Kos Reports Exceptional Financial Performance and Success in Strategic Initiatives for the Quarter and Year.Business Editors/Health/Medical Writers MIAMI--(BUSINESS WIRE)--Feb. 18, 2004 Kos Pharmaceuticals, Inc. (Nasdaq:KOSP): Full Year Highlights -- Full-year revenue increased 70% to a record $294 million -- First ever full-year of operating profitability -- Achieved record net income of $59 million; EPS (Encapsulated PostScript) A PostScript file format used to transfer a graphic image between applications and platforms. EPS files contain PostScript code as well as an optional preview image in TIFF, WMF, PICT or EPSI, the latter being an ASCII-only format. escalated to $1.53 -- Generated cash from operations in 2003 in excess of $55 million -- Cash and marketable securities Marketable Securities Very liquid securities that can be converted into cash quickly at a reasonable price. Notes: Marketable securities are very liquid as they tend to have maturities less than one year, and the rate at which these securities can be bought or sold has increased 13-fold to $260 million -- Merck KGaA This article needs sources or references that appear in reliable, third-party publications. Alone, primary sources and sources affiliated with the subject of this article are not sufficient for an accurate encyclopedia article. , Oryx oryx (ôr`ĭks), name for several small, horselike antelopes, genus Oryx, found in deserts and arid scrublands of Africa and Arabia. They feed on grasses and scrub and can go without water for long periods. and Takeda Takeda (武田氏 Takeda) relationships dramatically broaden sales potential Fourth Quarter Highlights -- Fourth quarter revenue increased 59% to a record $87 million -- Fourth quarter net income more than tripled to $21 million and EPS grew to $0.49 -- Completed highly successful equity offering, bolstering cash position for future growth Kos Pharmaceuticals, Inc. (Nasdaq:KOSP) today announced financial results for the fourth quarter and 12 months ended December December: see month. 31, 2003, and commented on key strategic achievements that contributed to a landmark year for the Company. During the fourth quarter of 2003, revenue increased 59% to a record $87.3 million, from $55 million for the fourth quarter of 2002. For the 12 months ended December 31, 2003, revenue increased 70% to $293.9 million from $172.7 million reported for the full year in 2002, another record for the Company. The significant increase in revenue in the quarter, and particularly the year, was attributable to heightened awareness of the importance of managing the full range of lipid lipid Any of a diverse class of organic compounds, found in all living things, that are greasy and insoluble in water. One of the three large classes of substances in foods and living cells, lipids contain more than twice as much energy (calories) per unit of weight as the parameters in the treatment and prevention of cardiovascular disease Cardiovascular disease Disease that affects the heart and blood vessels. Mentioned in: Lipoproteins Test cardiovascular disease and the accelerating adoption of Kos' cholesterol products, Niaspan(R) and Advicor(R), resulting in the combined prescriptions written for the franchise surpassing the 12.5 million mark since their respective launches. For the fourth quarter of 2003, net income increased significantly to $20.9 million or $0.49 per fully 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 to $6.1 million or $0.18 per fully diluted share reported for the same period in 2002. For the year ended December 31, 2003, the Company reported net income of $59.4 million or $1.53 per diluted share, a dramatic earnings per share swing in excess of $2.50 from the Company's net loss of $20.8 million or $1.01 per share in 2002. Such significant operating results, which resulted in the Company's first full year of operating profitability, were derived from strong revenue performance coupled with ongoing measured investments, particularly in R&D and the sales force, and solid control of 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. during the year. The record quarterly and annual revenue was attributed to impressive growth of Kos' cholesterol franchise. In the fourth quarter of 2003, sales of Niaspan accounted for $66.8 million, and Advicor sales accounted for $20.5 million. For the full year, Niaspan sales grew 56% from 2002 and resulted in a record $226.5 million in revenue, while Advicor sales reached a new high of $67.5 million, or a 150% increase from the full year 2002. For all of 2003, approximately 3,582,000 prescriptions were written for Niaspan and approximately 852,000 prescriptions were written for Advicor, which are both records for the Company. For the year, total prescriptions for Kos' cholesterol franchise grew nearly 3 times faster than the growth rate of the overall cholesterol market, and at the end of December 2003, Kos achieved a 3.6% share of new prescriptions in the overall cholesterol market. Kos generated over $55 million in cash from operations for the full year, and as of December 31, 2003, the Company had approximately $260 million of cash and marketable securities, a greater than 13-fold increase from 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. 2002 levels. "Last year was nothing short of a remarkable and breakthrough year for Kos," said Adrian Adrian, Roman emperor Adrian, Roman emperor: see Hadrian. Adrian, city, United States Adrian, city (1990 pop. 22,097), seat of Lenawee co., SE Mich., on the Raisin River; inc. 1836. Adams Adams, town (1990 pop. 9,445), Berkshire co., NW Mass., in the Berkshires, on the Hoosic River; inc. 1778. Its manufactures include chemicals, textiles, and paper products. The Berkshire region attracts tourists year-round. , President and Chief Executive Officer. "We set extremely aggressive financial and strategic goals for the year and met or surpassed nearly every one of them. From a financial perspective, we excelled in all areas in that we delivered impressive record revenue and operating performance, resulting in our first ever year of operating profitability, one year ahead of schedule. We also dramatically improved our cash balance through continued cash generation from operations and through a highly successful equity offering in which we netted about $184 million of proceeds to the Company. The exceptional performance we achieved in 2003 coupled with a significantly enhanced balance sheet establishes a strong financial foundation for the broad corporate development initiatives that will help expand our portfolio of products and fuel robust growth for Kos. "This year's noteworthy achievements also included several other strategic milestones, especially in regard to business development and licensing initiatives. Our relationships with Merck KGaA, Oryx and Takeda help maximize the potential of our cholesterol franchise throughout the world by taking our highly differentiated products to nearly every corner of the globe." With respect to the financial outlook for 2004, the Company now expects annual revenue to come in at the higher end Coordinates: For other places with the same name, see Billinge. Higher End or Billinge Higher End is a district of the Metropolitan Borough of Wigan, in Greater Manchester, England. of the range communicated previously, to about $410 million, reflecting approximately 40% growth from 2003. The Company expects earnings per fully diluted share for 2004 to also come in at the higher end of the range of $2.10 - $2.20 per fully diluted share. Consistent with patterns in previous years, the Years, The the seven decades of Eleanor Pargiter’s life. [Br. Lit.: Benét, 1109] See : Time Company expects first quarter 2004 revenue to be essentially flat to slightly higher than fourth quarter 2003 revenue because of the seasonally weak first quarter for the cholesterol market. Accordingly, the Company expects earnings per share in the first quarter of 2004 to be approximately $0.25 - $0.30 because of the combination of traditionally soft first quarter revenue and an expected significant increase in operating expenses. Following the first quarter, the Company expects to resume its sequential One after the other in some consecutive order such as by name or number. quarterly growth in both revenue and earnings per share for the balance of 2004. Kos' senior management will host a conference call at 10:30 a.m. ET to discuss the Company's quarterly results. The conference call will be available live via the Internet Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the by accessing Kos' website at www.kospharm.com. Please go to the website at least fifteen minutes prior to the call to register, download To receive a file transmitted over a network. In any communications session, "download" means receive, and "upload" means send. The download/upload often implies a big/little scenario, in which data is being downloaded from the "big" server into the "little" user's computer. and install any necessary audio software. For those who cannot access the webcast, you can dial into the conference call at 719-457-2641 domestic or international, conference passcode 600528. A replay will also be available on the website or by calling 719-457-0820 domestic or international, and entering 600528 from 1:30 PM ET on Wednesday Wednesday: see week. , February February: see month. 18, 2004, until 12:00 AM ET on Friday Friday: see Sabbath; week. Friday young Indian rescued by Crusoe and kept as servant and companion. [Br. Lit.: Robinson Crusoe] See : Servant , February 20, 2004. Kos Pharmaceuticals, Inc. is a fully integrated specialty pharmaceutical company engaged in developing, commercializing, manufacturing and marketing proprietary prescription products for the treatment of chronic diseases. The Company's principal product development strategy is to reformulate Verb 1. reformulate - formulate or develop again, of an improved theory or hypothesis redevelop formulate, explicate, develop - elaborate, as of theories and hypotheses; "Could you develop the ideas in your thesis" existing pharmaceutical products with large market potential to improve safety, efficacy, or patient compliance. The Company currently markets Niaspan and Advicor for the treatment of cholesterol disorders. Kos is developing additional products and has proprietary drug delivery technologies in solid-dose and aerosol aerosol (âr`əsōl,–sŏl): see colloid. aerosol System of tiny liquid or solid particles evenly distributed in a finely divided state through a gas, usually air. metered-dose inhalation inhalation /in·ha·la·tion/ (in?hah-la´shun) 1. the drawing of air or other substances into the lungs.inhala´tional 2. the drawing of an aerosolized drug into the lungs with the breath. 3. administration and is pursuing many strategic business development and licensing opportunities. Certain statements in this press release, including statements regarding the expected growth in the number of prescriptions written for Niaspan and Advicor, the expected growth in sales of Niaspan and Advicor, our expectations regarding revenue and earnings per share in future periods, our ability to continue to garner acceptance among physicians for Niaspan and Advicor, our ability to complete acquisition and licensing transactions, and our ability to market our products outside the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. , are forward-looking for·ward-look·ing adj. Concerned with or making provision for the future: forward-looking educators; a forward-looking corporate plan. Adj. 1. and are subject to risks and uncertainties. These risks and uncertainties include the continued market acceptance of the Advicor and Niaspan products, the expected continued growth in sales of the Niaspan and Advicor products, the Company's ability to successfully commercialize Niaspan and Advicor in other countries, the ability of the Company to obtain and maintain regulatory approvals, the ability of the Company to remediate re·me·di·a·tion n. The act or process of correcting a fault or deficiency: remediation of a learning disability. re·me the compliance issues identified by 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. without adversely affecting its manufacturing capability or ability to meet its production requirements, the ability of Kos to build awareness for Niaspan and Advicor within the medical community, the Company's ability to continue to develop new products, the Company's ability to attract and retain sales professionals, the Company's ability to grow revenue and control expenses, the protection afforded by the Company's patents, the effect of conditions in the pharmaceutical industry and the economy in general, as well as certain other risks. Actual results may differ materially from our projections. A more detailed discussion of risks attendant ATTENDANT. One who owes a duty or service to another, or in some sort depends upon him. Termes de la Ley, h.t. As to attendant terms, see Powell on Morts. Index, tit. Attendant term; Park on Dower, c. 1 7. to the 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. included in this press release are set forth in the "Forward-Looking Information: Certain Cautionary Statements" section of the Company's Annual Report on 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 31, 2002, filed with the Securities and Exchange Commission, and will be set forth in the "Forward-Looking Information: Certain Cautionary Statements" section of the Company's Annual Report on Form 10-K for the year ended December 31, 2003, and in other documents already filed with the SEC.
Kos Pharmaceuticals, Inc. and Subsidiaries
SELECTED FINANCIAL INFORMATION
Three Months Ended Year Ended
December 31, December 31,
-------------------- -----------------------
2003 2002 2003 2002
-------- --------- --------- ---------
(unaudited)
Condensed Consolidated
Statement of Operations
(in thousands, except
per share data)
Revenues $87,276 $55,016 $293,907 (III)$172,693
Cost of
Sales 6,185 3,768 20,038 15,362
-------- --------- --------- ---------
81,091 51,248 273,869 157,331
-------- --------- --------- ---------
Operating
Expenses:
Research and
development 16,356 10,224 52,203 43,981
Selling,
general and
administrative 41,869 33,911 156,469 130,145
-------- --------- --------- ---------
Total
operating
expenses 58,225 44,135 208,672 174,126
-------- --------- --------- ---------
Income (Loss)
from
Operations 22,866 7,113 65,197 (16,795)
Other, net 1,964 1,024 5,783 4,021
-------- --------- --------- ---------
Net Income
(Loss) $20,902 $6,089 $59,414 $(20,816)
======== ========= ========= =========
Net Income
(Loss) per
Share:
Basic $0.86 $0.29 $2.71 $(1.01)
Diluted 0.49 (I) 0.18 1.53 (I) (1.01)
Shares Used in
Computing Net
Income (Loss)
per Share:
Basic 24,203 20,695 21,914 20,582
Diluted 44,401 38,463 41,033 20,582
December December
31, 31,
2003 2002
--------- ---------
Condensed Consolidated
Balance Sheet
(in thousands)
Cash and cash
equivalents $259,958 (II) $19,572 (II)
Accounts
Receivable,
net 39,559 24,088
Other
Current
Assets 16,529 11,821
Fixed Assets,
net of
depreciation 17,841 12,528
Other Assets 3,727 1,432
--------- ---------
Total
assets $337,614 $69,441
========= =========
Current
Liabilities $67,987 $110,125
Long-term
Debt 30,000 34,025
Shareholders'
Equity
(Deficit) 239,627 (74,709)
--------- ---------
Total
liabilities and
shareholders'
equity
(deficit) $337,614 $69,441
========= =========
-----
(I) Calculation of fully diluted EPS reflects net income minus
$788,000 and $3,321,000 in interest expense for the fourth
quarter 2003 and for the year ended December 31, 2003,
respectively, associated with the Company's convertible debt
facilities.
(II) Includes $17.1 million of cash pledged as collateral under the
Company's letters of credit facility.
(III) Includes the effect of a one-time $11 million revenue benefit
resulting from a change in accounting estimate.
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