Revenue Growth and Operating Profitability Validate Business Model
MELVILLE, NY, Jan. 21 /PRNewswire/ -- V. I. Technologies, Inc.
(Nasdaq: VITX) today announced financial results for the fourth quarter and
the year ended January 1, 2000.
For the quarter, the Company reported a net loss of $28,950,000, or
$1.78 per share. This included special items as described below, most notably
the anticipated charge of $32,998,000 for the cost of acquired in-process R&D
associated with the Pentose merger. Excluding these special items, the
Company recorded:
-- Quarterly net income of $356,000, or $0.02 per share, which compares to
net income of $1,025,000, or $0.08 per share, in the fourth quarter of
fiscal 1998.
-- Quarterly revenues of $11,427,000, which represents 14% growth over
comparable revenues of $10,028,000 in the year-ago quarter.
For the year, the Company reported a net loss of $37,329,000, or $2.78 per
share, compared to a net loss of $6,400,000, or $0.61 per share, in 1998.
Excluding the effects of the special items in the two years, the Company
recorded:
-- Annual net income of $1,461,000, or $0.11 per share, in comparison to a
loss of $4,198,000, or $0.40 per share, in 1998.
-- Annual revenues of $42,423,000, which represents 26% growth over
comparable revenues of $33,756,000 in 1998.
The Company recorded three special items. All three represent important
steps in broadening the Company's product portfolio and establishing the viral
inactivation of blood products as a standard of care.
Pentose Merger Accounting
The Company completed its merger with Pentose on November 12, 1999. The
merger was accounted for as a purchase at a total cost of $38,802,000 as of
the merger date. A charge of $32,998,000 for the cost of acquired in-process
R&D was recorded in the fourth quarter. Prospectively, amortization of other
assets capitalized in the merger will be approximately $400,000 per year.
Mr. Barr commented, "The acquisition and subsequent integration of Pentose
has been an unqualified success. We are moving full speed ahead on
commercializing our red cell viral inactivation technology. Phase I clinical
trials for red cells are well underway and proceeding on schedule. With the
strong financial and development support of our corporate partner, Pall
Corporation (NYSE: PLL) -- as evidenced by Pall's recent $3 million milestone
investment in VITEX -- we have established the objective of being first-to-
market with a virally-inactivated red cell product."
Litigation Settlement
During the quarter, the Company successfully resolved a dispute with its
insurer, Vigilant Insurance Company, over a 1996 claim that resulted from a
malfunction in the Company's manufacturing equipment. This malfunction, which
was corrected shortly after the incident, resulted in the loss of some product
being manufactured under the Company's contract with Bayer Corporation. Under
the terms of the settlement, VITEX received $3.5 million in cash that was
recognized as a non-operating gain.
Mr. Barr commented, "We were pleased to reach a satisfactory resolution of
our dispute with Vigilant and are confident that manufacturing controls put in
place since 1996 minimize our exposure to similar events in the future. In
that context, the recent $65 million extension and expansion of Bayer's take-
or-pay contract with VITEX is evidence of their confidence in us."
Mr. Barr added, "The $3.5 million settlement also helped bring our year-
ending cash balance to a healthy $26.9 million. With our core businesses
generating positive operating cash flow, we are well positioned to fund our
ambitious R&D programs without being subject to the dilution and timing
vagaries of having to raise additional equity."
Red Cross Conversion Program/Universal Plasma
During the third quarter, the American National Red Cross (ANRC) announced
a one year plan to accelerate to a conversion from fresh frozen plasma to
VITEX's PLAS+(R)SD virally inactivated transfusion plasma. At that time,
VITEX developed and announced a one year incentive program -- which runs
through the end of September, 2000 -- that has specific goals for increases in
ANRC quarter-to-quarter shipments and additional incentives for progress
toward regional conversions. Based on encouraging sales results by the ANRC
during the Company's fourth quarter, and the projected trend of sales going
forward, VITEX has now estimated and recorded a charge against sales of
$4.5 million for the projected cost of the incentives, which will be reflected
as a restatement of the Company's third quarter results. The company will
soon file Form 10Q-A to reflect the charge. Accordingly, the previously
reported 1999 third quarter loss of $1,326,000 will be restated to a loss of
$5,826,000.
Mr. Barr noted, "We are pleased at the ANRC's continued progress with
PLAS+(R)SD in the marketplace. Based on preliminary sales results, the
fourth quarter was the ANRC's strongest shipment quarter since the product's
introduction. Looking forward, we agree with several industry observers who
are predicting that the FDA will mandate the adoption of leukoreduction
filters for all blood products. The combination of ANRC's market momentum and
the predicted increase in the price of competitive alternatives bodes well for
the future."
VITEX is a leading developer and manufacturer of a broad portfolio of
blood products that utilize its patented viral inactivation technologies
designed to ensure product safety. The technologies are tailored for all
blood component applications and other blood-derived products, including
plasma, plasma derivatives, red blood cells and platelets. The first of
VITEX's virally inactivated products, PLAS+(R)SD, is the only FDA-approved
method for viral inactivation of plasma.
For further information, please visit the VITEX web site at
http://www.vitechnologies.com .
Except for the historical information contained herein, the matters
discussed are forward-looking statements made pursuant to the safe harbor
provisions of the Private Securities Litigation Reform Act of 1995. These
statements involve risks and uncertainties, such as quarterly fluctuations in
operating results, the timely availability of new products, market acceptance
of the company's products, the impacts of competitive products and pricing,
government regulation of the company's products and other risks and
uncertainties set forth in the company's filings with the Securities and
Exchange Commission. These risks and uncertainties could cause actual results
to differ materially from any forward-looking statements made herein.
To receive additional information on V. I. Technologies, Inc., via fax, at
no charge, dial 1-800-PRO-INFO and enter code VITX.
V. I. Technologies, Inc.
Condensed Statements of Operations
(In thousands, except for per share data)
Quarter Ended Year Ended
Jan. 1, Jan. 2, Jan. 1, Jan. 2,
2000 1999 2000 1999
(unaudited) (unaudited) (audited) (audited)
Revenue $11,427 $10,028 $42,423 $33,756
Less: ANRC Incentive
Program -- -- (4,500) --
Net Revenue $11,427 $10,028 $37,923 $33,756
Costs and expenses:
Cost of goods sold 7,059 5,937 24,742 23,860
Research and
development, net 1,943 2,219 6,966 7,507
Selling, general and
administrative expenses 2,054 1,764 9,372 6,951
Operating expenses,
excluding special items 11,056 9,920 41,080 38,318
Income (loss) from
operations, excluding
special items $371 $108 ($3,157) ($4,562)
Interest income
(expense), net (15) 917 117 364
Net income (loss), excluding
special items $356 $1,025 ($3,040) ($4,198)
Special items
Credit related to settlement
of Vigilant (3,500) -- (3,500) --
Charges related to merger
- R&D restructuring (130) -- 2,208 --
- In Process R&D 32,998 -- 32,998 --
Charges related to recall
and R&D collaboration (62) -- 2,583 2,202
Net income (loss) ($28,950) $1,025 ($37,329) ($6,400)
Basic and diluted net
income (loss) per share ($1.78) $0.08 ($2.78) ($0.61)
Weighted average number
of shares 16,305 12,314 13,405 10,454
Net income (loss), excluding
special items $356 $1,025 $1,461 ($4,198)
Net income (loss) per share,
excluding special items $0.02 $0.08 $0.11 ($0.40)
Condensed Balance Sheet
(In thousands) (Audited)
January 1, January 2,
2000 1999
Cash and cash equivalents $26,886 $35,264
Trade receivables 4,596 3,967
Inventory 2,744 2,512
Other current assets 1,505 1,895
Property, plant & equipment, net 37,520 30,821
Other assets 4,892 766
Total assets $78,143 $75,225
Current liabilities $10,882 $6,575
Current portion, long-term debt 4,175 3,960
Long-term debt 7,701 11,055
Stockholders' equity 55,385 53,635
Total liabilities and stockholders' equity $78,143 $75,225
SOURCE V.I. Technologies, Inc.
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Related links:
http://www.vitechnologies.com
CONTACT:
John Barr, President and CEO of V.I.
Technologies, Inc., 516-752-7314, ext. 6110; or Alison Ziegler,
Brian Gill, or Deanne Eagle, all of The Financial Relations
Board, 212-661-8030, for V.I. Technologies, Inc.
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