Collagen Corp. reports first quarter, including previously reported in-process R&D charge; Trilucent breast implant launched in Germany, Switzerland and Austria; company makes orthopaedic investment.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.--(BUSINESS WIRE)--Oct. 19, 1995--Collagen Corp. (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 :CGEN CGEN Convective Sigmet Generation ) Thursday reported its fiscal 1996 first quarter results, which included revenues of $16.9 million, compared with $16.4 million in the prior year first quarter. Revenues for the first quarter include a 24% increase in worldwide product sales from the company's dermatology dermatology (dûrmətŏl`əjē), branch of medicine concerned with diagnosis and treatment of diseases and disorders of the skin. and plastic surgery products. These products include the Trilucent 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. (the "Trilucent implant"), a new triglyceride-filled mammary mammary /mam·ma·ry/ (mam´ah-re) pertaining to the mammary gland, or breast. mam·ma·ry adj. Of or relating to a breast or mamma. mammary pertaining to the mammary gland. implant, which was introduced in the United Kingdom during the past quarter. 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. and LipoMatrix Inc. ("LipoMatrix") are currently introducing the Trilucent implant in Germany, Switzerland and Austria and plan to introduce it throughout most of Western Europe Western Europe The countries of western Europe, especially those that are allied with the United States and Canada in the North Atlantic Treaty Organization (established 1949 and usually known as NATO). over the next few months. "Collagen and LipoMatrix introduced the Trilucent implant in the United Kingdom last June, with a formal launch of the product last month that received extensive media coverage in Europe," said Gary Petersmeyer, president and chief operating officer Chief Operating Officer (COO) The officer of a firm responsible for day-to-day management, usually the president or an executive vice-president. of Collagen Corp. "The company believes that physicians and patients have embraced the safety profile of the Trilucent implant, and initial response to the Trilucent implant is extremely encouraging." The company reported a net loss of $8.6 million, or 95 cents per share Cents per share The amount of a mutual fund's dividend or capital gains distributions that a shareholder will receive for each share owned. , for the fiscal quarter ended Sept. 30, 1995. The net loss includes a previously reported non-recurring charge of $14.8 million, or $1.65 per share, for the purchased in-process research and development ("R&D") from the previously announced acquisition of majority ownership of LipoMatrix, developer and manufacturer of the Trilucent implant. The balance of the acquisition price, approximately $8.8 million, will be allocated to purchased intangibles and goodwill and will be amortized over the next few years. In the prior year first quarter, net income was $1.3 million, or 14 cents per share. Fiscal 1996 first quarter 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. includes the $14.8 million in-process R&D charge, as well as 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. and amortization from the LipoMatrix acquisition, none of which were included in the prior year first quarter operating expenses. Excluding the acquisition-related, non-recurring, in-process R&D charge and reporting LipoMatrix under the equity method of accounting as in fiscal 1995, proforma operating income would have been $2.9 million for the quarter ended Sept. 30, 1995, compared with operating income of $2.3 million for the same period in the prior year. "Exclusive of the non-recurring charge, Collagen's first quarter results reflect continued strong growth in both sales and profitability of our worldwide dermatology and plastic surgery business," stated Howard D. Palefsky, chairman and chief executive officer of Collagen Corp. He continued, "The acquisition of LipoMatrix will involve a near term increase in our expenses, but the purchase is intended to further strengthen our cosmetic medical franchise and is an excellent strategic fit for Collagen Corp. Worldwide revenues from the company's dermatology and plastic surgery products increased 24% to $12.8 million during the first quarter of fiscal 1996, compared with $10.3 million in the prior year period. Revenues for the first quarter were positively impacted by approximately $200,000 of favorable foreign exchange rate movements, compared with the prior year period. Contigen 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. collagen implant ("Contigen implant") revenues were $3 million for the fiscal 1996 first quarter, $2 million of which was received from Collagen Corp.'s marketing partner, C.R. Bard Inc. ("Bard") as a milestone payment on the second anniversary date of U.S. 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. marketing clearance. The remaining $1 million was revenue based on sales by Bard to physician customers in that quarter. In June 1995, Collagen announced that it expected to ship little, if any, product to Bard during fiscal year 1996 due to excess inventory at Bard. In the prior year first quarter, revenues from Contigen implant totaled $5 million, $1 million of which was a milestone payment. The remaining $4 million was comprised of $3.5 million in shipments to Bard and $487,000 in revenue from sales by Bard to physician customers in that quarter. Combined first quarter revenues from sales of Collagraft bone graft bone graft Orthopedic surgery Sterilized bony tissue, often of cadaveric origin, used to fill and/or 'sculpt' bone defects Indications Spinal fusion, revision of failed articular prostheses, filling traumatic or malignant bone defects, or periodontal defects. matrix and Collagraft bone graft matrix strip were $966,000, compared with revenues of $1 million in the prior-year first quarter. During the first quarter of fiscal 1996 Collagen Corp. sold 300,000 shares of Target Therapeutics therapeutics Treatment and care to combat disease or alleviate pain or injury. Its tools include drugs, surgery, radiation therapy, mechanical devices, diet, and psychiatry. 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. Sales from its holdings will also be used to finance, in part, the purchase price of the LipoMatrix acquisition. These sales contributed to a pre-tax gain on investments for the quarter of $10.5 million. As of Sept. 30, 1995, Collagen Corp. owned approximately 1.7 million shares of Target stock, or about 24% of the outstanding shares of such company, recently worth about $115 million before taxes, or approximately $7 per share, after tax, of Collagen Corp. stock. In its ongoing program to increase stockholder value, Collagen Corp. repurchased 50,000 shares of its common stock during the fiscal first quarter at an average acquisition price of approximately $16 per share. As of Sept. 30, 1995, the company had authorization to repurchase an additional 250,000 shares of its common stock in the open market. Collagen Corp. also reported that yesterday it completed an equity investment in and a collaborative product development Collaborative Product Development (Collaborative Product Design) (CPD) is a business strategy, work process and collection of software applications that facilitates different organizations to work together on the development of a product. agreement with Innovasive Devices Inc. of Hopkinton, Mass. Collagen's investment, part of a larger round of equity financing Equity Financing The act of raising money for company activities by selling common or preferred stock to individual or institutional investors. In return for the money paid, shareholders receive ownership interests in the corporation. for Innovasive, was for $4 million, or an approximate 15% ownership position. Collagen Corp. and Innovasive are collaborating to develop certain resorbable or partially resorbable mechanical tissue-fixation devices utilizing collagen-based biomaterials for applications in orthopaedic tissue repairs. Innovasive Devices is a company that develops, manufactures, and markets tissue and bone reattachment reattachment, n in dentistry the reattachment of the gingival epithelium to the surface of the tooth. reattachment The reanastomosis of a thing detached. See Penile reattachment. systems which are particularly relevant to the sports medicine sports medicine, branch of medicine concerned with physical fitness and with the treatment and prevention of injuries and other disorders related to sports. Knee, leg, back, and shoulder injuries; stiffness and pain in joints; tendinitis; "tennis elbow"; and and arthroscopy Arthroscopy Definition Arthroscopy is the examination of a joint, specifically, the inside structures. The procedure is performed by inserting a specifically designed illuminated device into the joint through a small incision. segments of the orthopaedic surgery market. "Our investment in Innovasive fits well with our affiliate strategy in extending collagen technology into other promising therapeutic applications. While Innovasive may be a new partner to Collagen Corp., the leader at Innovasive is an old friend. We are very pleased to be working again with Rick Randall, president and chief executive officer of Innovasive. Rick is the former president and chief executive officer of Target Therapeutics, and a current member of Target's Board of Directors," stated Palefsky. Collagen Corp. is a technology-based company that develops, manufactures and markets biomedical bi·o·med·i·cal adj. 1. Of or relating to biomedicine. 2. Of, relating to, or involving biological, medical, and physical sciences. devices for the treatment of defective, diseased dis·eased adj. 1. Affected with disease. 2. Unsound or disordered. , traumatized or aging human tissues. -0-
COLLAGEN CORP.
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
(In thousands, except per share amounts)
Three Months Ended
Sept. 30,
1995 1994
Revenues:
Product sales $14,940 $15,432
Other 2,000 1,000
16,940 16,432
Costs and expenses:
Cost of sales 3,997 4,406
Selling, general &
administrative 8,302 7,224
Research & development 2,579 2,534
Purchased in-process
research and development 14,800 --
29,678 14,164
Income (loss) from operations (12,738) 2,268
Other income (expense):
Gain on investments, net
principally Target
Therapeutics Inc. 10,466 --
Equity in losses of
affiliates, net (508) (129)
Interest income 154 130
Interest expense (12) (15)
Income (loss) before income taxes (2,638) 2,254 Provision for income taxes 5,913 947 Net income (loss) $(8,551) $1,307 Net income (loss) per share (95 cents) 14 cents Shares used in calculating per share information 8,992 9,631
COLLAGEN CORP.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In thousands)
Sept. 30, June 30,
1995 1995
(Note 1)
ASSETS
Current assets:
Cash, cash equivalents and
short-term investments $21,153 $9,384
Accounts receivable, net 9,876 13,402
Inventories 6,377 5,056
Other current assets 5,303 5,568
Total current assets 42,709 33,410
Property and equipment, net 16,717 16,506
Intangible assets 2,990 2,727
Purchased intangibles and goodwill 8,729 --
Investments & other assets,
principally Target
Therapeutics, Inc. 20,950 24,263
$92,095 $76,906
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $3,034 $2,250
Accrued liabilities 30,569 10,862
Income taxes payable 8,570 5,902
Total current liabilities 42,173 19,014
Long-term liabilities:
Deferred income taxes 8,478 8,478
Other long-term liabilities 2,892 1,494
Total long-term liabilities 11,370 9,972
Stockholders' equity:
Common stock 64,001 63,961
Retained earnings 8,065 16,669
Treasury stock (33,514) (32,710)
Total stockholders' equity 38,552 47,920
$92,095 $76,906
Note 1 -- Amounts derived from audited financial statements at date indicated. CONTACT: Collagen Corp. David Foster  This article or section resembles a .Please help [ improve this article] by removing excessive trivia, irrelevant praise and criticism, lists and collections of links that are of . , 415/856-0200 or Edelman Public Relations public relations, activities and policies used to create public interest in a person, idea, product, institution, or business establishment. By its nature, public relations is devoted to serving particular interests by presenting them to the public in the most Jon Greer, 415/433-5381 |
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