glass needle used in micromanipulation. , nor does it include the $10.6 million paid to acquire certain assets from Cygnus. Selling, general and administrative expenses (or "SG&A"): First quarter SG&A expenses, were $10.7 million or 56% of net revenues, compared to SG&A expenses of 73% of adjusted net revenues in Q1 '04, which reflects increased operating leverage Operating Leverage A measurement of the degree to which a firm or project relies on fixed rather than variable costs. Notes: The higher the degree of operating leverage, the greater the potential danger from forecasting risk. year over year. Purchased in-process research and development: In March 2005, the Company acquired certain assets of Cygnus, Inc. The cost of this acquisition, including transaction charges, was $10.6 million, of which $9.3 million was charged to expense as purchased in-process research and development, $1.2 million was recorded as property and equipment, and $0.1 million was recorded as inventory. Net loss: Including the $9.3 million Cygnus in-process research and development charges, the net loss for the quarter totaled $10.4 million, or $0.51 per share, compared to a net loss of $8.1 million, or $2.01 per share, in the prior year period. The Company had adjusted net loss of $1.1 million in the quarter, compared to an adjusted net loss of $3.4 million in the first quarter of 2004. Of the $1.1 million net loss, $326,000 was a result of increased warranty reserve charge associated with the IR 1250 recall announced on April 11. Second quarter and year guidance: For the year, the Company is raising its net revenue guidance from a range of $82 to $84 million to a range of $84 to $87 million. Net income guidance remains between $3 and $4 million, excluding any charges associated with the Cygnus transaction. Guidance for second quarter net revenues is $19.5 to $20.5 million, compared to adjusted net revenues of $14.4 million in Q2 '04, an increase of approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. 40%. Anticipated second quarter net loss ranges from breakeven breakeven 1. The level of output or sales necessary to cover fixed expenses. Companies in industries that have high fixed costs and, consequently, high breakevens, such as automobile and steel manufacturing, are likely to exhibit large fluctuations to a loss of $300,000. (Tables Follow) Webcast information: Animas Corporation will host a webcast today, May 9, 2005, at 5:00 p.m. (ET), to discuss its financial results for the first quarter ended March 31, 2005 and its future guidance. This quarterly presentation will be webcast through the Company's website at http://www.animascorp.com. An online archive (1) A file that contains one or more compressed files. Most archive formats are also capable of storing folders in order to reconstruct the file/folder relationship when decompressed. See archive formats. of the webcast will be available through May 8, 2006. A copy of this earnings release will be available at http://www.animascorp.com. Animas Corporation undertakes no obligation to update or revise whether as a result of new information, future events, or for any other reason. About Animas Corporation: Animas, a leading maker of insulin insulin, hormone secreted by the β cells of the islets of Langerhans, specific groups of cells in the pancreas. Insufficiency of insulin in the body results in diabetes. Insulin was one of the first products to be manufactured using genetic engineering. infusion pumps infusion pump A device designed to deliver drugs and/or 'biologicals', at low doses and at a constant or controllable rate; ↑ rates of delivery in such devices may be associated with local hemolysis, compromising the potential benefits of a calibrated delivery and related products, is dedicated to improving diabetes management This article is about the management of diabetes mellitus. For more on the disease itself see diabetes mellitus. Diabetes is a chronic disease with no cure as of 2007. It is associated with an impaired glucose cycle, altering metabolism. and making insulin pump therapy easier for patients with insulin requiring diabetes diabetes or diabetes mellitus (məlī`təs), chronic disorder of glucose (sugar) metabolism caused by inadequate production or use of insulin, a hormone produced in specialized cells (beta cells in the islets of and healthcare professionals through product innovation, exemplary customer support and superior customer education. For more information on Animas, visit http://www.animascorp.com or call Animas Corporation at 877-937-7867. Statements in this press release or made by management from time to time regarding Animas Corporation that are not historical facts 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. and are subject to risks, assumptions and uncertainties that could cause actual future events or results to differ materially from such statements. Any such forward-looking statements are made pursuant to 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. The following factors, among others, could cause Animas' actual results to differ materially from those described in a forward-looking statement: the failure to successfully commercialize the licensed technology, technical issues of the IR 1250; failure to capture recurring re·cur intr.v. re·curred, re·cur·ring, re·curs 1. To happen, come up, or show up again or repeatedly. 2. To return to one's attention or memory. 3. To return in thought or discourse. purchases of ancillary supplies by patients using Animas' pumps; the risks associated with completion and integration of acquisitions; any significant disruption disruption /dis·rup·tion/ (dis-rup´shun) a morphologic defect resulting from the extrinsic breakdown of, or interference with, a developmental process. with vendors; any failure to achieve and then maintain profitability; the failure of Animas' ezSet Infusion Set An infusion set is used with an insulin pump as part of intensive insulin therapy. The purpose of an infusion set is to deliver insulin under the skin. It is a complete tubing system to connect an insulin pump to the pump user: it includes a subcutaneous cannula, adhesive mount, to be fully-developed or commercially accepted; technological breakthroughs in diabetes monitoring, treatment, or prevention that could render (1) To make visible; to draw. The term comes from the graphics world where a rendering is an artist's drawing of what a new structure would look like. In computer-aided design (CAD), a rendering is a particular view of a 3D model that has been converted into a realistic image. Animas' products obsolete OBSOLETE. This term is applied to those laws which have lost their efficacy, without being repealed, 2. A positive statute, unrepealed, can never be repealed by non-user alone. 4 Yeates, Rep. 181; Id. 215; 1 Browne's Rep. Appx. 28; 13 Serg. & Rawle, 447. ; failure to comply with any 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. or foreign regulations; an inability to attract and retain personnel; competition; an inability to adequately protect Animas' intellectual property; product liability lawsuits; and, the failure to secure or retain third party insurance coverage or reduced reimbursement Reimbursement Payment made to someone for out-of-pocket expenses has incurred. for Animas' products by third party payors. This list is intended to identify only certain of the principal factors that could cause actual results to differ. Readers are referred to the reports and documents filed from time to time by Animas Corporation with the Securities and Exchange Commission for a discussion of these and other important risk factors. Readers are cautioned not to place undue reliance on forward-looking statements, which are made as of the date of this press release. Animas Corporation undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or for any other reason.
ANIMAS CORPORATION AND SUBSIDIARIES
Condensed Consolidated Statements of Operations
(unaudited)
Three Months Ended March 31,
----------------------------
2005 2004
------------ ------------
(in thousands, except
share and per share data)
Net revenues $ 19,348 $ 4,837
------------ ------------
Operating expenses:
Cost of products sold 8,083 2,941
Research and development expenses 1,721 1,437
Selling, general and administrative
expenses 10,742 8,439
Purchased in-process research and
development 9,265 --
------------ ------------
Total operating expenses 29,811 12,817
------------ ------------
Loss from operations (10,463) (7,980)
Interest income (expense), net 110 (104)
------------ ------------
Net loss $ (10,353) $ (8,084)
============ ============
Basic and diluted net loss attributable
to common stockholders per share $ (0.51) $ (2.01)
============ ============
Weighted average shares - basic and
diluted 20,284,824 4,022,208
============ ============
ANIMAS CORPORATION AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(unaudited)
March 31, December 31,
2005 2004
----------- -----------
(in thousands)
Assets
Current assets:
Cash and cash equivalents $ 21,967 $ 30,867
Accounts receivable, net 23,739 22,382
Inventories 12,438 10,924
Other current assets 2,634 1,378
----------- -----------
Total current assets 60,778 65,551
Property and equipment, net 8,013 6,780
Other assets 3,554 3,654
----------- -----------
Total assets $ 72,345 $ 75,985
=========== ===========
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $ 6,613 $ 4,430
Other current liabilities 6,188 4,475
----------- -----------
Total current liabilities 12,801 8,905
Other liabilities 1,999 2,074
Stockholders' equity 57,545 65,006
----------- -----------
Total liabilities and stockholders'
equity $ 72,345 $ 75,985
=========== ===========
ANIMAS CORPORATION AND SUBSIDIARIES
Reconciliation of Net Revenues, Cost of Products Sold and Net Loss to
Eliminate the Effect of the Deferral of Revenue, Delayed Shipments and
the Write-off of Purchased In-process Research and Development
(unaudited)
Three Months Ended
March 31,
-----------------------
2005 2004
----------- -----------
(in thousands)
Reconciliation of Adjusted Net Revenues
Net revenues $ 19,348 $ 4,837
Deferral of net revenues from prior periods
under the pump upgrade program -- 4,480
Delay of shipment of unfulfilled orders of
the IR 1200 to the second quarter of 2004 -- 2,303
----------- -----------
Adjusted net revenues $ 19,348 $ 11,620
=========== ===========
Reconciliation of Adjusted Gross Margin
Cost of products sold $ 8,083 $ 2,941
Cost of products sold associated with the
pump upgrade program and the delayed
shipments -- 2,127
----------- -----------
Adjusted cost of products sold 8,083 5,068
----------- -----------
Adjusted gross margin $ 11,265 $ 6,552
=========== ===========
Reconciliation of Adjusted Net Loss
Net loss $ (10,353) $ (8,084)
Purchased in-process research and development 9,265 --
Deferral of net revenues from prior periods
under the pump upgrade program -- 4,480
Delay of shipment of unfulfilled orders of
the IR 1200 to the second quarter of 2004 -- 2,303
Cost of products sold associated with the
pump upgrade program and the delayed
shipments -- (2,127)
----------- -----------
9,265 4,656
----------- -----------
Adjusted net loss $ (1,088) $ (3,428)
=========== ===========
Note:
The reconciliation of net revenues, cost of products sold and net loss
is to provide useful information indicative of the Company's core
operating results and permit the comparison of shipments relating to
the demand generated in the three months ended March 31, 2005 to that
of the prior year period, respectively. To effectively measure the
ongoing operations and the demand shipments for the period, the
Company eliminated the effect of the write-off of purchased in-process
research and development, the deferral of revenue relating to the pump
upgrade program and the delayed shipments of unfulfilled orders of the
IR 1200. The non-GAAP measures are included to provide investors and
management with an alternative method for assessing the Company's
operating results that is focused on the performance of the Company's
ongoing operations and to provide a more consistent basis for
comparison between quarters.
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