|
|
| Cellex Biosciences Reports Third Quarter Results, Status of Recapitalization Plan |
MINNEAPOLIS, Aug. 25 /PRNewswire/ -- CELLEX BIOSCIENCES, Inc. (Nasdaq: CLXX), today reported results for its third quarter ended June 30, 1998, as well as progress on its recapitalization plan announced July 1, 1998. The company reported a net loss applicable to common shareholders in the third quarter of fiscal 1998 of $2,213,352, or a loss of $ .32 per share of common stock. This compares with a net loss applicable to common shareholders in the third quarter of fiscal 1997 of $1,546,567, or a loss of $ .29 per share of common stock. The company reported a net loss applicable to common shareholders in the first nine months of fiscal 1998 of $5,834,878, or a loss of $ .85 per share of common stock. This compares with a net loss applicable to common shareholders in the first nine months of fiscal 1997 of $3,660,164, or a loss of $ .75 per share of common stock. Compared to last year, the company experienced increases in the third quarter in sales of its perfusion and stirred tank fermentation systems, freeze dryer systems and contract cell production services, while consumable sales decreased. The company experienced declines in the third quarter of 1998 in its total backlog of open sales orders from the second quarter of this year, while work-in-process inventories increased. The company's significant working capital deficit increased from the second quarter of this year. The company noted that its operating performance in the third quarter improved, with an operating loss of $542,000, compared to operating losses of $1,119,000 in the third quarter of last year and $1,212,000 in the second quarter of this year. However, other expenses, which negatively affected the net loss, rose to $1,591,000 in the third quarter, compared to $62,000 last year, as a result of financing costs related to the proposed recapitalization plan and increased interest expense. Regarding the recapitalization plan, the company said that it has communicated with creditors representing an aggregate liability of $8,100,000 million asking for a preliminary indication of whether they would accept common stock in exchange for their claims. To date, holders and guarantors of promissory notes representing an aggregate liability of $7,850,000 have given a positive indication, however the company has not yet obtained commitments from potential investors to raise all or part of the additional financing required by the plan. Richard E. Sakowicz, CEO and president, CELLEX BIOSCIENCES, Inc., and president and directeur general, LSL Biolafitte, SA, commented: "Cellex made progress in key areas during the quarter, as demonstrated in increases in sales of system products, particularly perfusion systems, and contract cell production, as well as a reduction in operating loss. These improvements occurred despite a significant shortage of operating capital and the continued negative impact on our operations of the aborted merger with Unisyn. Our products and services are state-of-the-art, and we are confident Cellex will participate in the positive trends of worldwide biotech markets during the coming quarters and years, if we can rebuild our financial resources through the current recapitalization effort. We are pleased that the great majority of creditors contacted have indicated that they would accept our proposal. However, the company still needs additional financing in order to complete the recapitalization plan." The company's working capital deficit increased to $10,910,419 at June 30, 1998, from $10,111,185 at March 31, 1998. The company cited increased losses and the issuance of short-term promissory notes relating to its failed merger with Unisyn as reasons for the increases in working capital deficit from $5,567,236 at September 30, 1997. The company said that the unilateral termination of the merger agreement by Unisyn on February 27, 1998, resulted in the termination of the bridge financing, for which approximately $3.8 million principal and interest remain unpaid to date. In addition, since April 21, 1998, the company has not been able, as it has historically, to obtain any financing from any source, including term loans, lines of credit, corporate partners, debt or equity financing or working capital advances from affiliates. Revenues for the third quarter were $2,626,784, 40.4 percent higher than revenues of $1,871,314 in the second quarter of last year. Total system sales in the third quarter were $1,512,845, up 47.5 percent from $1,025,562 in the same quarter last year. Third quarter perfusion system sales increased by $200,694 or 89.9 percent over the third quarter of last year, sales of stirred tank fermentation systems and freeze dryers increased by $286,589 or 35.7 percent in the same period. Total consumable sales for the third quarter were $295,098, compared to $338,648 in last year's third quarter. Revenues for the first nine months were $6,234,366, down from $7,553,342 in the same period last year. Total system sales for the nine months of fiscal 1998 were $3,468,760, down 32.6 percent from $5,143,001 in the same period last year. Perfusion sales for the nine months increased by $237,725 or 35.4 percent from the same period last year. Sales of stirred tank and freeze dryer systems for the nine months decreased by $1,911,965 or 42.8 percent from the same period last year. Total consumable sales were $1,036,133 for the nine months, up $117,564 or 12.8 percent, from $918,569 in the same period last year. Third quarter contract cell culture production services revenues increased to $758,157, up 74.3 percent from $435,029 in the third quarter last year. For the nine months, contract cell production increased to $1,517,505, up 12.7 percent from $1,346,200 in the same period last year. Contract production represented 24.3 percent of the company's total revenues for the nine months ended June 30, 1998, as compared to 17.8 percent for first nine months of last year. During the first quarter of fiscal 1998, the company obtained an order for contract production services totaling over a million dollars of which approximately $350,000 has been shipped and recognized as revenue. The company said that customer interest in contract cell production continues to increase. Contract production revenues represented 17.2 percent of the company's total revenues for fiscal 1997, 7.6 percent in fiscal 1996 and 10.6 percent in fiscal 1995. The company's backlog of open sales orders at the end of the third quarter was approximately $4.1 million, of which $3.1 million related to LSL Biolafitte, and $ .8 million related to contract cell culture services. This compares to a backlog of open sales orders at March 30, 1998, of $5.0 million of which $3.4 million related to LSL Biolafitte, and $1.0 million related to contract cell production. Work-in-process inventory at June 30, 1998, totaled $2.2 million, compared to $1.8 million at March 31, 1998, and $1.3 million at December 31, 1997. The company's gross margin decreased from 36.7 percent during the nine months of fiscal 1997 to 35.5 percent during the first nine months of this year. In the third quarter, gross margin was 41.4 percent down from 42.1 percent in the third quarter last year. Gross margins are expected to improve as the production volume increases given adequate financing. Gross margin of the company's perfusion systems business was at approximately 50 percent in the third quarter of fiscal 1998, about even with the third quarter of fiscal 1997 and the second quarter of fiscal 1998, but up significantly from the gross margin of 21.5 percent in the first quarter of fiscal 1998 when the perfusion systems business experienced an increase in cost of goods sold due to unabsorbed burden due to lower business volumes. LSL gross margins decreased from 29.4 percent during the first nine months of fiscal 1997 to 23.6 percent during the same period this year due to unabsorbed burden due to lower production volumes in the first three quarters of this year, offset by increased efficiencies and improved manufacturing processes. On an ongoing basis, the company expects LSL gross margins, excluding unabsorbed burden, to improve over prior years due to increased efficiencies, improved manufacturing processes and implementation of new enterprise resource planning software. CELLEX BIOSCIENCES, Inc. is dedicated to providing cell processing products and services to meet the needs of human health care and biotechnology markets worldwide with stirred tank cell culturing systems, freeze dryers and perfusion technology. The company's innovative perfusion bioreactors are generally used by diagnostic and emerging biotechnology companies. The company's LSL Biolafitte equipment offers traditional stirred tank cell culturing and fermentation systems preferred by well-established pharmaceutical and mature biotech companies. The company's LSL Secfroid equipment provides advanced pilot plant and industrial scale freeze dryer equipment used by many large well- established pharmaceutical companies. The statements contained in this press release that are forward-looking, including those which relate to the expectation of (i) increased revenues and gross margins from perfusion, stirred tank and freeze dryer systems in the next fiscal year; (ii) growth in the markets for Cellex systems and (iii) growth in contract production services business, are subject to risks and uncertainties which could cause actual results to differ materially from the statements made herein. For example, growth in the company's business is dependent upon obtaining adequate financing to pay its significant past-due liabilities and finance continuing operations. There is no assurance that such financing will be available in the amounts or at the time needed; meanwhile, the company has incurred a significant increase in its working capital deficit and has not completed its recapitalization plan. Any inability to obtain additional financing when needed would nave a material adverse effect on the company, including requiring the company to curtail, and possibly cease operations. Growth in the markets for Cellex systems depends upon the success of new biotherapeutic products and the willingness of the manufacturers of such products to accept Cellex systems. Additional risks and uncertainties related to the company have been included in the company's filings made with the Securities and Exchange Commission. The company's proposed offer of common stock pursuant to its proposed recapitalization plan has not been registered under the Securities Act of 1933, as amended, and the shares of common stock issuable pursuant to the plan may not be offered or sold in the United States without obtaining registration or an applicable exemption from registration requirements. CELLEX BIOSCIENCES is headquartered in Minneapolis, Minn., with subsidiaries in England, France, Switzerland and the United States. Financial Highlights to Follow CELLEX BIOSCIENCES, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except per share amounts) Three Months Nine Months Ended June 30, Ended June 30, 1998 1997 1998 1997 Operating Revenues: System & Consumable Sales $1,811 $1,370 $4,516 $6,103 Contract Production Services 758 435 1,518 1,346 Other 58 66 200 104 Total Operating Revenues 2,627 1,871 6,234 7,553 Operating Costs and Expenses: Cost of Sales 1,519 1,045 3,907 4,718 Research and Development 342 239 907 750 Marketing, General & Administrative 1,308 1,706 4,710 4,927 Loss from Operations (542) (1,119) (3,290) (2,842) Other Income (Expense), Net (1,591) (62) (2,308) (83) Net Loss (2,133) (1,181) (5,598) (2,925) Dividends Applicable to Preferred Stock 80 366 237 735 Net Loss Applicable to Common Shareholders ($2,213) ($1,547) ($5,835) ($3,660) Net Loss Per Share of Common Stock ($0.32) ($0.29) ($0.85) ($0.75) Weighted Average Number of Common Shares Outstanding-Basic 6,887 5,297 6,851 4,892 CONDENSED CONSOLIDATED BALANCE SHEET (in thousands) ASSETS June 30, 1998 Total Current Assets $5,727 Other Assets $8,543 Total $14,270 LIABILITIES AND SHAREHOLDERS' EQUITY Current Liabilities $16,637 Long-term Liabilities $2,683 Shareholders' Equity (Deficit) $(5,050) Total $14,270SOURCE Cellex Biosciences
back to topCompany News On-Call:
fax, 800-758-5804, ext. 100767
CONTACT:
Joseph Jennings, Investor Relations for
Cellex Biosciences, 612-786-0302, Fax 612-786-0915
