EXHIBIT 99.1
Bentley Pharmaceuticals, Inc.
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Bentley Park News Release
2 Holland Way
Exeter, New Hampshire 03833
Phone: 603.658.6100
Fax: 603.658.6101
Contact:
Michael D. Price
Vice President, Chief Financial Officer
Bentley Pharmaceuticals, Inc.
603.658.6100
www.bentleypharm.com
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Investors: Deborah Ardern-Jones/Lanie Fladell
Media: Sean Leous
FD Morgen-Walke
212.850.5600
BENTLEY PHARMACEUTICALS, INC. REPORTS RECORD SECOND QUARTER RESULTS
- Total Revenues Increase 70% to $16.8 Million -
- - Gross Margins on Product Sales Improve to 58.9% and Operating Margins Improve
to 19.8%, Driven by Strength of Spain-based Operations -
EXETER, NH, JULY 30, 2003 -- Bentley Pharmaceuticals, Inc. (AMEX: BNT), a
technology-based specialty pharmaceutical and drug delivery company with a
growing branded and generic product line in Europe, today announced record
financial results for the three and six month periods ended June 30, 2003.
Total revenues for the quarter grew 70% (38% at constant exchange rates) to
$16.8 million compared to $9.9 million in the same period last year. Net product
sales increased 69% (37% at constant exchange rates) to $16.6 million, from $9.8
million in last year's second quarter. Second quarter licensing and
collaboration revenues totaled $158,000, representing royalties recognized from
Auxilium for sales of its TestimTM Testosterone Gel, which uses Bentley's drug
delivery technology CPE-215. This compares to licensing and collaboration
revenues of $58,000 in the second quarter of last year. Net income for the 2003
second quarter grew to $1.5 million, or $0.07 per diluted share, compared to
$519,000, or $0.03 per diluted share, in last year's second quarter. Second
quarter 2003 net income was positively impacted by approximately $500,000 due to
favorable currency exchange rates.
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Second quarter gross profit increased significantly to $9.9 million, or 59.3% of
total revenues, versus $5.6 million, or 56.9% of total revenues, in the
comparable prior year period. Gross margins on product sales improved to 58.9%
in the second quarter of 2003 compared to 56.7% in the second quarter of the
prior year. Operating income in the second quarter of 2003 totaled $3.3 million,
or 19.8% of total revenues, versus $1.4 million, or 14.1% of total revenues, in
the comparable 2002 quarter. The year over year margin improvements primarily
reflect cost leverage gained through higher sales volumes.
Selling and marketing expenses in the second quarter of 2003 were $3.6 million,
or 21.8% of net product sales, compared to $2.6 million, or 26.6% of net product
sales, in the prior year second quarter. General and administrative expenses
were $1.8 million, or 10.7% of total revenues, versus $1.3 million, or 13.3% of
total revenues, in the second quarter of 2002. Research and development expenses
increased 51% in the second quarter of 2003, and reached $879,000 compared to
$583,000 in the 2002 second quarter, reflecting the Company's ongoing efforts to
develop technology solutions for the pharmaceutical industry.
For the six months ended June 30, 2003, total revenues grew 67% (40% at constant
exchange rates) to $31.7 million from $19.0 million for the six months ended
June 30, 2002. Net product sales were $30.8 million, up 63% (37% at constant
exchange rates) in the 2003 six-month period compared to $18.9 million in the
comparable prior year period. Licensing and collaboration revenues were $911,000
in the 2003 six-month period compared to $175,000 in the comparable 2002
six-month period. Net income for the 2003 six-month period increased almost four
times to $3.1 million, or $0.15 per diluted share, versus $654,000, or $0.03 per
diluted share, in the 2002 six-month period. For the six months ended June 30,
2003, net income was positively impacted by approximately $900,000 due to
favorable currency exchange rates.
Gross profit was $18.8 million, or 59.2% of total revenues, for the 2003
six-month period compared to $11.0 million, or 57.9% of total revenues, for the
same period of 2002. Gross margins on product sales improved to 58.0% during the
first six months of 2003, compared to 57.5% in the first six months of the prior
year. Operating income totaled $6.0 million, or 18.8% of total revenues, for the
2003 six-month period, compared to $2.2 million, or 11.3% of total revenues, for
the 2002 six-month period.
Selling and marketing expenses were $7.0 million, or 22.6% of net product sales,
compared to $5.2 million, or 27.7% of net product sales, in the 2002 six-month
period. General and administrative expenses were $3.3 million, or 10.5% of total
revenues, in the 2003 six-month period, compared to $2.4 million, or 12.7% of
total revenues, in the 2002 six-month period. Research and development expenses
were $1.9 million in the 2003 six-month period, up 41%, compared to $1.3 million
in the same period of 2002.
With respect to licensing and collaboration revenues, Bentley has recognized
royalty revenues based on estimated sell-through of pharmaceutical products, and
has deferred recognition of royalty revenues associated with the initial sales
made to wholesalers and pharmacies to fill the distribution channel.
Pharmaceutical products are typically sold with limited shelf lives and
wholesalers and pharmacies have the right to return unsold or expired product.
The Company's policy, therefore, is to recognize royalty revenues based on an
estimate of the prescriptions written by physicians and filled by patients,
until such time that returns from wholesalers and pharmacies can be reasonably
estimated. The Company will use available market information to determine the
amounts and timing of royalty revenues it recognizes.
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James Murphy, Bentley's president and chief executive officer, stated, "Our
strong second quarter financial results reflect continued growth from our
Spanish operations, namely due to strong sales of omeprazole and simvastatin. We
are increasingly pleased with the progress we're making in Spain--currently we
have 59 product registrations pending approval and an additional 40 that we
expect to file by the beginning of next year. In addition, we are moving forward
with our European expansion strategy, and currently have licensees for certain
products in place in Portugal, the United Kingdom, France and Germany. To
capitalize on the opportunities in this business, we have invested in the
appointment of James Hand as Vice President of Business Development. His key
responsibilities will be to focus on licensing technologies and products
globally."
"Yesterday's announcement of the appointment of Janet Rae as Director of
Regulatory Affairs, further endorses our commitment to expansion. Her broad
experience with FDA negotiations leading to regulatory approvals for U.S. and
European pharmaceutical companies will allow our European business to continue
its rapid development. In addition, we believe her detailed knowledge of
bringing European filings to the U.S. will ensure our American operations will
be in a position to begin to leverage off our Spanish generic operations."
Mr. Murphy continued, "With regard to our drug delivery business, Auxilium's
Testim, the first product containing our CPE-215 technology which was launched
in early February, continues to gain traction in the topical testosterone
market. Royalty revenues from Testim were $158,000 in the second quarter, versus
$50,000 in the first quarter of this year. Total prescriptions for Testim
continued to grow throughout the quarter and now account for approximately 5% of
new prescriptions in its market."
Michael D. Price, Vice President and Chief Financial Officer, stated, "As
previously announced, in our efforts to build our patent portfolio, we purchased
certain of MacroChem's patents for antifungal nail lacquers, enabling us to
continue patent protection through the year 2020, making the technology more
attractive to potential licensees."
Mr. Murphy concluded, "We are well positioned, both strategically and
financially, for success. Our leadership in the Spanish pharmaceutical market
enhances our ability to develop new alliances with pharmaceutical companies
throughout the world while maintaining our excellent marketing and distribution
network. Further, our CPE-215 technology offers a solid platform for building
our drug delivery business. The strength of our balance sheet, with
approximately $25 million in cash and minimal long-term debt, affords Bentley
the financial flexibility to capitalize on strategic growth opportunities in the
future. Accordingly, we expect these opportunities and the continuing growth of
our Spanish operations to drive our financial performance going forward and
remain confident that our business will continue to perform well over the coming
quarters."
Management will host a conference call to discuss these results today at 10:00
a.m. Eastern Daylight Time. To participate on the call, please dial (800)
603-9527 approximately ten minutes prior to the scheduled start time and give
the password "BENTLEY." International participants may dial (706) 634-0645; the
password is the same. The conference call will also be broadcast live on the
Internet and may be accessed via the Company's website,
http://www.bentleypharm.com/. A replay of the conference call will be available
approximately two hours after the call has finished and will remain available
through August 6, 2003. Listeners may access the replay via the Company's
website, http://www.bentleypharm.com/, or by dialing (800) 642-1687, access code
1693700 / International participants may dial (706) 645-9291--access code is the
same.
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ABOUT BENTLEY PHARMACEUTICALS
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 branded and generic pharmaceuticals in Spain for
the treatment of cardiovascular, gastrointestinal, infectious and neurological
diseases through its subsidiaries Laboratorios Belmac, Laboratorios Davur and
Laboratorios Rimafar.
Copies of the company's 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: The statements which are not historical facts contained in this press
release are forward-looking statements that involve certain risks and
uncertainties including but not limited to risks associated with identifying
suitable drugs for drug delivery technologies, expanding generic and branded
drug operations, development and commercialization of our products,
relationships with our strategic partners, uncertainty of clinical trials,
regulatory approval process, product sales concentration, unpredictability of
patent protection, technological changes, the effect of economic conditions and
other uncertainties detailed in Bentley's filings with the Securities and
Exchange Commission.
- 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 June 30, For the Six Months Ended June 30,
----------------------------------- ----------------------------------
2003 2002 2003 2002
---------------- --------------- --------------- ---------------
Revenues:
Net product sales $ 16,596 $ 9,809 $ 30,831 $ 18,866
Licensing and collaboration revenues 158 58 911 175
---------------- --------------- --------------- ---------------
Total revenues 16,754 9,867 31,742 19,041
Cost of net product sales 6,819 4,249 12,940 8,025
---------------- --------------- --------------- ---------------
Gross profit 9,935 5,618 18,802 11,016
---------------- --------------- --------------- ---------------
Operating expenses:
Selling and marketing 3,626 2,608 6,979 5,218
General and administrative 1,786 1,315 3,345 2,409
Research and development 879 583 1,897 1,347
Depreciation and amortization 328 237 611 484
---------------- --------------- --------------- ---------------
Total operating expenses 6,619 4,743 12,832 9,458
---------------- --------------- --------------- ---------------
Gain on sale of drug licenses - 520 - 592
---------------- --------------- --------------- ---------------
Income from operations 3,316 1,395 5,970 2,150
---------------- --------------- --------------- ---------------
Other income (expenses):
Interest income 82 85 165 93
Interest expense (60) (67) (114) (110)
Other (4) (8) (4) 4
---------------- --------------- --------------- ---------------
Income before income taxes 3,334 1,405 6,017 2,137
Provision for foreign income taxes 1,805 886 2,956 1,483
---------------- --------------- --------------- ---------------
Net income $ 1,529 $ 519 $ 3,061 $ 654
================ =============== =============== ===============
Net income per common share:
Basic $ 0.09 $ 0.03 $ 0.17 $ 0.04
================ =============== =============== ===============
Diluted $ 0.07 $ 0.03 $ 0.15 $ 0.03
================ =============== =============== ===============
Weighted average common shares outstanding:
Basic 17,534 16,823 17,495 15,735
================ =============== =============== ===============
Diluted 20,878 20,484 20,617 19,204
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BENTLEY PHARMACEUTICALS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands, except per share data) June 30, December 31,
2003 2002
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ASSETS
Current assets:
Cash and cash equivalents $ 24,823 $ 26,581
Marketable securities 436 396
Receivables, net 17,325 10,874
Inventories, net 5,563 5,133
Deferred taxes 134 123
Prepaid expenses and other 1,174 865
---------------- ---------------
Total current assets 49,455 43,972
---------------- ---------------
Non-current assets:
Fixed assets, net 14,096 9,565
Drug licenses and related costs, net 13,261 10,975
Restricted cash 1,000 -
Other 180 180
---------------- ---------------
Total non-current assets 28,537 20,720
---------------- ---------------
$ 77,992 $ 64,692
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 9,676 $ 7,206
Accrued expenses 7,136 4,059
Short-term borrowings 1,606 1,598
Current portion of long-term debt 138 127
Deferred income 1,168 279
---------------- ---------------
Total current liabilities 19,724 13,269
---------------- ---------------
Non-current liabilities:
Taxes payable 2,335 2,141
Long-term debt 322 345
Other 179 186
---------------- ---------------
Total non-current liabilities 2,836 2,672
---------------- ---------------
Commitments and contingencies
Stockholders' equity:
Preferred stock, $1.00 par value, authorized 2,000 shares,
issued and outstanding, none - -
Common stock, $.02 par value, authorized 100,000 shares,
issued and outstanding, 17,664 and 17,404 shares 354 348
Stock purchase warrants (to purchase 3,147 and 3,292
shares of common stock) 429 431
Additional paid-in capital 122,507 121,084
Accumulated deficit (69,635) (72,696)
Accumulated other comprehensive income (loss) 1,777 (416)
---------------- ---------------
Total stockholders' equity 55,432 48,751
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$ 77,992 $ 64,692
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