Catalytica Reports Second Quarter Financial Results.Business Editors MOUNTAIN VIEW, Calif.--(BW HealthWire)--Aug. 3, 2000 Catalytica, Inc. (Nasdaq:CTAL CTAL Confederacion de Trabajadores de America Latina (Confederation of Latin American Workers) CTAL Canadian Tire Acceptance Limited CTAL Computer Technology Application Lab, Inc. CTAL Confidentially Typed Assembly Language ) today reported financial results for the second quarter and six months ended June 30, 2000. The financial results have been restated for all periods presented to reflect the acquisition of Wyckoff Chemical Company, which has been accounted for as a pooling of interests Pooling of Interests An accounting method, used in mergers and acquisitions, where the balance sheet items of the two companies are simply added together. Notes: The opposite of pooling of interests is the purchase acquisition method. and was completed on September 20, 1999. For the second quarter, total revenues were $97,260,000, compared with $118,106,000 in the same period a year ago. 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. in the second quarter of 2000 was $10,123,000, compared with $14,311,000 during the second quarter of 1999. The anticipated decline in revenues and thus operating income was the result of a scheduled step-down of Glaxo Wellcome business as part of a five-year supply agreement that was signed upon Catalytica's purchase of its Greenville, North Carolina
Greenville, one of the fastest growing cities in North Carolina, is the county seat of Pitt County, and is the principal city of the Greenville, North Carolina Metropolitan Statistical Area. facility in July 1997. This decline in product revenues was partially offset by a significant growth in research revenues in the second quarter which were $9,017,000, an 80% increase over research revenues of $5,001,000 reported during the same period last year. Net income during the second quarter of $5,516,000, or $0.08 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, reflected an expected increase in Catalytica's tax rate from 23% in the second quarter of 1999, to 39% in the second quarter of 2000, when compared with net income of $9,526,000, or $0.14 per diluted share, reported in the second quarter last year. During the quarter, Catalytica received a $2.5 million settlement through its business interruption insurance Noun 1. business interruption insurance - insurance that provides protection for the loss of profits and continuing fixed expenses resulting from a break in commercial activities due to the occurrence of a peril to cover a portion of the lost production incurred following Hurricane Floyd This article is about the 1999 hurricane. For other storms of the same name, see Tropical Storm Floyd (disambiguation). Hurricane Floyd was the sixth named storm, fourth hurricane, and third major hurricane in the 1999 Atlantic hurricane season. during the third quarter last year. This payment was included as a reduction in cost of goods sold Cost of goods sold The total cost of buying raw materials, and paying for all the factors that go into producing finished goods. cost of goods sold . It also incurred a $1 million non-cash compensation charge related to the retirement of a senior executive. For the first half of 2000, revenues were $195,954,000, compared with $214,030,000 reported in the corresponding period last year. This decline in product revenues was again partially offset by a continued increase in demand for Catalytica's pharmaceutical development services which resulted in a near doubling of research revenues for the first half of 2000 to $20,247,000, compared with $10,314,000 reported during the first six months of 1999. Operating income of $21,773,000 and net income of $11,755,000, or $0.17 per diluted share, for the six months ended June 30, 2000, reflected a slight decrease, compared with operating income of $23,725,000 and net income of $15,898,000, or $0.23 per diluted share, in the first six months of 1999. Catalytica also announced in a separate release yesterday that it plans to merge Catalytica, Inc. with DSM 1. DSM - Data Structure Manager. An object-oriented language by J.E. Rumbaugh and M.E. Loomis of GE, similar to C++. It is used in implementation of CAD/CAE software. DSM is written in DSM and C and produces C as output. , a major supplier of key intermediate products to the pharmaceutical industry. At or about the same time, it will spin out the Catalytica Combustion combustion, rapid chemical reaction of two or more substances with a characteristic liberation of heat and light; it is commonly called burning. The burning of a fuel (e.g., wood, coal, oil, or natural gas) in air is a familiar example of combustion. Systems and Catalytica Advanced Technologies divisions as a single entity to Catalytica shareholders. Ricardo B. Levy, president and chief executive officer of Catalytica, Inc., commented, "Despite the decrease in total revenues during the first half of 2000, the continued increase in research revenues is a positive indication that we are building a good product pipeline for future business to offset the transition of original Glaxo business from our facility. This transition will also be helped by a global presence and broadened customer base that will result from combining Catalytica and DSM. Together, we will become one of the largest fully integrated supplier of development and manufacturing services to the pharmaceutical industry." Levy continued, "As our pharmaceutical division will soon be acquired, we look now to spin out our Catalytica Combustion Systems subsidiary by combining it with Catalytica Advanced Technologies as a new entity. Both subsidiaries made notable progress during the second quarter and the first half of the year. With the announcement of two new orders for Xonon-equipped gas turbines for distributed generation Distributed generation generates electricity from many small energy sources. It has also been called also called on-site generation, dispersed generation, embedded generation, decentralized generation, decentralized energy or projects, we feel that Xonon is progressing nicely along its commercialization path as an enabling technology for ultra-low emissions power production in urban and suburban areas. We plan to pursue the adaptation of Xonon to additional gas turbines for the growing distributed generation market through a program funded by the U.S. Department of Energy and through collaborations with additional original equipment manufacturers (OEMs). In our Advanced Technologies division, we announced the creation of Catalytica NovoTec which is focused on improving manufacturing processes for the chemical and petrochemical petrochemical, any one of a large group of chemicals derived from a component of petroleum or natural gas. The cracking processes for manufacturing gasoline produce vast quantities of gaseous hydrocarbons. industries. This new subsidiary presents exciting new opportunities for Catalytica's expertise in catalysis catalysis Modification (usually acceleration) of a chemical reaction rate by addition of a catalyst, which combines with the reactants but is ultimately regenerated so that its amount remains unchanged and the chemical equilibrium of the conditions of the reaction is not ." During the second quarter, Catalytica Pharmaceuticals completed an expansion of its chemical manufacturing facility in South Haven, Michigan South Haven is a city in the U.S. state of Michigan. Most of the city is in Van Buren County, although a small portion extends into Allegan County. The population was 5,021 at the 2000 census. . The new facility provides for 11,000 additional reactor Reactor (electricity) A device for introducing an inductive reactance into a circuit. Inductive reactance x is a function of the product of frequency f and inductance L; thus, x = 2πfL. gallons to the Company's existing chemical manufacturing capacity. The additional reactor gallon gallon: see English units of measurement. capacity enables Catalytica to expand its early-stage manufacturing production work with customers and strengthens the Company's position as a leading supplier of advanced intermediates and active pharmaceutical ingredients (APIs) in the pharmaceutical outsourcing (1) Contracting with outside consultants, software houses or service bureaus to perform systems analysis, programming and datacenter operations. Contrast with insourcing. See netsourcing, ASP, SSP and facilities management. market. Catalytica Pharmaceuticals now has a total of 120,000 gallons of reactor capacity across its three production sites, making it one of the largest chemical manufacturing suppliers that services the pharmaceutical industry. Expansions of the South Haven There are a few places named South Haven in the United States:
1. unable to produce offspring. 2. aseptic. ster·ile adj. 1. Not producing or incapable of producing offspring. 2. manufacturing facility in Greenville. Catalytica, Inc. has scheduled a conference call to be held today at 9:30 AM (PDT PDT abbr. Pacific Daylight Time PDT Pacific Daylight Time PDT n abbr (US) (= Pacific Daylight Time) → hora de verano del Pacífico PDT ). This call will be accessible live via 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 at http://www.catalytica-inc.com or via telephone at 1-888-850-2534 (719-457-2633 for international callers). A replay of the call will also be available via the Internet or via telephone 24 hours / day for 72 hours beginning at 12:30 PM (PDT) today and ending at 12:00 AM (PDT) on August 7, 2000. To connect to the replay via telephone, simply dial 1-888-203-1112 (719-457-0820 for international callers), reference pass code 921731. Catalytica, Inc. (http://www.catalytica-inc.com) finds new pathways to improve processes -- reducing time, waste and costs. It operates through three subsidiaries: Catalytica Pharmaceuticals, Catalytica Combustion Systems, and Catalytica Advanced Technologies. Catalytica Pharmaceuticals applies innovative and patented catalytic cat·a·lyt·ic adj. Of, involving, or acting as a catalyst: "Deregulation's catalytic power . . . is still reshaping the banking, communications, and transportation industries" Ellyn E. technologies and other chemical processes to improve the steps for manufacturing pharmaceuticals and finds better and more efficient ways to produce products in commercial scale quantities. Catalytica Combustion Systems' unique Xonon Cool Combustion technology enables gas turbines to produce essentially pollution-free power. Catalytica Advanced Technologies serves as the incubator incubator, apparatus for the maintenance of controlled conditions in which eggs can be hatched artificially. Incubator houses with double walls of mud, a fireroom, and several compartments each holding about 6,000 hens' eggs were developed in ancient times; the for new catalytic technologies for industrial applications. Catalytica employs over 1600 people. This news release 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. regarding Catalytica's future performance and Catalytica's competitive position in its markets. Such forward-looking statements include the prospects for our business, the market demand of our products, the benefits from our agreements, obtaining additional XONON orders, securing additional manufacturing business through our research and development associations with our customers, our future ability to obtain new Catalytica Pharmaceuticals' customers, the future performance of the Xonon system, the proposed spin- off of Catalytica Combustion Systems and Catalytica Advanced Technologies, and the merger of DSM. Actual results may differ and such differences may be material from those anticipated in such forward-looking statements. These statements involve risks and uncertainties, including without limitation the ability to complete the spin-off The situation that arises when a parent corporation organizes a subsidiary corporation, to which it transfers a portion of its assets in exchange for all of the subsidiary's capital stock, which is subsequently transferred to the parent corporation's shareholders. and merger with DSM, the ability of Catalytica Pharmaceuticals and Catalytica Combustion Systems to perform cost-effectively and in a timely manner, the impact of product development delays at both Catalytica Pharmaceuticals and Catalytica Combustion Systems, the impact of market demand, the ability to continue to increase revenue from new customers and research services and offset declines in revenue from Glaxo Wellcome and Warner Lambert Lambert may refer to
abbr. Food and Drug Administration FDA, n.pr See Food and Drug Administration. FDA, n.pr the abbreviation for the Food and Drug Administration. on the pharmaceutical market, the EPA EPA eicosapentaenoic acid. EPA abbr. eicosapentaenoic acid EPA, n.pr See acid, eicosapentaenoic. EPA, n. on the energy market, and other regulations on pharmaceutical and biotech bi·o·tech n. Informal Biotechnology. biotech Noun short for biotechnology Noun 1. manufacturing, as well as the impact of environmental regulations on the demand for ultra-low NOx emissions. Readers are cautioned not to place undo To restore the last editing operation that has taken place. For example, if a segment of text has been deleted or changed, performing an undo will restore the original text. Programs may have several levels of undo, including being able to reconstruct the original data for all edits reliance on these forward-looking statements, which speak only as of the date of this release. The Company undertakes no obligation to update publicly any forward-looking statements to reflect new information, events or circumstances CIRCUMSTANCES, evidence. The particulars which accompany a fact. 2. The facts proved are either possible or impossible, ordinary and probable, or extraordinary and improbable, recent or ancient; they may have happened near us, or afar off; they are public or after the date of this release or to reflect the incurrence In`cur´rence n. 1. The act of incurring, bringing on, or subjecting one's self to (something troublesome or burdensome); as, the incurrence of guilt, debt, responsibility, etc. s> Noun 1. of unanticipated events. Investors are encouraged to review Catalytica's Form 10K for the year ending December 31, 1999, Form 10Q for the period ending March 31, 2000, filed with the Securities and Exchange Commission for a discussion of additional factors that could affect Catalytica's future performance.
Catalytica, Inc.
Condensed Consolidated Statements of Operations(a)
(in thousands, except per share amounts)
(unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
-------------------- --------------------
2000 1999 2000 1999
--------- --------- --------- ---------
Revenues:
Product sales $ 88,243 $ 113,105 $ 175,707 $ 203,716
Research revenues 9,017 5,001 20,247 10,314
--------- --------- --------- ---------
Total revenues 97,260 118,106 195,954 214,030
Costs and expenses:
Cost of product sales 68,574 85,540 139,228 157,864
Research and development 12,236 10,491 22,747 18,934
Selling, general and
administrative 6,327 7,764 12,206 13,507
--------- --------- --------- ---------
Total costs and expenses 87,137 103,795 174,181 190,305
Operating income 10,123 14,311 21,773 23,725
Interest expense, net (1,086) (1,418) (2,502) (2,837)
Loss on joint venture (0) (462) (0) (974)
Income taxes (3,521) (2,905) (7,516) (4,016)
--------- --------- --------- ---------
Net income $ 5,516 $ 9,526 $ 11,755 $ 15,898
========= ========= ========= =========
Net income per share:
Basic $ 0.09 $ 0.17 $ 0.20 $ 0.28
========= ========= ========= =========
Diluted $ 0.08 $ 0.14 $ 0.17 $ 0.23
========= ========= ========= =========
Shares used in computing
net income per share:
Basic 58,070 57,543 58,017 57,507
========= ========= ========= =========
Diluted 64,191 63,553 64,186 63,836
========= ========= ========= =========
(a) Note: The results for all periods presented have been restated to
reflect the acquisition of Wyckoff Chemical Company which has been
accounted for as a pooling of interests and was completed on
September 20, 1999.
Catalytica, Inc.
Condensed Consolidated Balance Sheet(a)
(in thousands)
June 30, December 31,
2000 1999
-------- --------
(unaudited)
Assets:
Cash and short-term investments $ 19,811 $ 40,346
Accounts and notes receivable, net 47,211 42,320
Inventory 100,041 105,519
Other current assets 15,482 17,011
-------- --------
Total current assets 182,545 205,196
Property and equipment, net 241,344 221,131
Other assets 1,701 2,181
-------- --------
$425,590 $428,508
======== ========
Liabilities and Stockholders' Equity:
Current liabilities $ 60,731 $ 73,751
Current portion of long-term debt 18,498 12,948
-------- --------
Total current liabilities 79,229 86,699
Long-term debt 41,000 51,000
Other long-term liabilities 23,457 23,982
Minority interest 41,000 41,000
Class A and B common stock 97,079 97,079
Stockholders' equity 143,825 128,748
-------- --------
$425,590 $428,508
======== ========
(a) Note: The results for all periods presented have been restated to
reflect the acquisition of Wyckoff Chemical Company which has been
accounted for as a pooling of interests and was completed on
September 20, 1999.
Note to Editors: Xonon and Cool Combustion are trademarks of Catalytica. |
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