CLOSURE Medical Reports First Quarter Revenues of $10.5 Million, Up 28 Percent From Prior Year Period
15 April 2004 - 10:35PM
PR Newswire (US)
CLOSURE Medical Reports First Quarter Revenues of $10.5 Million, Up
28 Percent From Prior Year Period New Product Launches Contribute
to Growth RALEIGH, N.C., April 15 /PRNewswire-FirstCall/ -- CLOSURE
Medical Corporation , a global leader in biomaterial-based medical
devices, today announced results for the first quarter ended March
31, 2004. First-quarter 2004 revenues were $10.5 million compared
to $8.2 million during the same period of 2003, representing an
increase of approximately 28 percent. As previously announced,
first-quarter 2004 revenues include a one-time reduction of
$490,000 for incentive payments to be made to ETHICON, INC., a
Johnson & Johnson Company and CLOSURE's marketing partner for
DERMABOND adhesive. Net income for the first quarter of 2004 was
$2.5 million, or $0.16 per diluted share, compared to $1.9 million,
or $0.14 per diluted share in the prior year period. Gross margin
was 75 percent for the first quarter of 2004, compared to 77
percent in the 2003 period. The decrease in gross margin percentage
during the 2004 period is attributable to the lower-margin liquid
bandage product representing a greater share of total revenues as
well as increased overhead costs related to the expanded
manufacturing facility. The Company's operating margin increased to
37 percent, up from 36 percent in the corresponding 2003 period.
DERMABOND adhesive experienced revenue growth as a result of the
continuing penetration and acceptance of High-Viscosity DERMABOND
and the introduction of the ProPen and ProPen XL in January. The
ProPen is a new medical device that provides physicians with
greater control and ease of use when applying DERMABOND adhesive.
The BAND-AID(R) Brand Liquid Bandage contributed the balance of the
top- line growth primarily through expanded distribution in markets
outside the U.S. The Company's marketing partner, Johnson &
Johnson Consumer Products Company, introduced the liquid bandage in
Australia and New Zealand during the first quarter and continued
its product launch in Europe, where it is marketed under the
Compeed(R) brand name, a recognized leader in the European bandage
market. In addition to its international product launch efforts,
J&J has recently initiated its 2004 U.S. promotional campaign
which will continue through the upcoming bandage season. Also
contributing to the revenue growth during the quarter was the
January introduction in the U.S. of a new liquid bandage line
extension for skin cracks. Daniel A. Pelak, President and CEO,
commented, "Given the results from the first quarter, we feel that
2004 is off to a good start and we are on target to meet our
financial goals and strategic initiatives for the year. The initial
results and feedback following the launch of the ProPen have been
very encouraging with better than expected end-user sales at the
end of the first quarter." Pelak continued, "While we continue to
support current revenue streams, much of our focus for the balance
of 2004 will be on the execution and completion of our vascular
sealant definitive clinical study. The U.S. Food and Drug
Administration gave us the go-ahead last month and we expect first
patient enrollment in the upcoming weeks." At March 31, 2004, the
Company had cash and investments of $35.2 million, a current ratio
of 10.8:1, and a quick ratio of 8.8:1. In addition, total assets
were $58.6 million and stockholders' equity was $52.8 million. The
Company had no outstanding debt and a $3.0 million line of credit.
Looking forward to the second quarter, the Company expects results
similar to those of the first quarter 2004. Revenues are expected
to be approximately $10.7 million, with diluted earnings per share
slightly lower than the first quarter at $0.13 to $0.15. The
sequential decrease in earnings per share is primarily due to the
planned increase in clinical trial expenses for the vascular
sealant, projected lower gross margins due to a heavier mix of the
lower margin liquid bandage product and in-house production
start-up costs for the new ProPen products. Given the current
results and trends the Company feels that the previously provided
full-year 2004 revenue and earnings guidance of $45.0 to $47.0
million and $0.65 to $0.70 per diluted share, respectively, is
still appropriate. 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 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 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. CLOSURE Medical
Corporation Statements of Operations (In thousands, except per
share data) THREE MONTHS ENDED MARCH 31, 2004 2003 Product sales
$10,204 $7,899 License and product development revenue 264 262
Total revenues 10,468 8,161 Cost of products sold 2,667 1,893 Gross
profit 7,801 6,268 Research, development and regulatory affairs
expenses 2,308 1,830 General and administrative expenses 1,662
1,527 Total operating expenses 3,970 3,357 Income from operations
3,831 2,911 Interest income, net 109 78 Income before income taxes
3,940 2,989 Provision for income taxes 1,410 1,070 Net income
$2,530 $1,919 Shares used in computation of net income per common
share: Basic 14,217 13,604 Diluted 16,042 13,751 Net income per
common share: Basic $0.18 $0.14 Diluted $0.16 $0.14 CLOSURE Medical
Corporation Balance Sheet Data (In thousands) March 31, December
31, 2004 2003 Cash, cash equivalents and investments $35,204
$33,427 Working capital $40,390 $30,974 Total assets $58,614
$53,768 Total debt obligations $-- $-- Total stockholders' equity
$52,754 $47,428 Total shares outstanding 14,247 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 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/
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