CIMA Reports Record First Quarter Operating Revenues and Earnings.Business Editors EDEN PRAIRIE Eden Prairie A city of eastern Minnesota, a residential suburb of Minneapolis. Population: 57,300. , Minn.--(BUSINESS WIRE)--May 1, 2002 CIMA LABS INC inc - /ink/ increment, i.e. increase by one. Especially used by assembly programmers, as many assembly languages have an "inc" mnemonic. Antonym: dec. . (Nasdaq:CIMA) today reported operating revenues operating revenue Revenue from any regular source. Revenue from sales is adjusted for discounts and returns when calculating operating revenue. Compare other revenue. of $8.4 million for the first quarter of 2002 ended March 31, an increase of 41% from $6.0 million in the year-earlier period. 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. came to $1.5 million, up 100% from $751,000 in first quarter of 2001. Net income rose to $3.4 million or $0.23 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, an increase of 7% from $3.2 million or $0.20 per diluted share in the year-earlier period. John M. Siebert, Ph.D., president and chief executive officer, commented: "The first quarter of 2002 was another period of strong operating results for CIMA. Consistent with our prior financial guidance, CIMA's improved first quarter revenues and gross operating margin Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: more than offset the impact of significant growth-related investments and reduced investment income. Due to the size of our product development pipeline, which encompasses more than 25 partner-funded and proprietary products, we are expanding CIMA's R&D and manufacturing infrastructure. As we have indicated in the past, a portion of our large cash reserves Cash reserves See: Cash investments cash reserves Investment funds that are held in short-term assets such as Treasury bills and certificates of deposit until more permanent investment opportunities are available. will be used to support these growth-related investments. When this capital program is completed in 2003, we will have established a strong operational foundation capable of supporting higher rates of profitable growth." Siebert added: "Late-stage feasibility studies The analysis of a problem to determine if it can be solved effectively. The operational (will it work?), economical (costs and benefits) and technical (can it be built?) aspects are part of the study. Results of the study determine whether the solution should be implemented. on fast-dissolve products are currently underway for four major pharmaceutical companies. These feasibility studies have the potential to result in new product development and licensing agreements with our partners. For this reason, we are optimistic op·ti·mist n. 1. One who usually expects a favorable outcome. 2. A believer in philosophical optimism. op about finalizing at least one new collaborative col·lab·o·rate intr.v. col·lab·o·rat·ed, col·lab·o·rat·ing, col·lab·o·rates 1. To work together, especially in a joint intellectual effort. 2. partnership in 2002. In addition, we expect to submit an Investigational New Drug filing with the 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. for our proprietary OraVescent(R) fentanyl fentanyl /fen·ta·nyl/ (fen´tah-nil) an opioid analgesic; the citrate salt is used as an adjunct to anesthesia, in the induction and maintenance of anesthesia, in combination with droperidol (or similar agent) as a neuroleptanalgesic, and product during this year's second half. These and other factors make us believe 2002 should be another year of solid progress and achievement for CIMA." Financial Review Sales of branded prescription products rose 39% in this year's first quarter from the fourth quarter of 2001 and by 26% from the first quarter of 2001. Branded prescription products accounted for 72% of total first quarter product sales, up from 49% in last year's fourth quarter and virtually unchanged from the first quarter of 2001. First quarter product development fees and licensing revenues rose 24% from the year-earlier level, reflecting the expansion of CIMA's product development pipeline. This revenue category was down 23% from the fourth quarter of 2001, due to the timing of scheduled R&D milestone “Milemarker” redirects here. For the American indie rock band, see Milemarker (band). A milestone or kilometre sign is one of a series of numbered markers placed along a road at regular intervals, typically at the side of the road or in a median. payments, which vary between quarters. Royalty revenues increased 132% in this year's first quarter versus the year-earlier period and by 6% from last year's fourth quarter, reflecting the growth of end-customer sales of our partners' branded prescription products (on which royalties are paid to CIMA). Growing royalty revenues are anticipated as the branded prescription products introduced primarily in 2001 become increasingly established in their respective therapeutic categories. Partner sales of products developed and manufactured by CIMA are expected to exceed $200 million in 2002, compared to about $100 million in 2001. The gross operating margin (total operating revenues less cost of sales and R&D expense) benefited from higher than anticipated manufacturing orders and shipments of branded prescription products, together with the growth of royalty revenues and product development and licensing revenues. As a percentage of total operating revenues, the gross operating margin rose to 35% in this year's first quarter, from 31% in last year's fourth quarter and 31% in the first quarter of 2001. Further improvements in the gross operating margin are anticipated over the balance of 2002. Since turning profitable in the fourth quarter of 1999, CIMA has not reported tax expense due to the recognition of tax benefits carried over from the years when the Company was losing money. Through March 31, 2002, the Company has recognized approximately $7.7 million in tax benefits. The Company expects to recognize the majority of its remaining tax benefits by the end of 2002. Cash and available-for-sale securities totaled $142.8 million at the end of this year's first quarter, down from $149.5 million at the end of 2001. During the quarter, cash of $9.4 million was used to fund capital expenditures aimed at increasing R&D and manufacturing capacity, to purchase CIMA's Eden Prairie, Minnesota The creator of this article, or someone who has substantially contributed to it, may have a conflict of interest regarding its subject matter. It may require cleanup to comply with Wikipedia's content policies, particularly neutral point of view. , headquarters and manufacturing facility and to acquire shares of its common stock under a stock repurchase Stock repurchase A firm's repurchase of outstanding shares of its common stock. program. Reflecting these uses of cash as well as lower interest rates on cash reserves, other income, principally investment income on cash reserves, declined to $1.7 million, from $2.8 million in the fourth quarter of 2001, and from $2.5 million in last year's first quarter. Second Quarter Guidance For the second quarter of 2002 ending June June: see month. 30, CIMA expects earnings of $0.23 to $0.27 per diluted share on operating revenues of $9.5 million to $10.5 million. The timing of milestone payments from partner-funded product development collaborations, the rate of spending on infrastructure initiatives and taxes will affect where second quarter revenues and earnings fall within the targeted range. The Company also reaffirmed its prior financial guidance for 2002 of operating revenues of $41.0 to $45.0 million and earnings of $1.18 to $1.24 per diluted share. As the year progresses, the Company intends to update its guidance based on the latest available information. About CIMA LABS CIMA develops and manufactures prescription and over-the-counter products based upon its proprietary, fast-dissolve drug delivery technologies, OraSolv(R) and DuraSolv(R). Based on our technologies, an active drug ingredient
An ingredient is something that forms part of a mixture (in a general sense). , which we frequently taste-mask, is formulated for·mu·late tr.v. for·mu·lat·ed, for·mu·lat·ing, for·mu·lates 1. a. To state as or reduce to a formula. b. To express in systematic terms or concepts. c. into a new, orally disintegrating dosage form A dosage form is the physical form of a dose of medication, such as a capsule or injection. The route of administration is dependent on the dosage form of a given drug. that dissolves quickly in the mouth without chewing chewing or mastication Up-and-down and side-to-side movements of the lower jaw, using the teeth to grind food for easier swallowing. During chewing, the tongue shapes food into a lump and saliva lubricates it for swallowing. or the need for water. CIMA's business involves a dual operating strategy. We develop and manufacture fast-dissolve versions of drugs for pharmaceutical company partners for whom we currently produce three branded prescription pharmaceuticals and two over-the-counter brands. CIMA is also developing proprietary products utilizing our fast-dissolve technologies, as well as our new OraVescent(R) enhanced absorption, transmucosal transmucosal /trans·mu·co·sal/ (trans?mu-ko´s'l) entering through, or across, a mucous membrane. transmucosal, drug delivery system. This press release, including the information related to CIMA's expectations about new product development agreements, new product introductions, marketing efforts of third parties, sources of future revenues, other income, earnings and revenues, contains 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. within the meaning 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. A number of factors could cause actual results to differ materially from CIMA's assumptions and expectations. These factors include the successful completion of feasibility fea·si·ble adj. 1. Capable of being accomplished or brought about; possible: a feasible plan. See Synonyms at possible. 2. projects, agreeing to commercial terms with pharmaceutical companies for new collaborative development and license agreements, consumer acceptance of CIMA's products, the receipt of firm orders for CIMA's products, the success of pharmaceutical companies in marketing CIMA's products, production costs, production yields, capacity utilization Capacity Utilization measures the rate at which a firm makes use of their capital productive capacities, such as factories and machinery. Capacity Utilization generally rises when the economy is healthy and falls when demand softens. of product development and manufacturing resources, the outcome of tests in humans of proposed products, and returns on investments. Additional factors that may cause actual results to differ from CIMA's assumptions and expectations include those set forth under the heading "Factors That Could Affect Future Results" included in CIMA's most recent filings with the Securities and Exchange Commission. All forward-looking statements are qualified by, and should be considered in conjunction with, such cautionary statements. First Quarter Conference Call CIMA Labs will review its first quarter operating results in a conference call at 4:30 PM Eastern today. Investors can also listen to the conference call at www.cimalabs.com or www.vcall.com. It is recommended that listeners go to one of these web sites at least 15 minutes before the scheduled start time to 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. For those who cannot listen to the live webcast, a replay will be available shortly after the teleconference at the Vcall web site. A replay of the conference call will be available through May 8 at 719/457-0820 with the 484098 confirmation code.
CONDENSED STATEMENTS OF OPERATIONS
(in thousands, except per share)
(Unaudited)
Three Months Ended
March 31
----------------------
2002 2001
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Operating revenues:
Net sales $ 4,238 $ 3,296
Product development fees and licensing 2,308 1,868
Royalties 1,838 792
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Total operating revenues 8,384 5,956
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Operating expenses:
Cost of sales 3,356 2,601
Research and product development 2,052 1,486
Selling, general and administrative 1,477 1,118
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Total operating expenses 6,885 5,205
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Operating income 1,499 751
Other income 1,739 2,425
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Income before provision for taxes 3,238 3,176
Income tax expense (benefit)
(167) -
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Net income $ 3,405 $ 3,176
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Net income per basic share $ .24 $ .22
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Net income per diluted share $ .23 $ .20
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Weighted average number of shares outstanding:
Basic 14,159 14,459
Diluted 14,655 15,612
BALANCE SHEET DATA
(in thousands)
March 31, December 31,
2002 2001
----------- ------------
(Unaudited) (Audited)
Cash, cash equivalents and available-for- $142,831 $149,505
sale securities - Current and Noncurrent
Property, plant and equipment 34,454 27,761
Total Assets 199,358 198,931
Long-term debt - -
Stockholders' Equity 196,375 194,777
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