Exhibit 99.1
| |
Bentley Park
2 Holland Way
Exeter, NH 03833-2937 Tel: 603.658.6100
Fax: 603.658.6101/6102
www.bentleypharm.com FOR IMMEDIATE RELEASE | News Release |
Company Contact:
Michael D. Price
Vice President, Chief Financial Officer Bentley Pharmaceuticals, Inc.
603.658.6100
www.bentleypharm.com |
| Investor Relations Contacts:
Linda Decker, V.P. — Investor Relations
Jeff Myhre, V.P. — Editorial
Porter, Le Vay & Rose, Inc.
212.564.4700
Tom Gibson — Media Relations
201.476.0322 |
BENTLEY PHARMACEUTICALS REPORTS THIRD QUARTER 2005 DILUTED EPS OF $0.11
AND THIRD QUARTER REVENUES INCREASE 30% TO $23.5 MILLION
EXETER, NH, November 2, 2005 — Bentley Pharmaceuticals, Inc. (NYSE: BNT), a technology-based specialty pharmaceutical and drug delivery company with a growing branded and generic product line in Europe, today announced financial results for the third quarter and nine months ended September 30, 2005.
Total revenues grew 30% to $23.5 million in the third quarter of 2005 compared to the same three month period of the prior year. Net product sales increased 27% to $22.1 million and licensing and collaboration revenues increased 84% to almost $1.5 million in the third quarter of 2005. Foreign currency exchange rate fluctuations had no material impact on third quarter results.
Net product sales to licensees and other customers outside of Spain increased by approximately $3.6 million, or 172%, compared to the third quarter of 2004, to $5.6 million. Total revenues outside of Spain accounted for approximately 32% of total revenues in the third quarter of 2005 compared to approximately 18% of revenues in the third quarter of the prior year. Also contributing to the third quarter growth were royalty revenues totaling $1.4 million from sales of Testim® by the Company’s licensee, Auxilium Pharmaceuticals, Inc.
Operating expenses increased 26% in the third quarter of 2005 to $8.7 million, primarily as a result of increases in general and administrative and research and development expenses. The increase in general and administrative expenses is primarily attributable to increased general business expenses required to support the Company’s growth. The increase in research and development costs is primarily attributable to increased resources for the advancement of pre-clinical and clinical programs for certain generic pharmaceutical products in countries outside of Spain, including the U.S., and for the Company’s development program for intranasal delivery of insulin.
Operating income for the third quarter of 2005 increased 46% to approximately $3.7 million and net income for the quarter increased 76% to $2.5 million, or $0.11 per diluted share.
James R. Murphy, Chairman and CEO of Bentley, stated, “We are very pleased with our ability to continue the expansion of our portfolio of pharmaceutical products and expansion into new markets where we can introduce our product lines. Our expansion has led to a 30% growth rate and another great quarter, and we expect to capitalize on additional opportunities in the coming months and years. According to Datamonitor, the 2004 E.U. generics market was estimated at approximately $11.2 billion and is expected to grow at a compounded annual growth rate of 12% through 2009. Additionally, according to S.G. Cowen, 72 major drugs in the U.S. are expected to lose patent protection or exclusivity through 2009. We intend to vigorously pursue growth opportunities that are available to us in these markets in an effort to continue our current growth trend.”
For the first nine months of 2005, total revenues climbed 35% to $72.5 million from $53.9 in the same period of the prior year. Net product sales increased 34% (30% in constant currency) in the nine months ended September 30, 2005 to $68.8 million when compared to the same period in 2004. Operating income in the nine months ended September 30, 2005 increased 67% (61% in constant currency) over the same period of 2004, to $11.3 million. Net income in the first nine months of 2005 increased 96% to $7.3 million, or $0.32 per diluted share, when compared to the same period in 2004.
Michael D. Price, Vice President and CFO, commented, “Our revenues have continued their double-digit growth, and we expect growth to continue into the fourth quarter. Our earnings per share have been strong primarily as a result of our top-line growth. Our net income of $7.3 million or $0.32 per diluted share in the first nine months of this year has already surpassed our $5.7 million in net income reported for all of 2004.
Mr. Price added, “Moreover, Bentley’s balance sheet remains healthy with a current ratio of 2.5 to 1. Our cash flow from operations continues to be strong and we ended the quarter with $35.8 million in cash and cash equivalents.”
Mr. Murphy continued, “The August hiring of John A. Sedor as President of Bentley demonstrates the direction we are headed with Bentley’s strategic vision. John has obtained a wealth of knowledge about the pharmaceutical industry through his thirty years of experience. In addition, our recent appointment of Dr. Fred Feldman as Vice President of Research and Development will complement our existing team of accomplished scientists, particularly with respect to his knowledge of the rapidly growing advances in nanoparticle research. John and Fred are welcome additions to our management team and will be instrumental in helping us achieve our short and long-term goals and building shareholder value.”
John A. Sedor, President, concluded, “During the third quarter, Bentley was named one of FORTUNE magazine’s 100 Fastest-Growing Companies and one of Forbes magazine’s 200 Best Small Companies. These honors are third-party recognition of the success Bentley has had in implementing its business plan, and of the hard work and dedication of everyone at Bentley. We look forward to continued growth in the fourth quarter and to the prospects for our research and development programs, including our intranasal insulin and Nanocaplet™ programs.”
Significant components of Bentley’s revenues for third quarter and first nine months of 2005 and 2004 are summarized below:
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For the three months ended September 30, 2005:
(in thousands) | | Revenues Within Spain | | | | | | | |
| | | | | | | | Revenues | | | | | |
| | Branded | | Generic | | | | Outside of | | | | % of Total | |
Product Line | | Products | | Products | | Other | | Spain | | Total | | Revenues | |
Omeprazole | | $ | 657 | | $ | 3,694 | | $ | — | | $ | — | | $ | 4,351 | | 19% | |
Simvastatin | | 402 | | 1,277 | | — | | — | | 1,679 | | 7% | |
Enalapril | | 933 | | 407 | | — | | — | | 1,340 | | 6% | |
Paroxetine | | 294 | | 765 | | — | | — | | 1,059 | | 5% | |
Pentoxifylline | | — | | 607 | | — | | — | | 607 | | 2% | |
All other products | | 2,651 | | 1,765 | | 86 | | 424 | | 4,926 | | 21% | |
Sales to licensees and others | | — | | — | | 2,479 | | 5,616 | | 8,095 | | 34% | |
Licensing and collaborations | | — | | — | | 58 | | 1,397 | | 1,455 | | 6% | |
Total Revenues | | $ | 4,937 | | $ | 8,515 | | $ | 2,623 | | $ | 7,437 | | $ | 23,512 | | 100% | |
% of Q-3 2005 Revenues | | 21% | | 36% | | 11% | | 32% | | 100% | | | |
For the three months ended September 30, 2004:
(in thousands) | | Revenues Within Spain | | | | | | | |
| | | | | | | | Revenues | | | | | |
| | Branded | | Generic | | | | Outside of | | | | % of Total | |
Product Line | | Products | | Products | | Other | | Spain | | Total | | Revenues | |
Omeprazole | | $ | 742 | | $ | 3,296 | | $ | — | | $ | — | | $ | 4,038 | | 22% | |
Simvastatin | | 374 | | 929 | | — | | — | | 1,303 | | 7% | |
Enalapril | | 725 | | 348 | | — | | — | | 1,073 | | 6% | |
Paroxetine | | 225 | | 698 | | — | | — | | 923 | | 5% | |
Pentoxifylline | | — | | 668 | | — | | — | | 668 | | 4% | |
All other products | | 2,216 | | 1,144 | | 430 | | 379 | | 4,169 | | 23% | |
Sales to licensees and others | | — | | — | | 3,077 | | 2,061 | | 5,138 | | 29% | |
Licensing and collaborations | | — | | — | | — | | 791 | | 791 | | 4% | |
Total Revenues | | $ | 4,282 | | $ | 7,083 | | $ | 3,507 | | $ | 3,231 | | $ | 18,103 | | 100% | |
% of Q-3 2004 Revenues | | 24% | | 39% | | 19% | | 18% | | 100% | | | |
For the nine months ended September 30, 2005:
(in thousands) | | Revenues Within Spain | | | | | | | |
| | | | | | | | Revenues | | | | | |
| | Branded | | Generic | | | | Outside of | | | | % of Total | |
Product Line | | Products | | Products | | Other | | Spain | | Total | | Revenues | |
Omeprazole | | $ | 2,107 | | $ | 11,948 | | $ | — | | $ | — | | $ | 14,055 | | 19% | |
Simvastatin | | 1,275 | | 3,862 | | — | | — | | 5,137 | | 7% | |
Enalapril | | 3,084 | | 1,319 | | — | | — | | 4,403 | | 6% | |
Paroxetine | | 1,011 | | 2,413 | | — | | — | | 3,424 | | 5% | |
Codeisan | | 2,531 | | — | | — | | — | | 2,531 | | 4% | |
All other products | | 7,003 | | 7,429 | | 271 | | 1,439 | | 16,142 | | 22% | |
Sales to licensees and others | | — | | — | | 9,722 | | 13,355 | | 23,077 | | 32% | |
Licensing and collaborations | | — | | — | | 228 | | 3,523 | | 3,751 | | 5% | |
Total Revenues | | $ | 17,011 | | $ | 26,971 | | $ | 10,221 | | $ | 18,317 | | $ | 72,520 | | 100% | |
% of YTD 2005 Revenues | | 23% | | 37% | | 14% | | 26% | | 100% | | | |
For the nine months ended September 30, 2004:
(in thousands) | | Revenues Within Spain | | | | | | | |
| | | | | | | | Revenues | | | | | |
| | Branded | | Generic | | | | Outside of | | | | % of Total | |
Product Line | | Products | | Products | | Other | | Spain | | Total | | Revenues | |
Omeprazole | | $ | 1,923 | | $ | 9,783 | | $ | — | | $ | — | | $ | 11,706 | | 22% | |
Simvastatin | | 968 | | 2,570 | | — | | — | | 3,538 | | 7% | |
Enalapril | | 2,280 | | 883 | | — | | — | | 3,163 | | 6% | |
Paroxetine | | 703 | | 2,282 | | — | | — | | 2,985 | | 5% | |
Codeisan | | 2,118 | | — | | — | | — | | 2,118 | | 4% | |
All other products | | 4,852 | | 5,149 | | 466 | | 610 | | 11,077 | | 20% | |
Sales to licensees and others | | — | | — | | 7,915 | | 8,823 | | 16,738 | | 31% | |
Licensing and collaborations | | — | | — | | 541 | | 2,009 | | 2,550 | | 5% | |
Total Revenues | | $ | 12,844 | | $ | 20,667 | | $ | 8,922 | | $ | 11,442 | | $ | 53,875 | | 100% | |
% of YTD 2004 Revenues | | 24% | | 38% | | 17% | | 21% | | 100% | | | |
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Management will host a conference call to discuss the third quarter results and provide a business update at 10:00 a.m. EST on Thursday, November 3, 2005. To participate on the live call, please dial (866) 713-8562 from the U.S. or, for international callers, please dial (617) 597-5310 (passcode #89361255), approximately 15 minutes prior to the scheduled start time. A telephone replay will be available for 30 days by dialing (888) 286-8010 from the U.S. or (617) 801-6888 for international callers (passcode #99265867). The conference call will also be broadcast live on the Internet and may be accessed via Bentley’s web site, www.bentleypharm.com. Please go to the Company’s web site approximately 15 minutes prior to the scheduled start time to register, download and install any necessary audio software. A replay of the conference will also be available on Bentley’s web site for 30 days.
Bentley Pharmaceuticals, Inc. is a specialty pharmaceutical company focused on advanced drug delivery technologies and pharmaceutical products. Bentley’s proprietary drug technologies enhance or facilitate the absorption of pharmaceutical compounds across various membranes. Bentley also manufactures and markets a growing portfolio of generic and branded pharmaceuticals in Europe for the treatment of cardiovascular, gastrointestinal, infectious and neurological diseases through its subsidiaries, Laboratorios Belmac, Laboratorios Davur and Laboratorios Rimafar; and manufactures and markets active pharmaceutical ingredients through its subsidiary, Bentley API.
Copies of Bentley Pharmaceuticals’ press releases and other information may be obtained through Bentley’s web site 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 prospects for increasing branded and generic drug sales, revenue growth, net income growth, results for the remainder of 2005, the prospects for Bentley’s intranasal insulin and Nanocaplet® programs, and the prospects for growth of its businesses. 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 timing and nature of regulatory approvals, changes in third-party reimbursement and government mandates which impact pharmaceutical pricing, development and commercialization of Bentley’s 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, risks associated with international operations, and other uncertainties detailed in Bentley’s most recent Annual Report on Form 10-K and its other subsequent 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.
(tables to follow)
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Bentley Pharmaceuticals, Inc. and Subsidiaries
Consolidated Income Statements
(in thousands, except per share data) | | For the Three Months Ended
September 30, | | For the Nine Months Ended
September 30, | |
| | 2005 | | 2004 | | 2005 | | 2004 | |
Revenues: | | | | | | | | | |
Net product sales | | $ | 22,057 | | $ | 17,312 | | $ | 68,769 | | $ | 51,325 | |
Licensing and collaboration revenues | | 1,455 | | 791 | | 3,751 | | 2,550 | |
| | | | | | | | | |
Total revenues | | 23,512 | | 18,103 | | 72,520 | | 53,875 | |
| | | | | | | | | |
Cost of net product sales | | 11,104 | | 8,662 | | 33,923 | | 25,383 | |
| | | | | | | | | |
Gross profit | | 12,408 | | 9,441 | | 38,597 | | 28,492 | |
| | | | | | | | | |
Operating expenses: | | | | | | | | | |
Selling and marketing | | 3,503 | | 3,199 | | 12,118 | | 10,919 | |
General and administrative | | 3,036 | | 2,140 | | 9,072 | | 6,590 | |
Research and development | | 1,775 | | 1,230 | | 4,734 | | 3,171 | |
Depreciation and amortization | | 416 | | 353 | | 1,359 | | 1,038 | |
| | | | | | | | | |
Total operating expenses | | 8,730 | | 6,922 | | 27,283 | | 21,718 | |
| | | | | | | | | |
Income from operations | | 3,678 | | 2,519 | | 11,314 | | 6,774 | |
| | | | | | | | | |
Other income (expenses): | | | | | | | | | |
Interest income | | 238 | | 157 | | 610 | | 399 | |
Interest expense | | (53 | ) | (49 | ) | (163 | ) | (160 | ) |
Other, net | | (1 | ) | 130 | | 23 | | 1,405 | |
| | | | | | | | | |
Income before income taxes | | 3,862 | | 2,757 | | 11,784 | | 8,418 | |
| | | | | | | | | |
Provision for income taxes | | 1,377 | | 1,344 | | 4,521 | | 4,706 | |
| | | | | | | | | |
Net income | | $ | 2,485 | | $ | 1,413 | | $ | 7,263 | | $ | 3,712 | |
| | | | | | | | | |
Net income per common share: | | | | | | | | | |
Basic | | $ | 0.11 | | $ | 0.07 | | $ | 0.34 | | $ | 0.18 | |
Diluted | | $ | 0.11 | | $ | 0.06 | | $ | 0.32 | | $ | 0.16 | |
| | | | | | | | | |
Weighted average common shares outstanding: | | | | | | | | | |
Basic | | 21,652 | | 21,049 | | 21,455 | | 20,764 | |
Diluted | | 22,970 | | 22,746 | | 22,700 | | 22,772 | |
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Bentley Pharmaceuticals, Inc. and Subsidiaries
Consolidated Balance Sheets
(in thousands, except per share data) | | September 30,
2005 | | December 31,
2004 | |
| | | | | |
Assets | | | | | |
| | | | | |
Current assets: | | | | | |
Cash and cash equivalents | | $ | 35,813 | | $ | 34,230 | |
Marketable securities | | 469 | | 528 | |
Receivables, net | | 26,856 | | 27,860 | |
Inventories, net | | 12,758 | | 10,258 | |
Deferred taxes | | 613 | | 479 | |
Prepaid expenses and other | | 1,568 | | 1,355 | |
| | | | | |
Total current assets | | 78,077 | | 74,710 | |
| | | | | |
Non-current assets: | | | | | |
Fixed assets, net | | 30,820 | | 30,849 | |
Drug licenses and related costs, net | | 13,944 | | 14,863 | |
Restricted cash | | 1,000 | | 1,000 | |
Other | | 976 | | 508 | |
| | | | | |
Total non-current assets | | 46,740 | | 47,220 | |
| | $ | 124,817 | | $ | 121,930 | |
| | | | | |
Liabilities and Stockholders’ Equity | | | | | |
| | | | | |
Current liabilities: | | | | | |
Accounts payable | | $ | 15,608 | | $ | 17,048 | |
Accrued expenses | | 9,686 | | 6,169 | |
Related party payable | | 736 | | — | |
Short-term borrowings | | 2,129 | | 2,754 | |
Current portion of long-term debt | | 27 | | 31 | |
Deferred income | | 2,674 | | 1,594 | |
| | | | | |
Total current liabilities | | 30,860 | | 27,596 | |
| | | | | |
Non-current liabilities: | | | | | |
Deferred taxes | | 2,047 | | 2,319 | |
Long-term debt | | 319 | | 349 | |
Deferred income | | 2,360 | | 1,944 | |
Other | | 47 | | 65 | |
| | | | | |
Total non-current liabilities | | 4,773 | | 4,677 | |
| | | | | |
Commitments and contingencies | | | | | |
| | | | | |
Stockholders’ equity: | | | | | |
Preferred stock, $1.00 par value, authorized 2,000 shares, issued and outstanding, none | | — | | — | |
Common stock, $.02 par value, authorized 100,000 shares, issued and outstanding, 21,840 and 21,312 shares | | 437 | | 426 | |
Additional paid-in capital | | 139,677 | | 140,418 | |
Accumulated deficit | | (53,646 | ) | (60,909 | ) |
Accumulated other comprehensive income | | 2,716 | | 9,722 | |
| | | | | |
Total stockholders’ equity | | 89,184 | | 89,657 | |
| | $ | 124,817 | | $ | 121,930 | |
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