Bentley Pharmaceuticals Reports 40% Increase in First Quarter 2005 Revenues.EXETER, N.H. -- Bentley Pharmaceuticals, Inc. (NYSE NYSE See: New York Stock Exchange : BNT BNT Bentley Pharmaceuticals, Inc. (stock symbol) BNT Boston Naming Test (psychology) BNT Bermuda National Trust BNT Bulgarian National TV BNT Broadband Network Termination BNT Binary File Transfer ) --First Quarter 2005 Revenues Grow 34% in Constant Currency to $24.2 Million --Diluted Earnings Per Share Increase 150% Over Prior Year First Quarter to $0.10 Bentley Pharmaceuticals, Inc. (NYSE: BNT), a technology-based specialty pharmaceutical and drug delivery company with a growing branded and generic product line in Europe, today announced financial results for its first quarter ended March 31, 2005. Total revenues grew 40% to $24.2 million in the first quarter of 2005, compared with $17.3 million in the first quarter of 2004. In constant currency, revenues increased 34%. Net product sales grew 40% to $23.3 million in the first three months of 2005 from $16.6 million in the same period of the prior year (34% growth in constant currency). Licensing and collaboration revenues climbed 39% to approximately $1.0 million in the first quarter of 2005 from approximately $700,000 in the same period of the prior year. A number of factors contributed to these better-than-expected results: --Continuing sales volume growth in Spain, including strong sales of omeprazole omeprazole /omep·ra·zole/ (o-mep´ra-zol) an inhibitor of gastric acid secretion used in the treatment of dyspepsia , gastroesophageal reflux disease, disorders of gastric hypersecretion, and peptic ulcer, including that associated with , simvastatin simvastatin /sim·va·stat·in/ (sim´vah-stat?in) an antihyperlipidemic agent that acts by inhibiting cholesterol synthesis, used in the treatment of hypercholesterolemia and other forms of dyslipidemia and to lower the risks associated , Codeisan, and enalapril enalapril /enal·a·pril/ (e-nal´ah-pril) an angiotensin-converting enzyme inhibitor used as the maleate salt in the treatment of hypertension, congestive heart failure, and asymptomatic left ventricular dysfunction. ; --The strengthening of the Euro in relation to the US Dollar over the past year, which increased quarterly revenues by approximately $1.1 million; --Continuing growth in pharmaceutical sales to licensees and others, both in Spain and outside of Spain; and --Increasing royalties from sales of Testim(R), the first marketed product to incorporate Bentley's CPE- 215 drug delivery technology - Testim has captured approximately 13% of its market. Sales to licensees and others, both in Spain and outside of Spain, grew 24% in the first quarter of 2005, reaching $6.8 million, driven largely by the Company's growing product sales under its license and supply agreements. The Company's Spanish Spanish, river, c.150 mi (240 km) long, issuing from Spanish Lake, S Ont., Canada, NW of Sudbury, and flowing generally S through Biskotasi and Agnew lakes to Lake Huron opposite Manitoulin island. There are several hydroelectric stations on the river. subsidiaries have now executed 129 license agreements, of which 67 cover actively marketed products that are generating revenues; the remaining 62 license agreements are for products that are awaiting regulatory approvals and are expected to generate a significant source of revenues in the future. Operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. for the first quarter of 2005 more than doubled to $3.6 million, compared to $1.7 million in the same period of the prior year, as a result of the leverage provided by strong revenue growth. Net income for the first three months of 2005 totaled $2.2 million, or $0.10 per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. common share, compared with net income of approximately $800,000, or $0.04 per diluted common share, in the first quarter of 2004. James R. Murphy, president and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. , stated, "We are pleased to report strong financial results in the first quarter of 2005, which reflect the hard work and perseverance Perseverance See also Determination. Ainsworth redid dictionary manuscript burnt in fire. [Br. Hist.: Brewer Handbook, 752] Call of the Wild, The dogs trail steadfastly through Alaska’s tundra. [Am. Lit. that we put forth during 2004. As I stated in our Annual Report to Shareholders, our efforts in 2004 were not always readily obvious or visible, but are now beginning to bear fruit. We have entered into new collaborations in 2005 and have a substantial number of regulatory submissions pending approval. We expect our growth to further accelerate in an aggressive expansion throughout Europe as more of our products are approved and patents of other companies' products begin to expire expire /ex·pire/ (ek-spi´er) 1. to exhale. 2. to die. ex·pire v. 1. To breathe one's last breath; die. 2. To exhale. , opening the doors for Bentley's competing products." Michael D. Price, vice president and chief financial officer, commented, "With revenues and earnings continuing to grow, it is no surprise that our balance sheet remains strong. Our assets total $123 million at quarter end. We have approximately $36 million in cash and a healthy current ratio of 2.6:1. Strong sales during the quarter resulted in growing receivable balances; however, we have reduced our trade and royalty receivables Receivables An asset designation applicable to all debts, unsettled transactions or other monetary obligations owed to a company by its debtors or customers. Receivables are recorded by a company's accountants and reported on the balance sheet, and they and include all debts owed from 125 days of sales outstanding at year end to 99 days of sales outstanding at March 31, 2005. Deferred income increased by $1.2 million during the first quarter of 2005, to $4.7 million, representing additional up-front payments that we have received from long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. licensing agreements, as well as growing royalties on sales of Testim. The deferred revenues associated with our licensing agreements, while significant, are relatively immaterial Not essential or necessary; not important or pertinent; not decisive; of no substantial consequence; without weight; of no material significance. immaterial adj. when compared to the future revenues we expect to receive from sales of products to our licensees under those agreements. Cash flows from operations more than tripled to $4.5 million in the first quarter, further confirming that our business model is on track and very healthy. Strong cash flows from operations should provide a greater than expected source of cash to help fund our capital expenditures planned for the balance of this year, as we prepare to expand our capacity and gear up for continuing growth in 2006 and 2007. "The Spanish Ministry of Health has recently proposed a plan for nationwide expansion of a regional practice of filling prescriptions that do not specify a brand name or laboratory name with one of the lowest-priced generics then available. This proposal, if enacted, will not require government-mandated price reductions as in the past. We are positioned in the Spanish market with three subsidiaries to capture: (i) brand name sales; (ii) generic-equivalent sales; and (iii) lowest-priced generic sales. At least one of our subsidiaries has historically been positioned among the lowest-priced in order to compete for non-specified prescriptions. We constantly monitor the market, prices and our competitors' activities, and occasionally adjust prices for competitive purposes. We are prepared to address the opportunities that this proposal will present as well. We do not anticipate that this proposal will materially affect our 2005 revenues or profits because we expect that any voluntary downward adjustment in our selling prices will be offset by increases in volume and the benefits of other strategies that have been developed and are underway," Mr. Price concluded. Mr. Murphy continued, "We recently signed an 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. licensing agreement with Dong Sung Pharmaceutical Co. Ltd. of South Korea, which is focused on applying advanced technologies to pharmaceuticals and cosmetics cosmetics, preparations externally applied to change or enhance the beauty of skin, hair, nails, lips, and eyes. The use of body paint for ornamental and religious purposes has been common among primitive peoples from prehistoric times (see body-marking). . We found them to be a dynamic, researched-based, pharmaceutical company involved in areas such as respiratory diseases Noun 1. respiratory disease - a disease affecting the respiratory system respiratory disorder, respiratory illness adult respiratory distress syndrome, ARDS, wet lung, white lung - acute lung injury characterized by coughing and rales; inflammation of the , oncology oncology /on·col·o·gy/ (ong-kol´ah-je) the sum of knowledge regarding tumors; the study of tumors. on·col·o·gy n. and diabetes. Having recently completed an initial Phase II study of our intranasal in·tra·na·sal adj. Within the nose. formulation formulation /for·mu·la·tion/ (for?mu-la´shun) the act or product of formulating. American Law Institute Formulation of insulin, we decided to team with Dong Sung, who will fund and conduct Phase III Noun 1. phase III - a large clinical trial of a treatment or drug that in phase I and phase II has been shown to be efficacious with tolerable side effects; after successful conclusion of these clinical trials it will receive formal approval from the FDA studies of our intranasal insulin product in Korea. Additional preclinical preclinical /pre·clin·i·cal/ (-klin´i-k'l) before a disease becomes clinically recognizable. pre·clin·i·cal adj. 1. and clinical work is scheduled and will precede the initiation of the Dong Sung Phase III program. The data generated from the Dung DUNG. Manure. Sometimes it is real estate, and at other times personal property. When collected in a heap, it is personal estate; when spread out on the land, it becomes incorporated in it, and it is then real estate. Vide Manure. Sung program could be very useful to Bentley in supplementing our regulatory filings in other territories. We have great expectations for this collaboration and for the product. Successful completion of the Phase III study would not only provide us with a commercially powerful product, but also give us reason to believe that our platform technology may be used to deliver other peptides - meaning that other diseases could be treated by administering other therapeutic agents intranasally." He added, "In addition to our work with insulin, one of our Spanish subsidiaries, Laboratorios Davur, has recently received approval to market in Spain 1 mg, 3 mg and 6 mg generic dosage dosage /dos·age/ (do´saj) the determination and regulation of the size, frequency, and number of doses. dos·age n. 1. Administration of a therapeutic agent in prescribed amounts. versions of risperidone risperidone /ris·per·i·done/ (-per´i-don) an antipsychotic agent, which may act by a combination of dopamine and serotonin antagonism. ris·per·i·done n. , which belongs to a class of antipsychotic antipsychotic /an·ti·psy·chot·ic/ (-si-kot´ik) effective in the treatment of psychotic disorders; also, an agent that so acts. Antipsychotics are a chemically diverse but pharmacologically similar class of drugs; besides psychotic products used for treatment of schizophrenia The concept of a cure as such in the treatment of schizophrenia remains controversial, as there is no consensus on the definition of "treatment" in the case of schizophrenia, although some criteria for the remission of symptoms have recently been suggested. . We already have a broad portfolio of anti-depressants, but risperidone will now provide us with the ability to compete in the antipsychotic market as well." We also recently received Spanish approval for additional dose levels of lisinopril lisinopril /li·sin·o·pril/ (li-sin´o-pril) an angiotensin-converting enzyme inhibitor used in the treatment of hypertension, congestive heart failure, and acute myocardial infarction. li·sin·o·pril n. for the treatment of high blood pressure, for which the Company had previously announced approval." Mr. Murphy also said, "On this side of the Atlantic we, along with our research partner - The University of New Hampshire New Hampshire, one of the New England states of the NE United States. It is bordered by Massachusetts (S), Vermont, with the Connecticut R. forming the boundary (W), the Canadian province of Quebec (NW), and Maine and a short strip of the Atlantic Ocean (E). , recently announced the discovery and synthesis of a thermodynamically ther·mo·dy·nam·ic adj. 1. Characteristic of or resulting from the conversion of heat into other forms of energy. 2. Of or relating to thermodynamics. stable, biodegradable biodegradable /bio·de·grad·a·ble/ (-de-grad´ah-b'l) susceptible of degradation by biological processes, as by bacterial or other enzymatic action. bi·o·de·grad·a·ble adj. Nanocaplet(TM) technology for the delivery of macromolecule macromolecule, term that may refer either to a crystal such as a diamond, in which the atoms are identical and held by covalent bonds (see chemical bond) of equal strength, or to one of the units that compose a polymer. therapeutics therapeutics Treatment and care to combat disease or alleviate pain or injury. Its tools include drugs, surgery, radiation therapy, mechanical devices, diet, and psychiatry. . This proprietary Nanocaplet technology, which represents a significant advancement in drug delivery technology, was discovered as part of Bentley's four-year sponsored research program with The University of New Hampshire Nanostructured Polymers Research Center. This, in addition to our collaboration with Perrigo that we announced last year, illustrates our commitment to develop a presence in the North American North American named after North America. North American blastomycosis see North American blastomycosis. North American cattle tick see boophilusannulatus. market." Mr. Murphy concluded, "Our business in Spain is healthy, our expansion into other countries in the European Union European Union (EU), name given since the ratification (Nov., 1993) of the Treaty of European Union, or Maastricht Treaty, to the European Community is well underway, our American presence is being developed, and our drug delivery research is advancing. So far, 2005 is meeting our expectations, and we firmly believe that the balance of the year will bring continued success from the execution of our business plan." Year to Date Accomplishments: --Announced completion of Phase II study of intranasal insulin; results to be presented at a meeting of the American Diabetes Association The American Diabetes Association, or the ADA, is an American health organization providing diabetes research, information and advocacy. Founded in 1940, the American Diabetes Association conducts programs in all 50 states and the District of Columbia, reaching hundreds of ; --Entered into an agreement with Dong Sung Pharmaceutical Co. Ltd. of South Korea to fund and conduct Phase III studies of Bentley's intranasal formulation of insulin; --Received marketing authorization The right or permission to use a system resource; the process of granting access. See access control. to sell generic risperidone in Spain; --Announced invention of Nanocaplet drug delivery technology; and --Entered into additional licensing and supply agreements in Europe. Significant components of Bentley's revenues for first quarter 2005 and 2004 are summarized below:
For the three months ended March 31, 2005:
(in thousands) Revenues Within Spain
----------------------------------
Branded Generic
Product Line Products Products Other
-------------------------------------------------------------
Omeprazole $716 $4,120 $-
Simvastatin 448 1,240 -
Codeisan 1,369 - -
Enalapril 925 465 -
Paroxetine 364 836 -
All other products 2,628 2,639 112
Sales to licensees and
others - - 3,678
Licensing and
collaborations - - 95
-------------------------------------------------------------
Total Revenues $6,450 $9,300 $3,885
=============================================================
% of Q-1 2005 Revenues 27% 38% 16%
(in thousands)
Revenues
Outside of % of Total
Product Line Spain Total Revenues
----------------------------------------------------------
Omeprazole $- $4,836 20%
Simvastatin - 1,688 7%
Codeisan - 1,369 6%
Enalapril - 1,390 6%
Paroxetine - 1,200 5%
All other products 576 5,955 24%
Sales to licensees and
others 3,163 6,841 28%
Licensing and
collaborations 870 965 4%
----------------------------------------------------------
Total Revenues $4,609 $24,244 100%
==========================================================
% of Q-1 2005 Revenues 19% 100%
For the three months ended March 31, 2004:
(in thousands) Revenues Within Spain
----------------------------------
Branded Generic
Product Line Products Products Other
-------------------------------------------------------------
Omeprazole $533 $3,288 $-
Simvastatin 239 773 -
Codeisan 903 - -
Enalapril 662 209 -
Paroxetine 250 820 -
All other products 1,704 1,693 -
Sales to licensees and
others - - 2,534
Licensing and
collaborations - - 142
-------------------------------------------------------------
Total Revenues $4,291 $6,783 $2,676
=============================================================
% of Q-1 2004 Revenues 25% 39% 15%
(in thousands)
Revenues
Outside of % of Total
Product Line Spain Total Revenues
----------------------------------------------------------
Omeprazole $- $3,821 22%
Simvastatin - 1,012 6%
Codeisan - 903 5%
Enalapril - 871 5%
Paroxetine - 1,070 6%
All other products - 3,397 20%
Sales to licensees and
others 2,998 5,532 32%
Licensing and
collaborations 554 696 4%
----------------------------------------------------------
Total Revenues $3,552 $17,302 100%
==========================================================
% of Q-1 2004 Revenues 21% 100%
Management will host a conference call to discuss the first quarter results and provide a business update at 10:00 a.m. Eastern Time on Thursday, May 5, 2005. To participate on the live call, please dial (800) 299-0148 from the U.S. or, for international callers, please dial (617) 801-9711 (passcode #62978742), approximately 15 minutes prior to the scheduled start time. A telephone replay will be available for 30 days by dialing (888) 286-8010 from the U.S. or (617) 801-6888 for international callers (passcode #91943032). The conference call will also be broadcast live on the Internet Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the and may be accessed via Bentley's web site, www.bentleypharm.com. Please go to the Company's web site approximately 15 minutes prior to the scheduled start time to register, download To receive a file transmitted over a network. In any communications session, "download" means receive, and "upload" means send. The download/upload often implies a big/little scenario, in which data is being downloaded from the "big" server into the "little" user's computer. and install any necessary audio software. A replay of the conference will also be available on Bentley's web site for 30 days. Bentley Pharmaceuticals, Inc. is a specialty pharmaceutical company focused on advanced drug delivery technologies and pharmaceutical products. Bentley's proprietary drug technologies enhance or facilitate the absorption of pharmaceutical compounds across various membranes. Bentley also manufactures and markets a growing portfolio of generic and branded pharmaceuticals in Europe for the treatment of cardiovascular cardiovascular /car·dio·vas·cu·lar/ (-vas´ku-ler) pertaining to the heart and blood vessels. car·di·o·vas·cu·lar adj. Abbr. , gastrointestinal gastrointestinal /gas·tro·in·tes·ti·nal/ (-in-tes´ti-n'l) pertaining to or communicating with the stomach and intestine. gas·tro·in·tes·ti·nal adj. Abbr. , infectious and neurological diseases Noun 1. neurological disease - a disorder of the nervous system nervous disorder, neurological disorder disorder, upset - a physical condition in which there is a disturbance of normal functioning; "the doctor prescribed some medicine for the disorder"; through its subsidiaries, Laboratorios Belmac, Laboratorios Davur and Laboratorios Rimafar; and manufactures and markets active pharmaceutical ingredients through its subsidiary, Bentley API (Application Programming Interface) A language and message format used by an application program to communicate with the operating system or some other control program such as a database management system (DBMS) or communications protocol. . Copies of Bentley Pharmaceuticals' press releases and other information may be obtained through Bentley's web site at www.bentleypharm.com. 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. Statement under 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: This press release contains forward looking statements, including without limitation, statements regarding Bentley's anticipated cash flows and capital expenditures in 2005 and later years, the Years, The the seven decades of Eleanor Pargiter’s life. [Br. Lit.: Benét, 1109] See : Time prospects for Bentley's intranasal insulin, the potential development of other intranasal products, Bentley's expectations for its business in Spain in response to government proposals, and the prospects for growth of its business. 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. are subject to a number of risks and uncertainties that could cause actual results to differ materially from future results expressed or implied by such statements. Factors that may cause such differences include, but are not limited to risks associated with the timing and results of clinical trials, efficacy and safety of our products, the timing and nature of regulatory approvals, expanding generic and branded drug operations, changes in third-party reimbursement Reimbursement Payment made to someone for out-of-pocket expenses has incurred. and government mandates which impact pharmaceutical pricing, development and commercialization of our products, competition from other manufacturers of generic and proprietary pharmaceuticals, intellectual property 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. , Bentley's relationships with its strategic partners, the unpredictability of patent protection, technological changes, the effects of economic conditions, risks associated with international operations Internal Operations (I.O., IO or I/O) is a fictional American Intelligence Agency in Wildstorm comics. It was originally called International Operations. I.O. first appeared in WildC.A.T.S. volume 1 #1 (August, 1992) and was created by Brandon Choi and Jim Lee. , and other uncertainties detailed in Bentley's 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. and its other subsequent periodic reports filed with the Securities and Exchange Commission. Bentley cautions investors not to place undue reliance on the forward-looking statements contained in this release. These statements speak only as of the date of this document, and Bentley undertakes no obligation to update or revise the statements, except as may be required by law.
Bentley Pharmaceuticals, Inc. and Subsidiaries
Consolidated Income Statements
For the Three
Months Ended
(in thousands, except per share data) March 31,
-----------------
2005 2004
-------- --------
Revenues:
Net product sales $23,279 $16,606
Licensing and collaboration revenues 965 696
-------- --------
Total revenues 24,244 17,302
Cost of net product sales 11,452 8,255
-------- --------
Gross profit 12,792 9,047
Operating expenses:
Selling and marketing 4,392 3,870
General and administrative 3,018 2,162
Research and development 1,351 995
Depreciation and amortization 384 347
-------- --------
Total operating expenses 9,145 7,374
-------- --------
Income from operations 3,647 1,673
Other income (expenses):
Interest income 161 110
Interest expense (48) (53)
-------- --------
Income before income taxes 3,760 1,730
Provision for income taxes 1,590 921
-------- --------
Net income $ 2,170 $ 809
======== ========
Net income per common share:
Basic $ 0.10 $ 0.04
======== ========
Diluted $ 0.10 $ 0.04
======== ========
Weighted average common shares outstanding:
Basic 21,316 20,597
======== ========
Diluted 22,531 22,784
======== ========
Bentley Pharmaceuticals, Inc. and Subsidiaries
Consolidated Balance Sheets
(in thousands, except per share data) March 31, December 31,
2005 2004
--------- ---------
Assets
-----------------------------------------------
Current assets:
Cash and cash equivalents $ 35,756 $ 34,230
Marketable securities 500 528
Receivables, net 29,113 27,860
Inventories, net 9,613 10,258
Deferred taxes 499 479
Prepaid expenses and other 1,499 1,355
--------- ---------
Total current assets 76,980 74,710
--------- ---------
Non-current assets:
Fixed assets, net 30,087 30,849
Drug licenses and related costs, net 14,599 14,863
Restricted cash 1,000 1,000
Other 504 508
--------- ---------
Total non-current assets 46,190 47,220
--------- ---------
$123,170 $121,930
========= =========
Liabilities and Stockholders' Equity
-----------------------------------------------
Current liabilities:
Accounts payable $ 15,575 $ 17,048
Accrued expenses 9,078 6,169
Short-term borrowings 2,470 2,754
Current portion of long-term debt 29 31
Deferred income 2,355 1,594
--------- ---------
Total current liabilities 29,507 27,596
--------- ---------
Non-current liabilities:
Deferred taxes 2,196 2,319
Long-term debt 331 349
Deferred income 2,374 1,944
Other 61 65
--------- ---------
Total non-current liabilities 4,962 4,677
--------- ---------
Commitments and contingencies
Stockholders' equity:
Preferred stock, $1.00 par value, authorized
2,000 shares, issued and outstanding,
none -- --
Common stock, $.02 par value, authorized
100,000 shares, issued and outstanding,
21,320 and 21,312 shares 426 426
Additional paid-in capital 140,477 140,418
Accumulated deficit (58,739) (60,909)
Accumulated other comprehensive income 6,537 9,722
--------- ---------
Total stockholders' equity 88,701 89,657
--------- ---------
$123,170 $121,930
========= =========
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