Bentley Pharmaceuticals Reports Fiscal 2004 Revenues of $73.4 Million And EPS OF $0.25 Per Diluted Share; Reports Fourth Quarter EPS of $0.09 Per Diluted Share on Revenues of $19.5 Million.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 ), a technology-based specialty pharmaceutical and drug delivery company with a growing branded and generic product line in Europe, today released its financial results for the fourth quarter and year ended December 31, 2004. Total revenues increased 13% in 2004 to $73.4 million, meeting previously announced guidance, compared with $64.7 million in fiscal 2003. At constant exchange rates, revenues were up 3%. Net product sales climbed 11% to $69.9 million in 2004 from $63.0 million in 2003 (1% at constant exchange rates). Licensing and collaboration fees more than doubled to $3.5 million in 2004, from $1.7 million in 2003. A number of factors contributed to these results, including: --Increasing royalties from sales of Testim(R), the first marketed product to incorporate Bentley's CPE- 215(R) drug delivery technology; --Continuing sales volume growth in Spain, which helped offset price reductions that were required by 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. law last year; --Continuing growth in pharmaceutical sales outside of Spain; and --The strength of the Euro compared to the US Dollar, which increased revenues by approximately $6.5 million. Sales outside of Spain reached $14.9 million in fiscal 2004, up from $9.1 million in 2003, driven largely by the revenues generated by the Company's license and supply agreements. Management expects these revenues to continue to grow during 2005. As of December 31, 2004, Bentley's Spanish operations have executed 119 license agreements, of which14 with customers in Spain and 41 with customers outside of Spain, cover actively marketed products that are generating revenues. The remaining licenses, four with customers in Spain and 60 with customers outside of Spain, are for products that are awaiting regulatory approvals. 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 2004 totaled $8.7 million, compared to $11.4 million in 2003, as a result of the government-mandated price reductions that reduced the Company's gross margins on net product sales to 51% in 2004, compared to 58% in 2003. The price reductions had the effect of reducing 2004 revenues and gross profit by almost $14.0 million. Net income for 2004 totaled $5.7 million, or $0.25 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. share, compared with $6.1 million, or $0.28 per diluted share in 2003. 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 consider the positive results of 2004 to be a testament to our management and employees and their ability to quickly respond to adverse market conditions brought about by price reductions in Spain. The changes in Spanish law at the end of 2003 forced us to reduce our prices on certain of our prescription pharmaceutical products that accounted for a significant portion of our business. The fact that we could maintain revenues on a constant currency basis despite the price reductions affirms the strength of the Bentley organization. At the same time, we are aware that increases in G&A costs are running at 12% of revenues, compared with 11% the year before. Like every other publicly traded company publicly traded company A company whose shares of common stock are held by the public and are available for purchase by investors. The shares of publicly traded firms are bought and sold on the organized exchanges or in the over-the-counter market. , we have seen our costs increase significantly over the past year. Some of these increases are due to new regulatory requirements Regulatory requirements are part of the process of drug discovery and drug development. Regulatory requirements describe what is necessary for a new drug to be approved for marketing in any particular country. , including costs incurred to meet the requirements of the Sarbanes-Oxley Act See SOX. of 2002, while others are the result of our growth and current market conditions. Our higher costs also reflect investment of resources to prepare for our continuing growth that we expect in 2005 and beyond. As we expand our activities in Europe, we are entering new markets, many of which have great potential for our products. At the same time, we must invest in the sales and support infrastructure needed to realize that potential. We expect that 2005 will begin to reflect the rewards for those investments. We are especially enthusiastic about our plans for European European emanating from or pertaining to Europe. European bat lyssavirus see lyssavirus. European beech tree fagussylvaticus. European blastomycosis see cryptococcosis. expansion beyond Spain." For the fourth quarter of 2004, record revenues of $19.5 were 8% higher than fourth quarter 2003 revenues of $18.1 million. At constant exchange rates, revenues decreased by 1% from the fourth quarter of 2003. Fourth quarter operating income totaled $1.9 million compared to $2.6 million in the fourth quarter of 2003, a decrease of 27%, largely due to the same reasons discussed above. Net income for the final quarter of 2004 was just under $2.0 million, or $0.09 per diluted share, up from $1.7 million, or $0.08 per diluted share, in the fourth quarter of 2003. Michael D. Price, Vice President and CFO See Chief Financial Officer. , commented, "Not only have we maintained our revenues, expressed in constant currency, in spite of in opposition to all efforts of; in defiance or contempt of; notwithstanding. See also: Spite the price reductions in the Spanish market, but our balance sheet continues to strengthen. Our total assets increased by $21.5 million during 2004 to $122 million. 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 declined in the fourth quarter when expressed in constant currency; however, receivables increased by approximately $2 million when translated into U.S. Dollars. Our long-term debt Long-Term Debt Loans and financial obligations lasting over one year. Notes: For example debts obligations such as bonds and notes which have maturities greater than one year would be considered long-term debt. of $349,000 is very low for a company of our size in the pharmaceutical industry. We have maintained this low level of long-term debt while investing more than $10 million in factory improvements and additions in 2004. We also purchased an active pharmaceutical ingredients manufacturing facility in 2004, which should broaden our revenue base and contribute to our growth in the future." Mr. Murphy concluded, "Our product line continues to expand, and we are planning to grow our business both in Spain, and across Europe, beginning with our initial approvals in the UK. Our US drug business is in a stronger position than it was a year ago, thanks in large part to our consistent and growing royalty revenue stream from the sales of Auxilium's Testim(R). In January 2005, Testim was launched in Germany by Auxilium's partner, Ipsen. Testim has received marketing authorizations in two additional European countries in 2005, bringing the total number of countries in which Testim is approved outside the U.S. to 11. We also have great hopes for our proprietary intranasal in·tra·na·sal adj. Within the nose. 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. product, which successfully completed Phase I and initial Phase II trials in 2004. We are looking forward to continued success in 2005." Company Updates/Accomplishments in 2004 --In February, Bentley announced that it had successfully completed a Phase I and an initial Phase II clinical trial Noun 1. phase II clinical trial - a clinical trial on more persons than in phase I; intended to evaluate the efficacy of a treatment for the condition it is intended to treat; possible side effects are monitored phase II using its proprietary intranasal insulin formulation formulation /for·mu·la·tion/ (for?mu-la´shun) the act or product of formulating. American Law Institute Formulation in human volunteers. --Bentley successfully completed an initial Phase II clinical trial using its proprietary intranasal insulin formulation just before the end of 2004, and are in the data analysis and reporting stages of that study. --The Spanish government
1. an antidepressant compound used in the treatment of major depressive disorder, administered orally as the hydrobromide. 2. , all anti-depressants. --Bentley's common stock began trading on the NYSE under the ticker symbol Ticker Symbol An arrangement of characters (usually letters) representing a particular security listed on an exchange or otherwise traded publicly. When a company issues securities to the public marketplace, it selects an available ticker symbol for its securities which investors "BNT." --Marketing authorizations for Bentley's branded and generic versions of ibuprofen ibuprofen (ī`by  prō'fən), nonsteroidal anti-inflammatory drug (NSAID) that reduces pain, fever, and inflammation. pediatric pediatric /pe·di·at·ric/ (pe?de-at´rik) pertaining to the health of children. pe·di·at·ric adj. Of or relating to pediatrics. suspension, generic versions of the 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. product lansoprazole lansoprazole /lan·so·pra·zole/ (lan-so´prah-zol) a proton pump inhibitor used to inhibit gastric acid secretion for the treatment of duodenal or gastric ulcer, gastroesophageal reflux disease, and hyperchlorhydria. and the antibiotic antibiotic, any of a variety of substances, usually obtained from microorganisms, that inhibit the growth of or destroy certain other microorganisms. Types of Antibiotics azithromycin azithromycin /az·ith·ro·my·cin/ (az-ith?ro-mi´sin) a macrolideantibiotic derived from erythromycin, effective against a wide range of gram-positive, gram-negative, and anaerobic bacteria. were approved Spain. --The British government approved generic versions of 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 , a lipid-lowering agent in the treatment of high cholesterol Cholesterol, High Definition Cholesterol is a fatty substance found in animal tissue and is an important component to the human body. It is manufactured in the liver and carried throughout the body in the bloodstream. disorders. --Bentley purchased an FDA-approved active pharmaceutical ingredient manufacturing facility in Zaragoza, Spain; sales of APIs from that facility accounted for 2% of Bentley's consolidated revenues in 2004. --Bentley entered into a multi-product collaboration agreement with Perrigo Company to boost Bentley's presence in the US. --The Company also announced over the course of the year results from studies that showed Testim(R) is effective in treating erectile dysfunction Erectile Dysfunction Definition Erectile dysfunction (ED), formerly known as impotence, is the inability to achieve or maintain an erection long enough to engage in sexual intercourse. and low libido libido (lĭbē`dō, –bī`–) [Lat.,=lust], psychoanalytic term used by Sigmund Freud to identify instinctive energy with the sex instinct. in hypogonadal men. --Significant components of Bentley's revenues for 2004 and 2003 are summarized below:
For the year ended December 31, 2004 (in thousands):
Revenues Within Spain
---------------------
Revenues % of
Branded Generic Outside Total
Product Line Products Products Other of Spain Total Revenues
----------------------------------------------------------------------
Omeprazole $2,721 $13,520 $- $- $16,241 22%
Simvastatin 1,392 3,638 - - 5,030 7%
Enalapril 3,192 1,243 - - 4,435 6%
Paroxetine 1,045 2,928 - - 3,973 5%
Codeisan 3,131 - - - 3,131 4%
All other products 7,690 6,910 - 1,742 16,342 23%
Sales to licensees
and others - - 10,502 10,288 20,790 28%
Licensing and
collaborations - - 607 2,844 3,451 5%
----------------------------------------------------------------------
Total Revenues $19,171 $28,239 $11,109 $14,874 $73,393 100%
======================================================================
% of 2004 Revenues 26% 39% 15% 20% 100%
For the year ended December 31, 2003 (in thousands):
Revenues Within Spain
---------------------
Revenues % of
Branded Generic Outside Total
Product Line Products Products Other of Spain Total Revenues
----------------------------------------------------------------------
Omeprazole $6,099 $13,863 $- $- $19,962 31%
Simvastatin 2,176 4,412 - - 6,588 10%
Enalapril 2,610 1,878 - - 4,488 7%
Paroxetine - 749 - - 749 1%
Codeisan 2,713 - - - 2,713 4%
All other products 5,463 6,065 - - 11,528 18%
Sales to licensees
and others - - 9,536 7,391 16,927 26%
Licensing and
collaborations - - - 1,721 1,721 3%
----------------------------------------------------------------------
Total Revenues $19,061 $26,967 $9,536 $9,112 $64,676 100%
======================================================================
% of 2003 Revenues 29% 42% 15% 14% 100%
Bentley Pharmaceuticals will host a conference call today at 10 a.m. EST EST electroshock therapy. EST abbr. electroshock therapy to discuss the results. To participate on the live call, please dial 800-884-5695 from the U.S. or, for international callers, please dial 617-786-2960 passcode #10092450, approximately 15 minutes before the 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, and entering passcode #37129206. To listen to the conference call live via the Internet, visit Bentley's web site at www.bentleypharm.com. Please go to the web site 15 minutes prior to its start 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 the necessary audio software. A replay will 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, 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 2005 revenues, its plans and prospects for 2005, anticipated sources of future revenue, and the prospects for growth of our 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. , our relationships with our 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
(in thousands, except per share data)
For the For the
Three Months Ended Year Ended
December 31, December 31,
-----------------------------------
2004 2003 2004 2003
-------- -------- -------- --------
Revenues:
Net product sales $18,617 $17,584 $69,942 $62,955
Licensing and collaboration
revenues 901 475 3,451 1,721
-------- -------- -------- --------
Total revenues 19,518 18,059 73,393 64,676
Cost of net product sales 9,391 7,715 34,551 26,399
-------- -------- -------- --------
Gross profit 10,127 10,344 38,842 38,277
-------- -------- -------- --------
Operating expenses:
Selling and marketing 3,889 4,009 14,808 14,212
General and administrative 2,536 1,912 9,126 7,001
Research and development 1,248 1,432 4,419 4,295
Depreciation and amortization 534 373 1,794 1,340
-------- -------- -------- --------
Total operating expenses 8,207 7,726 30,147 26,848
-------- -------- -------- --------
Income from operations 1,920 2,618 8,695 11,429
-------- -------- -------- --------
Other income (expenses):
Interest income 149 96 548 332
Interest expense (66) (54) (226) (228)
Other, net 74 (18) 1,478 (13)
-------- -------- -------- --------
Income before income taxes 2,077 2,642 10,495 11,520
Provision for income taxes 99 954 4,805 5,423
-------- -------- -------- --------
Net income $1,978 $1,688 $5,690 $6,097
======== ======== ======== ========
Net income per common share:
Basic $0.09 $0.09 $0.27 $0.34
======== ======== ======== ========
Diluted $0.09 $0.08 $0.25 $0.28
======== ======== ======== ========
Weighted average common shares outstanding:
Basic 21,308 19,071 20,901 17,997
======== ======== ======== ========
Diluted 22,487 22,418 22,627 21,637
======== ======== ======== ========
BENTLEY PHARMACEUTICALS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands, except per share data) December December
31, 2004 31, 2003
--------- ---------
ASSETS
------
Current assets:
Cash and cash equivalents $34,230 $39,393
Marketable securities 528 1,252
Receivables, net 27,860 18,036
Inventories, net 10,258 7,106
Deferred taxes 479 213
Prepaid expenses and other 1,355 899
--------- ---------
Total current assets 74,710 66,899
--------- ---------
Non-current assets:
Fixed assets, net 30,849 18,566
Drug licenses and related costs, net 14,863 13,646
Restricted cash 1,000 1,000
Other 508 352
--------- ---------
Total non-current assets 47,220 33,564
--------- ---------
$121,930 $100,463
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
---------------------------------------
Current liabilities:
Accounts payable $17,048 $10,154
Accrued expenses 6,169 7,103
Short-term borrowings 2,754 1,915
Current portion of long-term debt 31 70
Deferred income 1,594 1,476
--------- ---------
Total current liabilities 27,596 20,718
--------- ---------
Non-current liabilities:
Deferred taxes 2,319 2,555
Long-term debt 349 369
Deferred income 1,944 480
Other 65 176
--------- ---------
Total non-current liabilities 4,677 3,580
--------- ---------
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,
21,312 and 20,573 shares 426 412
Stock purchase warrants (to purchase zero and
420 shares of common stock) - 333
Additional paid-in capital 140,418 136,850
Accumulated deficit (60,909) (66,599)
Accumulated other comprehensive income 9,722 5,169
--------- ---------
Total stockholders' equity 89,657 76,165
--------- ---------
$121,930 $100,463
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