Collagen Aesthetics Reports Year-end Results; EPS from Continuing Operations of $1.15, Global Injectable Sales up 11%.PALO ALTO Palo Alto, city, California Palo Alto (păl`ō ăl`tō), city (1990 pop. 55,900), Santa Clara co., W Calif.; inc. 1894. Although primarily residential, Palo Alto has aerospace, electronics, and advanced research industries. , Calif.--(BW HealthWire)--August 5, 1999-- Collagen collagen (kŏl`əjən), any of a group of proteins found in skin, ligaments, tendons, bone and cartilage, and other connective tissue. Cells called fibroblasts form the various fibers in connective tissue in the body. Aesthetics aesthetics (ĕsthĕt`ĭks), the branch of philosophy that is concerned with the nature of art and the criteria of artistic judgment. , Inc. (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on NM: CGEN CGEN Convective Sigmet Generation ) today reported financial results for the quarter and year ended June June: see month. 30, 1999. For the fiscal 1999 fourth quarter, Collagen Aesthetics reported income from continuing operations continuing operations Parts of a business that are expected to be maintained as an ongoing segment of an overall business operation. Income and losses from continuing operations are reported separately if any segments have been discontinued during the of $3.7 million, or $0.43 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 $39,000 of income from continuing operations during the prior year period, which included the operating results of Cohesion cohesion: see adhesion and cohesion. Cohesion (physics) The tendency of atoms or molecules to coalesce into extended condensed states. This tendency is practically universal. Technologies (NASDAQ NM: CSON CSON Connell School of Nursing (Boston College) ). During the quarter, the Company increased its provision for the loss on disposal of LipoMatrix by $11.5 million, thereby resulting in a net loss of $3.7 million, or a loss of $0.43 per diluted share, compared with a net loss of $9.3 million, or a loss of $1.04 per diluted share, in the prior year period. LipoMatrix was Collagen Aesthetics' breast implant breast implant, saline- or silicone-filled prosthesis used after mastectomy as a part of the breast reconstruction process or used cosmetically to augment small breasts. business, which the Company treated as a discontinued operation discontinued operation A segment of a business that has been abandoned or sold or for which plans for one or another of these actions have been approved. See also continuing operations. in June 1998 and divested in November November: see month. 1998. The adjustment records additional current and future costs related to ongoing clinical follow-up follow-up, n the process of monitoring the progress of a patient after a period of active treatment. follow-up subsequent. follow-up plan for multi-year studies in the U.S. and Europe Europe (y  r`əp), 6th largest continent, c.4,000,000 sq mi (10,360,000 sq km) including adjacent islands (1992 est. pop. 512,000,000). , the withdrawal of the Trilucent(R)
breast implant from the European Europeanemanating from or pertaining to Europe. European bat lyssavirus see lyssavirus. European beech tree fagussylvaticus. European blastomycosis see cryptococcosis. and U.K. markets, safety studies and a patient surveillance program in the U.K. These costs are expected to be paid over the next several years. Fourth quarter product sales of $24.2 million included $19.2 million in sales of facial facial /fa·cial/ (fa´shul) pertaining to or directed toward the face. fa·cial adj. Relating to the face. facial, adj pertaining to the face. injectable in·ject·a·ble adj. Capable of being injected. Used of a drug. n. A drug or medicine that can be injected. products, a 16% increase over the prior year period, and $3.1 million in sales of Contigen(R) Bard bard, in Wales, term originally used to refer to the order of minstrel-poets who composed and recited the poems that celebrated the feats of Celtic chieftains and warriors. (R) collagen implant implant /im·plant/ (im-plant´) to insert or to graft (tissue, or inert or radioactive material) into intact tissues or a body cavity. , the Company's incontinence incontinence Inability to control excretion. Starting and stopping urination relies on normal function in pelvic and abdominal muscles, diaphragm, and control nerves. Babies' nervous systems are too immature for urinary control. Later incontinence may reflect disorders (e.g. treatment. For fiscal year 1999, Collagen Aesthetics reported income from continuing operations of $10.0 million, or $1.15 per diluted share, compared with a loss from continuing operations of $1.9 million, or a loss of $0.21 per diluted share, during fiscal year 1998. Fiscal year 1998 financials included the operating results of Cohesion Technologies and a $1.5 million restructuring charge restructuring charge The expense of reorganizing a company's operations. A restructuring charge is an infrequent expense that generally results from asset writedowns or facility closings. . Net income for fiscal year 1999 was $2.6 million, or $0.30 per diluted share, compared with a net loss of $14.1 million, or a loss of $1.58 per diluted share, in the prior year. Fiscal year 1999 product sales of $86.4 million included $65.9 million in sales of facial injectable products, an 11% increase over fiscal year 1998, and $14.3 million in sales of Contigen implant, a 19% decrease over fiscal year 1998. Commenting on the fiscal year 1999 fourth quarter, Gary Gary, city (1990 pop. 116,646), Lake co., NW Ind., a port of entry on Lake Michigan; inc. 1909. Gary was founded by the U.S. Steel Corporation, which purchased the land in 1905 and landscaped it for a city. Petersmeyer, president and chief executive officer, said, "We are pleased with the continued growth in injectable sales, particularly the 18% improvement in worldwide sales of Zyderm(R) and Zyplast(R) collagen implants, and the $3.7 million increase in income from continuing operations over the prior year period. Also, Collagen KK, our Japanese Japanese (jăp'ənēz`), language of uncertain origin that is spoken by more than 125 million people, most of whom live in Japan. There are also many speakers of Japanese in the Ryukyu Islands, Korea, Taiwan, parts of the United States, and subsidiary, recently received approval for the SoftForm(R) facial implant and will begin sales on September September: see month. 1, 1999. However, our performance results were significantly impacted by the decline in Contigen sales and the $11.5 million increase in our provision for the discontinued operations Discontinued operations Divisions of a business that have been sold or written off and that no longer are maintained by the business. of LipoMatrix. These additional costs are a result of the Company's commitment to work with the 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 to provide data on the Trilucent implant." Results for the quarter and year ended June 30, 1998 included operations of Cohesion Technologies, which was spun off to Collagen stockholders in mid-August Noun 1. mid-August - the middle part of August period, period of time, time period - an amount of time; "a time period of 30 years"; "hastened the period of time of his recovery"; "Picasso's blue period" 1998. In connection with the operating results of Cohesion, the Company reported a gain on sale of investments of $5.4 million and $19.1 million for the quarter and year ended June 30, 1998, respectively, from the sale of Boston Scientific The Boston Scientific Corporation (NYSE: BSX) (abbreviated BSC), is a worldwide developer, manufacturer and marketer of medical devices whose products are used in a range of interventional medical specialties, including interventional cardiology, peripheral interventions, common stock (NYSE NYSE See: New York Stock Exchange : BSX BSX Bermuda Stock Exchange BSX Bandai Satellaview-X BSX Bicycle Super-X (Cross) ), which partially funded Cohesion Technologies operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. of $7.0 million and $33.5 million, respectively. On July July: see month. 31, 1999, Collagen Aesthetics entered into a definitive agreement with Inamed Corporation whereby Inamed will make a tender offer for all of Collagen Aesthetics' outstanding shares and options at a price of $16.25 per share in cash. Collagen Aesthetics has scheduled an investor conference call regarding this announcement to be held today at 4:30 p.m. Eastern Time. To participate in the call, a few minutes prior to the start time please dial (800)288-8974. Those unable to participate are invited to listen to a recording of the call and Q&A from August 5, 1999 through the end of the day August 9, 1999 by dialing (800)-475-6701, access code 461840. Set forth on the following page are unaudited results of Collagen Aesthetics, Inc. operations for the quarter and year ended June 30, 1999 and 1998. Collagen Aesthetics is maximizing the Company's worldwide aesthetic medicine franchise and nearly two decades of physician relationships with proprietary and in-licensed products. The Company's proprietary product line includes Zyderm(R) and Zyplast(R) collagen implants and Contigen(R) Bard collagen implant, while in-licensed products include Hylaform(R) viscoelastic Adj. 1. viscoelastic - having viscous as well as elastic properties natural philosophy, physics - the science of matter and energy and their interactions; "his favorite subject was physics" gel, SoftForm(R) facial implant, Refinity(tm) Medical Skin Solutions and the Coblation(tm) dermatologic dermatological, dermatologic pertaining to dermatology; of or affecting the skin. surgery system. For more information regarding Collagen Aesthetics, please visit the Company's Web site at www.collagen.com. In addition, Collagen Aesthetics' press releases can be viewed at www.businesswire.com/cnn/cgen.htm. Except for the historical information contained herein, the matters discussed in this press release are 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. , the accuracy of which is necessarily subject to risks and uncertainties including the timing of product introductions, receipt of regulatory approvals, actions taken by regulatory authorities, clinical efficacy of and market demand for products, product development cycles, results of clinical studies, development and rate of growth of new markets, potential unfavorable publicity regarding Collagen Aesthetics or its products, possible reversal of sales trends, and risks associated with Inamed completing its proposed acquisition of Collagen Aesthetics, among other matters discussed in this release. Actual results are subject to risks and uncertainties, and actual events and results may differ significantly from the discussion of such matters in the forward-looking statements. Such differences may be based upon factors within Collagen Aesthetics' control, such as strategic planning Strategic planning is an organization's process of defining its strategy, or direction, and making decisions on allocating its resources to pursue this strategy, including its capital and people. decisions by management and reallocation Noun 1. reallocation - a share that has been allocated again allocation, allotment - a share set aside for a specific purpose 2. reallocation of internal resources, or on factors outside of the Company's control, such as scientific advances by third parties, introduction of competitive products and actions or delays by regulatory authorities, as well as those factors set forth under the heading "Factors That May Affect Future Results of Operations" in Collagen Aesthetics' 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. filed for the year ended June 30, 1998 and Form 10-Q Form 10-Q See 10-Q. for the quarter ended March 31, 1999. -0-
COLLAGEN AESTHETICS, INC.
CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In thousands, except share and per share amounts)
June 30, June 30,
1999 1998 (a)
----------- ---------
ASSETS
Current assets:
Cash and cash equivalents $ 16,741 $ 7,916
Short-term investments 7,890 8,011
Accounts receivable, less
allowance for doubtful accounts
($439 in 1999 and $505 in 1998) 14,283 13,764
Inventories, net 11,690 12,101
Inventories of discontinued
operations, net --- 417
Other current assets, net 9,691 11,016
------- -----------
Total current assets 60,295 53,225
Property and equipment, net 12,877 14,448
Intangible assets , net 8,877 6,861
Investment in Boston Scientific
Corporation --- 73,979
Investment in Innovasive
Devices, Inc. --- 7,027
Investment in Pharming, B.V. --- 7,010
Loans to officers and employees --- 259
Other investments and
assets, net 6,021 3,530
$ 88,070 $ 166,339
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 7,206 $ 3,561
Accrued compensation 3,166 4,749
Accrued liabilities and other 19,033 14,020
Income taxes payable 15,666 10,606
Net liabilities of
discontinued operations --- 781
-- ---
-------- ----------
Total current liabilities 45,071 33,717
Long-term liabilities:
Deferred income taxes --- 30,589
Other long-term liabilities 1,170 1,393
Total long-term liabilities 1,170 31,982
Commitments and contingencies
Minority interest --- ---
Stockholders' equity:
Preferred stock, $.01 par value,
authorized: 5,000,000 shares; none
issued or outstanding --- ---
Common shares, $.01 par value,
authorized: 28,950,000 shares, issued:
11,046,359 shares
(10,937,830 shares at June 30, 1998),
outstanding: 8,592,359 shares
(8,864,930 shares at June 30, 1998) 110 109
Additional paid-in capital 56,036 69,619
Retained earnings 34,711 32,128
Cumulative translation adjustment (2,084 (2,030)
Unrealized gain on
available-for-sale investments --- 43,833
Treasury stock, 2,454,000 shares
(2,072,900 shares in 1998) (46,944) (43,019)
-------- ---------
Total stockholders' equity 41,829 100,640
$ 88,070 $ 166,339
(a) Amounts derived from audited financial statements. Includes
amounts related to Cohesion Technologies, Inc,. which was spun off to
Collagen stockholders on August 18, 1998.
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COLLAGEN AESTHETICS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(In thousands, except per share amounts)
Quarter Ended
June 30,
1999 1998(a)
----------- ----------
Revenues:
Product sales $ 24,232 $ 22,732
Costs and expenses:
Cost of sales 7,050 6,388
Selling, general
and administrative 10,105 12,470
Research and development 887 6,637
Restructuring expense -- 1,541
Acquired in-process
research and development -- 57
Total operating
costs and expenses 18,042 27,093
--------- ---------
Income (loss) from operations 6,190 (4,361)
Other income (expense):
Net gain on investments,
principally Boston Scientific
Corporation -- 5,358
Equity in earnings (losses)
of affiliates, net -- 80
Interest income 118 286
Interest expense (3) (6)
--------- ---------
Income before income taxes,
minority interest and
discontinued operations 6,305 1,357
Provision for income taxes 2,585 1,296
Minority interest -- 22
--------- ---------
Income (loss) from continuing
operations 3,720 39
Discontinued operations:
Loss from operations -- (1,198)
Benefit for income taxes -- 369
--------- ---------
Loss from discontinued
operations net of taxes -- (829)
Loss from disposal (11,500) 11,045)
Benefit for income taxes 4,059 2,489
--------- ---------
Loss from discontinued
operations net of taxes (7,441) (8,556)
--------- ---------
Total loss from discontinued
operations net of taxes (7,441) (9,385)
--------- ---------
Net income (loss) $ (3,721) $ (9,346)
========= =========
Net income (loss) per
share - Basic:
Continuing operations $ .43 $ --
Discontinued operations (.86) (1.04)
--------- ---------
Net income (loss)
per share - Basic $ (.43) $ (1.04)
========= =========
Net income (loss) per
share - Diluted:
Continuing operations $ .43 $ --
Discontinued operations (.86) (1.04)
--------- ---------
Net income (loss)
per share - Diluted $ (.43) $ (1.04)
========= =========
Shares used in calculating
per share information - Basic 8,565 8,947
========= =========
Shares used in calculating
per share information - Diluted 8,565 8,947
Year Ended
June 30,
1999(a) 1998(b)
--------- ---------
Revenues:
Product sales $ 86,389 $ 82,772
Costs and expenses:
Cost of sales 24,559 23,958
Selling, general
and administrative 41,120 42,535
Research and development 7,889 22,715
Restructuring expense -- 1,541
Acquired in-process
research and development -- 10,587
Total operating
costs and expenses 73,568 101,336
--------- ---------
Income (loss) from operations 12,821 (18,564)
Other income (expense):
Net gain on investments,
principally Boston Scientific
Corporation 3,721 19,096
Equity in earnings (losses)
of affiliates, net (35) (151)
Interest income 591 988
Interest expense (64) (56)
--------- ---------
Income before income taxes,
minority interest and
discontinued operations 17,034 1,313
Provision for income taxes 7,010 3,207
Minority interest 1 (16)
--------- ---------
Income (loss) from continuing
operations 10,023 (1,878)
Discontinued operations:
Loss from operations -- (5,278)
Benefit for income taxes -- 1,629
--------- ---------
Loss from discontinued
operations net of taxes -- (3,649)
Loss from disposal (11,500) (11,045)
Benefit for income taxes 4,059 2,489
--------- ---------
Loss from discontinued
operations net of taxes (7,441) (8,556)
--------- ---------
Total loss from discontinued
operations net of taxes (7,441) (12,205)
--------- ---------
Net income (loss) $ 2,582 $ (14,083)
========= =========
Net income (loss) per
share - Basic:
Continuing operations $ 1.16 $ (.21)
Discontinued operations (.86) (1.37)
--------- ---------
Net income (loss)
per share - Basic $ .30 $ (1.58)
========= =========
Net income (loss) per
share - Diluted:
Continuing operations $ 1.15 $ (.21)
Discontinued operations (.85) (1.37)
--------- ---------
Net income (loss)
per share - Diluted $ .30 $ (1.58)
========= =========
Shares used in calculating
per share information - Basic 8,650 8,913
========= =========
Shares used in calculating
per share information - Diluted 8,714 8,913
(a) Includes results of Cohesion Technologies, Inc., which was spun
off to Collagen stockholders on August 18, 1998.
(b) Amounts derived from audited financial statements for the periods
illustrated. Includes results of Cohesion Technologies, Inc.,
which was spun off to Collagen stockholders on August 18, 1998.
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