CIMA Reports Strong Fourth Quarter Revenues and Earnings.Business Editors MINNEAPOLIS--(BUSINESS WIRE)--Feb. 22, 2001 Record Full-Year 2000 Operating Results Driven by Transition to Higher-Margin Branded Prescription Products 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 NMS See NetWare Management System. : 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 $7.1 million for the fourth quarter of 2000 ended December December: see month. 31, an increase of 61% from $4.4 million in the comparable period in 1999. Fourth quarter net income came to $3.2 million or $0.22 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, up substantially from $103,000 or $0.01 per diluted share in the year-earlier quarter. For full-year 2000, operating revenues totaled $23.9 million, an increase of 79% from $13.4 million in 1999. Net income was $4.0 million or $0.32 per diluted share, a substantial turnaround Turnaround A situation where a company that has had poor performance for an extended period of time experiences a positive reversal. Notes: A speculator may profit from a turnaround if he or she accurately anticipates the improvement of a poorly performing company. from the net loss of $1.3 million or $0.13 per diluted share in 1999. As previously announced, CIMA changed its revenue recognition policy in the second quarter of 2000 with respect to licensing revenues in response to an SEC accounting bulletin issued in December 1999. As a result, the Company's 2000 operating results, specifically product development fees and licensing revenues, are not directly comparable with CIMA's 1999 results. John M. Siebert, Ph.D., president and chief executive officer, commented: "The year 2000 marked the beginning of a true breakout period for CIMA. We recorded steadily improving profitability throughout the year, making 2000 our first profitable year. The improvement in our operating results reflected the pronounced shift in our revenue mix from over-the-counter (OTC OTC See: Over-the-counter. OTC See over-the-counter market (OTC). ) products to higher-margin branded prescription products. Branded prescription products accounted for the majority of CIMA's total fourth quarter sales and had a positive impact on our profit margins. These factors made the final three months of 2000 the strongest quarter in our history by a wide margin. "With two 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. approvals behind us," Siebert continued, "we believe CIMA's OraSolv(R) and DuraSolv(TM) fast-dissolve drug delivery technologies have been validated val·i·date tr.v. val·i·dat·ed, val·i·dat·ing, val·i·dates 1. To declare or make legally valid. 2. To mark with an indication of official sanction. 3. by regulatory authorities Noun 1. regulatory authority - a governmental agency that regulates businesses in the public interest regulatory agency administrative body, administrative unit - a unit with administrative responsibilities and the marketplace. We also anticipate the commercial introduction of a third prescription product, Schwarz Schwarz is a common surname, derived from the German schwarz, meaning black. It may refer to: People
In January January: see month. 2001, Organon or·ga·non or or·ga·num n. pl. or·ga·nons or or·ga·nums or or·ga·na 1. An organ. 2. A set of principles for use in scientific investigation. organon pl. organa [Gr.] organ. Inc. received FDA approval to market Remeron Remeron® Mirtazipine, see there SolTab, CIMA's OraSolv-based formulation formulation /for·mu·la·tion/ (for?mu-la´shun) the act or product of formulating. American Law Institute Formulation of Organon's Remeron (mirtazapine mirtazapine /mir·taz·a·pine/ (mir?taz-ah-pen) an antidepressant structurally unrelated to any of the classes of antidepressants. ) tablets. Remeron SolTab is the first and only fast-dissolve antidepressant antidepressant, any of a wide range of drugs used to treat psychic depression. They are given to elevate mood, counter suicidal thoughts, and increase the effectiveness of psychotherapy. to receive FDA approval. Remeron tablets, the solid oral 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. of Remeron SolTab, have been commercially available in the U.S. since 1996. For the four quarters ended September September: see month. 30, 2000, Organon has reported that worldwide Remeron sales increased approximately 60% in constant currencies to an estimated U.S. $350.0 million. Earlier this month, Organon announced the U.S. market launch of Remeron SolTab and its agreement with Solvay Noun 1. Solvay - Belgian chemist who developed the Solvay process and built factories exploiting it (1838-1922) Ernest Solvay Pharmaceuticals Inc. to co-promote this product through their respective sales forces. CIMA, which is Organon's exclusive supplier of Remeron SolTab, expects Organon to commence the marketing of this product in selected European European emanating from or pertaining to Europe. European bat lyssavirus see lyssavirus. European beech tree fagussylvaticus. European blastomycosis see cryptococcosis. countries later in 2001. In February 2001, AstraZeneca received FDA approval to market Zomig-ZMT, CIMA's DuraSolv-based formulation of AstraZeneca's Zomig Zo·mig A trademark for the drug zolmitriptan. zolmitriptan Zomig, Zomig-ZMT Pharmacologic class: Selective 5-hydroxytryptamine receptor agonist Therapeutic class: (zolmitriptan zolmitriptan /zol·mi·trip·tan/ (zol?mi-trip´tan) a selective serotonin receptor agonist used to relieve acute migraine. zol·mi·trip·tan n. ) tablets. Zomig tablets, the solid oral dosage form of Zomig-ZMT, have been commercially available in the U.S. since 1997. A CIMA fast-dissolve version of Zomig, marketed as Rapimelt and under other tradenames, is currently available in 14 European countries. For full-year 2000, AstraZeneca reported worldwide Zomig sales (all formulations) increased approximately 31% in constant currencies to U.S. $237.0 million. CIMA expects AstraZeneca to commence U.S. marketing of Zomig-ZMT in the second quarter of 2001. CIMA is AstraZeneca's exclusive supplier of all CIMA-formulated versions of Zomig for distribution in the U.S and Europe. In the fourth quarter of 2000, sales of products manufactured for pharmaceutical companies increased 199% to $4.1 million (58% of total revenues), from $1.4 million (31% of total revenues) in the year-earlier period. Of total fourth quarter product sales, sales of branded prescription products amounted to $3.7 million, compared to $123,000 in the year-earlier period. Fourth quarter sales of branded prescription products accounted for 89% of product sales and 53% of total fourth quarter operating revenues. For full-year 2000, product sales totaled $13.4 million (56% of total revenues), up substantially from $4.8 million (36% of total revenues) in 1999. Of total 2000 product sales, sales of branded prescription products amounted to $6.2 million, compared to $328,000 in 1999. Branded prescription products accounted for 47% of full-year 2000 product sales and 26% of total revenues. Sales of branded prescription products are expected to exceed 50% of anticipated product sales in 2001. In the fourth quarter of 2000, product development fees and licensing revenues amounted to $2.4 million (34% of total revenues), down 8% from $2.7 million (60% of total revenues) in the year-earlier period. For full-year 2000, product development fees and licensing revenues totaled $8.8 million (37% of total revenues), up 13% from $7.8 million (58% of total revenues) in 1999. Amortization of deferred revenue added $150,000 to licensing revenues in fourth quarter and $1.3 million for the full year. This revenue category is expected to decline as a percentage of total revenues in 2001, reflecting the anticipated growth of product sales. In the fourth quarter of 2000, royalties on products under license from CIMA that are sold by pharmaceutical companies were $529,000 (7% of total revenues), up 43% from $369,000 (8% of total revenues) in the year-earlier period. For full-year 2000, royalties totaled $1.7 million (7% of total revenues), an increase of 131% from $735,000 (5% of total revenues) in 1999. Royalties in terms of dollar amounts and as a percentage of total revenues are expected to increase in 2001, consistent with the outlook for growing product sales. Reflecting the increased production volumes of higher-margin branded prescription products, the Company reported its first positive gross profit margin Gross profit margin Gross profit divided by sales, which is equal to each sales dollar left over after paying for the cost of goods sold. gross profit margin A measure calculated by dividing gross profit by net sales. on product sales in the third quarter. The gross profit margin on product sales exceeded 27% in the fourth quarter of 2000. The Company expects its gross profit margin on product sales to increase further in 2001. The Company completed in March 2000 a private placement with institutional investors Institutional Investor A non-bank person or organization that trades securities in large enough share quantities or dollar amounts that they qualify for preferential treatment and lower commissions. of 1.1 million shares of CIMA common stock that generated net proceeds Net Proceeds The amount received after all costs are deducted from the sale of a piece of property or security. Notes: In the case of an investor selling a security, net proceeds represent the proceeds from the sale minus any trading costs (i.e. commissions). of approximately $19.4 million. In November 2000, the Company completed a public offering of 3.2 million shares of common stock that raised net proceeds of approximately $150.2 million. Proceeds from the offering will be used to fund business growth initiatives, including an expansion of the Company's manufacturing capacity and the acquisition or development of new products and technologies. Reflecting the capital raised in 2000, cash and available-for-sale securities totaled $163.2 million at December 31, 2000, compared to $2.5 million at year-end 1999. Other income, consisting principally of interest income on the Company's 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. , totaled $1.6 million for the fourth quarter of 2000, compared to other expense of $154,000 in the year-earlier period. For the full-year 2000, other income totaled $2.1 million, up from $116,000 for 1999. The Company expects other income to increase in the first quarter of 2001. Based on the outlook for its branded prescription products, the Company expects earnings of $0.10 to $.15 per diluted share for the first quarter of 2001, on revenues of $6.5 to $7.5 million. The Company does not intend to update these estimates prior to its earnings release for the first quarter of 2001. About CIMA CIMA develops and manufactures prescription and over-the-counter products for pharmaceutical companies based upon its proprietary, fast-dissolve drug delivery technologies, OraSolv and DuraSolv. CIMA formulates a pharmaceutical company's active drug ingredient into a new, orally disintegrating dosage form 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. Taste masking mask·ing n. 1. The concealment or the screening of one sensory process or sensation by another. 2. An opaque covering used to camouflage the metal parts of a prosthesis. agents may be used with the Company's fast-dissolve technologies to prevent or minimize the unpleasant taste associated with many active drug ingredients. CIMA currently manufactures three prescription and two over-the-counter products. The information in this press release, including the information related to CIMA's expectations about product introductions, marketing efforts of third parties, sources of future revenues, gross profit margins, other income, earnings and revenues, contain 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 consumer acceptance of the 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 production resources 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 "Risk Factors" in Amendment No. 1 to a Registration Statement on Form S-3 (No. 333-47558) filed by CIMA with the Securities and Exchange Commission. All forward-looking statements are qualified by, and should be considered in conjunction with, such cautionary statements. Fourth Quarter Conference Call CIMA Labs will review its fourth quarter and full-year 2000 operating results in a conference call at 4:30 PM Eastern this afternoon. Investors can listen to the conference call at www.cimalabs.com or www.vcall.com. It is recommended that listeners go to 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 broadcast, a replay will be available shortly after the teleconference at the Vcall web site. A replay of the conference call is also available for one week at 719/457-0820 with the 736822 confirmation code.
CONDENSED STATEMENTS OF OPERATIONS
(in thousands, except per share)
(Unaudited) (Audited)
For the Three For the
Months Ended Twelve Months Ended
-------------------- ----------------------
Dec. 31, Dec. 31, Dec. 31, Dec. 31,
2000 1999 2000 1999
---------- --------- --------- ----------
Operating Revenues:
Net sales $4,115 $1,375 $13,407 $4,839
Product development
fees and licensing 2,442 2,658 8,817 7,818
Royalties 529 369 1,695 735
---------- --------- --------- ----------
Total operating revenues 7,086 4,402 23,919 13,392
Operating expenses:
Cost of goods sold 2,992 2,457 12,410 7,545
Research and product
development 1,473 1,002 4,958 4,389
Selling, general
and administrative 1,035 686 3,880 2,836
---------- --------- --------- ----------
Total operating expenses 5,500 4,145 21,248 14,770
Other income (expense) 1,634 (154) 2,114 116
---------- --------- --------- ----------
Income (loss) before
cumulative effect of a
change in
accounting principle 3,220 103 4,785 (1,262)
Cumulative effect of a
change in accounting
principle, net of
income taxes - - (799) -
---------- --------- --------- ----------
Net income (loss) $3,220 $103 $3,986 $(1,262)
========== ========= ========= ==========
Net income (loss)
per share:
Basic
Net income (loss)
per share before
cumulative effect of
a change in
accounting principle $.25 $.01 $.43 $(.13)
Net loss per share
from cumulative
effect of a change
in accounting
principle .00 .00 (.07) .00
---------- --------- --------- ----------
Net income (loss) per
basic share $.25 $.01 $.36 $(.13)
========== ========= ========= ==========
Diluted
Net income (loss) per
share before cumulative
effect of a change in
accounting principle $.22 $.01 $.39 $(.13)
Net loss per share from
cumulative effect of a
change in accounting
principle .00 .00 (.07) .00
---------- --------- --------- ----------
Net income (loss) per
diluted share $.22 $.01 $.32 $(.13)
========== ========= ========= ==========
Weighted average of
number of shares:
Basic 12,956 9,615 11,151 9,615
Diluted 14,361 9,615 12,385 9,615
Proforma amounts
assuming the accounting
change were applied
retroactively
(unaudited):
Net income (loss) $3,220 $(246) $3,986 $(874)
Net income (loss)
per diluted share $.22 $(.03) $.32 $(.09)
Weighted average
diluted shares 14,361 9,615 12,385 9,615
BALANCE SHEET DATA
(in thousands)
Dec. 31, Dec. 31,
2000 1999
(Audited) (Audited)
------------ -----------
Cash, cash equivalents
and available-for-
sale securities $163,162 $2,481
Working capital 170,885 4,198
Total Assets 189,462 19,270
Long-term debt & lease obligations - 3,510
Stockholders' Equity 186,925 11,574
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