EXHIBIT 99.1
Contacts:
Caraco Pharmaceutical - Jitendra Doshi or Bob Kurkiewicz - P: (313) 871-8400
Marcotte Financial Relations - Mike Marcotte - P: (248) 656-3873
CARACO PHARMACEUTICAL LABORATORIES
12-MONTH NET SALES JUMP 103%
12-MONTH NET INCOME OF $11.22 MILLION
12-MONTH NET CASH FROM OPERATING ACTIVITIES OF $15.50 MILLION
Q4 NET SALES RISE 66%
DETROIT, Mar 01, 2004 -- CARACO PHARMACEUTICAL LABORATORIES, LTD.,
(AMEX: CPD) posted record net sales and net income for the full year 2003 and
the fourth quarter ended December 31, 2003, its first ever full year of profit,
Jitendra Doshi, Chief Executive Officer, reported today.
12-month 2003 results
Net sales for the year ended December 31, 2003 rose 103% to a record
$45.50 million, from $22.38 million for the year ended December 31, 2002. Gross
profit for 2003 increased 151% to $25.99 million, from $10.33 million for 2002.
Net income for 2003 improved to $11.22 million, or $0.44 per fully diluted
share, compared with a net loss of $2.26 million, or $(0.10) per fully diluted
share for 2002. SG&A expenses of $7.36 million in 2003 were higher compared to
$3.83 million in 2002. This included non-cash variable compensation expenses
aggregating to $2.29 million as compared to $0.26 million during 2002 resulting
from the modification of the terms of the stock options of two former directors
and severance compensation to the former CEO.
Net cash generated from operating activities was $15.50 million during
2003 as compared to net cash used in operating activities of $0.84 million
during 2002. A schedule of net cash provided by / (used) in operating activities
is presented below.
Total R&D expenses for the year declined by 14% to $6.22 million from
$7.24 million in 2002, due to lower R&D activities in 2003 and this included
non-cash R&D expense of $3.10 million as compared to non-cash R&D expense of
$3.89 million in 2002.
Mr. Doshi said, "2003 has been our best year yet and we are pleased
with our results. We posted record net sales, four consecutive profitable
quarters and accomplished our first-
ever profitable year. Our strong financial position enabled us to successfully
implement operational changes. We paid off the entire Sun Pharma loan of $9.35
million to reduce our interest cost. We were also able to restructure our
mortgage loan with the Economic Development Corporation of the City of Detroit
with lower interest rates and better repayment terms and we also completed a
$2.5 million plant renovation that added production capacity and improved
efficiency."
"We launched four new drugs, which expanded our product portfolio to
17, and received two FDA approvals. We completed bio-equivalency studies for one
product during the 4th quarter of 2003. The ANDA for the product was submitted
to the FDA for approval during the 1st quarter of 2004, raising the number of
products awaiting FDA approval to three.
We continue to aggressively move forward with the new product
development we began during Q4 of 2003. While the development of new products
will increase our non-cash R&D expense and will impact EPS, the cash will be
available, among other things, to repay loans and reduce interest burden, meet
increased working capital requirements and finance capital investments. This in
turn will strengthen our balance sheet and build value for our shareholders," Mr
Doshi added.
Fourth-quarter 2003 results
Q4 2003 net sales rose 66% to a record $12.59 million, from $7.55
million for Q4 2002. The gross margin for Q4 2003 increased 117% to $6.41
million from $2.95 million for Q4 2002. Net income for Q4 2003 improved to $0.15
million, or $0.01 per fully diluted share, compared to a net loss of $0.54
million, or $(.03) per diluted share, for Q4 2002. SG&A expenses were $1.88
million compared to $1.18 million in Q4 2002.
Total R&D expense in Q4-2003 increased by 120% to $4.19 million from
$1.90 million in Q4-2002, which included a non-cash R&D expense of $3.10 million
as compared to a non-cash R&D expense of $1.10 million in Q4 2002.
Detroit-based Caraco Pharmaceutical Laboratories, Ltd., develops,
manufactures and distributes generic and private-label prescription drugs to the
nation's largest wholesalers, distributors, drugstore chains and healthcare
systems.
Safe Harbor: This news release contains forward-looking statements made
pursuant to the safe-harbor provisions of the Private Securities Litigation
Reform Act of 1995. Such statements are based on management's current
expectations and are subject to risks and uncertainties that could cause actual
results to differ materially from those described in the forward-looking
statements. These risks and uncertainties are contained in the Corporation's
filings with the Securities and Exchange Commission and include: information is
of a preliminary nature and may be subject to adjustment, not obtaining or
delays in obtaining FDA approval for new products, governmental restrictions on
the sale of certain products, dependence on key personnel, development by
competitors of new or superior products or cheaper products or new technology
for the production of products, the entry into the market of new competitors,
market and customer acceptance and demand for new pharmaceutical products,
availability of raw materials, timing and success of product development and
launches, integrity and reliability of the Corporation's data, lack of success
of attaining full compliance with regard to regulatory and cGMP compliance, and
other risks identified from time to time in the Corporation's reports and
registration statements filed with the SEC, available free via EDGAR. The
Corporation assumes no responsibility to update forward-looking statements.
Financial statements follow
CARACO PHARMACEUTICAL LABORATORIES, LTD.
UNAUDITED STATEMENTS OF OPERATIONS
TWELVE MONTHS ENDED THREE MONTHS ENDED
DECEMBER 31 DECEMBER 31
--------------------------- ----------------------------
2003 2002 2003 2002
---------- ---------- ---------- ----------
Net sales 45,498,400 22,380,964 12,592,738 7,552,115
Cost of Goods Sold 19,507,407 12,047,410 6,185,209 4,598,601
Gross Profit 25,990,994 10,333,554 6,407,530 2,953,514
Selling, general & administrative expenses 7,363,341 3,827,707 1,883,775 1,179,505
R&D cost to affiliate - non-cash 3,103,370 3,887,424 3,103,370 1,096,704
R&D cost other 3,112,294 3,348,789 1,094,265 807,340
Operating income / (loss) 12,411,989 (730,365) 326,120 (130,034)
Other Income / (expense)
Interest expense (1,233,531) (1,539,075) (192,149) (408,177)
Interest income 9,102 13,436 (15,688) 2,638
Profit on sale of asset 25,531 - 25,531 -
Other miscellaneous income 9,627 - 9,627 -
Net other income / (expense) (1,189,271) (1,525,639) (172,679) (405,539)
Net income / (loss) 11,222,718 (2,256,004) 153,441 (535,573)
Net income / (loss) per basic common share 0.46 (.10) 0.01 (.03)
Net income / (loss) per basic and diluted common share 0.44 (.10) 0.01 (.03)
Schedule of Net Cash Provided By/(Used) in Operating Activities (Unaudited) (1)
Twelve-month period ended
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12/31/03 12/31/02
------------ ------------
Net income / (loss) 11,222,718 (2,256,004)
Adjustments to reconcile net income / (loss) to net cash provided by /
(used) in operating activities
Depreciation 683,339 539,374
Common shares issued in lieu of cash for compensation to independent 112,310 41,400
directors
Variable compensation for stock options, extended to former directors 2,435,877 262,265
Preferred stock to be issued for R&D to affiliate 3,103,370 -
Common shares issued for R&D to affiliate - 3,887,423
Gain on sale of property, plant & equipment (25,531) -
Changes in operating assets and liabilities which provided / (used) cash
Accounts receivable 945,662 (3,997,627)
Inventories (3,994,848) (2,706,907)
Prepaid expenses and deposits (90,716) (292,112)
Accounts payable 1,243,139 3,019,936
Accrued expenses and Interest (126,829) 663,652
Net cash provided by / (used) in operating activities 15,508,491 (838,600)
(1) This schedule of net cash provided by / (used) in operating activities is
deemed by management to be a meaningful measure of financial performance and
liquidity, and provides investors with a measure of cash that may be used for
debt service and for other purposes.