Catalytica Reports Second Quarter Results; Operating Income Increases 33% Over Q2, 98.MOUNTAIN VIEW, Calif.--(BW HealthWire)--July 29, 1999-- 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 June: see month. 30, 1999. Revenues for the second quarter increased by approximately 9% to $104,419,000, compared with $96,077,000 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 1999 rose by 33% to $11,068,000 compared with $8,293,000 for the second quarter of 1998. Net income for the quarter rose 45% to $7,283,000, or $0.11 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 net income of $5,033,000, or $0.08 per diluted share, a year earlier. For the first half of 1999, revenues were $192,483,000 compared with the $188,211,000 reported in the corresponding period last year. Operating income of $19,948,000 and net income of $13,447,000, or $0.21 per diluted share, for the six months ended June 30, 1999, reflected a 24% and 45% increase, respectively, compared with operating income of $16,052,000 and net income of $9,284,000, or $0.15 per diluted share, in the first six months of 1998. Ricardo Ri·car·do , David 1772-1823. British economist whose major work, Principles of Political Economy and Taxation (1817), supported the laws of supply and demand in a free market. Noun 1. B. Levy, President and Chief Executive Officer of Catalytica, Inc., commented, "Our revenue growth for the quarter clearly signals our business is healthy and we are beginning to benefit from the more than 40 new development and manufacturing agreements that we have signed in the past two years. In addition to top line growth, we continue to improve our operating and net margins. We believe the recently announced acquisition of Wyckoff
1 City (1990 pop. 45,226), seat of Washington co., W Miss., on Lake Ferguson, a deepwater harbor adjoining the Mississippi River; inc. 1886. site at full capacity in this area, and the expansion opportunities and complementary equipment capabilities that the Wyckoff facility provides, we believe there will be synergistic synergistic /syn·er·gis·tic/ (sin?er-jis´tik) 1. acting together. 2. enhancing the effect of another force or agent. syn·er·gis·tic adj. 1. benefits to our combined company. We hope to complete the acquisition in the fourth quarter of 1999." Levy continued, "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 has also made good progress during the quarter. Dennis Dennis is a male first name derived from the Greco-Roman name Dionysius meaning "servant of Dionysus", the Thracian god of wine, which is ultimately derived from the Greek Dios (Διος, "of Zeus") combined with Nysos or Nysa (Νυσα), where the and his team are working to secure our first orders for XONON and we are confirming our performance expectations for XONON through our Silicon Valley Power operation. Our turbine turbine, rotary engine that uses a continuous stream of fluid (gas or liquid) to turn a shaft that can drive machinery. A water, or hydraulic, turbine is used to drive electric generators in hydroelectric power stations. equipped with XONON at Silicon Valley Power is running 24 hours a day, producing clean electricity for Silicon Valley customers. We are pleased to report that from the data we have collected, we are achieving emission results that clearly demonstrate XONON's effectiveness in reducing NOx emissions to below 3 parts per million parts per million mg/kg or ml/l; see ppm. ." During the quarter, Catalytica announced that it has signed a definitive agreement to acquire Wyckoff Chemical Company, a well-established manufacturer of active pharmaceutical ingredients for the pharmaceutical industry. The additional manufacturing capacity of Wyckoff's operations will significantly increase the chemical manufacturing capabilities of Catalytica's subsidiary Catalytica Pharmaceuticals, Inc. Wyckoff also brings chemical process development and pilot plant capabilities, as well as large-volume 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. production capacity that will complement the current operations of Catalytica Pharmaceuticals. Catalytica believes that the acquisition will be slightly accretive to earnings in 1999, and will continue the accretive trend in future years. The acquisition is subject to customary conditions and stockholder and regulatory approval. Catalytica, Inc. builds business in markets where the Company's technologies serve to optimize optimize - optimisation manufacturing and solve environmental problems. Catalytica Pharmaceuticals, Inc. provides drug development and product manufacturing services to the pharmaceutical industry; Catalytica Combustion Systems, Inc. produces XONON, a 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. system that permits essentially pollution free electric power generation for the energy market; and Catalytica Advanced Technologies, Inc. serves as an 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. Find Catalytica on the World Wide Web at www.catalytica-inc.com. 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 health of our business, the market demand, the benefits from our agreements, the continued improvement in operating and net margins, our future ability to obtain new Catalytica Pharmaceuticals customers, the future performance and future growth of the XONON system, the completion of the Wyckoff acquisition and the potential effects on Catalytica's future operations and earnings after the purchase of Wyckoff. It also contains forward-looking statements related to the current and future expansion opportunities at Wyckoff's facility including but not limited to statements related to expansion of facilities, expectations of additional business and market position. 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 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 demands, the ability to operate the manufacturing, research and development facilities efficiently, the satisfaction of conditions and completion of the Wyckoff acquisition, the manufacturing and development of Wyckoff facilities and the ability to efficiently achieve operating synergies with Catalytica, the ability to perform cost-effectively and in a timely manner, changes in the companies' competitive positions, changes in the pharmaceutical and energy production industries and the impact of 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. 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 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. for the year ended December December: see month. 31, 1998 for a more complete discussion of risk factors that could affect Catalytica's future performance. -0-
Catalytica, Inc.
Condensed Consolidated Statements of Operations
(in thousands, except per share amounts)
(unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
1999 1998(a) 1999 1998(a)
Revenues:
Product sales $ 99,418 $ 92,238 $ 182,169 $ 182,512
Research revenues 5,001 3,839 10,314 5,699
--------- --------- -------- ---------
Total revenues 104,419 96,077 192,483 188,211
Costs and expenses:
Cost of product sales 77,479 75,787 143,959 151,685
Research and development 10,049 8,168 18,105 13,218
Selling, general and
administrative 5,823 3,829 10,471 7,256
--------- --------- -------- ---------
Total costs and expenses 93,351 87,784 172,535 172,159
Operating income 11,068 8,293 19,948 16,052
Interest expense, net (1,374) (1,748) (2,574) (3,464)
Loss on joint venture (463) (1,152) (975) (2,307)
Income taxes (1,948) (360) (2,952) (997)
--------- --------- -------- ---------
Net income $ 7,283 $ 5,033 $ 13,447 $ 9,284
========= ========= ========= ==========
Net income per share:
Basic $ 0.14 $ 0.09 $ 0.25 $ 0.16
========= ========= ========= ==========
Diluted $ 0.11 $ 0.08 $ 0.21 $ 0.15
========= ========= ========= ==========
Shares used in computing
net income per share:
Basic 53,513 53,035 53,477 52,993
========= ========= ======== =========
Diluted 58,942 59,616 59,178 58,936
========= ========= ======== =========
(a) Certain 1998 Statements of Operations amounts have been
reclassified to conform with the current period's presentation.
Catalytica, Inc.
Condensed Consolidated Balance Sheet
(in thousands)
June 30, 1999 Dec. 31, 1998
(unaudited)
Assets:
Cash and short-term investments $ 51,557 $ 47,585
Accounts and notes receivable 24,183 35,859
Inventory 92,138 88,849
Other current assets 7,066 4,445
----------- -----------
Total current assets 174,944 176,738
Property and equipment, net 174,307 167,642
Other assets 2,529 3,016
----------- -----------
$ 351,780 $ 347,396
=========== ===========
Liabilities and Stockholders' Equity:
Current liabilities $ 51,519 $ 52,782
Current portion of long-term debt 8,201 10,770
----------- -----------
Total current liabilities 59,720 63,552
Long-term debt 59,500 67,007
Other long-term liabilities 2,539 2,181
Minority interest 41,000 41,000
Class A and B common stock 97,079 97,079
Stockholders' equity 91,942 76,577
----------- -----------
$ 351,780 $ 347,396
=========== ===========
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