Embrex Reports Record Revenue for Fourth Quarter and Year.Business Editors/Health & Medical Writers RESEARCH TRIANGLE PARK Research Triangle Park, research, business, medical, and educational complex situated in central North Carolina. It has an area of 6,900 acres (2,795 hectares) and is 8 × 2 mi (13 × 3 km) in size. Named for the triangle formed by Duke Univ. , N.C.--(BUSINESS WIRE)--March 27, 2001 Embrex, Inc. (Nasdaq: EMBX) today announced revenues and earnings for the fourth quarter and the year ended December December: see month. 31, 2000. In the course of performing its year-end year-end also year·end n. The end of a year. adj. Occurring or done at the end of the year: a year-end audit. Noun 1. audit, Embrex has discovered employee misappropriation misappropriation n. the intentional, illegal use of the property or funds of another person for one's own use or other unauthorized purpose, particularly by a public official, a trustee of a trust, an executor or administrator of a dead person's estate, or by any and related irregularities at its European European emanating from or pertaining to Europe. European bat lyssavirus see lyssavirus. European beech tree fagussylvaticus. European blastomycosis see cryptococcosis. subsidiary, Embrex 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). , Ltd. These actions resulted in
inflated accounts receivable accounts receivable n. the amounts of money due or owed to a business or professional by customers or clients. Generally, accounts receivable refers to the total amount due and is considered in calculating the value of a business or the business' problems in paying and understated expenses over the course of
the year, which were adjusted in cost of revenue, general and
administrative, sales and marketing and income tax expenses upon
completion of the audit. While revenues were not affected, net income
for the year was adversely impacted by approximately $1.2 million, or
$0.14 per share. After the adjustment, net income for the fourth quarter
was $1.8 million and $6.6 million for the year. Adjustments for the
first three quarters are included on the attached schedule.Highlights --Fourth-quarter total revenues $10.1 million, up 11% over fourth-quarter 1999 --Before the $0.04 adjustment to $0.21 per share, fourth quarter earnings would have been $0.25 per share, up 17% over 1999 --Full year total revenues were $38.8 million, a 15% increase over the full year of 1999 --Pre-adjusted earnings for the full year 2000 would have been $0.91 per share, up 33% from $0.68 in 1999, or $0.77 per share after the adjustment of $0.14 per share.
Financial Summary Table
Embrex, Inc.
Condensed Statements of Operations (Unaudited)
(In thousands except per share amounts)
Three Months Year
Ended December 31, Ended December 31,
-------------------- --------------------
2000 1999 2000 1999
--------- --------- -------- ----------
Revenues $10,104 $9,074 $38,796 $33,750
Cost of revenues 4,037 3,437 16,770 13,119
--------- --------- -------- ----------
Gross profit 6,067 5,637 22,026 20,631
Operating expenses 4,448 3,923 15,066 14,038
Other (income) expense (131) (19) (178) 8
Income taxes (65) 8 507 841
--------- --------- -------- ----------
Net income $1,815 $1,725 $6,631 $5,744
========= ========= ======== ==========
Net income per share:
Basic $ 0.23 $ 0.22 $ 0.84 $ 0.70
Diluted $ 0.21 $ 0.20 $ 0.77 $ 0.68
No. of shares of Common
Stock used in per share
calculation:
Basic 7,880 7,927 7,901 8,151
Diluted 8,569 8,443 8,639 8,488
Fourth-quarter revenues for 2000 were $10.1 million, an increase of 11% over revenues of $9.1 million for the same period in 1999. Fourth-quarter net income was $1.8 million, a increase of 5% over net income of $1.7 million for the same period in 1999. Diluted earnings per share diluted earnings per share An earnings measure calculated by dividing net income less preferred stock dividends for a period by the average number of shares of common stock that would be outstanding if all convertible securities were converted into shares of for the fourth-quarter were $0.21 per share on 8.6 million average shares outstanding, as compared to 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. earnings of $0.20 per share on 8.4 million average shares outstanding for the same period in 1999. The company's fourth-quarter revenue increase was primarily attributable to additional installations of Inovoject(R) systems and increased injection activity in North America North America, third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere. , Europe, Asia and Latin America Latin America, the Spanish-speaking, Portuguese-speaking, and French-speaking countries (except Canada) of North America, South America, Central America, and the West Indies. as well as Inovoject(R) system sales System sales is a business term used in the franchising industry. Franchisors provide supplies, marketing and administration services to franchisees in return for a part of the franchisees' revenues. Some franchisors also operate some outlets directly. in Europe. In addition, sales of Bursaplex(R) in ovo bursal bursal emanating from or pertaining to bursa. infectious bursal disease a disease of 3- to 6-week-old chickens caused by an Avibirnavirus which primarily and selectively destroys B lymphocytes in the bursa of Fabricius resulting in disease vaccine vaccine Preparation containing either killed or weakened live microorganisms or their toxins, introduced by mouth, by injection, or by nasal spray to stimulate production of antibodies against an infectious agent. in North America and Asia contributed to the revenue increase. The fourth-quarter decrease in gross margin from 62% in 1999 to 60% in 2000 resulted from the Europe adjustment described above along with changing the classification of various international start-up-operating expenses to cost of revenue. This change reflects the increased commercial installations of the Inovoject(R) system as well as sales of Bursaplex(R) vaccine in these markets. Impact from the classification change on operating profit Operating profit (or loss) Revenue from a firm's regular activities less costs and expenses and before income deductions. operating profit See operating income. remains unchanged. For the year ended December 31, 2000, revenues were $38.8 million, a 15% increase over revenues of $33.8 million during the same period of 1999. Net income for the full-year of 2000 rose 15% to $6.6 million, or $0.77 per share, from $5.7 million, or $0.68 per share, for the full-year of 1999. EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) A metric used to show a company's profitability, but not its cash flow. EBITDA became popular in the 1980s to show the potential profitability of leveraged buyouts, but has become increased 5% to $11.5 million in 2000 from $10.9 million during the same period of 1999. At December 31, 2000, cash and cash equivalents totaling $3.0 million were $1.8 million lower than the amount on hand at December 31, 1999, principally due to capital expenditures of $6.2 million, equipment lease repayments of $0.6 million, common stock repurchases Stock repurchase A firm's repurchase of outstanding shares of its common stock. of $7.0 million, short-term debt Short-term debt Debt obligations, recorded as current liabilities, requiring payment within the year. repayments of $0.4 million and currency translation adjustments of $0.5 million. These were offset by cash provided from operating activities of $10.2 million and proceeds of $2.5 million, primarily from the exercise of employee stock options. The situation uncovered Uncovered may refer to:
v. di·vert·ed, di·vert·ing, di·verts v.tr. 1. To turn aside from a course or direction: Traffic was diverted around the scene of the accident. 2. funds and hide expenses while making the financial statements appear normal. Embrex is still investigating these actions and intends to pursue all rights and remedies available. Management and the Company's accountants are reviewing company controls, but intentional in·ten·tion·al adj. 1. Done deliberately; intended: an intentional slight. See Synonyms at voluntary. 2. Having to do with intention. acts of deceit Deceit Aimwell pretends to be titled to wed into wealth. [Br. Lit.: The Beaux’ Stratagem] Ananias lies about amount of money received for land. [N.T.: Acts 5:1–6] Ananias Club all its members are liars. [Am. are difficult to discover no matter what controls are in place. Randall Randall may refer to the following: In places:
"Embrex takes very seriously misuse and misappropriation of its funds and property and will aggressively pursue the ongoing investigation of these abuses which were uncovered as a result of our normal year end audit. We have and will continue to take pride in the value, quality and integrity of our relationships with customers, shareholders and collaborators. "While we believe only one individual was involved and that the operations of Embrex Europe continue to meet our internal targets, we have taken this aggressive action in the adjustment to earnings, even as our investigation is ongoing. "On the business more broadly, I am pleased that the solid progress we saw in the previous quarters continued in the fourth quarter, even in the face of a challenging environment for the poultry poultry, domesticated fowl kept primarily for meat and eggs; including birds of the order Galliformes, e.g., the chicken, turkey, guinea fowl, pheasant, quail, and peacock; and natatorial (swimming) birds, e.g., the duck and goose. industry globally. We placed 12 additional Inovoject(R) systems in the fourth quarter, with eight going overseas, bringing total systems placed to 62 during 2000. Revenues derived from our foreign operations grew to 29% of total sales, up from 23% in 1999, with revenues in our Asian operations growing by 86%. Product sales also grew by 86% year over year, with 60% of those sales coming from our Asia Region. "Both the VNF VNF Voies Navigables de France VNF Virtual Network Feature VNF Very-Near Field (R) Newcastle Disease Newcastle disease, pneumoencephalitis, acute viral disease of domestic poultry. Newcastle disease is characterized by sneezing, coughing, and nervous behavior. Affected birds may show tremors, circling, falling, twisting of the head and neck, or complete paralysis. vaccine and the coccidiosis coccidiosis /coc·cid·i·o·sis/ (kok-sid?e-o´sis) infection by coccidia. In humans, applied to the presence of Isospora hominis or I. belli in stools; it is often asymptomatic, rarely causing a severe watery mucous diarrhea. vaccine projects continue to meet or exceed the performance milestones established in our business plan. Development on the gender sort project has accelerated most notably in the progress to a commercial prototype and as we work to reduce the time it takes to do the biological test for gender determination. "Our intellectual property position continues to grow with 17 patents issued in the US and abroad in 2000. We now have in our worldwide patent portfolio some 184 patents issued or pending, building even more formidable barriers to entry. "2000 was a year of strong progress across all areas of our business. You have my assurance that we will continue that progress in 2001, even as we deal with the events uncovered in the last several weeks. You also have my assurance that we will continue to be intolerant in·tol·er·ant adj. Not tolerant, especially: a. Unwilling to tolerate differences in opinions, practices, or beliefs, especially religious beliefs. b. of misappropriations of any kind." About Embrex Embrex, Inc., is an international agricultural biotechnology company. In addition to Forbes Magazine's 200 Best Small Companies in America, the company is also listed on the North Carolina North Carolina, state in the SE United States. It is bordered by the Atlantic Ocean (E), South Carolina and Georgia (S), Tennessee (W), and Virginia (N). Facts and Figures Area, 52,586 sq mi (136,198 sq km). Pop. Technology Fast 50, which honors the fastest growing technology companies. Embrex is focused on developing patented pharmaceutical, biological, and mechanical products that improve bird health, reduce bird production costs and provide other economic benefits to the poultry industry. The company has developed and commercialized the first in ovo platform delivery system called the Inovoject(R) system, a proprietary, automated au·to·mate v. au·to·mat·ed, au·to·mat·ing, au·to·mates v.tr. 1. To convert to automatic operation: automate a factory. 2. , injection system which eliminates the need for manual vaccination vaccination, means of producing immunity against pathogens, such as viruses and bacteria, by the introduction of live, killed, or altered antigens that stimulate the body to produce antibodies against more dangerous forms. of newly hatched hatch 1 n. 1. a. An opening, as in the deck of a ship, in the roof or floor of a building, or in an aircraft. b. The cover for such an opening. c. A hatchway. d. broiler broiler a young (about 8 weeks old) male or female chicken weighing 3 to 3.5 lb. chicks. In addition, the company has developed and markets Bursaplex(R), the first in ovo VNF(R)-based vaccine for inoculating against infectious bursal disease Infectious Bursal Disease (IBD) is a highly contagious disease of young chickens caused by infectious bursal disease virus (IBDV), characterized by immunosuppression and mortality generally at 3 to 6 weeks of age. (IBD IBD abbr. inflammatory bowel disease Inflammatory bowel disease (IBD) Disease in which the lining of the intestine becomes inflamed. Mentioned in: Amebiasis IBD 1. ). Other biologics, pharmaceuticals, and mechanical products currently are under development. This 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. , including statements with respect to future products, services, markets and financial results. These statements involve risks and uncertainties that could cause actual results to differ materially. Risks include without limitation the Company's ability to penetrate new markets, the results of our accounting investigation when complete, the degree of market acceptance of new products, the outcome of the Company's patent litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. appeal, the complete commercial development of potential future products or the ability to obtain regulatory approval of products. Such approval is dependent upon a number of factors, such as results of trials, the discretion of regulatory officials, and potential changes in regulations. Additional information on these risks and other factors, which could affect the Company's financial results, is included in the Company'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. filed with the Securities and Exchange Commission (SEC) and other filings with the SEC. Embrex(R), Inovoject(R), Bursaplex(R) and VNF(R) are registered trademarks of Embrex, Inc.
Embrex, Inc.
Condensed Statements of Operations (Unaudited)
(In thousands except per share amounts)
Three Months Year
Ended December 31, Ended December 31,
-------------------- -------------------
2000 1999 2000 1999
-------- ---------- ------- ----------
Revenues $10,104 $9,074 $38,796 $33,750
Cost of revenues 4,037 3,437 16,770 13,119
-------- ---------- ------- ----------
Gross profit 6,067 5,637 22,026 20,631
Operating expenses
General & Administrative 1,804 1,856 6,474 7,386
Sales & Marketing 550 297 1,867 795
Research & Development 2,094 1,770 6,725 5,857
-------- ---------- -------- ---------
Total operating expenses 4,448 3,923 15,066 14,038
-------- ---------- -------- ---------
Operating profit 1,619 1,714 6,960 6,593
Other (income) expense (131) (19) (178) 8
-------- ---------- -------- ---------
Income before taxes 1,750 1,733 7,138 6,585
Income taxes (65) 8 507 841
-------- ---------- -------- ---------
Net income $ 1,815 $1,725 $ 6,631 $ 5,744
Net income per share: ======== ========== ======== =========
Basic 0.23 0.22 0.84 0.70
Diluted 0.21 0.20 0.77 0.68
No. of shares of Common
Stock used in per share
calculation:
Basic 7,880 7,927 7,901 8,151
Diluted 8,569 8,443 8,639 8,488
EBITDA $ 2,664 $2,774 $11,507 $10,934
Condensed Balance Sheet (Unaudited)
(In thousands)
Dec. 31, 2000 Dec. 31, 1999
--------------- ---------------
ASSETS
Cash and cash equivalents $ 2,966 $ 4,799
Other current assets 8,801 8,237
--------------- ---------------
Total current assets 11,767 13,036
Inovoject(R)systems 9,877 8,560
Equipment, furniture
and fixtures 4,859 4,289
Other assets 266 348
--------------- ---------------
Total assets $26,770 $26,233
=============== ===============
LIABILITIES AND SHAREHOLDERS'
EQUITY
Current liabilities $ 4,072 $ 5,151
Long-term debt and lease
obligations 37 47
Shareholders' equity 22,660 21,035
--------------- ---------------
Total liabilities and shareholders'
equity $26,770 $26,233
=============== ===============
Embrex, Inc.
Condensed Statements of Quarterly Operations (Unaudited)
(In thousands except per share amounts)
March 31, 2000 June 30, 2000
---------------------- ----------------------
Previously Previously
Reported Restated Reported Restated
---------- ---------- ---------- ----------
Revenues $9,291 $9,291 $9,674 $9,674
Cost of revenues 3,898 4,049 4,160 4,311
---------- ---------- ---------- ----------
Gross profit 5,393 5,242 5,514 5,363
Operating expenses
General &
Administrative 1,408 1,575 1,420 1,587
Sales & Marketing 441 448 412 419
Research & Development 1,488 1,488 1,576 1,575
---------- ---------- ---------- ----------
Total operating expenses 3,337 3,511 3,408 3,581
---------- ---------- ---------- ----------
Operating profit 2,056 1,731 2,106 1,782
Other (income) expense (23) (23) (30) (30)
---------- ---------- ---------- ----------
Income before taxes 2,079 1,754 2,137 1,812
Income taxes 236 213 220 197
---------- ---------- ---------- ----------
Net income $1,843 $1,541 $1,917 $1,615
========== ========== ========== ==========
Net income per share:
Basic 0.23 0.19 0.24 0.21
Diluted 0.21 0.18 0.22 0.19
No. of shares of Common
Stock used in per share
Basic 7,945 7,945 7,870 7,870
Diluted 8,733 8,733 8,701 8,701
Embrex, Inc.
Condensed Statements of Quarterly Operations (Unaudited)
(In thousands except per share amounts)
September 30, 2000
-------------------------
Previously
Reported Restated
----------- -----------
Revenues $9,727 $9,727
Cost of revenues 4,222 4,373
----------- -----------
Gross profit 5,505 5,354
Operating expenses
General & Administrative 1,341 1,508
Sales & Marketing 443 450
Research & Development 1,568 1,568
----------- -----------
Total operating expenses 3,352 3,526
----------- -----------
Operating profit 2,153 1,828
Other (income) expense 6 6
----------- -----------
Income before taxes 2,147 1,822
Income taxes 185 162
----------- -----------
Net income $1,962 $1,660
=========== ===========
Net income per share:
Basic 0.25 0.21
Diluted 0.23 0.19
No. of shares of Common Stock
used in per share
Basic 7,910 7,910
Diluted 8,554 8,554
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