COLLAGEN CORP. ANNOUNCES FOURTH QUARTER AND YEAR-END RESULTS -- Company reports 86% increase in EPS and 38% increase in Operating Earnings for the year.
Gross margin as a percentage of sales improved during fiscal 1995 to 74 percent from 71 percent during fiscal 1994. Selling, general and administrative ("SG&A") expenses increased to 45 percent of sales in fiscal 1995, from 44 percent in fiscal 1994, while research and development ("R&D") expenses as a percentage of sales declined to 14 percent from 15 percent in fiscal 1994.
For the fourth quarter ended June 30, 1995, Collagen reported revenues of $20.2 million, operating income of $3.2 million and net income of $2.7 million, or $0.29 per share, compared with revenues of $18.7 million, operating income of $2.7 million and net income of $1.6 million, or $0.17 per share, during the prior year period. This represents an 8 percent increase in revenues, a 19 percent increase in operating income, and a 71 percent increase in earnings per share compared with the prior year period.
Worldwide revenues from the Company's dermatology and plastic surgery products increased 20 percent to $14.9 million during the fiscal 1995 fourth quarter, compared with $12.4 million in the prior year period. Revenues for the fourth quarter were positively impacted by approximately $500,000 of favorable foreign exchange rate movements, compared with the prior year period. Unit sales increased approximately 22 percent on a worldwide basis compared with the prior year fourth quarter. Worldwide revenues from the sales of these products totaled $51.5 million for fiscal 1995, compared with $43.5 million in fiscal 1994, which represents an 18 percent increase in revenues for fiscal 1995.
"This past year we saw a gratifying revitalization in the revenue growth of our dermatology and plastic surgery products business. For fiscal 1996, we expect to build on this success with the addition of sales people and the introduction of novel sales and marketing programs on a worldwide basis. We also plan to expand our offerings in this market franchise with the launch of the Trilucent(TM) breast implant, which is manufactured by our affiliate, LipoMatrix, Incorporated, of Neuchatel, Switzerland. We are quite encouraged with the reception that the Trilucent(TM) implant has received during the initial phases of its launch in the United Kingdom and we look forward to the roll-out of this product throughout the major markets of Europe over the next twelve months," stated Gary S. Petersmeyer, president and chief operating officer. "As part of our strategy to develop closer relationships with our physician customers, Collagen International recently formed a joint venture in Spain, Collagen Iberica, S.A., with our long-time distributor Quimigranel, S.A., to further our local presence in that country. We now have direct control of our sales efforts for our collagen implant products in 11 of our top 12 countries, including the U.S."
Contigen(R) Bard collagen implant ("Contigen implant") revenues were $4.4 million for the fiscal 1995 fourth quarter, consisting of shipments to Collagen Corporation's marketing partner, C.R. Bard, Inc. ("Bard"), as well as income based on sales by Bard to physician customers in that quarter. This compares with $4.6 million in revenues during the same prior year period. Total Contigen implant revenues during fiscal 1995 were $16.5 million, compared with $16.7 million in fiscal 1994.
Combined fourth quarter revenues from sales of Collagraft(R) bone graft matrix ("Collagraft implant") and Collagraft(R) bone graft matrix strip ("Collagraft strip") were $820,000, compared with revenues of $1.1 million in the prior-year fourth quarter. Collagraft implant and Collagraft strip revenues totaled $3.0 million for fiscal 1995, compared with $2.7 million in fiscal 1994.
During fiscal 1995, Collagen Corporation sold an aggregate of 245,000 shares of Target Therapeutics, Inc. ("Target") common stock as part of its on-going program to generate cash for investments in current or new affiliates, corporate development programs, and other purposes. Collagen Corporation sold 75,000 shares of Target stock during the fiscal fourth quarter, contributing to a pre-tax gain on investments for the quarter of $2.0 million. As of June 30, 1995 Collagen Corporation owned approximately 2 million shares of Target stock, or about 29 percent of the outstanding shares of such company. Collagen's investment in Target has proven to be a very valuable asset and, over time, one that has increased in value despite the reduction in the Company's ownership position.
"We are delighted with the performance of our Target asset, and we expect to increase our activity in corporate and affiliate development by: expanding our presence in our cosmetic medical franchise; extending the uses of our collagen technology to other medical specialties and, enhancing our biomaterials technology," commented Howard D. Palefsky, chairman and chief executive officer.
Further increasing stockholder value, Collagen Corporation repurchased 300,000 shares of its common stock during the fiscal fourth quarter and a total of 562,500 shares during fiscal 1995. Collagen Corporation has repurchased a total of 1.5 million shares of its common stock, or 14 percent of outstanding shares, at an average acquisition price of approximately $22.00 per share, since the inception of the stock repurchase program in February 1993. As of June 30, 1995, the Company had authorization to repurchase an additional 300,000 shares of its common stock in the open market.
Collagen Corporation is a technology-based company that develops, manufactures and markets biomedical devices for the treatment of defective, diseased, traumatized or aging human tissues. -0-
COLLAGEN CORPORATION CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (In thousands)
June 30, 1995(a) 1994(a)
ASSETS Current assets: Cash, cash equivalents and short-term investments $ 9,384 $ 12,736 Accounts receivable, net 13,402 12,241 Inventories 5,056 3,861 Other current assets 5,568 3,305 Total current assets 33,410 32,143
Property and equipment, net 16,506 17,108 Intangible assets 2,727 2,243 Investments & other assets, principally Target Therapeutics, Inc. 24,263 23,011
$ 76,906 $ 74,505
LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $ 2,250 $ 1,420 Accrued liabilities 10,862 10,245 Income taxes payable 5,902 4,251 Total current liabilities 19,014 15,916
Long-term liabilities Deferred income taxes 8,478 8,240 Other long-term liabilities 1,494 1,267 Total long-term liabilities 9,972 9,507
Stockholders' equity: Common stock 63,961 61,276 Retained earnings 16,669 9,234 Treasury stock (32,710) (21,428) Total stockholders' equity 47,920 49,082
$ 76,906 $ 74,505
(a) NOTE: Amounts derived from audited financial statements at dates indicated.
COLLAGEN CORPORATION CONSOLIDATED STATEMENTS OF INCOME (Unaudited) (In thousands, except per share amounts)
Quarter Ended Years Ended June 30, June 30, 1995 1994 1995(a) 1994(a) Revenues: Product sales $20,226 $18,726 $71,560 $64,552 Other -- -- 1,000 1,000 20,226 18,726 72,560 65,552
Costs and expenses: Cost of sales 4,917 5,968 18,584 18,940 Research & development 2,672 2,377 9,943 9,366 Selling, general & administrative 9,405 7,666 32,179 28,639 16,994 16,011 60,706 56,945
Income from operations 3,232 2,715 11,854 8,607
Other income (expense): Gain on investments, net 1,766 -- 5,110 -- Equity in losses of affiliates, net (364) (115) (1,160) (269) Interest income 134 107 487 510 Interest expense (8) -- (91) --
Income before income taxes 4,760 2,707 16,200 8,848 Provision for income taxes 2,060 1,076 7,440 3,928
Net income $ 2,700 $ 1,631 $ 8,760 $ 4,920
Net income per share $ .29 $ .17 $ .93 $ .50
Shares used in calculating per share information 9,250 9,667 9,460 9,896
(a) NOTE: Amounts derived from audited financial statements for the periods indicated.
CONTACT: Collagen Corporation
David Foster, 415/865-0200
Edelman Public Relations
Jon Greer, 415/433-5381
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|Date:||Aug 16, 1995|
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