Closure Medical (NASDAQ:CLSR)
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CLOSURE Medical Reports Third Quarter 2004 Results
RALEIGH, N.C., Oct. 13 /PRNewswire-FirstCall/ -- CLOSURE Medical Corporation
(NASDAQ:CLSR), a global leader in biomaterial-based medical devices, today
announced results for the third quarter and nine months ended September 30,
2004.
Total revenues for the third quarter 2004 were $9.2 million compared to $8.9
million during the same period of 2003. For the nine months ended September
30, 2004, revenues increased 21 percent to $31.0 million, up from $25.5 million
in the same period of 2003.
Net income for the third quarter 2004 was $2.0 million, or $0.14 per diluted
share, compared to $2.0 million, or $0.13 per diluted share, in the prior year
period. Net income for the nine months ended September 30, 2004, increased 28
percent to $7.1 million, or $0.46 per diluted share, up from $5.5 million, or
$0.39 per diluted share, in the same period of 2003.
For the third quarter 2004, the Company increased its R&D and regulatory
expenditures, which were $2.6 million, or 29 percent of revenues, versus $2.0
million, or 23 percent of revenues, during the 2003 period. The increased
expenses were primarily for the vascular sealant clinical study and other
regulatory preparation efforts for the product. Gross margins were 75 percent
and 74 percent during the three- and nine-month periods ended September 30,
2004, compared to 76 percent during both periods of 2003. Gross margin
improved sequentially from 72 percent for the second quarter 2004 primarily due
to a product mix of greater than 80 percent of the higher-margin DERMABOND
product. In addition, higher-than-normal royalty revenue, $373,000,
contributed approximately 100 basis points of the improvement.
Daniel A. Pelak, President and CEO, commented, "The clinical trial of our
vascular sealant product continues to make good progress. During the past
month, we have applied for the European CE mark and expect a favorable response
on this application prior to the end of the year. OMNEX(TM) Surgical Sealant
has been selected as the commercial name for the vascular sealant product. In
addition, we are in discussions with several major multi-national medical
device companies that have an interest in partnering with us to distribute
OMNEX(TM)."
Pelak added, "As we apply our core technology to a broader range of medical
uses, our business will continue to expand. We are encouraged by the
opportunities we see for our professional products, DERMABOND and OMNEX(TM), in
surgery and other clinical uses. DERMABOND continues to experience attractive
dollar volume growth at the end-user level, with current penetration of
applicable U.S. procedures in the range of 12-15 percent. That leaves, we
believe, plenty of room for market share expansion. In addition, we continue
to deliver solid net margins in excess of 20 percent, while financing increased
R&D and regulatory expense for new products."
General and administrative expense as a percentage of revenues decreased to 15
percent for the three- and nine-month periods ended September 30, 2004,
compared to 19 percent for both 2003 periods. For the nine-month period, the
Company's operating margin increased to 34 percent compared to 33 percent in
the 2003 period.
At September 30, 2004, the Company had cash and investments of $46.1 million
and net working capital of $40.0 million. Total assets were $64.6 million, up
from $53.8 million at the beginning of the year, and stockholders' equity was
$58.9 million. The Company had no outstanding debt and a $3.0 million
available line of credit.
The Company expects fourth quarter revenues to be in the range of $9.0 to $10.0
million and earnings per diluted share to be in the range of $0.13 to $0.16.
For the full year the Company reiterates the guidance provided in its press
release dated September 29, 2004, which included total revenues in the range of
$40.0 to $41.0 million and earnings per diluted share from $0.59 to $0.62.
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 early stage of commercialization of the
Company's products; 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 vascular sealant product and future
clinical studies; the successful enrollment of current and 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, 2003, 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.
TABLES FOLLOW
CLOSURE Medical Corporation
Statements of Operations
(In thousands, except per share data)
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
2004 2003 2004 2003
Product sales $9,181 $8,597 $30,605 $24,713
License and product
development revenue 59 264 381 790
Total revenues 9,240 8,861 30,986 25,503
Cost of products sold 2,289 2,140 8,117 6,082
Gross profit 6,951 6,721 22,869 19,421
Research, development
and regulatory affairs
expenses 2,640 2,042 7,603 6,030
General and
administrative expenses 1,431 1,657 4,730 4,876
Total operating
expenses 4,071 3,699 12,333 10,906
Income from operations 2,880 3,022 10,536 8,515
Interest income, net 195 69 428 216
Income before
income taxes 3,075 3,091 10,964 8,731
Provision for
income taxes 1,070 1,140 3,890 3,190
Net income $2,005 $1,951 $7,074 $5,541
Shares used in
computation of
net income
per common share:
Basic 14,323 13,768 14,269 13,680
Diluted 14,778 14,746 15,344 14,071
Net income per
common share:
Basic $ 0.14 $ 0.14 $ 0.50 $ 0.41
Diluted $ 0.14 $ 0.13 $ 0.46 $ 0.39
CLOSURE Medical Corporation
Balance Sheet Data
(In thousands)
September 30, December 31,
2004 2003
Cash, cash equivalents and investments $46,066 $33,427
Working capital $40,047 $30,974
Total assets $64,643 $53,768
Total debt obligations $ -- $ --
Total stockholders' equity $58,875 $47,428
Total shares outstanding 14,360 14,127
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 Corporation; or Benny Ward, CFO of CLOSURE Medical
Corporation, +1-919-876-7800
Web site: http:/// http://www.allencaron.com/
Web site: http://www.closuremed.com/