IMPAX Reports Fourth Quarter and 2003 Financial Results; Received 9 FDA Approvals; Filed 8 Applications in Year.Business Editors/Health/Medical Writers HAYWARD Hayward, city (1990 pop. 111,498), Alameda co., W Calif.; settled 1851, inc. 1876. It is an important commercial and distribution center for farm products. Manufactures include wire, plastics, metal and paper products, textiles, machinery, and motor vehicles. , Calif.--(BUSINESS WIRE)--Feb. 17, 2004 IMPAX Laboratories, Inc. (Nasdaq:IPXL) today reported financial results for the three and twelve months ended December December: see month. 31, 2003. Revenues for the fourth quarter of 2003 were $16,829,000, up more than 100% compared with total revenues of $8,400,000 in the prior year's fourth quarter, and compared with total revenues of $16,497,000 in the third quarter of 2003. The year-over-year increase for the fourth quarter was primarily due to shipments of over-the-counter (OTC OTC See: Over-the-counter. OTC See over-the-counter market (OTC). ) Loratadine loratadine /lor·at·a·dine/ (lah-rat´ah-den) a nonsedating antihistamine used in the treatment of allergic rhinitis, chronic idiopathic urticaria, and asthma. lor·at·a·dine n. and Pseudoephedrine Sulfate pseudoephedrine sulfate Drixoral Nasal Decongestant, Drixoral Non-Drowsy Formula Pharmacologic class: Sympathomimetic Therapeutic class: Decongestant (systemic) Pregnancy risk category C (5mg/120mg) 12-hour Extended Release Tablets and Flavoxate flavoxate /fla·vox·ate/ (fla-voks´at) a smooth muscle relaxant; the hydrochloride salt is used in treatment of spasms of the urinary tract. Hydrochloride hydrochloride /hy·dro·chlo·ride/ (-klor´id) a salt of hydrochloric acid.hy·dro·chlo·ride n. A compound resulting from the reaction of hydrochloric acid with an organic base. 100mg Tablets (which began shipping during the fourth quarter of 2003), and higher sales of Fludrocortisone fludrocortisone /flu·dro·cor·ti·sone/ (floo?dro-kor´ti-son) a synthetic adrenal corticoid with effects similar to those of hydrocortisone and desoxycorticosterone, administered as the acetate salt. Tablets, Minocycline minocycline /mi·no·cy·cline/ (mi-no-si´klen) a semisynthetic broad-spectrum tetracycline antibiotic, used as the hydrochloride salt. minocycline a second-generation, highly lipid-soluble derivative of tetracycline. Capsules, and the LIPRAM product family. Included in the 2003 fourth quarter revenues was $3,500,000 representing the reversal of part of the refundable Refundable Eligible for refunding under the terms of a bond indenture. deposit from Teva under its strategic alliance agreement related to its exercise of the exclusivity option for certain products. On a sequential-quarter basis, sales were impacted by lower OTC product shipments. As a result of an increased manufacturing pace during the quarter, there was a temporary reduction in production of OTC products as additional resources were put in place to sustain a higher level of manufacturing output going forward. OTC production is now back to full capacity and demand for these products has continued to be strong. In addition, inventory has been built in preparation for anticipated new product launches. The net loss for the 2003 fourth quarter was $5,102,000, or $(0.09) per share, compared with a net loss of $3,471,000, or $(0.07) per share, in the prior-year fourth quarter. Net loss for the 2003 fourth quarter was negatively impacted by $2,365,000, or approximately $(0.04) per share, due to a significant number of batches being written-off, primarily related to anticipated new product launches. Additionally, during the third quarter a substantial number of manufacturing personnel were added in order to increase output in preparation for expected new product launches. The impact of this increase was felt during the 2003 fourth quarter in higher unabsorbed manufacturing costs. In addition to higher spending in manufacturing, there was also higher spending in research and development as new applications continued to be filed with the 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. , and higher sales and general administrative costs administrative costs, n.pl the overhead expenses incurred in the operation of a dental benefits program, excluding costs of dental services provided. . The net loss for the fourth quarter of 2002 was favorably fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. impacted by the reversal of $1,595,000 net interest on the refundable deposit from Teva. For the twelve months ended December 31, 2003, the Company reported total revenues of $58,818,000, up more than 139% when compared with total revenues of $24,515,000 in the previous year. The year-over-year annual increase was primarily due to the introduction of OTC Loratadine and Pseudoephedrine Sulfate (5mg/120mg) 12-hour Extended Release Tablets and Flavoxate Hydrochloride 100mg Tablets during 2003 after receiving approval from the U.S. Food and Drug Administration ("FDA"), and higher sales of Fludrocortisone Tablets, Minocycline Capsules, and the LIPRAM product family. Also included in the 2003 revenues was $3,500,000 representing the reversal of part of the refundable deposit from Teva related to its exercise of the exclusivity option for certain products. The net loss for the twelve months ended December 31, 2003, was $14,207,000, or $(0.28) per share, compared with a net loss of $20,040,000, or $(0.42) per share, in the previous year. Net loss narrowed due to increased sales, which partially offset increases in manufacturing expenses, research and development, and other 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. . Unrestricted cash, cash equivalents, and short-term Short-term Any investments with a maturity of one year or less. short-term 1. Of or relating to a gain or loss on the value of an asset that has been held less than a specified period of time. investments were $15.5 million at December 31, 2003, compared to $10.2 million at December 31, 2002. In December 2003, we transferred the $25 million revolving credit Revolving Credit A line of credit where the customer pays a commitment fee and is then allowed to use the funds when they are needed. It is usually used for operating purposes, fluctuating each month depending on the customers current cash flow needs. facility and term loan from Congress Financial to Wachovia For Moravian settlements in North Carolina, see . Wachovia Corporation (NYSE: WB), based in Charlotte, North Carolina, is the third largest banking chain in the United States based on total deposits. Bank N.A., thereby securing better terms and conditions. As of January January: see month. 15, 2004, our refundable deposit obligation to Teva was satisfied in full due to a combination of common stock issued to Teva, and achievement of a milestone amount due to Teva's exercise of the exclusivity option for certain products. Recently, the holders of the Mandatorily Redeemable Redeemable Eligible for redemption under the terms of an indenture. Convertible Preferred Stock Convertible Preferred Stock Preferred stock that includes an option for the holder to convert the preferred shares into a fixed number of common shares, usually anytime after a predetermined date. Also known as "convertible preferred shares". which was issued in March 2000, converted their entire 75,000 preferred shares Preferred shares Preferred shares give investors a fixed dividend from the company's earnings and entitle them to be paid before common shareholders. See: Preferred stock. into 1,500,000 shares of common stock. "We achieved record sales this past year as we benefited from the work of previous years through the receipt of FDA approvals, launches of new products, both on our own as well as with our partners, and the resolution of several patent lawsuits," said Barry R. Edwards, Chief Executive Officer. "Our fourth quarter product sales were off sequentially as we had lower OTC product shipments while we put the manufacturing resources in place to allow us to sustain a higher level of manufacturing output going forward. We are pleased that we have been able to build inventories of products anticipated to be launched in early 2004 and will continue our efforts to expand our manufacturing capacity and capabilities." Larry Hsu, Ph.D., President, added: "We are very pleased that our development team reached the high end of our goal in 2003 by filing eight applications: six Abbreviated New Drug Applications abbreviated new drug application Pharmacology An application made in the US by a pharmaceutical company requesting authority to market a 'new' drug for which both its therapeutic indications and formulation were previously approved by the FDA in another similar (`ANDAs') and two Investigative New Drug (`IND') applications. This marks the fourth straight year that we have filed eight applications. Once again, for 2004, we expect to be able to file at least six new applications with the FDA." IMPAX currently has twenty applications pending at the FDA, including five applications tentatively ten·ta·tive adj. 1. Not fully worked out, concluded, or agreed on; provisional: tentative plans. 2. Uncertain; hesitant. approved, that address, according to according to prep. 1. As stated or indicated by; on the authority of: according to historians. 2. In keeping with: according to instructions. 3. NDC NDC National Drug Code NDC NATO Defense College NDC National Documentation Centre (National Hellenic Research Foundation, Athens, Greece) NDC National Dairy Council NDC National Democratic Congress Health, approximately $6.8 billion in U.S. branded product sales for the twelve months ended December 31, 2003. Fifteen of these filings were made under Paragraph IV of the Hatch-Waxman Amendments. IMPAX Laboratories, Inc. is a technology-based specialty pharmaceutical company applying its formulation formulation /for·mu·la·tion/ (for?mu-la´shun) the act or product of formulating. American Law Institute Formulation expertise and drug-delivery technology to the development of controlled-release and specialty generics in addition to the development of branded products. IMPAX markets its generic products through its Global Pharmaceuticals division and intends to market its branded products through the IMPAX Pharmaceuticals division. Additionally, where strategically appropriate, IMPAX has developed marketing partnerships to fully leverage its technology platform. IMPAX Laboratories is headquartered in Hayward, and has a full range of capabilities in its Hayward and Philadelphia facilities. For more information, please visit the Company's Web site at: www.impaxlabs.com. "Safe Harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. " statement under the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995: To the extent any statements made in this news release contain information that is not historical, these statements are forward-looking in nature and express the beliefs and expectations of management. Such statements are based on current expectations and involve a number of known and unknown risks and uncertainties that could cause IMPAX's future results, performance or achievements to differ significantly from the results, performance or achievements expressed or implied by such 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. . Such risks and uncertainties include, but are not limited to, IMPAX's ability to obtain sufficient capital to fund its operations, the difficulty of predicting FDA filings and approvals, consumer acceptance and demand for new pharmaceutical products, the impact of competitive products and pricing, IMPAX's ability to successfully develop and commercialize pharmaceutical products, IMPAX's reliance on key strategic alliances, the uncertainty of 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. , the availability of raw materials, the regulatory environment, dependence on patent and other protection for innovative products, exposure to product liability claims, fluctuations in operating results and other risks detailed from time to time in IMPAX's filings with the Securities and Exchange Commission. Forward-looking statements speak only as to the date on which they are made, and IMPAX undertakes no obligation to update publicly or revise any forward-looking statement, regardless of whether new information becomes available, future developments occur or otherwise.
IMPAX LABORATORIES, INC.
STATEMENTS OF OPERATIONS
(dollars in thousands, except share and per share data)
Three Months Ended Twelve Months Ended
December 31, December 31,
(unaudited) (unaudited)
2003 2002 2003 2002
Net sales $ 13,131 $ 7,998 $ 53,565 $ 23,758
Other revenues(a) 3,698 402 5,253 757
Total revenues 16,829 8,400 58,818 24,515
Cost of sales 13,325 6,218 43,769 18,492
Gross profit 3,504 2,182 15,049 6,023
Research and
development 4,890 4,355 17,195 16,254
Less: Teva
reimbursements (10) (219) (257) (705)
Research and
development, net 4,880 4,136 16,938 15,549
Selling expenses 945 835 2,497 2,836
General and
Administrative 2,650 2,203 9,176 8,396
Other operating
income (expense),
net 2 3 27 (36)
Net loss from
operations (4,969) (4,989) (13,535) (20,794)
Interest income 81 104 280 644
Interest
expense(b) (214) 1,414 (952) 110
Net loss $ (5,102) $ (3,471) $ (14,207) $ (20,040)
Net loss per share
(basic and
diluted) $ (0.09) $ (0.07) $ (0.28) $ (0.42)
Weighted average
common shares
outstanding 54,208,856 47,867,379 51,346,587 47,444,364
(a) The Other Revenues for the quarter and twelve months ended
December 31, 2003, included $3,500,000 in reversal of part of the
refundable deposit from Teva under its strategic alliance
agreement related to its exercise of the exclusivity agreement for
certain products.
(b) The interest expense for the quarter and twelve months ended
December 31, 2002, included the reversal of the interest on the
refundable deposit from Teva, as follows:
Q-4 2002 Year 2002
Reversal of Interest on Refundable Deposit $2,190,000 $ 876,000
Other Interest (181,000) (565,000)
Less: Amounts Previously Capitalized (595,000) (201,000)
Total Interest Expense $1,414,000 $ 110,000
IMPAX LABORATORIES, INC.
CONDENSED BALANCE SHEETS
(in thousands)
December 31, December 31,
2003 2002
(unaudited) (unaudited)
ASSETS
Cash, cash equivalents and short-
term investments $ 15,505 $ 10,219
Restricted cash(a) 10,000 10,000
Accounts receivable, net 9,885 6,524
Inventory 28,479 10,478
Property, plant and equipment, net 38,132 37,065
Goodwill and intangibles, net 27,953 28,337
Other assets 2,752 1,780
Total assets $ 132,706 $ 104,403
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities $ 42,365 $ 23,248
Long-term debt, net of current
portion 8,854 9,105
Refundable deposit(b) 5,000 22,000
Other liabilities 2,879 1,486
Mandatorily redeemable convertible
preferred stock(c) 7,500 7,500
Stockholders' equity 66,108 41,064
Total liabilities and
stockholders' equity $ 132,706 $ 104,403
(a) Collateral for the $25 million revolving credit facility and term
loan with Congress Financial until December 2003, and thereafter
with Wachovia Bank N.A.
(b) As of January 15, 2004, our refundable deposit obligation to Teva
was satisfied in full due to a combination of common stock issued
to Teva and achievement of a milestone amount due to Teva's
exercise of the exclusivity option for certain products.
(c) Recently, the holders of the Mandatorily Redeemable Convertible
Preferred Stock converted their entire 75,000 preferred shares
into 1,500,000 shares of common stock.
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