Quarterly Highlights
-- Record revenue growth of 31% over comparable 2000 quarter
-- Net income of $684,000 and EPS of $0.05, also records
-- On target to meet year-end revenue and EPS projections of
approximately $19 million and $0.18, respectively
RALEIGH, N.C., Oct. 23 /PRNewswire/ -- CLOSURE Medical Corporation
(Nasdaq: CLSR), a medical tissue adhesive products company, today reported
record revenue and earnings for the third quarter and nine months ended
September 30, 2001. In addition, the Company updated financial forecasts for
the full year 2001 and fiscal 2002.
Revenues for the three months ended September 30, 2001 were $4,873,000, up
31% from $3,721,000 in the corresponding period of 2000, and up 11% from
$4,408,000 in the second quarter of 2001. Net income for the third quarter of
2001 was $684,000, or $0.05 per common share, compared to a net loss of
$87,000, or ($0.01) per common share, in the corresponding 2000 period. Net
income was $441,000, or $0.03 per common share, in the second quarter of 2001.
Revenues for the nine months ended September 30, 2001 grew to $13,198,000,
an increase of 35% from $9,771,000 in the corresponding period in 2000. For
the nine months ended September 30, 2001, net income was $1,394,000, or $0.10
per common share, compared to a net loss of $3,693,000, or ($0.28) per common
share, for the same period of 2000.
As of September 30, 2001, cash, cash equivalents and investments totaled
$10,454,000 compared to $11,711,000 at June 30, 2001 and $11,832,000 at
December 31, 2000. The lower cash and investments balance at September 30,
2001 was primarily related to the timing of shipments towards the latter part
of the quarter. All related accounts receivable will be collected within
normal terms.
Commenting on today's news, Robert V. Toni, President and Chief Executive
Officer of CLOSURE Medical, stated, "Through the first three quarters of 2001,
our business has steadily grown, primarily driven by increased acceptance of
Dermabond. This has resulted in impressive revenue and earnings growth. In
fact, our 2001 year-to-date revenues are almost equivalent to revenues for the
entire year of 2000 and earnings have grown at a rate of 50% or better for the
past two quarters."
2001 Forecast
Revenues for 2001 are expected to be approximately $19.0 million,
resulting in earnings per common share of approximately $0.18 for the full
year.
Robert V. Toni said, "Given our visibility for the remainder of the year,
particularly advanced Dermabond orders and initial shipments of Liquiderm(TM)
liquid adhesive bandage, we expect to have an excellent fourth quarter. This
would allow us to meet our full year financial expectations that we
communicated to the financial community at the beginning of this fiscal year."
2002 Expectations
The Company expects full year 2002 revenue growth of approximately 30% -
35% over 2001 and earnings per common share of $0.27 to $0.32. This
represents approximately 50% - 75% growth over projected 2001 full year
earnings. Additionally, gross margin percentages are expected to range from
68% - 70%.
Mr. Toni continued, "We believe the accomplishments of 2001 have
positioned CLOSURE for continued growth and another year of solid performance
in 2002. We will continue to benefit from the broad distribution channels of
our marketing partners, three of which signed new agreements over the last ten
months. Additionally, we continue to broaden our revenue base as evidenced by
the 2001 introduction of five new stock keeping units."
The Company plans significant investment in research and development of
approximately $7.5 to $8 million in 2002, representing a 30% - 40% increase
over 2001 spending and providing the foundation for revenue growth beyond
2002. This will include spending on clinical activities targeting several new
product indications as well as line extensions for existing products. Mr.
Toni added, "In support of our long-term strategy, a considerable portion of
our R&D commitment for 2002 will be dedicated to the preparation of our
internal adhesive clinical trial."
General and administrative expenses are expected to remain flat year-over-
year at approximately $5.5 to $6 million. For accounting purposes and
consistent with 2001, the Company expects to be subject to alternative minimum
taxes of 1% - 2% for 2002.
About CLOSURE Medical
CLOSURE Medical Corporation, headquartered in Raleigh, North Carolina,
develops, manufactures, and commercializes medical tissue adhesive products
based on its proprietary cyanoacrylate technology. CLOSURE's proprietary
technology has customized the physical and chemical properties of
cyanoacrylates to develop medical adhesive formulations to close and seal
topical skin wounds and incisions, as well as formulations to close or seal
internal wounds. In addition to its products discussed herein, CLOSURE is
also developing internal adhesives for wound closure and the possible
treatment of emphysema, as well as developing liquid occlusive dressings for
the treatment of a variety of partial thickness wounds, including pressure
ulcers and skin tears.
DERMABOND Topical Skin Adhesive is a topical tissue adhesive used to close
wounds from skin lacerations and incisions, minimally invasive surgery and
plastic surgery. DERMABOND adhesive can be used as a replacement for topical
sutures or staples and is marketed and distributed by Ethicon, Inc., a
division of Johnson & Johnson, the world leader in wound closure products.
LIQUIDERM(TM) adhesive is the first and only cyanoacrylate medical device
approved by the FDA for the over-the-counter ("OTC") adhesive bandage market.
LIQUIDERM(TM) adhesive is painted on the wound, sealing it from dirt and
germs, and creating a healing environment which allows natural healing to take
place quickly. As the wound heals, the adhesive sloughs off naturally.
CLOSURE recently signed a worldwide supply, distribution and development
rights agreement with Johnson & Johnson Consumer Products Company which
includes rights to its LIQUIDERM(TM) adhesive and its overall OTC wound care
platform, including distribution rights to all present and future OTC
products, except for SOOTHE-N-SEAL(TM) adhesive. Distribution of
LIQUIDERM(TM) adhesive by Johnson & Johnson Consumer Products Company is
expected to begin in early 2002.
SOOTHE-N-SEAL(TM) adhesive is indicated for the treatment of oral ulcers
and mouth sores. It forms a protective barrier that shields oral ulcers from
irritation due to eating and drinking while providing immediate and long-term
pain relief. SOOTHE-N-SEAL(TM) adhesive is in the early stages of the product
launch to the professional and consumer markets by Colgate Oral
Pharmaceuticals, Inc.
The NEXABAND(R) liquid adhesive line consists of two products used in
veterinary wound closure and wound care. The adhesives are used in cat declaw
procedures as well as spay and neuter procedures. In July 2001, the Company
entered into an agreement providing Abbott Laboratories with worldwide supply,
distribution and development rights to the NEXABAND(R) product line. In
accordance with the agreement, Abbott has been granted immediate worldwide
distribution rights of NEXABAND(R) adhesives excluding the United States and
Canada. Upon the expiration of the Company's prior distribution arrangement
in the second quarter of 2002, Abbott can begin the distribution of
NEXABAND(R) products in the United States and Canada.
DERMABOND adhesive is a registered trademark of Ethicon, Inc.; SOOTHE-N-
SEAL(TM) is a licensed trademark of Colgate Oral Pharmaceuticals, Inc.;
LIQUIDERM(TM) is a trademark of CLOSURE Medical Corporation; and NEXABAND(R)
is a registered trademark of CLOSURE Medical Corporation.
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 products; the progress of its research and development programs for
future products; the need for regulatory approval and effects of governmental
regulation; technological uncertainties; 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, 2000 filed with the
Securities and Exchange Commission.
CLOSURE Medical Corporation
Statements of Operations
(In thousands, except per share data)
(Unaudited)
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
2001 2000* 2001 2000*
Product sales $4,687 $3,565 $12,652 $9,303
License and product development
revenue 186 156 546 468
Total revenues 4,873 3,721 13,198 9,771
Cost of products sold 1,466 950 3,799 2,747
Gross profit 3,407 2,771 9,399 7,024
Research, development and regulatory
affairs expenses 1,443 1,439 4,178 4,505
General and administrative expenses 1,383 1,544 4,157 3,925
Total operating expenses 2,826 2,983 8,335 8,430
Income (loss) from operations 581 (212) 1,064 (1,406)
Interest income, net 114 125 351 369
Income (loss) before taxes 695 (87) 1,415 (1,037)
Provision for income taxes 11 - 21 -
Income (loss) before cumulative
effect of accounting change 684 (87) 1,394 (1,037)
Cumulative effect of accounting
change* - - - (2,656)
Net income (loss) $684 $(87) $1,394 $(3,693)
Shares used in computation of net
income (loss) per common share:
Basic 13,484 13,407 13,459 13,380
Diluted 13,814 13,407 13,767 13,380
Net income (loss) per common share:
Basic and diluted $0.05 $(0.01) $0.10 $(0.28)
* See the Company's Annual Report on Form 10-K for the year ended
December 31, 2000.
CLOSURE Medical Corporation
Balance Sheet Data
(In thousands)
SEPTEMBER 30, DECEMBER 31,
2001 2000
(Unaudited)
Cash, cash equivalents and
investments $10,454 $11,832
Working capital $9,495 $8,462
Total assets $23,413 $22,139
Current portion of long-term debt $1,086 $1,487
Total stockholders' equity $15,974 $13,907
Total shares outstanding 13,491 13,428
SOURCE CLOSURE Medical Corporation
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CONTACT:
Robert V. Toni, President & CEO, or Benny
Ward, CFO, both of CLOSURE Medical Corporation, +1-919-876-7800,
or General, Alison Ziegler, Analysts, Julie Tu, or Media, Judith
Sylk-Siegel, all of FRB Weber Shandwick, +1-212-445-8400
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