EXHIBIT 99.1
[ADAMS RESPIRATORY THERAPEUTICS LOGO]
425 Main Street, Colonial Court
Chester, NJ 07930
Main: 908-879-1400
Fax: 908-879-9191
www.adamsrt.com
ADAMS RESPIRATORY THERAPEUTICS REPORTS
FISCAL 2006 FIRST QUARTER RESULTS
First Quarter Financial Highlights:
- Net sales increased 81% to $47.0 million
- Pretax income increased 91% to $20.1 million
Other Recent Events:
- Received FDA approval for a secondary source of guaifenesin
supply (Nov.)
- Signed agreement with existing supplier for multi-year
commitment for dextromethorphan supply (Nov.)
- Launched Mucinex(R) D (600 mg guaifenesin/60 mg
pseudoephedrine HCl extended-release bi-layer tablets), for
the treatment of nasal congestion and sinus pressure (Oct.)
- Received a second patent from the U.S. Patent and Trademark
Office covering Adams' suite of extended-release bi-layer
tablet products (Oct.)
- Introduced Mrs. Mucus(TM) in new consumer advertising campaign
(Oct.)
CHESTER, N.J. (Nov. 9, 2005) - Adams Respiratory Therapeutics, Inc. (NASDAQ:
ARxT) today announced financial results for the fiscal first quarter ended Sept.
30, 2005.
"We are pleased with our solid financial performance during this fiscal first
quarter and are excited about the growth opportunities being generated across
our expanding product portfolio," said Michael J. Valentino, president and CEO.
First Quarter Financial Results
Net sales for the quarter were $47.0 million, an increase of 81 percent from
$25.9 million in the first quarter of fiscal 2005. The solid growth in net sales
was led by the continued market penetration of the Mucinex(R) franchise of
guaifenesin-based extended-release bi-layer tablet products.
Pretax income of $20.1 million in the fiscal 2006 first quarter grew 91 percent
or $9.6 million from $10.5 million in the prior year period. Income per diluted
share in the first quarter of fiscal 2006 was $0.36, versus a loss of ($9.77) in
the prior year period. The first quarter of fiscal 2005 included the accretion
of preferred stock which was converted into common stock upon the initial public
offering.
Product Sales
Net sales of Mucinex(R) (600 mg guaifenesin extended-release bi-layer tablets),
for respiratory congestion, grew 74 percent in the first quarter of fiscal 2006
to $36.6 million from sales of $21.0 million in the fiscal 2005 first quarter.
Net sales of Mucinex(R) DM (600 mg guaifenesin/30 mg dextromethorphan HBr
extended-release bi-layer tablets), for controlling cough, more than doubled in
the quarter to $10.4 million from $4.3 million in the prior year period. Product
sales continued to benefit from the residual impact of the Company's initial
consumer advertising campaign that ran from November 2004 through mid-June 2005,
and the market introduction of Mucinex(R) DM in August 2004.
Margins and Expense Items
The Company's gross margin was 81.9 percent for the fiscal 2006 first quarter,
compared to 76.0 percent in the prior year period. The gross margin improvement
is primarily related to the advantage gained from higher net sales on the profit
share arrangement in the Company's supply agreement with Cardinal Health.
Selling, marketing and administrative expenses rose significantly during the
current quarter to $15.9 million from $7.8 million in the fiscal 2005 first
quarter. The increase was primarily due to the production expenses associated
with Adams' new consumer advertising campaign, which was launched on Oct. 27,
2005, incremental costs related to the additional 50 sales representatives that
were hired in December 2004 and higher general and administrative costs related
to new headcount, insurance and information technology. In addition, non-cash
stock-based compensation increased $911,000 primarily as a result of the
consideration of a volatility assumption in the calculation of the fair value of
the fiscal 2006 stock option grants.
Product development expenses increased by $1.9 million to $3.4 million during
the fiscal 2006 first quarter as compared to $1.5 million in the prior-year
period. The increase was primarily related to the ongoing development of
additional Mucinex(R) line extensions and other development projects. This
expense includes a $650,000 milestone payment to Edmond Pharma SRL to in-license
erdosteine, an established muco-regulator compound in Europe, for U.S.
development.
Interest income rose significantly during the quarter to $926,000 from $109,000
in the comparable period a year ago. This increase was due to the interest
earned on higher cash balances, which include the $106.7 million of net proceeds
received from the IPO in July 2005 coupled with higher interest rates.
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"This early in the fiscal year, much of our progress is subject to timing - the
timing of retailer and wholesaler purchases in anticipation of the upcoming
cough/cold season, the timing of ad spending and clinical trials and, of course,
the timing of the onset and severity of the cough/cold season," commented
Valentino. "We remain on track to meet our 2006 business objectives and are
preparing for the launch of new products. In addition, we are actively pursuing
business development opportunities."
Business Outlook
- Adams expects to make ongoing investments to support new
product launches, including Mucinex(R) D (October 2005), as
well as to continue to invest in consumer advertising to
strengthen brand awareness for the entire Mucinex(R)
franchise.
- The Company plans a 25 percent increase in advertising
expenditures during fiscal 2006. A new television ad campaign,
introducing Mrs. Mucus(TM), commenced on Oct. 27, 2005, and
will continue throughout the 2006 cough/cold season.
- Adams continues to plan for a U.S. launch of the
maximum-strength extended-release bi-layer tablet (1200 mg
guaifenesin) under the Humibid(R) brand name in the first half
of calendar 2006 and expects to launch the remaining
maximum-strength combination formulations in the second half
of calendar 2006.
- The Company has committed up to $9 million during fiscal 2006
for investigational Phase II activities and milestone payments
related to the U.S. development of erdosteine. Phase II
studies of erdosteine are expected to begin during the first
half of calendar 2006.
Fiscal First Quarter 2006 Conference Call and Webcast
Adams will conduct a conference call today at 10:00 a.m. (EST) to review the
fiscal first quarter results. Michael J. Valentino, president and CEO, and David
P. Becker, executive vice president, CFO and treasurer, will host the conference
call.
To listen live to the call, dial 1-877-669-8882 or 1-706-758-9391. A replay of
the call will be available starting at approximately 1 p.m. on Nov. 9 through 5
p.m. on Nov. 16. To listen to the replay, dial 1-800-642-1687 or 1-706-645-9291
and enter the conference ID# 1701032.
A live audio webcast of the conference call also will be available by going to
the Investor Relations section of the Adams web site, http://www.adamsrt.com,
and clicking on the "News and Events" link. A replay of the webcast will be
available starting at approximately noon on Nov. 9 through 5 p.m. on Dec. 7.
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About Adams Respiratory Therapeutics, Inc.
Adams is a specialty pharmaceutical company focused on the late-stage
development, commercialization and marketing of over-the-counter and
prescription pharmaceuticals for the treatment of respiratory disorders.
Forward-Looking Statements
This release contains statements relating to projections or future results.
These statements are forward-looking statements under the federal securities
laws. We can make no assurance that any projections or future results discussed
in these statements will be achieved. Any forward-looking statements represent
our views only as of today and should not be relied upon as representing our
views as of any subsequent date. These statements are subject to a variety of
risks and uncertainties that could cause our actual results to differ materially
from the statements contained in this release. For a discussion of important
factors that could affect our actual results, please refer to our SEC filings,
including the "Risk Factors" section of our Form 10-K, for the fiscal year ended
June 30, 2005.
# # #
Investor/Media Contact: Janet M. Barth (908) 879-2428
Source: Adams Respiratory Therapeutics, Inc. (NASDAQ: ARxT)
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ADAMS RESPIRATORY THERAPEUTICS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
THREE MONTHS ENDED SEPTEMBER 30,
--------------------------------
2005 2004
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(UNAUDITED)
Net sales ....................................................... $47,017 $ 25,923
Cost of goods sold .............................................. 8,521 6,211
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Gross margin .................................................... 38,496 19,712
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Selling, marketing & administrative ............................. 15,869 7,831
Product development ............................................. 3,426 1,475
Interest income, net ............................................ (926) (109)
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18,369 9,197
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Income before income taxes ...................................... 20,127 10,515
Provision for income taxes ...................................... 7,739 4,080
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Net income ...................................................... 12,388 6,435
Accretion of preferred stock .................................... -- (62,789)
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Net income/(loss) applicable to common stockholders ............. $12,388 $(56,354)
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Income/(loss) per common share
Basic ...................................................... $ 0.44 $ (9.77)
Diluted .................................................... $ 0.36 $ (9.77)
Weighted-average of common shares used in income/(loss)
per share calculation
Basic ...................................................... 27,870 5,766
Diluted .................................................... 34,745 5,766
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