Animas Corporation Reports Robust Revenue Growth for Third Quarter 2004.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 its financial results for the quarter ended September September: see month. 30, 2004. Third Quarter's Highlight --Net revenues of $22.7 M, compared to $11.3 M over Q3 '03 --Adjusted net revenues of $17.2 M, a 52% growth over Q3 '03 (adjusted net revenues are net revenues after subtracting net revenues of pumps shipped under the upgrade program) --Successful completion of upgrade program --Launch of the new Animas pump, the IR 1200, in seven countries, including Germany Germany (jûr`mənē), Ger. Deutschland, officially Federal Republic of Germany, republic (2005 est. pop. 82,431,000), 137,699 sq mi (356,733 sq km). and France --Reduction in SG&A as a percentage of adjusted net revenue from 67% in Q3 '03 to 55% in Q3 '04 --Net Income of $2.8 M, compared to a loss of $2.2 M in Q3 '03. "We were delighted to exceed our revenue targets, while simultaneously si·mul·ta·ne·ous adj. 1. Happening, existing, or done at the same time. See Synonyms at contemporary. 2. Mathematics completing the upgrade program, ramping-up of production of the IR 1200, overcoming various supply shortages, and introducing our IR 1200 pump in seven countries," said Kathy Kathy is a feminine first name. It may refer to: In sports:
n. A portable device for people with diabetes that injects insulin at programmed intervals in order to regulate blood sugar levels. market." FINANCIAL HIGHLIGHTS Net revenues: Net revenues for the third quarter 2004 grew 101% to $22.7 million, compared to $11.3 million in the third quarter of 2003. The growth in net revenues was favorably fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. impacted by continued strong demand for the IR 1200 insulin pump, the international launch of the IR 1200, and $5.5 million of revenues for shipment of IR 1200 pumps under the upgrade program. Adjusted net revenues increased 52% over Q3 '03. Pump sales accounted for 76% of total net revenues, while 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' sales accounted for 24%. Gross margin: Third quarter gross margin was $13.8 million, or 61% of net revenues, up from 59% in the same quarter in 2003, reflecting increased leverage year over year. Gross margin for Q3 was negatively impacted by certain factors, totaling $439,000, associated with production ramp-up of the IR 1200. Operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. : Third quarter operating expenses, which include both R&D (research and development) expenses and SG&A (selling, general and administrative) expenses grew by 26% from the prior year period to $11.1 million. SG&A as a percentage of adjusted net revenues fell from 67% in Q3 '03 to 55% in Q3 '04. Net income (loss): Net income for the quarter totaled $2.8 million. Excluding the effects of the upgrade program, the Company had an adjusted net loss of $1.4 million for the period versus a net loss of $2.2 million in the third quarter of 2003. Adjusted net loss as a percentage of adjusted net revenues fell from 20% in Q3 '03 to 8% in Q3 '04. Nine-month performance: For the nine month period ended September 30, 2004, net revenues were $47.9 million. Adjusted net revenues for the first nine months of 2004 were $43.2 million, compared to $27.9 million in the prior nine month period, a growth of 55%. The Company reported a net loss for the nine month period of $2.6 million, compared to a net loss of $16.4 million in the prior nine month period. As a percentage of net revenue, the net loss for the nine month period fell from 59% in 2003 to 5% in 2004. As a percentage of adjusted net revenues, the adjusted net loss for the nine month period fell from 59% in 2003 to 15% in 2004. Fourth quarter and full year - 2004 guidance: For the fourth quarter, the Company anticipates net revenues ranging from $17 to $18 million, compared to net revenues of $6.2 million and adjusted net revenues of $11.4 million in Q4 '03, representing an increase of approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. 50%. The Company believes that revenue growth rates Growth Rates The compounded annualized rate of growth of a company's revenues, earnings, dividends, or other figures. Notes: Remember, historically high growth rates don't always mean a high rate of growth looking into the future. in the range of 30% to 40% over prior year periods are realistic for the next several quarters. The anticipated range for net income in the fourth quarter is between break-even to $1 million. For the year, the Company is expecting net revenues of $64 to $66 million, including net revenues of approximately $5 million from the pump upgrade program, and a net loss between $1 and $2 million. Animas Corporation, headquartered in West Chester, Pennsylvania The Borough of West Chester is the county seat of Chester County, Pennsylvania.GR6 Philadelphia is 25 miles to the east and Wilmington 17 miles to the south. , develops, manufactures, and sells external insulin pumps and ancillary pump supplies for people with 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 . The Company was founded in July July: see month. 1996 and began shipping its third generation pump, the IR 1200, in April 2004. Webcast Information: Animas Corporation will host a webcast today, October October: see month. 20, 2004, at 4:30 p.m. (EDT EDT abbr. Eastern Daylight Time EDT Eastern Daylight Time EDT n abbr (US) (= Eastern Daylight Time) → hora de verano de Nueva York EDT ), to discuss its financial results for the quarter ended September 30, 2004 and its future guidance. This quarterly presentation will be webcast through the Company's website at http://www.animascorp.com. Replay will be available until midnight EDT on October 19, 2005. This earnings release will be archived and a transcript A generic term for any kind of copy, particularly an official or certified representation of the record of what took place in a court during a trial or other legal proceeding. A transcript of record of the webcast will be available at http://www.animascorp.com. Animas Corporation undertakes no obligation to update or revise such transcript, whether as a result of new information, future events, or for any other reason. Our internet address There are two kinds of addresses that are widely used on the Internet. One is a person's e-mail address, and the other is the address of a Web site, which is known as a URL. Following is an explanation of Internet e-mail addresses only. For more on URLs, see URL and Internet domain name. is http://www.animascorp.com. 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 technical issues or the failure of the IR 1200 to gain significant market acceptance; 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; 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 Nine Months Ended
September 30, September 30,
---------------------- ----------------------
2004 2003 2004 2003
----------- ---------- ----------- ----------
(in thousands except share and per share
data)
Net revenues $ 22,654 $ 11,291 $ 47,911 $ 27,876
Operating expenses:
Cost of products sold 8,805 4,602 19,338 12,934
Research and
development expenses 1,723 1,244 4,395 3,732
Selling, general and
administrative
expenses 9,403 7,612 26,715 22,472
----------- ---------- ----------- ----------
Total operating
expenses 19,931 13,458 50,448 39,138
----------- ---------- ----------- ----------
Income (loss) from
operations 2,723 (2,167) (2,537) (11,262)
Interest income
(expense), net 96 (45) (92) (124)
----------- ---------- ----------- ----------
Net income (loss) $ 2,819 $ (2,212) $ (2,629) $ (11,386)
----------- ---------- ----------- ----------
Deemed dividend -
beneficial conversion
feature of preferred
stock -- -- -- (5,063)
----------- ---------- ----------- ----------
Net income (loss)
attributable to common
stockholders $ 2,819 $ (2,212) $ (2,629) $ (16,449)
=========== ========== =========== ==========
Basic net income (loss)
attributable to common
stockholders per share $ 0.15 $ (0.57) $ (0.23) $ (4.25)
=========== ========== =========== ==========
Diluted net income
(loss) attributable to
common stockholders per
share $ 0.14 $ (0.57) $ (0.23) $ (4.25)
=========== ========== =========== ==========
Weighted average
shares - basic 19,215,289 3,870,716 11,453,535 3,869,429
=========== ========== =========== ==========
Weighted average
shares - diluted 20,804,281 3,870,716 11,453,535 3,869,429
=========== ========== =========== ==========
ANIMAS CORPORATION AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(unaudited)
September 30, December 31,
2004 2003
------------- ------------
(in thousands)
Assets
Current assets:
Cash and cash equivalents $ 48,608 $ 384
Accounts receivable, net 20,410 13,178
Inventories 8,083 3,335
Cost associated with deferred revenue -- 1,025
Other current assets 1,309 575
------------- ------------
Total current assets 78,410 18,497
Property and equipment, net 5,681 3,899
Other assets 93 847
------------- ------------
Total assets $ 84,184 $ 23,243
============= ============
Liabilities and Stockholders' Equity
Current liabilities:
Line of credit $ -- $ 2,657
Deferred revenue 592 5,179
Other current liabilities 10,780 6,497
------------- ------------
Total current liabilities 11,372 14,333
Other liabilities 1,170 1,607
Stockholders' equity 71,642 7,303
------------- ------------
Total liabilities and stockholders'
equity $ 84,184 $ 23,243
============= ============
ANIMAS CORPORATION AND SUBSIDIARIES
Reconciliation of Net Revenues, Cost of Products Sold and Net Income
(Loss) to Eliminate the Effect of the Recognition of Deferred Revenue
(unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
------------------ -------------------
2004 2003 2004 2003
--------- -------- --------- ---------
(in thousands)
Net revenues $ 22,654 $11,291 $47,911 $27,876
Recognition of net revenues
deferred from prior periods
under the pump upgrade
program, net of deferrals (5,453) -- (4,746) --
--------- -------- --------- ---------
Adjusted net revenues $ 17,201 $11,291 $ 43,165 $ 27,876
========= ======== ========= =========
Cost of products sold $ 8,805 $ 4,602 $ 19,338 $ 12,934
Cost of products sold
associated with the upgrade
program, net of deferrals (1,265) -- (1,025) --
--------- -------- --------- ---------
Adjusted cost of products
sold 7,540 4,602 18,313 12,934
--------- -------- --------- ---------
Adjusted gross margin $ 9,661 $ 6,689 $ 24,852 $ 14,942
========= ======== ========= =========
Net income (loss) attributable
to common stockholders $ 2,819 $(2,212) $ (2,629) $(16,449)
Recognition of net revenues
deferred from prior periods
under the pump upgrade
program, net of deferrals (5,453) -- (4,746) --
Cost of products sold
associated with the pump
upgrade program, net of
deferrals 1,265 -- 1,025 --
--------- -------- --------- ---------
(4,188) -- (3,721) --
--------- -------- --------- ---------
Adjusted net loss
attributable to common
stockholders $ (1,369) $(2,212) $ (6,350) $(16,449)
========= ======== ========= =========
Note:
The reconciliation of net revenues, cost of products sold and net
income (loss) attributable to common stockholders is to provide
information which would permit the comparison of shipments relating to
the demand generated in the three and nine months ended September 30,
2004 to that of the prior year periods, respectively. To effectively
measure the demand shipments for each period the Company eliminated
the effect of the recognition of deferred revenue relating to the pump
upgrade program.
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