Virbac Corporation's Fourth Quarter Operating Income Jumps 287% to $1.6 Million Y/Y.Business Editors/Health/Medical Writers FORT WORTH, Texas--(BUSINESS WIRE)--Feb. 20, 2003 Virbac Corporation (NASDAQ/NMS: VBAC VBAC abbr. vaginal birth after cesarean VBAC Vaginal birth after cesarean. Mentioned in: Cesarean Section VBAC Vaginal birth after cesarean section, see there ) Fourth Quarter Sales Grow 9% to $16.3 Million; Vet Division Sales Up 32% Reflecting Strength across All Product Lines Virbac Corporation (NASDAQ/NMS: VBAC), a leading companion animal health company, today reported financial results for the fourth quarter and twelve months ended December December: see month. 31, 2002. For the fourth quarter 2002, net sales Net Sales The amount a seller receives from the buyer after costs associated with the sale are deducted. Notes: This amount is calculated by subtracting the following items from gross sales: merchandise returned for credit, allowances for damaged or missing goods, freight increased 9%, reaching $16.3 million, compared with $15.0 million in the 2001 fourth quarter. Sales for the Veterinary veterinary /vet·er·i·nary/ (vet´er-i-nar?e) 1. pertaining to domestic animals and their diseases. 2. veterinarian. vet·er·i·nar·y adj. Division, the Company's largest growth driver, jumped 32% to a record $8.6 million from $6.5 million in the 2001 fourth quarter. Parasiticide par·a·sit·i·cide n. An agent or preparation used to destroy parasites. adj. Destructive to parasites. par product sales grew by 21%, driven by IVERHART(TM) PLUS. Dermatological dermatological, dermatologic pertaining to dermatology; of or affecting the skin. product sales jumped 61%, particularly on the strength of Allermyl(R) and the initial success of the recently launched GENESIS Genesis (jĕn`əsĭs), 1st book of the Bible, first of the five books of the Law (the Pentateuch or Torah) ascribed by tradition to Moses. (TM) Topical topical /top·i·cal/ (top´i-k'l) pertaining to a particular area, as a topical antiinfective applied to a certain area of the skin and affecting only the area to which it is applied. top·i·cal adj. Spray for allergic al·ler·gic adj. 1. Of, caused, or characterized by an allergy. 2. Having an allergy or exhibiting an allergic reaction to a substance. allergic pertaining to or caused by allergy. dermatitis dermatitis (dûr'mətī`tĭs), nonspecific irritation of the skin. The causative agent may be a bacterium, fungus, or parasite; it can also be a foreign substance, known as an allergen. . Oral hygiene Oral Hygiene Definition Oral hygiene is the practice of keeping the mouth clean and healthy by brushing and flossing to prevent tooth decay and gum disease. sales grew by 8% and the nutraceutical nu·tra·ceu·ti·cal n. A food or naturally occurring food supplement thought to have a beneficial effect on human health. nutraceutical product line grew by 309%, driven by strong sales of Promotion and Palaflex. Consumer Brands Division sales were $3.5 million compared with $3.6 million in the prior-year quarter. Sales for PM Resources, the Contract Manufacturing Division, were $4.2 million compared with $4.9 million in the prior-year quarter, reflecting the Bovimec(TM) and Virbamec(TM) pour-on pour-on a technique for the application of insecticides, in which a small amount of liquid is poured onto the animal's back without any attempt to spread it over the surface. It is suited to systemic insecticides which are absorbed percutaneously. product shipped as part of the initial launch in the fourth quarter 2001. Thomas (language) Thomas - A language compatible with the language Dylan(TM). Thomas is NOT Dylan(TM). The first public release of a translator to Scheme by Matt Birkholz, Jim Miller, and Ron Weiss, written at Digital Equipment Corporation's Cambridge Research Laboratory runs L. Bell, Virbac Corporation's president and chief executive officer, stated, "We closed the year particularly strong in our Vet Division, where sales dramatically increased across all product lines for both new and existing products. We believe this success reflects veterinarians' high level of satisfaction with our products, allowing us to establish solid brand loyalty for our existing products and enthusiasm in endorsing our new product offerings. Our most recent success, our newly registered dermatology dermatology (dûrmətŏl`əjē), branch of medicine concerned with diagnosis and treatment of diseases and disorders of the skin. product GENESIS, began shipping in the fourth quarter and sales exceeded our initial expectations." Fourth quarter gross profit rose 16% to $7.0 million from $6.0 million in the prior-year quarter. Gross margins as a percentage of sales improved to 43% versus 40% in the comparable quarter last year, reflecting increased sales from the veterinary division, which carry higher gross margins. Fourth quarter 2002 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. increased 287%, reaching $1.6 million versus $410,000 in the prior-year fourth quarter. Net income for the fourth quarter 2002 was $1.0 million, or $0.04 per basic 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 $27,000, or $0.00 per basic and diluted share, for the comparable quarter of 2001. In addition to higher sales and gross margins, fourth quarter operating income reflected lower 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. , which were down $201,000 to $5.4 million. The lower operating expenses were due to unusually high marketing costs related to the IVERHART PLUS launch in the fourth quarter 2001 that were not repeated in 2002. For the twelve months ended December 31, 2002, net sales grew 5%, reaching a record $63.8 million compared with $60.6 million in the prior-year, fueled by Veterinarian veterinarian /vet·er·i·nar·i·an/ (vet?er-i-nar´e-an) a person trained and authorized to practice veterinary medicine and surgery; a doctor of veterinary medicine. vet·er·i·nar·i·an n. Division sales, which grew 29% year-over-year. Consumer Brands Division sales were $15.8 million compared with $17.4 million in 2001, reflecting competitive pressures within the sales channel. PM Resources sales were $15.1 million versus $17.8 million in the prior-year, reflecting the replacement of lower margin contract manufacturing business with internal production of higher margin items. PM Resources sales also reflect the livestock livestock Farm animals, with the exception of poultry. In Western countries the category encompasses primarily cattle, sheep, pigs, goats, horses, donkeys, and mules; other animals (e.g., buffalo, oxen, or camels) may predominate in other areas. pour-on launch in late 2001, which included unusually high sales to fill initial orders. The 2002 gross profit rose 11% to $27.4 million from $24.7 million in 2001. Gross margins as a percentage of sales improved to 43% for 2002 versus 41% in 2001. The improved gross profits were due to higher sales of veterinary products. Operating income increased significantly by 87% to a record $5.8 million from $3.1 million in 2001. Net income for the year was a record $3.4 million, or $0.15 per basic and diluted share, compared with $1.3 million, or $0.06 per basic and diluted share, in 2001. Bell continued, "2002 was an eventful e·vent·ful adj. 1. Full of events: an eventful week. 2. Important; momentous: an eventful decision. year marked by many sales, marketing and organizational achievements. We successfully grew sales of core dermatology and oral hygiene products while successfully launching five new products, Allermyl, IVERHART, IVERHART PLUS, GENESIS and Equell(TM). Furthermore, we restructured our Consumer Brands Division to benefit from the market trend towards pet super stores and large discount retailers and already see positive results. While advancing our sales and marketing efforts, we also made significant productivity enhancements by consolidating our manufacturing of IVERHART PLUS at PMR PMR 1 Percutaneous myocardial revascularization, see there 2 Perinatal mortality rate 3 Polymyalgia rheumatica 4 Proportionate mortality ratio, see there and by lowering our cost of goods with the installation of a high speed filling line, mainly for dermatological products, at our Fort Worth facility. "Looking ahead, 2003 looks just as bright with an excellent new product pipeline for continued robust sales. Reinforcing our sales efforts, we recently launched an exciting consumer driven advertising program featuring Paul Harvey <noinclude></noinclude>
Paul Harvey Aurandt (born September 4, 1918), better known as Paul Harvey, is an American radio broadcaster for the ABC Radio Networks. promoting our C.E.T. line of oral hygiene products. Paul Harvey is a highly popular radio personality carried by more than 1100 broadcast affiliates that each week reaches over 18 million listeners who are highly representative of our target consumer group. "Moreover, we remain committed to optimizing margins and recently announced consolidating our former Harbor City California California (kăl'ĭfôr`nyə), most populous state in the United States, located in the Far West; bordered by Oregon (N), Nevada and, across the Colorado River, Arizona (E), Mexico (S), and the Pacific Ocean (W). operations at our Fort Worth facility, which is expected to net an annual savings of $700,000. We would like to note that we expect 2003 R&D expense in the first quarter to increase by $750,000 to $1.4 million, reflecting increased registration activity compared with the first quarter of 2002. We will also incur To become subject to and liable for; to have liabilities imposed by act or operation of law. Expenses are incurred, for example, when the legal obligation to pay them arises. An individual incurs a liability when a money judgment is rendered against him or her by a court. $390,000 for our Paul Harvey campaign in the first quarter and a one-time cost of the shutdown shut·down n. A cessation of operations or activity, as at a factory. shutdown Noun the closing of a factory, shop, or other business Verb shut down of our Harbor City facility in the first quarter estimated at $539,000. In spite of in opposition to all efforts of; in defiance or contempt of; notwithstanding. See also: Spite these first quarter expenses, we still forecast solid profitable growth in 2003." 2002 - A Year of Success at Virbac Corporation - Entered the prescription allergic dermatitis market with FDA approval of GENESIS. Once fully launched, Virbac expects GENESIS to capture a 10% market share of the treatments, generating approximately $6 million in revenue. - Obtained FDA approval of EQUELL Paste and entered the $105 Million U.S. Equine Anthelmintic/Dewormer Market. - Joined the Russell 2000 Index, an index widely used by fund managers in determining their investment strategies. - Launched its breakthrough dermatological product, Allermyl Shampoo, which helps manage chronic itching in dogs and cats due to allergic skin disease, with the same efficacy and without the side effects associated with many of the competitive products, such as oral steroids. Sales of this product are exceeding the Company's initial expectations. - Parasiticide sales within the Vet Division grew by 59%, fueled by the first full year of IVERHART PLUS sales. - Increased its manufacturing capabilities with the installation of a new filling suite at PM Resources for Equimax(TM) and Equell. Notice of Conference Call and Webcast The Company will conduct a conference call to discuss these results today at 11 a.m. EDT EDT abbr. Eastern Daylight Time EDT Eastern Daylight Time EDT n abbr (US) (= Eastern Daylight Time) → hora de verano de Nueva York EDT . Those who wish to participate may telephone (973) 935-2101. A digital replay will be available by telephone for one week and may be accessed by dialing (973) 341-3080, PIN# 3709100. To listen to the live webcast, visit the Company's web site at www.virbaccorp.com and click on the Investor Relations' page and click on the webcast link. Please go to the web site 15 minutes prior to start time 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. A replay will be available on the Web site through February 28, 2003. About Virbac Corporation Virbac Corporation, located in Fort Worth, is a leading companion animal health company focusing on the pharmaceutical, dermatological, and dental hygiene dental hygiene n. The practice of keeping the mouth, teeth, and gums clean and healthy to prevent disease. Also called oral hygiene. markets for pets and companion animals, and provides a broad array of healthcare products to it's customers under the brand names C.E.T.(R), ALLERDERM(R), IVERHART(TM) PLUS, Preventic(R) PLUS, Pet-Tabs(R), St. JON(R), Mardel(R), Zema(R) and Francodex(R). Virbac Corporation is an affiliate of the $350 million revenue French public animal health company, Virbac S. A. For more information on, please visit www.virbaccorp.com. This press release contains forward-looking information made pursuant to the 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. provisions of 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. These 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. may be affected by certain risks and uncertainties described in the Company's filings with the Securities and Exchange Commission. Forward-looking statements regarding revenue depend in large part on the Company's ability to launch new products effectively and customer acceptance of those products. The Company's actual results could differ materially from such forward-looking statements. Management believes that these amounts are fairly stated, but audited results could differ from these unaudited results and the effect may be material. In addition, anticipated 2003 results depend upon sales and margin targets being met.
Virbac Corporation
Unaudited Statement of Operations
(amounts in thousands expect per share data)
For the Three For the Twelve
Months Months
Ended Dec. 31, Ended Dec. 31,
--------------- ---------------
2002 2001 2002 2001
Net revenues 16,331 14,972 63,752 60,628
Cost of goods sold 9,316 8,929 36,317 35,898
------- ------- ------- -------
Gross profit 7,015 6,043 27,435 24,730
Operating expenses:
Selling, general and administrative 3,958 4,356 16,380 16,404
Research and development 883 757 2,950 2,997
Warehouse and distribution 591 520 2,297 2,215
------- ------- ------- -------
Total Operating Expenses 5,432 5,633 21,627 21,616
Income from operations 1,583 410 5,808 3,114
Interest expense (51) (106) (329) (596)
Other income (expense) (6) (40) - 3
------- ------- ------- -------
Income before income tax expense 1,526 264 5,479 2,521
Income tax expense (539) (237) (2,099) (1,211)
------- ------- ------- -------
Net income 987 27 3,380 1,310
======= ======= ======= =======
Earnings per share:
Basic income per share $0.04 $0.00 $0.15 $0.06
======= ======= ======= =======
Diluted income per share $0.04 $0.00 $0.15 $0.06
======= ======= ======= =======
Basic shares outstanding 22,164 22,052 22,115 22,038
Diluted shares outstanding 22,810 22,588 22,771 22,558
Virbac Corporation
(amounts in thousands except share data) December 31,
2002 2001
---------- ---------
(unaudited)(unaudited)
Assets
Current assets:
Cash and cash equivalents $ 865 $ 477
Accounts receivable, net 14,970 12,905
Accounts receivable - Virbac S. A. and
subsidiaries 289 1,170
Inventories, net 12,022 13,932
Deferred income taxes 662 2,535
Prepaid expenses and other assets 2,135 1,338
---------- ---------
Total current assets 30,943 32,357
Property, plant and equipment, net 12,841 12,659
Goodwill and other intangible assets, net 9,763 7,152
Deferred income taxes 1,886 1,885
Other assets 278 315
---------- ---------
Total Assets $ 55,711 $ 54,368
========== =========
Liabilities and Shareholders' Equity
Current liabilities:
Current portion of long-term debt and notes
payable $ 4 $ 600
Accounts payable
Trade 4,487 5,059
Virbac S.A. 119 982
Accrued property taxes 196 198
Accrued expenses 3,535 1,597
---------- ---------
Total current liabilities 8,341 8,436
Long-term debt and notes payable 6,862 9,700
Unearned product license fees 5,916 5,395
Commitments and contingencies (Note 13)
Shareholders' equity:
Common stock ($.01 par value; 38,000,000
shares authorized; 22,214,000 and 22,055,000
issued, respectively) 222 221
Additional paid-in capital 35,287 34,938
Accumulated deficit (837) (4,217)
---------- ---------
34,672 30,942
Less: Treasury stock at cost (16,000 and
28,000 shares, respectively) (80) (105)
---------- ---------
34,592 30,837
---------- ---------
Total Liabilities and Shareholders' Equity $ 55,711 $ 54,368
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