CONTACT: Halsey Drug Co., Inc.
Investor Relations, Peter A. Clemens, VP & CFO 847-705-7709
FOR IMMEDIATE RELEASE
HALSEY DRUG CO., INC. REPORTS RESULTS FOR 2003
PALATINE, IL, APRIL 22, 2004: Halsey Drug Co., Inc. (OTC.BB-HDGC) today
announced that total revenues for the year ended December 31, 2003 decreased to
$5,750,000 compared to $8,205,000 for 2002. The Company also reported a net loss
for the year ended December 31, 2003 of $48,455,000 or $2.28 per share, compared
to a net loss of $59,589,000 or $3.90 per share for 2002. Included in the net
loss for 2003 were non-cash expenses of $31,631,000 or $1.49 per share,
comprised of $24,771,000 of amortization of debt discount and private offering
costs, a $3,619,000 charge for impairment of assets in connection with the
restructuring of the Company's operations and $3,241,000 of non-cash interest
expense. Non-cash expenses for 2002 were $44,027,000 or $2.88 per share.
Revenues were $1,540,000 and $2,053,000 for the quarters ended December 31, 2003
and 2002, respectively. The net loss for the quarter ended December 31, 2003 was
$15,263,000 or $ .71 per share, compared to a net loss of $38,901,000 or $2.45
per share for the quarter ended December 31, 2002.
Commenting, Andy Reddick, President and CEO said, "2003 was a transition year
for the Company. Beginning in the fourth quarter of 2003, the Company moved to
eliminate manufacturing operations of finished dosage generic pharmaceuticals
while focusing its resources and expertise on proprietary development
technologies where we believe significant value can be derived. The Company has
transitioned to a single vertically integrated operations facility located in
Culver, Indiana where it intends to implement the following strategy and perform
relevant key activities:
- - Development of the Company's proprietary abuse deterrent formulation
technology (the "ADF Technology") for use in orally administered opioid
finished dosage products.
- - Manufacture and quality assurance release of clinical trial supplies of
certain finished dosage form products utilizing the ADF Technology.
- - Evaluation of certain finished dosage products utilizing the ADF
Technology in clinical trials.
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- - Scale-up and manufacture of commercial quantities of certain products
utilizing the ADF Technology for sale by the Company's licensees.
- - Research, development and scale up of the Company's novel Opioid Synthesis
Technologies.
- - Prosecution of the Company's application to the DEA for registration to
import narcotic raw materials for use in the production of opioid active
pharmaceutical ingredients utilizing the Company's Opioid Synthesis
Technologies.
- - Negotiating and executing license and development agreements with
strategic pharmaceutical company partners providing that such licensees
will further develop certain finished dosage products utilizing the ADF
Technology, file for regulatory approval with the U.S. Food and Drug
Administration and other regulatory authorities and commercialize such
products.
Proceeds from the Company's 2004 private offering of debentures and the
divestment of certain assets as previously announced by the Company on February
10, 2004 and March 24, 2004 respectively, are expected to fund the Company's
operations through calendar year 2004.
Halsey Drug Co., Inc., together with its subsidiaries, is an emerging
pharmaceutical technology development company specializing in proprietary drug
formulation and active pharmaceutical ingredient manufacturing process
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 Drug Co., Inc. are available at Halsey's
web site at www.halseydrug.com.
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HALSEY DRUG CO., INC.
FINANCIAL HIGHLIGHTS
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE INFORMATION)
(UNAUDITED)
THREE MONTHS ENDED TWELVE MONTHS ENDED
DECEMBER 31, DECEMBER 31,
------------------------- -------------------------
2003 2002 2003 2002
---------- ---------- ---------- ----------
Net Product Revenues $ 1,540 $ 2,053 $ 5,750 $ 8,205
Operating Costs
Cost of Manufacturing 4,300 3,163 11,705 12,535
Research and Development 505 356 1,460 1,517
Selling, General and Administrative Expenses 1,789 1,744 7,903 7,216
Plant Shutdown Costs 1,926 (6) 1,926 (126)
---------- ---------- ---------- ----------
Loss From Operations (6,980) (3,204) (17,244) (12,937)
Other Income (Expense)
Interest Expense (1,565) (1,320) (6,001) (4,728)
Interest Income 3 5 25 15
Amortization of Deferred Debt Discount
and Private Offering Costs (6,721) (4,996) (24,771) (12,558)
Loss on Extinguishment of Debt -- (29,278) -- (29,278)
Investment in Joint Venture -- -- -- --
Other -- (108) (464) (103)
---------- ---------- ---------- ----------
Net Loss $ (15,263) $ (38,901) $ (48,455) $ (59,589)
========== ========== ========== ==========
Basic and Diluted Loss Per Common Share $ (0.71) $ (2.46) $ (2.28) $ (3.90)
========== ========== ========== ==========
Weighted Average Number of Outstanding Shares 21,548 15,844 21,227 15,262
========== ========== ========== ==========
HALSEY DRUG CO., INC.
FINANCIAL HIGHLIGHTS
CONDENSED CONSOLIDATED BALANCE SHEETS
AT DECEMBER 31,
(IN THOUSANDS)
2003 2002
-------- --------
ASSETS
Current Assets $ 2,122 $ 12,500
Property, Plant and Equipment, Net 3,394 5,367
Other Assets 1,106 1,497
-------- --------
$ 6,622 $ 19,364
======== ========
LIABILITIES & STOCKHOLDERS' DEFICIT
Current Liabilities 5,892 6,567
Long Term Debt, Net 52,797 25,065
Stockholders' Deficit (52,067) (12,268)
-------- --------
$ 6,622 $ 19,364
======== ========