Bentley Pharmaceuticals Announces First Quarter Financial Results

  
    
  
  
    
      Bentley Pharmaceuticals, Inc. (NYSE: BNT), a specialty pharmaceutical 
      company, today reported financial results for the first quarter and 
      three months ended March 31, 2008.
    
    
      First quarter 2008 revenues were $40.0 million, a 27% increase (13% in 
      constant currency) from $31.4 million reported in the first quarter 
      2007. Gross margins on net product sales for the quarters ended March 
      31, 2008 and 2007 were approximately 45%. Operating income for the first 
      quarter 2008 was $2.9 million compared with $4.2 million reported in the 
      same quarter of the prior year. The Company noted that the first quarter 
      2008 operating expenses include $3.8 million, or $0.16 per diluted 
      share, of strategic consulting expenses incurred in connection with the 
      Company’s plan to spin off its drug delivery 
      business and sell its specialty generics business. Net income for the 
      first quarter 2008 was $1.1 million, or $0.05 per diluted share, 
      compared with $2.4 million, or $0.10 per diluted share, a year ago. 
      Fluctuations in foreign currency provided a benefit of $0.6 million, or 
      $0.02 per diluted share, in the first quarter 2008.
    
    
      Bentley’s specialty generics segment’s 
      revenue for the first quarter 2008 increased 25% (9% in constant 
      currency) to $36.6 million from $29.2 million in the first quarter 2007. 
      Specialty generics revenue outside of Spain as a percentage of total 
      generics revenue increased to 32% for the first quarter 2008 from 26% 
      reported in the first quarter 2007. Operating expenses of this segment 
      increased 52% to $11.5 million from $7.5 million for the first quarter 
      2007 and were significantly increased by the inclusion of $2.0 million 
      in strategic consulting expenses in connection with the Company’s 
      plan to sell its specialty generics business. Sales and marketing cost 
      increases were consistent with rising revenues and included normal 
      increases in related compensation. General and administrative expenses 
      included normal compensation and benefit increases. Fluctuations in 
      foreign currency exchange rates increased operating expenses by $1.3 
      million. Net income reported for specialty generics, including the $2.0 
      million of strategic consulting expenses, was $3.2 million for the first 
      quarter 2008 compared to $3.8 million in the comparable quarter of 2007. 
      Fluctuations in foreign currency provided a benefit of $0.6 million, or 
      $0.02 per diluted share, in the first quarter 2008.
    
    
      Drug delivery revenues in the first quarter 2008 increased by 60%, or 
      $1.3 million, to $3.5 million compared to the first quarter 2007 due to 
      royalties on increased sales of Testim®. 
      Operating expenses increased $1.9 million from the first quarter 2007, 
      primarily as a result of $1.9 million in strategic consulting expenses 
      in connection with the planned spin-off of the drug delivery business. 
      As a result, net loss reported for the first quarter 2008 attributed to 
      the drug delivery business increased $0.6 million to $2.1 million from 
      $1.5 million in the comparable quarter of 2007.
    
    
      Cash, cash equivalents and marketable securities were $34.4 million at 
      March 31, 2008 compared to $34.7 million at December 31, 2007. During 
      the first quarter 2008 the Company invested $1.6 million in fixed asset 
      additions and $0.7 million in drug licenses. This compares to additions 
      of $2.0 million in fixed assets and $0.5 million in drug licenses during 
      the first quarter 2007.
    
    
      Management Comments
    
    
      “We continue to be pleased with the 
      performance of our generics business given the reimbursement environment 
      and resulting price constraints in Spain,” 
      said Bentley President John Sedor. “As 
      discussed in previous quarters, we have continued to expand beyond Spain 
      in order to capitalize on growing demand for generic pharmaceuticals in 
      other European markets. Generics revenues outside of Spain increased 55% 
      compared to the first quarter of 2007 and represented the major factor 
      contributing to the generics revenue growth in the quarter. We are also 
      pleased with the growth in Testim® royalties 
      which increased to $3.3 million in the first quarter of 2008, a $1.1 
      million increase over the first quarter of 2007.”
    
    
      Spin-off and Merger Transactions
    
    
      “As previously disclosed, we have entered 
      into a definitive agreement for Bentley and its specialty generics 
      business to be acquired by Teva Pharmaceuticals,” 
      said Sedor. “The acquisition will take place 
      following the spin-off of our drug delivery business as a new company, 
      CPEX Pharmaceuticals, Inc., which expects to file a second amendment to 
      its Form 10 this week. Completion of the spin-off is subject to various 
      conditions, including, but not limited to, the CPEX Form 10 being 
      declared effective by the Securities and Exchange Commission, approval 
      of the spin-off by Bentley’s Board of 
      Directors, and receipt of an opinion to the effect that Bentley and CPEX 
      each will be solvent and adequately capitalized immediately after the 
      distribution, and Bentley has sufficient surplus under Delaware law to 
      declare the dividend of CPEX common stock to Bentley shareholders. 
      Completion of the merger is also subject to a number of conditions, 
      including, but not limited to, completion of the spin-off of CPEX, 
      shareholder approval of the merger and completion of European antitrust 
      review. Although subject to various conditions, we expect the spin-off 
      and merger transactions to be completed by the third quarter of 2008. 
      Additional information regarding the spin-off can be found in the most 
      current CPEX Form 10 which is available on the SEC website, and 
      additional information regarding the proposed merger can be found in 
      Bentley’s preliminary proxy statement also 
      located on the SEC website. In addition, shareholders should review 
      updated versions of these documents as they become available.”
    
    
      Bentley’s results by operating segment for 
      the first quarters of 2008 and 2007 were as follows:
    
    
      For the three month periods ended March 31:
    
    
      
        
          
            (in thousands)
          
        
        
           
        
        
          2008
        
        
           
        
        
          2007
        
      
      
        
        
        
        
        
          Specialty Generics
        
        
           
        
        
          Drug Delivery
        
        
           
        
        
          Consolidated
        
        
        
        
          Specialty Generics
        
        
           
        
        
          Drug Delivery
        
        
           
        
        
          Consolidated
        
      
      
        
          Revenues
        
        
        
        
          $
        
        
          36,563
        
        
        
        
           
        
        
          $
        
        
          3,450
        
        
        
        
           
        
        
          $
        
        
          40,013
        
        
        
        
          $
        
        
          29,228
        
        
           
        
        
          $
        
        
          2,163
        
        
        
        
           
        
        
          $
        
        
          31,391
        
      
      
        
          Cost of net product sales
        
        
        
        
           
        
        
          19,947
        
        
           
        
        
        
        
           
        
        
          -
        
        
           
        
        
        
        
           
        
        
          19,947
        
        
        
        
           
        
        
          15,897
        
        
        
        
           
        
        
          -
        
        
           
        
        
        
        
           
        
        
          15,897
        
      
      
        
          Gross profit
        
        
        
        
        
        
          16,616
        
        
        
        
        
        
        
        
          3,450
        
        
        
        
        
        
        
        
          20,066
        
        
        
        
        
        
          13,331
        
        
        
        
        
        
          2,163
        
        
        
        
        
        
        
        
          15,494
        
      
      
        
          Operating expenses
        
        
        
        
           
        
        
          11,455
        
        
           
        
        
        
        
           
        
        
          5,685
        
        
           
        
        
        
        
           
        
        
          17,140
        
        
        
        
           
        
        
          7,514
        
        
        
        
           
        
        
          3,760
        
        
           
        
        
        
        
           
        
        
          11,274
        
      
      
        
          Income (loss) from operations
        
        
        
        
        
        
          5,161
        
        
        
        
        
        
        
        
          (2,235
        
        
          )
        
        
        
        
        
        
          2,926
        
        
        
        
        
        
          5,817
        
        
        
        
        
        
          (1,597
        
        
          )
        
        
        
        
        
        
          4,220
        
      
      
        
          Other (expenses) income, net
        
        
        
        
           
        
        
          (65
        
        
          )
        
        
        
        
           
        
        
          145
        
        
           
        
        
        
        
           
        
        
          80
        
        
        
        
           
        
        
          112
        
        
        
        
           
        
        
          109
        
        
           
        
        
        
        
           
        
        
          221
        
      
      
        
          Income (loss) before income taxes
        
        
        
        
        
        
          5,096
        
        
        
        
        
        
        
        
          (2,090
        
        
          )
        
        
        
        
        
        
          3,006
        
        
        
        
        
        
          5,929
        
        
        
        
        
        
          (1,488
        
        
          )
        
        
        
        
        
        
          4,441
        
      
      
        
          Provision for income taxes
        
        
        
        
           
        
        
          1,942
        
        
           
        
        
        
        
           
        
        
          -
        
        
           
        
        
        
        
           
        
        
          1,942
        
        
        
        
           
        
        
          2,081
        
        
        
        
           
        
        
          -
        
        
           
        
        
        
        
           
        
        
          2,081
        
      
      
        
          Net income (loss)
        
        
        
        
          $
        
        
          3,154
        
        
           
        
        
        
        
          $
        
        
          (2,090
        
        
          )
        
        
        
        
          $
        
        
          1,064
        
        
        
        
          $
        
        
          3,848
        
        
        
        
          $
        
        
          (1,488
        
        
          )
        
        
        
        
          $
        
        
          2,360
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          EBITDA
        
        
        
        
          $
        
        
          6,832
        
        
           
        
        
        
        
          $
        
        
          (2,063
        
        
          )
        
        
        
        
          $
        
        
          4,769
        
        
        
        
          $
        
        
          7,262
        
        
        
        
          $
        
        
          (1,405
        
        
          )
        
        
        
        
          $
        
        
          5,857
        
      
    
    
      Significant components of Bentley’s revenues 
      for the first quarters of 2008 and 2007 are summarized below:
    
    
      For the three months ended March 31, 2008:
    
    
      
        
          (in thousands)
        
        
           
        
        
          
            Revenues Within Spain
          
        
        
           
        
        
        
      
      
        
        
        
        
        
          
            BrandedGenerics
          
        
        
           
        
        
          
            Generics
          
        
        
           
        
        
          
            Other
          
        
        
        
        
          
            RevenuesOutside ofSpain
          
        
        
           
        
        
          
            Total
          
        
        
           
        
        
          
            % of TotalRevenues
          
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
      
      
        
          Product Line
        
        
        
        
           
        
        
           
        
        
           
        
        
           
        
        
        
      
      
        
          Omeprazole
        
        
        
        
          $
        
        
          499
        
        
        
        
          $
        
        
          5,331
        
        
        
        
          $
        
        
          –
        
        
        
        
          $
        
        
          –
        
        
        
        
          $
        
        
          5,830
        
        
        
        
           
        
        
          15%
        
      
      
        
          Simvastatin
        
        
        
        
        
        
          290
        
        
        
        
        
        
          1,506
        
        
        
        
        
        
          –
        
        
        
        
        
        
          –
        
        
        
        
        
        
          1,796
        
        
        
        
        
        
          4%
        
      
      
        
          Enalapril
        
        
        
        
        
        
          1,381
        
        
        
        
        
        
          373
        
        
        
        
        
        
          –
        
        
        
        
        
        
          –
        
        
        
        
        
        
          1,754
        
        
        
        
        
        
          4%
        
      
      
        
          Lansoprazole
        
        
        
        
        
        
          1,002
        
        
        
        
        
        
          400
        
        
        
        
        
        
          –
        
        
        
        
        
        
          –
        
        
        
        
        
        
          1,402
        
        
        
        
        
        
          4%
        
      
      
        
          Paroxetine
        
        
        
        
        
        
          464
        
        
        
        
        
        
          816
        
        
        
        
        
        
          –
        
        
        
        
        
        
          –
        
        
        
        
        
        
          1,280
        
        
        
        
        
        
          3%
        
      
      
        
          All other products
        
        
        
        
        
        
          3,268
        
        
        
        
        
        
          3,889
        
        
        
        
        
        
          310
        
        
        
        
        
        
          968
        
        
        
        
        
        
          8,435
        
        
        
        
        
        
          21%
        
      
      
        
          Sales to licensees and others
        
        
        
        
        
        
          –
        
        
        
        
        
        
          –
        
        
        
        
        
        
          5,241
        
        
        
        
        
        
          10,626
        
        
        
        
        
        
          15,867
        
        
        
        
        
        
          40%
        
      
      
        
          Licensing and collaborations
        
        
        
        
           
        
        
          –
        
        
           
        
        
           
        
        
          –
        
        
           
        
        
           
        
        
          199
        
        
           
        
        
           
        
        
          3,450
        
        
           
        
        
           
        
        
          3,649
        
        
        
        
           
        
        
          9%
        
      
      
        
          Total Revenues
        
        
        
        
          $
        
        
          6,904
        
        
           
        
        
          $
        
        
          12,315
        
        
           
        
        
          $
        
        
          5,750
        
        
           
        
        
          $
        
        
          15,044
        
        
           
        
        
          $
        
        
          40,013
        
        
        
        
           
        
        
          100%
        
      
      
        
          % of Q1 2008 revenues
        
        
        
        
        
        
          17%
        
        
        
        
        
        
          31%
        
        
        
        
        
        
          14%
        
        
        
        
        
        
          38%
        
        
        
        
        
        
          100%
        
        
        
        
        
        
        
      
    
    
      For the three months ended March 31, 2007:
    
    
      
        
          (in thousands)
        
        
           
        
        
          Revenues Within Spain
        
        
           
        
        
        
      
      
        
        
        
        
        
          
            BrandedGenerics
          
        
        
           
        
        
          Generics
        
        
           
        
        
          Other
        
        
        
        
          
            RevenuesOutsideof 
            Spain
          
        
        
           
        
        
          Total
        
        
           
        
        
          
            % of TotalRevenues
          
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
      
      
        
          Product Line
        
        
        
        
           
        
        
           
        
        
           
        
        
           
        
        
        
      
      
        
          Omeprazole
        
        
        
        
          $
        
        
          551
        
        
        
        
          $
        
        
          3,870
        
        
        
        
          $
        
        
          –
        
        
        
        
          $
        
        
          –
        
        
        
        
          $
        
        
          4,421
        
        
        
        
          14%
        
      
      
        
          Simvastatin
        
        
        
        
        
        
          366
        
        
        
        
        
        
          1,339
        
        
        
        
        
        
          –
        
        
        
        
        
        
          –
        
        
        
        
        
        
          1,705
        
        
        
        
          6%
        
      
      
        
          Enalapril
        
        
        
        
        
        
          1,314
        
        
        
        
        
        
          391
        
        
        
        
        
        
          –
        
        
        
        
        
        
          –
        
        
        
        
        
        
          1,705
        
        
        
        
          6%
        
      
      
        
          Lansoprazole
        
        
        
        
        
        
          856
        
        
        
        
        
        
          314
        
        
        
        
        
        
          –
        
        
        
        
        
        
          –
        
        
        
        
        
        
          1,170
        
        
        
        
          4%
        
      
      
        
          Paroxetine
        
        
        
        
        
        
          449
        
        
        
        
        
        
          897
        
        
        
        
        
        
          –
        
        
        
        
        
        
          –
        
        
        
        
        
        
          1,346
        
        
        
        
          4%
        
      
      
        
          All other products
        
        
        
        
        
        
          3,460
        
        
        
        
        
        
          3,868
        
        
        
        
        
        
          275
        
        
        
        
        
        
          957
        
        
        
        
        
        
          8,560
        
        
        
        
          
            27%
          
        
      
      
        
          Sales to licensees and others
        
        
        
        
        
        
          –
        
        
        
        
        
        
          –
        
        
        
        
        
        
          3,670
        
        
        
        
        
        
          6,537
        
        
        
        
        
        
          10,207
        
        
        
        
          32%
        
      
      
        
          Licensing and collaborations
        
        
        
        
           
        
        
          –
        
        
           
        
        
           
        
        
          –
        
        
           
        
        
           
        
        
          114
        
        
           
        
        
           
        
        
          2,163
        
        
           
        
        
           
        
        
          2,277
        
        
        
        
          7%
        
      
      
        
          Total Revenues
        
        
        
        
          $
        
        
          6,996
        
        
           
        
        
          $
        
        
          10,679
        
        
           
        
        
          $
        
        
          4,059
        
        
           
        
        
          $
        
        
          9,657
        
        
           
        
        
          $
        
        
          31,391
        
        
        
        
          100%
        
      
      
        
          % of Q1 2007 revenues
        
        
        
        
        
        
          22%
        
        
        
        
        
        
          34%
        
        
        
        
        
        
          13%
        
        
        
        
        
        
          31%
        
        
        
        
        
        
          100%
        
        
        
        
        
      
    
    
      Bentley uses both GAAP and certain non-GAAP measures to assess 
      performance. The Company’s management 
      believes the non-GAAP measure of EBITDA may also provide useful 
      supplemental information to investors in order that they may evaluate 
      Bentley’s financial performance using the 
      same measures as management. The Company’s 
      management believes that with this supplemental information investors 
      are afforded greater transparency in assessing the Company’s 
      financial performance. This non-GAAP financial measure should not be 
      considered as a substitute for, nor superior to, measures of financial 
      performance prepared in accordance with GAAP.
    
    
      Set forth below is a reconciliation of EBITDA to net income, the most 
      directly comparable financial measure calculated and presented in 
      accordance with GAAP.
    
    
      
        
          (in thousands)
        
        
           
        
        
          For the three months ended March 31,
        
      
      
        
        
        
        
        
          2008
        
        
           
        
        
          2007
        
        
           
        
      
      
        
        
        
        
        
          Specialty Generics
        
        
           
        
        
          Drug Delivery
        
        
           
        
        
          Consolidated
        
        
        
        
          Specialty Generics
        
        
           
        
        
          Drug Delivery
        
        
           
        
        
          Consolidated
        
      
      
        
          Net income (loss)
        
        
        
        
          $
        
        
          3,154
        
        
           
        
        
          $
        
        
          (2,090
        
        
          )
        
        
           
        
        
          $
        
        
          1,064
        
        
        
        
          $
        
        
          3,848
        
        
        
        
           
        
        
          $
        
        
          (1,488
        
        
          )
        
        
           
        
        
          $
        
        
          2,360
        
        
        
      
      
        
          Provision for income taxes
        
        
        
        
        
        
          1,942
        
        
        
        
        
        
          -
        
        
        
        
        
        
        
        
          1,942
        
        
        
        
        
        
          2,081
        
        
        
        
        
        
        
        
          -
        
        
        
        
        
        
        
        
          2,081
        
        
        
      
      
        
          Interest expense (income)
        
        
        
        
        
        
          164
        
        
        
        
        
        
          (145
        
        
          )
        
        
        
        
        
        
          19
        
        
        
        
        
        
          (20
        
        
          )
        
        
        
        
        
        
          (112
        
        
          )
        
        
        
        
        
        
          (132
        
        
          )
        
      
      
        
          Depreciation & amortization
        
        
        
        
           
        
        
          1,572
        
        
        
        
           
        
        
          172
        
        
           
        
        
        
        
           
        
        
          1,744
        
        
        
        
           
        
        
          1,353
        
        
           
        
        
        
        
           
        
        
          195
        
        
           
        
        
        
        
           
        
        
          1,548
        
        
           
        
      
      
        
          EBITDA
        
        
        
        
          $
        
        
          6,832
        
        
        
        
          $
        
        
          (2,063
        
        
          )
        
        
        
        
          $
        
        
          4,769
        
        
        
        
          $
        
        
          7,262
        
        
           
        
        
        
        
          $
        
        
          (1,405
        
        
          )
        
        
        
        
          $
        
        
          5,857
        
        
           
        
      
    
    
      EBITDA is calculated as earnings before interest, income taxes, 
      depreciation and amortization. The Company uses EBITDA as a supplemental 
      financial measure of its operational performance. Management believes 
      EBITDA to be an important measure as it excludes the effects of items 
      which primarily reflect the impact of long-term investment decisions, 
      rather than the performance of the Company’s 
      day-to-day operations. The Company believes that this measurement is 
      useful to measure a company’s ability to 
      service debt and to meet other payment obligations or as a valuation 
      measurement. As compared to net income according to GAAP, this measure 
      is more limited in scope because it does not reflect the periodic costs 
      of certain capitalized tangible and intangible assets used in generating 
      revenues in the company’s business. 
      Management evaluates those items through other financial measures such 
      as capital expenditures and cash flow provided by operating activities.
    
    
      Management will host a conference call at 10:00 a.m. ET on May 8, 2008 
      to discuss the first quarter 2008 results and provide an update on the 
      ongoing process of separating its drug delivery business from its 
      generic pharmaceuticals business. To participate on the live call, 
      please dial [phone] from the U.S. and Canada or, for 
      international callers, please dial [phone] (access code 
      45706774), approximately 10 minutes prior to the scheduled start time. A 
      telephone replay will be available for 30 days by dialing [phone] 
      from the U.S. and Canada or [phone] for international callers 
      (please reference reservation number 45706774). The conference call will 
      also be webcast live on the Internet and may be accessed via Bentley’s 
      website, www.bentleypharm.com. 
      Please go to the Company’s website 
      approximately 10 minutes prior to the scheduled start time to register. 
      A replay of the conference will also be available on Bentley’s 
      website until the earlier of (i) the closing of the merger transaction 
      or (ii) 90 days.
    
    
      Bentley Pharmaceuticals, Inc. is a specialty pharmaceutical company 
      focused on advanced drug delivery technologies and generic 
      pharmaceutical products. Bentley’s 
      proprietary drug delivery technologies enhance the absorption of 
      pharmaceutical compounds across various membranes. Bentley manufactures 
      and markets a growing portfolio of generic and branded generic 
      pharmaceuticals in Europe for the treatment of cardiovascular, 
      gastrointestinal, infectious and central nervous system diseases through 
      its subsidiaries -- Laboratorios Belmac, Laboratorios Davur, 
      Laboratorios Rimafar and Bentley Pharmaceuticals Ireland. Bentley also 
      manufactures and markets active pharmaceutical ingredients through its 
      subsidiary, Bentley API.
    
    
      Important Information
    
    
      In connection with the merger with Teva Pharmaceuticals (“Teva”), 
      Bentley filed a preliminary proxy statement for its stockholders with 
      the Securities and Exchange Commission (the “SEC”). 
      The proxy statement contains information about Bentley, the merger with 
      Teva and related matters. STOCKHOLDERS ARE URGED TO READ THE DEFINITIVE 
      PROXY STATEMENT CAREFULLY WHEN IT IS AVAILABLE, AS IT WILL CONTAIN 
      IMPORTANT INFORMATION THAT STOCKHOLDERS SHOULD CONSIDER BEFORE MAKING A 
      DECISION ABOUT THE TRANSACTION. In addition to receiving the proxy 
      statement from Bentley by mail, stockholders will be able to obtain the 
      proxy statement, as well as other filings containing information about 
      Bentley, without charge, from the SEC’s 
      website at www.sec.gov or, without 
      charge, from Bentley’s website at www.bentleypharm.com 
      or by directing such request to Bentley Pharmaceuticals, Inc., Bentley 
      Park, 2 Holland Way, Exeter, NH 03833, Attention: Richard Lindsay, Chief 
      Financial Officer.
    
    
      Bentley and its directors and executive officers and other persons may 
      be deemed to be participants in the solicitation of proxies in respect 
      of the merger with Teva. Information regarding Bentley’s 
      directors and executive officers is available in Bentley’s 
      2007 Annual Report on Form 10-K and Amendment No. 1 to the 2007 Annual 
      Report on Form 10-K/A, which were filed with the SEC on March 17, 2008 
      and April 29, 2008, respectively. Other information regarding the 
      participants in the proxy solicitation and a description of their direct 
      and indirect interests, by security holdings or otherwise, will be 
      contained in the proxy statement and other relevant materials to be 
      filed with the SEC when they become available.
    
    
      Additional information regarding Bentley Pharmaceuticals may be 
      obtained, free of charge, through the SEC website and Bentley’s 
      website at www.bentleypharm.com.
    
    
      Safe Harbor Statement under the Private Securities Litigation Reform Act 
      of 1995: This press release contains forward looking statements, 
      including without limitation statements regarding Bentley’s 
      plans for spinning off its drug delivery from its specialty generics 
      businesses, and its plans to sell Bentley following such spin-off 
      pursuant to its agreement and plan of merger with Teva, growth prospects 
      for the Company’s drug delivery and 
      specialty generics businesses, and Bentley’s 
      potential market expansion beyond Spain in its specialty generics 
      business. These forward-looking statements are subject to a number of 
      risks and uncertainties that could cause actual results to differ 
      materially from future results expressed or implied by such statements. 
      Factors that may cause such differences include, but are not limited to, 
      risks associated with the following: changes in third-party 
      reimbursement and government mandates that impact pharmaceutical 
      pricing, uncertainties in the clinical development of Nasulin and in the 
      development and commercialization of Bentley’s 
      other proprietary products and formulations, competition from other 
      manufacturers of generic and proprietary pharmaceuticals, intellectual 
      property litigation, the efficacy and safety of Bentley’s 
      products, the unpredictability of patent protection, international 
      operations, and other uncertainties detailed under “Risk 
      Factors” in Bentley’s 
      most recent Annual Report on Form 10-K and its other periodic reports 
      filed with the Securities and Exchange Commission. Bentley cautions 
      investors not to place undue reliance on the forward-looking statements 
      contained in this release. These statements speak only as of the date of 
      this document, and Bentley undertakes no obligation to update or revise 
      the statements, except as may be required by law.
    
    
      
        
          
            Bentley Pharmaceuticals, Inc. and Subsidiaries
          
          
            Consolidated Income Statements 
          
          
            (Unaudited)
          
        
      
      
        
        
        
           
        
        
        
        
        
      
      
        
          (in thousands, except per share data)
        
        
        
        
          
            For the Three Months EndedMarch 31,
          
        
        
          
             
          
        
      
      
        
        
        
          2008
        
        
        
        
          2007
        
        
        
      
      
        
          Revenues:
        
        
        
        
        
        
        
        
        
        
        
      
      
        
          Net product sales
        
        
        
        
          $
        
        
          36,364
        
        
        
        
          $
        
        
          29,114
        
        
        
      
      
        
          Licensing and collaboration revenues
        
        
        
        
          3,649
        
        
        
        
          2,277
        
        
        
      
      
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Total revenues
        
        
        
        
          40,013
        
        
        
        
          31,391
        
        
        
      
      
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Cost of net product sales
        
        
        
        
          19,947
        
        
        
        
          15,897
        
        
        
      
      
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Gross profit
        
        
        
        
          20,066
        
        
        
        
          15,494
        
        
        
      
      
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Operating expenses:
        
        
        
        
        
        
        
        
        
        
        
      
      
        
          Selling and marketing
        
        
        
        
          5,763
        
        
        
        
          4,445
        
        
        
      
      
        
          General and administrative
        
        
        
        
          4,213
        
        
        
        
          3,577
        
        
        
      
      
        
          Research and development
        
        
        
        
          2,804
        
        
        
        
          2,675
        
        
        
      
      
        
          Separation costs
        
        
        
        
          3,834
        
        
        
        
          69
        
        
        
      
      
        
          Depreciation and amortization
        
        
        
        
          526
        
        
        
        
          508
        
        
        
      
      
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Total operating expenses
        
        
        
        
          17,140
        
        
        
        
          11,274
        
        
        
      
      
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Income from operations
        
        
        
        
          2,926
        
        
        
        
          4,220
        
        
        
      
      
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Other income (expenses):
        
        
        
        
        
        
        
        
        
        
        
      
      
        
          Interest income
        
        
        
        
          260
        
        
        
        
          182
        
        
        
      
      
        
          Interest expense
        
        
        
        
          (279
        
        
          )
        
        
          (50
        
        
          )
        
      
      
        
          Other, net
        
        
        
        
          99
        
        
        
        
          89
        
        
        
      
      
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Income before income taxes
        
        
        
        
          3,006
        
        
        
        
          4,441
        
        
        
      
      
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Provision for income taxes
        
        
        
        
          1,942
        
        
        
        
          2,081
        
        
        
      
      
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Net income
        
        
        
        
          $
        
        
          1,064
        
        
        
        
          $
        
        
          2,360
        
        
        
      
      
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Net income per common share:
        
        
        
        
        
        
        
        
        
        
        
      
      
        
          Basic
        
        
        
        
          $
        
        
          0.05
        
        
        
        
          $
        
        
          0.11
        
        
        
      
      
        
          Diluted
        
        
        
        
          $
        
        
          0.05
        
        
        
        
          $
        
        
          0.10
        
        
        
      
      
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Weighted average common shares outstanding:
        
        
        
        
        
        
        
        
        
        
        
      
      
        
          Basic
        
        
        
        
          22,469
        
        
        
        
          22,293
        
        
        
      
      
        
          Diluted
        
        
        
        
          23,588
        
        
        
        
          22,534
        
        
        
      
    
    
      
        
          
            Bentley Pharmaceuticals, Inc. and Subsidiaries
          
          
            Consolidated Balance Sheets
          
          
            (Unaudited)
          
        
      
      
        
           
        
      
      
        
          (in thousands, except per share data)
        
        
           
        
        
          March 31,

          
            2008
          
        
        
        
        
          December 31,

          
            2007
          
        
        
        
      
      
        
          
            Assets
          
        
        
        
        
        
        
        
        
        
        
        
      
      
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Current assets:
        
        
        
        
        
        
        
        
        
        
        
      
      
        
          Cash and cash equivalents
        
        
        
        
          $
        
        
          33,279
        
        
        
        
          $
        
        
          33,706
        
        
        
      
      
        
          Marketable securities
        
        
        
        
          1,084
        
        
        
        
          1,010
        
        
        
      
      
        
          Receivables, net
        
        
        
        
          46,137
        
        
        
        
          39,324
        
        
        
      
      
        
          Inventories
        
        
        
        
          19,536
        
        
        
        
          17,658
        
        
        
      
      
        
          Deferred taxes
        
        
        
        
          1,038
        
        
        
        
          1,067
        
        
        
      
      
        
          Prepaid expenses and other
        
        
        
        
          1,827
        
        
        
        
          1,915
        
        
        
      
      
        
        
        
        
        
          
             
          
        
        
        
        
        
        
        
      
      
        
          Total current assets
        
        
        
        
          102,901
        
        
        
        
          94,680
        
        
        
      
      
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Non-current assets:
        
        
        
        
        
        
        
        
        
        
        
      
      
        
          Fixed assets, net
        
        
        
        
          63,620
        
        
        
        
          59,191
        
        
        
      
      
        
          Drug licenses and related costs, net
        
        
        
        
          17,613
        
        
        
        
          16,624
        
        
        
      
      
        
          Restricted cash
        
        
        
        
          1,000
        
        
        
        
          1,000
        
        
        
      
      
        
          Deferred taxes
        
        
        
        
          348
        
        
        
        
          676
        
        
        
      
      
        
          Other
        
        
        
        
          1,016
        
        
        
        
          925
        
        
        
      
      
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Total non-current assets
        
        
        
        
          83,597
        
        
        
        
          78,416
        
        
        
      
      
        
          Total assets
        
        
        
        
          $
        
        
          186,498
        
        
        
        
          $
        
        
          173,096
        
        
        
      
      
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          
            Liabilities and Stockholders’ 
            Equity
          
        
        
        
        
        
        
        
        
        
        
        
      
      
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Current liabilities:
        
        
        
        
        
        
        
        
        
        
        
      
      
        
          Accounts payable
        
        
        
        
          $
        
        
          18,664
        
        
        
        
          $
        
        
          19,413
        
        
        
      
      
        
          Accrued expenses
        
        
        
        
          13,643
        
        
        
        
          10,623
        
        
        
      
      
        
          Short-term borrowings
        
        
        
        
          186
        
        
        
        
          116
        
        
        
      
      
        
          Current portion of long-term debt
        
        
        
        
          1,304
        
        
        
        
          608
        
        
        
      
      
        
          Deferred income
        
        
        
        
          1,296
        
        
        
        
          1,186
        
        
        
      
      
        
          Other current liabilities
        
        
        
        
          1,206
        
        
        
        
          1,137
        
        
        
      
      
        
        
        
        
        
        
        
          
             
          
        
        
        
        
        
      
      
        
          Total current liabilities
        
        
        
        
          36,299
        
        
        
        
          33,083
        
        
        
      
      
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Non-current liabilities:
        
        
        
        
        
        
        
        
        
        
        
      
      
        
          Long-term debt
        
        
        
        
          16,076
        
        
        
        
          15,595
        
        
        
      
      
        
          Deferred income
        
        
        
        
          6,620
        
        
        
        
          5,976
        
        
        
      
      
        
          Other
        
        
        
        
          2,645
        
        
        
        
          2,470
        
        
        
      
      
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Total non-current liabilities
        
        
        
        
          25,341
        
        
        
        
          24,041
        
        
        
      
      
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Commitments and contingencies
        
        
        
        
        
        
        
        
        
        
        
      
      
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Stockholders’ equity:
        
        
        
        
        
        
        
        
        
        
        
      
      
        
          
            Preferred stock, $1.00 par value, authorized 2,000 shares, issued 
            and outstanding, none
          
        
        
        
        
          —
        
        
        
        
          —
        
        
        
      
      
        
          
            Common stock, $0.02 par value, authorized 100,000 shares, issued 
            and outstanding, 22,450 and 22,376 shares
          
        
        
        
        
          448
        
        
        
        
          447
        
        
        
      
      
        
          Additional paid-in capital
        
        
        
        
          144,533
        
        
        
        
          143,269
        
        
        
      
      
        
          Accumulated deficit
        
        
        
        
          (45,672
        
        
          )
        
        
          (46,736
        
        
          )
        
      
      
        
          Accumulated other comprehensive income
        
        
        
        
          25,549
        
        
        
        
          18,992
        
        
        
      
      
        
        
        
        
        
          
             
          
        
        
        
        
        
        
        
      
      
        
          Total stockholders’ equity
        
        
        
        
          124,858
        
        
        
        
          115,972
        
        
        
      
      
        
          Total liabilities and stockholders’ 
          equity
        
        
        
        
          $
        
        
          186,498
        
        
        
        
          $
        
        
          173,096