Closure Medical (NASDAQ:CLSR)
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CLOSURE Medical Reports First Quarter Results; Updates Pending
Johnson & Johnson Merger
RALEIGH, N.C., April 25 /PRNewswire-FirstCall/ -- CLOSURE Medical Corporation
(NASDAQ:CLSR), a global leader in biomaterial-based medical devices, today
announced results for the first quarter ended March 31, 2005.
Net income for the first quarter of 2005 was $2.1 million, or $0.14 per diluted
share, including merger-related expenses of approximately $1.3 million,
compared to $2.5 million, or $0.16 per diluted share, in the prior year period.
First-quarter 2005 revenues were $10.9 million compared to $10.5 million
during the same period of 2004. DERMABOND adhesive products increased to 79
percent of total revenues during the period versus 67 percent in the prior
period. DERMABOND growth, approximately 23 percent, continued to be driven by
shipments of the new generation ProPen products. Year-over-year BAND-AID(R)
Brand Liquid Bandage revenues declined approximately 31 percent due to
competition in the U.S. market; however, sequentially, liquid bandage revenues
were up approximately 156 percent primarily for shipments to international
markets.
Gross margin was 78 percent for the first quarter of 2005, compared to 75
percent in the 2004 period. The increase in gross margin percentage during the
2005 period was attributable to the higher-margin DERMABOND products
representing a greater share of total revenues as mentioned above and cost
reductions achieved in the production of ProPen products.
Research and development expenses were $2.6 million, or 24 percent of revenues,
for the 2005 period compared to $2.3 million, or 22 percent of revenues, for
2004. The increase was primarily attributable to follow-up, monitoring and
data-analysis activities related to the pivotal trial for OmNex(TM) Surgical
Sealant in the United States as well as preparation for a five-site,
100-patient European registry study to support the product launch in Europe.
General and administrative expenses as a percentage of revenues increased to 17
percent in 2005 from 16 percent for the 2004 period to support pre-launch
initiatives for the OmNex(TM) Surgical Sealant. Operating margin decreased to
26 percent from 37 percent in the prior year due to the merger-related costs of
$1.3 million included in the current period.
At March 31, 2005, total assets were $72.2 million, including $54.6 million in
cash and investments. Stockholders' equity increased $3.1 million from the
beginning of the year, totaling $65.2 million at March 31, 2005. The Company
had no outstanding debt and a $3.0 million line of credit at March 31, 2005.
Update on Pending Merger with Johnson & Johnson
As previously announced on March 3, 2005, the Company entered into a merger
agreement pursuant to which the Company will be acquired by Johnson & Johnson.
The Board of Directors of the Company has approved the transaction, which is
subject to approval by the Company's stockholders, clearance under the
Hart-Scott-Rodino Antitrust Improvements Act, or HSR Act, and other customary
closing conditions. On March 31, 2005, the Company and Johnson & Johnson filed
with the U.S. Federal Trade Commission and the Antitrust Division of the
Department of Justice the notification and report form required under the HSR
Act with respect to the pending merger. On April 15, 2005, the Company filed a
preliminary proxy statement relating to a special meeting of the Company's
stockholders to vote on the pending merger. As previously announced, the
pending merger with Johnson & Johnson is currently expected to close during the
second quarter of 2005.
About CLOSURE Medical Corporation
CLOSURE Medical Corporation is a global leader in the development and
manufacture of innovative biomaterial-based medical devices that fulfill the
needs of healthcare practitioners, patients and consumers.
For additional information on CLOSURE Medical visit its website at
http://www.closuremed.com/ or visit the "Clients" section of the Allen & Caron
website at http://www.allencaron.com/.
This release contains certain forward-looking statements which involve known
and unknown risks, delays, uncertainties or other factors not under the
Company's control which may cause actual results, performance or achievements
of the Company to be materially different from the results, performance, or
other expectations implied by these forward-looking statements. These factors
include, but are not limited to the satisfaction of the conditions to closing
of the pending merger with Johnson & Johnson, including receipt of stockholder
and regulatory approvals; the ability of the Company to increase the
efficiencies in its manufacturing processes; the effectiveness of initiatives
launched in response to the Company's competitors' product introductions; the
progress and success of its research and development programs for future
products; the success of its clinical study for its OMNEX(TM) product and
future clinical studies; the successful enrollment future clinical studies; the
need for regulatory approval and effects of governmental regulation;
technological uncertainties; the inventory management policies adopted by the
Company's marketing partners; end-user growth for the products sold by the
Company's marketing partners; the Company's success in securing marketing
partners for future products; the satisfactory conclusion of negotiations with,
and dependence on marketing partners, and dependence on patents and trade
secrets, as well as those detailed in the Company's Annual Report on Form 10-K
for the year ended December 31, 2004, filed with the Securities and Exchange
Commission. Although the Company believes that the expectations in the
forward-looking statements are reasonable, the Company cannot guarantee such
results. The Company undertakes no obligation to publicly revise these
forward-looking statements to reflect events or circumstances that arise after
the date hereof.
CLOSURE Medical Corporation
Statements of Operations
(In thousands, except per share data)
THREE MONTHS ENDED
MARCH 31,
2005 2004
Product sales $10,882 $10,204
License and product development revenue 58 264
Total revenues 10,940 10,468
Cost of products sold 2,412 2,667
Gross profit 8,528 7,801
Research, development and regulatory
affairs expenses 2,594 2,308
General and administrative expenses 1,845 1,662
Merger-related expenses 1,286 --
Total operating expenses 5,725 3,970
Income from operations 2,803 3,831
Interest income 331 109
Income before income taxes 3,134 3,940
Provision for income taxes 1,080 1,410
Net income $2,054 $2,530
Shares used in computation of net income
per common share:
Basic 14,435 14,217
Diluted 15,081 16,042
Net income per common share:
Basic $0.14 $0.18
Diluted $0.14 $0.16
CLOSURE Medical Corporation
Balance Sheet Data
(In thousands)
March 31, December 31,
2005 2004
Cash, cash equivalents and investments $54,586 $51,020
Working capital $41,885 $37,528
Total assets $72,195 $69,606
Total debt obligations $-- $--
Total stockholders' equity $65,200 $62,070
Total shares outstanding 14,477 14,393
DATASOURCE: CLOSURE Medical Corporation
CONTACT: investors, Joe Allen, +1-212-691-8087, , or
media, Len Hall, +1-949-474-4300, , both of Allen & Caron
Inc, for CLOSURE Medical Corp; or Benny Ward, CFO of CLOSURE Medical Corp,
+1-919-876-7800
Web site: http://www.allencaron.com/
Web site: http://www.closuremed.com/