Animas Corporation Reports Financial Results for the Second 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 quarter ended June June: see month. 30, 2005. Second Quarter's Highlights: --Net revenues of $21.4 million, compared to earlier guidance of net revenues of $19.5 to $20.5 million and representing an increase of 49% from adjusted net revenues for Q2 '04. (Please see attached table for reconciliation of adjusted to GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). numbers). --Net revenues of $40.8 million for the first half of 2005, representing an increase of 57% from adjusted net revenues for the first half of 2004. --An inventory write-off Write-Off A reduction in the value of an asset or earnings by the amount of an expense or loss. Companies are able to write off certain expenses that are required to run the business, or have been incurred in the operation of the business and detract from retained revenues. and additional reserve, totaling $2.8 million, as a result of (i) a shift in marketing focus away from the IR 1000 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. and (ii) the cost of replacing circuit boards containing a now-discontinued component with boards containing a substitute component during the refurbishment re·fur·bish tr.v. re·fur·bished, re·fur·bish·ing, re·fur·bish·es To make clean, bright, or fresh again; renovate. re·fur process of certain IR 1200 insulin pumps. --Adjusted gross margin of 59.1%, excluding the inventory write-off and additional reserve. --Adjusted net loss of $273,000, before the inventory write-off and additional reserve, in line with earlier guidance of a loss between $0.0 and $0.3 million. "We had another successful quarter, with our revenue exceeding our earlier midpoint mid·point n. 1. Mathematics The point of a line segment or curvilinear arc that divides it into two parts of the same length. 2. A position midway between two extremes. guidance by 7% and our adjusted loss within our guidance. The demand both in the US and internationally remains strong for our IR 1200/1250 pumps," said Kathy Kathy is a feminine first name. It may refer to: In sports:
Given the strength of the European European emanating from or pertaining to Europe. European bat lyssavirus see lyssavirus. European beech tree fagussylvaticus. European blastomycosis see cryptococcosis. market, management decided to concentrate its international marketing efforts there, rather than pursue third-world markets for the IR 1000. As a result of this decision, management recorded a charge to write-off the IR 1000 pumps returned to inventory in 2004 following the IR 1000 Upgrade Program. Furthermore, the Company decided that in light of both (i) strong market acceptance of the food database in the IR 1250 pump as well as (ii) manufacturing efficiencies of the IR 1200, it made economic sense to replace, during the refurbishment process, circuit boards containing a now-discontinued component with boards containing a substitute component supporting the additional functionality of the food database. As a result, an additional reserve was taken. FINANCIAL HIGHLIGHTS Net revenues: Net revenues for Q2 '05 totaled $21.4 million, compared to $14.3 million of adjusted net revenues in Q2 '04, representing an increase of 49%. Net revenues for the US market constituted 87% of total net revenues and are 38% greater than adjusted net revenues for the US market in Q2 '04. Net revenues for the international market constituted 13% of total net revenues and are 231% greater than adjusted net revenues for the international market in Q2 '04. Net revenues for supplies constituted 36% of total net revenues, compared to 23% in Q2 '04. Gross margin: Second quarter adjusted gross margin, before inventory write-off and additional reserve, was 59.1%, impacted negatively by the replacement circuit boards of certain IR 1200 pumps during the refurbishment process, in June. In comparison, the adjusted gross margin in Q2 '04 was 62.0%, impacted favorably fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. by the 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 overhead resulting from increased production associated with the Upgrade Program. Adjusted gross margin for 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 was 47.6%, compared to 40.4% in Q2 '04. Gross margin in Q2 '05 was 46.0%, reflecting the $2.8 million inventory write-off and increased reserve. Research and development (or "R&D") expenses: Second quarter R&D expenses were $2.1 million, compared to $1.4 million in Q2 '04. Additional R&D charges for the micropump and 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. developments are being incurred by the Company's technology partner, Debiotech, SA, in accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with its contractual obligations. Selling, general and administrative expenses (or "SG&A"): Second quarter SG&A expenses were $11.0 million, or 51% of net revenues, compared to SG&A expenses of 63% of adjusted net revenues in Q2 '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. Net loss: Second quarter adjusted net loss before inventory write-off and additional reserve were taken was $273,000, compared to the adjusted net loss for Q2 '04 of $1.6 million. Including the $2.8 million inventory write down and additional reserve, the net loss for Q2 '05 was $3.1 million. Six-month performance: For the six month period ended June 30, 2005, net revenues were $40.8 million, compared to adjusted net revenues for the first six months of 2004 of $26.0 million, a growth of 57%. The Company reported an adjusted net loss for the six month period, before the in-process R&D charges associated with the Cygnus transaction and the additional charge for inventory write-off and additional reserve, of $1.4 million, compared to an adjusted net loss of $5.0 million in the same period during 2004. Including the in-process R&D charges associated with the Cygnus transaction and the $2.8 million charge for inventory write-off and additional reserve, the net loss for the first half of 2005 was $13.4 million. Third quarter and year guidance: For the year, the Company is raising its net revenue guidance from a range of $84 to $87 million to a range of $85 to $88 million. Adjusted net income guidance, before the in-process R&D charges associated with the Cygnus transaction and the additional $2.8 million charge for inventory write-off and additional reserve, remains between $3 and $4 million. Guidance for third quarter net revenues is $21.5 to $23.0 million, compared to adjusted net revenues of $17.2 million in Q3 '04, an increase of approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. 32%. Guidance for third quarter net income ranges from $0.5 to $1.5 million. Webcast information: Animas Corporation will host a webcast today, August 2, 2005, at 5:00 p.m. (ET), to discuss its financial results for the second quarter ended June 30, 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 August 2, 2006. A copy of this earnings release will be available at http://www.animascorp.com. Animas Corporation undertakes no obligation to update or revise these materials, 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. (Tables Follow)
ANIMAS CORPORATION AND SUBSIDIARIES
Condensed Consolidated Statements of Operations
(unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
----------------------- ----------------------
2005 2004 2005 2004
----------- ----------- ----------- ----------
(in thousands, except share and per share data)
Net revenues $ 21,440 $ 20,420 $ 40,788 $ 25,257
----------- ----------- ----------- ----------
Operating expenses:
Cost of products sold 11,586 7,337 19,669 10,278
Research and
development expenses 2,060 1,381 3,781 2,818
Selling, general and
administrative
expenses 10,958 8,982 21,700 17,421
Purchased in-process
research and
development -- -- 9,265 --
----------- ----------- ----------- ----------
Total operating
expenses 24,604 17,700 54,415 30,517
----------- ----------- ----------- ----------
Income (loss)
from operations (3,164) 2,720 (13,627) (5,260)
Interest income
(expense), net 78 (84) 188 (188)
----------- ----------- ----------- ----------
Net income (loss) $ (3,086) $ 2,636 $ (13,439) $ (5,448)
=========== =========== =========== ==========
Basic net income (loss)
attributable to common
stockholders per
share $ (0.15) $ 0.24 $ (0.66) $ (0.72)
=========== =========== =========== ==========
Diluted net income
(loss) attributable to
common stockholders per
share $ (0.15) $ 0.14 $ (0.66) $ (0.72)
=========== =========== =========== ==========
Weighted average shares
- basic 20,588,143 11,037,815 20,437,321 7,530,011
=========== =========== =========== ==========
Weighted average shares
- diluted 20,588,143 18,291,612 20,437,321 7,530,011
=========== =========== =========== ==========
ANIMAS CORPORATION AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(unaudited)
June 30, December 31,
2005 2004
------------ ------------
(in thousands)
Assets
Current assets:
Cash and cash equivalents $ 15,704 $ 30,867
Short-term investments 4,710 --
Accounts receivable, net 22,995 22,382
Inventories 12,214 10,924
Other current assets 3,193 1,378
------------ ------------
Total current assets 58,816 65,551
Property and equipment, net 8,018 6,780
Other assets 4,082 3,654
------------ ------------
Total assets $ 70,916 $ 75,985
============ ============
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $ 6,251 $ 4,430
Other current liabilities 7,533 4,475
------------ ------------
Total current liabilities 13,784 8,905
Other liabilities 1,954 2,074
Stockholders' equity 55,178 65,006
------------ ------------
Total liabilities and stockholders'
equity $ 70,916 $ 75,985
============ ============
ANIMAS CORPORATION AND SUBSIDIARIES
Reconciliation of Net Revenues, Cost of Products Sold and Net Income
(Loss)
(unaudited)
Three Months Six Months Ended
Ended June 30, June 30,
----------------- ------------------
2005 2004 2005 2004
-------- -------- --------- --------
(in thousands)
Reconciliation of Adjusted Net
Revenues
Net revenues $21,440 $20,420 $ 40,788 $25,257
(Recognition) deferral of net
revenues from prior periods
under the pump upgrade
program -- (3,773) -- 707
Delay of shipment of
unfulfilled orders of the IR
1200 to the second quarter of
2004 -- (2,303) -- --
-------- -------- --------- --------
Adjusted net revenues $21,440 $14,344 $40,788 $25,964
======== ======== ========= ========
Reconciliation of Adjusted Gross
Margin
Cost of products sold $11,586 $ 7,337 $ 19,669 $10,278
Inventory and warranty
reserves (2,813) -- (2,813) --
Cost of products sold
associated with the pump
upgrade program and the
delayed shipments -- (1,888) -- 239
-------- -------- --------- --------
Adjusted cost of products
sold 8,773 5,449 16,856 10,517
-------- -------- --------- --------
Adjusted gross margin $12,667 $ 8,895 $ 23,932 $15,447
======== ======== ========= ========
Reconciliation of Adjusted Net
Income (Loss)
Net income (loss) $(3,086) $ 2,636 $(13,439) $(5,448)
Inventory and warranty
reserves 2,813 -- 2,813 --
Purchased in-process research
and development -- -- 9,265 --
(Recognition) deferral of net
revenues from prior periods
under the pump upgrade
program -- (3,773) -- 707
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 -- 1,888 -- (239)
-------- -------- --------- --------
2,813 (4,188) 12,078 468
-------- -------- --------- --------
Adjusted net loss $ (273) $(1,552) $ (1,361) $(4,980)
======== ======== ========= ========
Note:
The reconciliation of net revenues, cost of products sold and net
income (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 and six
months ended June 30, 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 inventory and warranty reserves, the purchased in-process
research and development, the (recognition) 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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