Contact: Halsey Pharmaceuticals
Investor Relations - Peter A. Clemens, Vice President & CFO
(815) 399-2060
FOR IMMEDIATE RELEASE
HALSEY PHARMACEUTICALS REPORTS RESULTS
FOR THIRD QUARTER
ROCKFORD, IL., NOVEMBER 19, 2003: Halsey Pharmaceuticals (OTC.BB-HDGC) today
reported a net loss for the third quarter, ended September 30, 2003, of
$(11,590,000) or $(.55) per share as compared to net loss of $(7,869,000) or
$(0.52) per share for the quarter ended September 30, 2002. For the nine months
ended September 30, 2003, the Company had a net loss of $(33,192,000) or $(1.57)
per share as compared to a net loss of $(20,688,000) or $(1.37) per share for
the same period in 2002.
Net product revenues for the third quarter were $1,478,000 as compared to
$2,013,000 for the quarter ended September 30, 2002. For the first nine months
of fiscal 2003, net product revenues were $4,210,000 as compared to $6,152,000
for the same period in 2002.
As previously disclosed on November 6, 2003, the Company announced that it
intends to restructure the Company's operations to focus its efforts on research
and development related to certain proprietary finished dosage products and
active ingredients. As part of that process, the Company intends to close or
divest its assets in Congers, NY, discontinue the manufacture and sale of
finished dosage generic products and substantially reduce activities at its
active pharmaceutical ingredient facility in Culver, Indiana.
Subject to securing necessary financing, of which no assurance can be given, the
restructured Company intends to continue certain laboratory operations and
development activities at the Culver facility including the development of
certain proprietary active pharmaceutical ingredient and finished dosage form
technologies.
In conjunction with the restructuring, the Company is continuing to meet with
its existing debentureholders and is seeking to identify unaffiliated third
parties to obtain the necessary long term financing necessary to fund the
restructured operations going forward. The Company estimates a funding
requirement of approximately $15 million to complete the restructuring and
provide working capital to fund operations through 2004. The Company estimates
that current cash on hand will fund the Company's operations through December 1,
2003. In the absence of continued additional funding by the Company's
debentureholders or an alternative third party investment, of which no assurance
can be given, the Company would be required to further scale back or terminate
operations, and/or seek protection under applicable bankruptcy laws.
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Halsey Pharmaceuticals, together with its subsidiaries, is an emerging
pharmaceutical company specializing in proprietary active pharmaceutical
ingredient and finished dosage form development.
The statements in this press release are forward looking and are made pursuant
to the safe harbor provisions of the Private Securities Litigation Reform Act of
1995. Investors are cautioned that forward looking statements involve risk and
uncertainties which may affect Halsey's business prospects, including economic,
competitive, governmental, technological and other factors discussed in filings
with the Securities and Exchange Commission.
This and past press releases for Halsey Pharmaceuticals are available at the
Company's web site at WWW.HALSEYDRUG.COM.
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HALSEY DRUG CO., INC. (D/B/A HALSEY PHARMACEUTICALS)
FINANCIAL HIGHLIGHTS
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE INFORMATION)
(UNAUDITED) (UNAUDITED)
NINE MONTHS ENDED THREE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
2003 2002 2003 2002
------------ ------------ ------------ ------------
Net Product Revenues $ 4,210 $ 6,152 $ 1,478 $ 2,013
Operating Costs
Cost of Manufacturing 7,405 9,372 2,267 3,118
Research and Development 955 1,161 339 404
Selling, General and Administrative Expenses 6,114 5,472 2,197 1,957
Plant Shutdown Costs -- (120) -- --
------------ ------------ ------------ ------------
Loss from Operations (10,264) (9,733) (3,325) (3,466)
Other Income (Expense)
Interest Income 22 10 1 3
Interest Expense (4,436) (3,408) (1,532) (1,235)
Amortization of Deferred Debt Discount
and Private Offering Costs (18,050) (7,562) (6,367) (3,187)
Other (464) 5 (367) 16
------------ ------------ ------------ ------------
Net Loss $ (33,192) $ (20,688) $ (11,590) $ (7,869)
============ ============ ============ ============
Basic and Diluted Loss Per Common Share $ (1.57) $ (1.37) $ (0.55) $ (0.52)
============ ============ ============ ============
Weighted Average Number of Outstanding Shares 21,196,131 15,065,240 21,222,993 15,065,240
============ ============ ============ ============
HALSEY DRUG CO., INC. (D/B/A HALSEY PHARMACEUTICALS)
FINANCIAL HIGHLIGHTS
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)
(UNAUDITED) (AUDITED)
SEPTEMBER 30, DECEMBER 31,
2003 2002
-------- --------
ASSETS
Current Assets $ 4,838 $ 12,500
Property, Plant and Equipment, Net 6,167 5,367
Other Assets 1,381 1,497
-------- --------
$ 12,386 $ 19,364
======== ========
LIABILITIES & STOCKHOLDERS' DEFICIT
Current Liabilities 51,169 6,567
Long Term Debt, Net 317 25,065
Stockholders' Deficit (39,100) (12,268)
-------- --------
$ 12,386 $ 19,364
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