[LOGO OF BENTLEY PHARMACEUTICALS]
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
--------------------
FOR IMMEDIATE RELEASE
Investors: Deborah Ardern-Jones/Jonathan Birt
212.850.5600
Media: Sean Leous 212.850.5600
Financial Dynamics
BENTLEY PHARMACEUTICALS REPORTS 2003 FOURTH QUARTER EPS OF $0.09, OR $0.08
DILUTED, ON 57% INCREASE IN REVENUES (29% AT CONSTANT CURRENCY)
- 2003 EPS Grows to $0.34, or $0.28 Diluted, on 65% Revenue Growth
(38% At constant currency)-
- Conference call and webcast to be held today at 10:00 a.m. (EST) -
EXETER, NH, FEBRUARY 26, 2004 - 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 financial
results for the fourth quarter and twelve months ended December 31, 2003.
Total revenues for the 2003 fourth quarter increased 57% (29% at
constant currency) to a record $18.1 million from $11.5 million in the
prior-year fourth quarter, reflecting the Company's expanding market share in
the European generic pharmaceuticals market and royalties from U.S. sales of
Auxilium's Testim(R), the first commercialized product containing Bentley's
CPE-215 technology. Fourth quarter operating income more than doubled to $2.6
million from $1.2 million in the comparable quarter of 2002. Net income in the
2003 fourth quarter increased 144% to $1.7 million, or $0.09 per basic common
share ($0.08 per diluted common share), compared to net income of $691,000, or
$0.04 per basic common share ($0.03 per diluted common share), in the 2002
fourth quarter.
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James R. Murphy, president and CEO, stated, "We had another outstanding
quarter fueled by continued growth of our branded and generic pharmaceutical
business in Europe. We are encouraged by the tremendous market opportunities in
Europe where we continue to build our presence as a leading, low-cost
manufacturer of high quality pharmaceutical products. We are equally encouraged
by the progress of our U.S. drug delivery business, which now has a consistent
and growing royalty stream from sales of Auxilium's Testim(R), the first
commercialized product containing our CPE-215 technology. In addition, we are
making significant progress with the developmental products in our
pipeline-most recently, we announced successful Phase I clinical trial results
for our proprietary intranasal insulin. We expect our Company to continue to
grow and mature throughout 2004."
Total 2003 revenues grew by 65% (38% at constant currency) to a record
$64.7 million from $39.1 million in the prior year. Full-year income from
operations increased significantly to $11.4 million, an improvement of $7.4
million from last year. Net income for 2003 improved 273% to $6.1 million, or
$0.34 per basic common share ($0.28 per diluted common share), compared with
$1.6 million, or $0.10 per basic common share ($0.08 per diluted common share),
last year. Note that prior year net income included approximately $425,000 as a
result of an after-tax gain on the sale of a drug license.
Michael D. Price, vice president and chief financial officer,
commented, "The strong rise in revenues in 2003 primarily reflects the continued
success of Bentley's branded and generic pharmaceutical products in Europe. Our
performance in Europe was mainly driven by sales of omeprazole and simvastatin,
and exports from Spain, which increased 227% in 2003 compared to 2002. The
October 2003 announcement of new price controls on certain pharmaceutical
products in Spain had a temporary effect on November product sales, as some of
our customers postponed purchases. Consequently, we made the decision to reduce
prices effective December 1, 2003, approximately one month ahead of schedule,
resulting in an increase in our market share. We are optimistic that careful
cost controls and increasing market share will enable us to improve our margins
in the future.
Mr. Price added, "We also continued to strengthen our balance sheet
throughout 2003. Cash and short-term investment balances at December 31, 2003,
increased 51% to $40.6 million from $27.0 million last year, primarily due to
increased cash flow from operations and cash proceeds from the exercises of our
Class B Redeemable Warrants. Our current ratio is greater than 3 to 1 and we
have essentially no long-term debt."
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Working capital at December 31, 2003, increased 49% to $45.7 million
from $30.7 million at December 31, 2002. Total assets at December 31, 2003, grew
55% to $100.5 million from $64.7 at December 31, 2002, while stockholders'
equity increased 56% to $76.2 million at December 31, 2003 from $48.8 million at
December 31, 2002.
Mr. Murphy concluded, "We are better positioned, both financially and
strategically, going into 2004 than at any time in our history. For the first
quarter of 2004, we expect to generate revenues in the range of $16 million to
$18 million. We anticipate another strong year in 2004, with total revenues in
the range of $70 million to $80 million. Our strong balance sheet will allow us
to continue to pursue opportunities to expand our business in the U.S. and
abroad. We continue to pursue our long-term strategy to penetrate high growth
markets, increase our pipeline and advance our drug delivery business. We look
forward to creating additional shareholder value in 2004."
COMPANY UPDATES
o In February 2003, Testim(TM), a patented testosterone
replacement therapy gel and the first product containing
Bentley Pharmaceuticals' patented CPE-215(TM) drug delivery
technology, was launched in the U.S. by its licensee, Auxilium
Pharmaceuticals, Inc. Since its launch, Auxilium's Testim(TM)
has continued to gain market share and clinical commendations
in the U.S., achieving approximately 10% of new prescriptions
by February 2004. Auxilium received its first European
approval in 2003 and recently entered into a distribution
agreement for the Canadian market place. Approximately 5
million men in the United States suffer from lower than normal
levels of testosterone.
o The Company's Spanish subsidiaries Laboratorios Belmac, S.A.,
Laboratorios Davur, S.L., and Laboratorios Rimafar, S.L. were
granted approvals by the Spanish Ministry of Health to market
several new drug formulations in Spain including paroxetine
and trimetazidine.
o The Company completed a successful Phase I clinical study
using its proprietary intranasal insulin product in human
volunteers. The study was conducted by a clinical research
organization in a hospital-based clinical pharmacology unit in
Ireland in compliance with U.S. and European clinical
standards. The clinical study consisted of 8 healthy
(non-diabetic) human volunteers who each received up to four
intranasal sprays of insulin over several weeks utilizing
Bentley's proprietary drug delivery technology. The Company is
planning additional studies for its intranasal insulin,
including the protocols for a Phase II study and an IND in the
U.S. The Company is also developing a licensing strategy.
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o In late February 2004, the Company's leading candidate to
license its topical Antifungal Nail Lacquer product line
decided not to move forward with a collaboration following a
change in their senior management. Bentley has opened
discussions with other potential licensees and continues to be
encouraged with the level of commercial interest in this
product line.
o The Company signed a wide-ranging agreement with Teva
Pharmaceutical Industries, Ltd in July 2000. A considerable
number of products resulting from this agreement are now in
the pipeline, and the Company expects these products to be an
important growth driver in 2004 and beyond.
o The Company signed an R&D agreement with Pfizer Inc in
December 2001. Following Pfizer's merger with Pharmacia,
progress on the collaboration has been slow. The current
agreement expires in April 2004.
o The Company has developed alliances in several European
countries, which have laid the groundwork for a significant
expansion into other high growth markets. As noted above,
exports from the Company's Spanish operations to other
European markets grew dramatically last year and this positive
trend is expected to continue.
o Almost all of the Company's outstanding Class B Redeemable
Warrants were exercised in 2003, generating more than $14
million in proceeds to the Company.
o In April 2003, the Company relocated its corporate
headquarters to Exeter, NH, where it opened a new research and
development laboratory focused on the advancement of it drug
delivery business in the U.S.
o Significant components of Bentley's revenues for 2003 and 2002
are summarized below:
For the year ended December 31, 2002:
Sales Within Spain
-----------------------------------
Product Line Branded Generic Contract % of Total
Products Products Manufacturing Other Total Revenues
-------- -------- ------------- ------- ------- ----------
Omeprazole $ 6,099 $13,863 $ - $ - $19,962 31%
Simvastatin 2,176 4,412 - - 6,588 10%
Enalapril 2,610 1,878 - - 4,488 7%
Codeisan 2,713 - - - 2,713 4%
Pentoxifiline - 2,070 - - 2,070 3%
Other products 5,463 4,744 - - 10,207 16%
Contract Manufacturing - - 9,536 - 9,536 15%
Sales Outside of Spain - - - 7,391 7,391 11%
Licensing and Collaborations - - - 1,721 1,721 3%
------- ------- ------- ------- ------- -------
Total $19,061 $26,967 $ 9,536 $ 9,112 $64,676 100%
======= ======= ======= ======= ======= =======
% of 2003 Revenues 29% 42% 15% 14% 100%
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For the year ended December 31, 2002:
Sales Within Spain
-----------------------------------
Product Line Branded Generic Contract % of Total
Products Products Manufacturing Other Total Revenues
-------- -------- ------------- ------- ------- ----------
Omeprazole $ 5,051 $ 9,813 $ - $ - $14,864 38%
Simvastatin 322 1,261 - - 1,583 4%
Enalapril 955 1,515 - - 2,470 6%
Codeisan 1,944 - - - 1,944 5%
Pentoxifiline - 1,348 - - 1,348 3%
Other products 4,103 2,738 - - 6,841 17%
Contract Manufacturing - - 7,406 - 7,406 19%
Sales Outside of Spain - - - 2,262 2,262 6%
Licensing and Collaborations - - - 418 418 1%
------- ------- ------- ------- ------- -------
Total $12,375 $16,675 $ 7,406 $ 2,680 $39,136 100%
======= ======= ======= ======= ======= =======
% of 2002 Revenues 32% 43% 19% 7% 100%
NOTICE OF CONFERENCE CALL
The Company will host a conference call to discuss these results and
the outlook for 2004 today at 10:00 A.M. EST. 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,
www.bentleypharm.com. A replay of the conference call will be available through
March 4, 2004. Listeners may access the replay via the Company's website,
www.bentleypharm.com, or by dialing (800) 642 - 1687, access code #5575962.
International participants may dial (706) 645 - 9291; the access code is the
same.
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: 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, changes in third-party reimbursement and government mandates
which impact pharmaceutical pricing, 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 For the Year Ended
December 31, December 31,
--------------------- ---------------------
2003 2002 2003 2002
-------- -------- -------- --------
Revenues:
Net product sales $ 17,584 $ 11,384 $ 62,955 $ 38,718
Licensing and collaboration revenue 475 140 1,721 418
-------- -------- -------- --------
Total revenues 18,059 11,524 64,676 39,136
Cost of net product sales 7,715 4,873 26,399 16,477
-------- -------- -------- --------
Gross profit 10,344 6,651 38,277 22,659
-------- -------- -------- --------
Operating expenses:
Selling and marketing 4,009 2,829 14,212 10,400
General and administrative 1,912 1,421 7,001 4,902
Research and development 1,432 988 4,295 2,960
Depreciation and amortization 373 281 1,340 1,015
-------- -------- -------- --------
Total operating expenses 7,726 5,519 26,848 19,277
-------- -------- -------- --------
Income from operations
before sale of drug licenses 2,618 1,132 11,429 3,382
Gain on sale of drug licenses - 58 - 650
-------- -------- -------- --------
Income from operations 2,618 1,190 11,429 4,032
-------- -------- -------- --------
Other income (expenses):
Interest income 96 85 332 279
Interest expense (54) (51) (228) (209)
Other, net (18) 50 (13) 68
-------- -------- -------- --------
Income before income taxes 2,642 1,274 11,520 4,170
Provision for foreign income taxes 954 583 5,423 2,534
-------- -------- -------- --------
Net income $ 1,688 $ 691 $ 6,097 $ 1,636
======== ======== ======== ========
Net income per common share:
Basic $ 0.09 $ 0.04 $ 0.34 $ 0.10
======== ======== ======== ========
Diluted $ 0.08 $ 0.03 $ 0.28 $ 0.08
======== ======== ======== ========
Weighted average common shares outstanding:
Basic 19,071 17,405 17,997 16,569
======== ======== ======== ========
Diluted 22,418 20,121 21,637 19,798
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BENTLEY PHARMACEUTICALS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands, except per share data) December 31, December 31,
2003 2002
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ASSETS
Current assets:
Cash and cash equivalents $ 39,393 $ 26,581
Marketable securities 1,252 396
Receivables, net 18,036 10,874
Inventories, net 7,106 5,133
Deferred foreign taxes 213 123
Prepaid expenses and other 899 865
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Total current assets 66,899 43,972
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Non-current assets:
Fixed assets, net 18,566 9,565
Drug licenses and related costs, net 13,818 10,975
Restricted cash 1,000 -
Other 180 180
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Total non-current assets 33,564 20,720
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$ 100,463 $ 64,692
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 10,154 $ 7,206
Accrued expenses 7,103 4,059
Short-term borrowings 1,915 1,598
Current portion of long-term debt 70 127
Deferred income 1,956 279
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Total current liabilities 21,198 13,269
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Non-current liabilities:
Deferred foreign taxes 2,555 2,141
Long-term debt 369 345
Other 176 186
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Total non-current liabilities 3,100 2,672
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Commitments and contingencies
Stockholders' equity:
Preferred stock, $1.00 par value, authorized 2,000 shares,
issued and outstanding, none - -
Common stock, $.02 par value, authorized 100,000 shares,
issued and outstanding, 20,572 and 17,404 shares 412 348
Stock purchase warrants (to purchase 420 and 3,292
shares of common stock) 333 431
Additional paid-in capital 136,850 121,084
Accumulated deficit (66,599) (72,696)
Accumulated other comprehensive income (loss) 5,169 (416)
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Total stockholders' equity 76,165 48,751
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$ 100,463 $ 64,692
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