SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10 - Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2000
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ______________ to _____________
COMMISSION FILE NUMBER 1-10352
COLUMBIA LABORATORIES, INC.
(Exact name of Company as specified in its charter)
DELAWARE 59-2758596
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2875 N.E. 191ST STREET, SUITE 400
AVENTURA, FLORIDA 33180
(Address of principal executive offices) (Zip Code)
Company's telephone number, including area code: (305) 933-6089
Indicate by check mark whether the Company (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the Company
was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No
Number of shares of the Common Stock of Columbia Laboratories, Inc.
issued and outstanding as of May 1, 2000: 30,433,926
COLUMBIA LABORATORIES, INC. AND SUBSIDIARIES
PART 1 - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
The following unaudited, condensed consolidated financial statements of
the Company have been prepared in accordance with the instructions to Form 10-Q
and, therefore, omit or condense certain footnotes and other information
normally included in financial statements prepared in accordance with generally
accepted accounting principles. In the opinion of management, all adjustments
(consisting only of normal recurring accruals) necessary for a fair presentation
of the financial information for the interim periods reported have been made.
Results of operations for the three months ended March 31, 2000 are not
necessarily indicative of the results for the year ending December 31, 2000.
Except for historical information contained herein, the matters
discussed in this document are forward looking statements made pursuant to the
safe harbor provisions of the Securities Litigation Reform Act of 1995. Such
statements involve risks and uncertainties, including but not limited to
economic, competitive, governmental and technological factors affecting the
Company's operations, markets, products and prices, and other factors discussed
elsewhere in this report.
2
COLUMBIA LABORATORIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
March 31, December 31,
2000 1999
------------- -------------
(Unaudited)
ASSETS
Current assets-
Cash and cash equivalents $ 5,501,774 $ 1,982,085
Accounts receivable, net 2,438,558 1,835,086
Inventories 1,428,843 1,848,816
Prepaid expenses 407,254 468,948
Other current assets 311,442 568,259
------------- -------------
Total current assets 10,087,871 6,703,194
Property and equipment, net 902,709 1,008,553
Intangible assets, net 5,955,088 4,860,212
Other assets 408,588 415,654
------------- -------------
TOTAL ASSETS $ 17,354,256 $ 12,987,613
============= =============
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIENCY)
Current liabilities-
Accounts payable $ 1,492,949 $ 2,089,260
Accrued expenses 1,072,250 1,072,567
Deferred revenue 100,000 100,000
------------- -------------
Total current liabilities 2,665,199 3,261,827
Convertible subordinated note payable 10,000,000 10,000,000
------------- -------------
TOTAL LIABILITIES 12,665,199 13,261,827
Stockholders' equity (deficiency)-
Preferred stock, $.01 par value; 1,000,000 shares authorized:
Series A Convertible Preferred Stock, 33 and 923
shares issued and outstanding in 2000 and 1999, respectively -- 9
Series B Convertible Preferred Stock, 1,630
shares issued and outstanding in 2000 and 1999 16 16
Series C Convertible Preferred Stock, 4,310 and
5,260 shares issued and outstanding in 2000 and 1999, respectively 43 53
Common stock, $.01 par value; 40,000,000 shares
authorized; 30,412,641 shares and 29,124,686
issued and outstanding in 2000 and 1999, respectively 304,126 291,246
Capital in excess of par value 105,939,456 99,575,803
Accumulated deficit (101,560,544) (100,198,848)
Accumulated other comprehensive income 5,960 57,507
------------- -------------
TOTAL STOCKHOLDERS' EQUITY (DEFICIENCY) 4,689,057 (274,214)
------------- -------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIENCY) $ 17,354,256 $ 12,987,613
============= =============
See notes to condensed consolidated financial statements
3
COLUMBIA LABORATORIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ended March 31,
2000 1999
------------ ------------
NET SALES $ 2,989,930 $ 5,466,461
COST OF GOODS SOLD 1,219,848 1,776,841
------------ ------------
Gross profit 1,770,082 3,689,620
------------ ------------
OPERATING EXPENSES:
Selling and distribution 812,870 857,827
General and administrative 788,128 1,484,598
Research and development 1,363,412 1,390,076
------------ ------------
Total operating expenses 2,964,410 3,732,501
------------ ------------
Loss from operations (1,194,328) (42,881)
------------ ------------
OTHER INCOME (EXPENSE):
License fees, net of expenses -- 387,500
Interest income 28,304 30,496
Interest expense (188,838) (188,838)
Other, net (6,834) (21,167)
------------ ------------
(167,368) 207,991
------------ ------------
Income (loss) before income taxes (1,361,696) 165,110
Provision for income taxes -- 25,000
------------ ------------
Net income (loss) (1,361,696) $ 140,110
============ ============
NET INCOME (LOSS) PER COMMON SHARE:
Basic $ (.05) $ .00
============ ============
Diluted $ (.05) $ .00
============ ============
WEIGHTED AVERAGE NUMBER OF COMMON AND
POTENTIAL COMMON SHARES OUTSTANDING:
Basic 29,527,163 28,685,000
============ ============
Diluted 29,527,163 28,985,000
============ ============
See notes to condensed consolidated financial statements
4
COLUMBIA LABORATORIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE OPERATIONS
(UNAUDITED)
Three Months Ended March 31,
2000 1999
----------- -----------
NET INCOME (LOSS) $(1,361,696) $ 140,110
Other comprehensive income (loss):
Foreign currency translation, net of tax 51,547 38,290
----------- -----------
Comprehensive income (loss) $(1,310,149) $ 178,400
=========== ===========
See notes to condensed consolidated financial statements.
5
COLUMBIA LABORATORIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Three Months Ended March 31,
2000 1999
----------- -----------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) ($1,361,696) $ 140,110
Adjustments to reconcile net income (loss) to net
cash used in operating activities-
Depreciation and amortization 241,322 259,725
Issuance of warrants for consulting services 5,681 12,699
Changes in assets and liabilities-
(Increase) decrease in:
Accounts receivable (603,472) (2,482,146)
Inventories 419,973 628,971
Prepaid expenses 61,694 (253,825)
Other assets 263,883 6,062
Increase (decrease) in:
Accounts payable (596,311) (976,448)
Accrued expenses (425,317) (337,395)
----------- -----------
Net cash used in operating activities (1,994,243) (3,002,247)
----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment (5,354) (4,406)
Acquisition of licensing rights (200,000) (100,000)
----------- -----------
Net cash used in investing activities (205,354) (104,406)
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of preferred stock -- 5,939,534
Dividends paid (62,404) (181,625)
Proceeds from exercise of options and warrants 5,833,237 --
----------- -----------
Net cash provided by financing activities 5,770,833 5,757,909
----------- -----------
(Continued)
6
COLUMBIA LABORATORIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(Continued)
Three Months Ended March 31,
2000 1999
----------- -----------
EFFECT OF EXCHANGE RATE CHANGES ON CASH (51,547) (45,047)
----------- -----------
NET INCREASE IN CASH
AND CASH EQUIVALENTS 3,519,689 2,606,209
CASH AND CASH EQUIVALENTS,
Beginning of period 1,982,085 315,288
----------- -----------
CASH AND CASH EQUIVALENTS,
End of period $ 5,501,774 $ 2,921,497
=========== ===========
See notes to condensed consolidated financial statements
7
COLUMBIA LABORATORIES, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(1) SIGNIFICANT ACCOUNTING POLICIES:
The accounting policies followed for quarterly financial reporting are
the same as those disclosed in Note (1) of the Notes to Consolidated Financial
Statements included in the Company's Annual Report on Form 10-K for the fiscal
year ended December 31, 1999.
(2) INVENTORIES:
March 31, December 31,
2000 1999
---------- ------------
Finished goods $ 688,190 $1,029,574
Raw materials 740,653 819,242
---------- ----------
$1,428,843 $1,848,816
========== ==========
(3) SEGMENT INFORMATION:
The Company and its subsidiaries are engaged in one line of business, the
development and sale of pharmaceutical products and cosmetics. The following
table shows selected information by geographic area:
NET LOSS FROM IDENTIFIABLE
SALES OPERATIONS ASSETS
------------ ------------ ------------
As of and for the three months
ended March 31, 2000-
United States $ 2,412,784 $ (144,827) $ 13,127,361
Europe 577,146 (1,049,501) 4,226,895
------------ ------------ ------------
$ 2,989,930 $ (1,194,328) $ 17,354,256
============ ============ ============
As of and for the three months
ended March 31, 1999-
United States $ 4,498,887 $ 1,228,563 $ 11,391,018
Europe 967,574 (1,271,444) 5,040,357
------------ ------------ ------------
$ 5,466,461 $ (42,881) $ 16,431,375
============ ============ ============
8
(4) INCOME (LOSS) PER COMMON AND POTENTIAL COMMON SHARE:
The calculation of basic and diluted income (loss) per common and potential
common share is as follows:
Three Months Ended March 31,
2000 1999
------------ ------------
Net income (loss) $ (1,361,696) $ 140,110
Less: preferred stock dividends (62,404) (59,968)
------------ ------------
Net income (loss) applicable to common stock (1,424,100) 80,142
============ ============
Basic:
Weighted average number of common shares outstanding 29,527,163 28,685,000
============ ============
Basic net income (loss) per common share $ (.05) $ .00
============ ============
Diluted:
Weighted average number of common shares outstanding 29,527,163 28,685,000
Weighted average number of potential common shares -- 300,000
------------ ------------
Weighted average number of common and potential common
shares outstanding 29,527,163 28,985,000
============ ============
Diluted net income (loss) per common share $ (.05) $ .00
============ ============
(5) LAWSUIT SETTLEMENT:
The Company filed an action in the United States District Court for the Southern
District of Florida ("Florida Action") in November 1997 seeking a declaratory
judgment on certain issues related to its relationship with Lake Consumer
Products, Inc. ("Lake") as governed in the contract between the Company and
Lake. Lake filed an action against the Company in the United States District
Court, Northern District of Illinois ("Illinois Action") , for damages alleged
by Lake to have been suffered by it as a result of the FDA's allegations in July
1997 that the Company's nonoxynol-9 product, then marketed by Lake under the
tradename Advantage 24, was not permitted to be sold under the monograph. The
Illinois Action was dismissed by the Illinois Court and transferred to the
Florida Court for consolidation as a counterclaim in the Florida Action. On
March 16, 2000, the Company and Lake settled all outstanding issues in the
consolidated Florida Action by the Company having bought out the contract for
the sum of $1,200,000 ($600,000 in cash and $600,000 in the form of Company
common stock). As a result, the Company reacquired the U.S. rights to the
Advantage product and both parties agreed to have their legal actions dismissed.
The total amount of the settlement plus certain attorney's fees, related solely
to the reacquisition of the product rights, have been capitalized as part of
intangible assets in the accompanying balance sheets.
9
(6) SUBSEQUENT EVENT:
Effective May 5, 2000, the Company sold various tangible and intangible assets
related to the U.S. rights for Replens for a total of $4.5 million cash.
Additionally, the purchaser agreed to buy up to $500,000 of Replens inventory
from the Company and to pay future royalties of up to $2 million equal to 10% of
future U.S. sales of Replens based.
Additionally, effective May 5, 2000, the Company licensed its Legatrin PM,
Legatrin GCM, Vaporizer in a Bottle and Diasorb brands to the same purchaser
mentioned above. Under the terms of these agreements, the Company will receive
license fees equal to 20% of the licensee's net sales of these brands. These
agreements each have five-year terms with provisions for renewal and contain
options that allow the licensee to acquire the brands from the Company.
10
COLUMBIA LABORATORIES, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITIONS AND RESULTS OF OPERATIONS
LIQUIDITY AND CAPITAL RESOURCES
The Company and its representatives from time to time make written or
verbal forward looking statements, including statements contained in this and
other filings with the Securities and Exchange Commission and in the Company's
reports to stockholders, which are made pursuant to the safe harbor provisions
of the Private Securities Litigation Reform Act of 1995. Such statements
include, without limitation, the Company's expectations regarding sales,
earnings or other future financial performance and liquidity, product
introductions, entry into new geographic regions and general optimism about
future operations or operating results. Although the Company believes that its
expectations are based on reasonable assumptions within the bounds of its
knowledge of its business and operations, there can be no assurance that actual
results will not differ materially from its expectations. Factors that could
cause actual results to differ from expectations include, without limitation:
(i) increased competitive activity from companies in the pharmaceutical
industry, some of which have greater resources than the Company; (ii) social,
political and economic risks to the Company's foreign operations, including
changes in foreign investment and trade policies and regulations of the host
countries and of the United States; (iii) changes in the laws, regulations and
policies, including changes in accounting standards, that affect, or will
affect, the Company in the United States and abroad; (iv) foreign currency
fluctuations affecting the relative prices at which the Company and foreign
competitors sell their products in the same market; and (v) the ability of the
Company and third parties, including customers or suppliers, to adequately
address Year 2000 issues. Additional information on factors that may affect the
business and financial results of the Company can be found in filings of the
Company with the Securities and Exchange Commission. All forward-looking
statements should be considered in light of these risks and uncertainties. The
Company assumes no responsibility to update forward-looking statements made
herein or otherwise.
Cash and cash equivalents increased from $1,982,285 at December 31,
1999 to $5,501,774 at March 31, 2000. The Company received approximately $5.8
million from the exercise of outstanding options and warrants.
The Company has a worldwide, except for South Africa, license and
supply agreement with Ares-Serono ("Serono") a Swiss pharmaceutical company.
Under the terms of the agreement, as of March 31, 2000, the Company has earned
$17 million in milestone payments and will continue to receive additional
milestone payments. The Company supplies Crinone to Serono at a price equal to
30% of Serono's net selling price.
In connection with the 1989 purchase of the assets of Bio-Mimetics,
Inc., which assets consisted of the patents underlying the Company's Bioadhesive
Delivery System, other patent applications and related technology, the Company
pays Bio-Mimetics, Inc. a royalty equal to two percent of the net sales of
products based on the Bioadhesive Delivery System, to an aggregate of $7.5
million. The Company is required to prepay a portion of the remaining royalty
obligation, in cash or stock at the option of the Company, if certain conditions
are met. Through March 31, 2000, the Company has paid approximately $1.7 million
in royalty payments.
In March 1999, the Company entered into a license and supply agreement
with Mipharm SpA under which Mipharm SpA will be the exclusive marketer of the
Company's previously
11
unlicensed women's healthcare products in Italy, Portugal, Greece and Ireland
with a right of first refusal for Spain. Under the terms of the agreement, the
Company received a $462,500 in 1999, net of expenses, upfront payment and
expects to receive future milestone payments, as additional products are made
available by the Company.
The Company believes that sales and liquidity will increase as Crinone
is fully marketed by Ares-Serono.
As of March 31, 2000, the Company has outstanding exercisable options
and warrants that, if exercised, would result in approximately $46.2 million of
additional capital. However, there can be no assurance that such options or
warrants will be exercised.
Significant expenditures anticipated by the Company in the near future
are concentrated on research and development related to new products. The
Company anticipates it will spend approximately $8.2 million on research and
development in 2000 and an additional $100,000 on property and equipment.
As of March 31, 2000, the Company had available net operating loss
carryforwards of approximately $51.2 million to offset its future U.S. taxable
income.
In accordance with Statement of Financial Accounting Standards No.
109, as of March 31, 2000 and December 31, 1999, other assets in the
accompanying consolidated balance sheets include deferred tax assets of
approximately $18.6 million and $17 million, respectively, (comprised primarily
of a net operating loss carryforward) for which a valuation allowance has been
recorded since the realizability of the deferred tax assets are not
determinable.
RESULTS OF OPERATIONS - THREE MONTHS ENDED MARCH 31, 2000 VERSUS THREE MONTHS
ENDED MARCH 31, 1999
Net sales decreased by approximately $2.5 million to approximately $2,990,000 in
2000 as compared to approximately $5,466,000 in 1999. The decrease is primarily
the result of decreased Crinone sales of approximately $1.9 million in 2000 from
approximately $3,192,000 in 1999 to approximately $1,274,000 in 2000 as a result
of Ares-Serono's transition to marketing Crinone in the U.S. and abroad.
Gross profit as a percentage of net sales decreased in 2000 to 59% as compared
to 67% in 1999. The lower gross profit in 2000 is the result of the decrease in
Crinone sales in which has a higher gross profit.
Selling and distribution expenses decreased by approximately $45,000 in 2000.
Selling and distribution expenses decreased from approximately $858,000 in 1999
to approximately $813,000 in 2000 resulting from an approximately $400,000
decrease in U.S. over-the-counter product sales.
General and administrative expenses decreased by approximately $697,000 from
approximately $1,485,000 in 1999 to approximately $788,000 in 2000. The majority
of the decrease is the result of a decrease in legal expenses of approximately
$518,000 related litigation settled in March 2000.
12
Research and development decreased in 2000 by approximately $27,000 from
approximately $1,390,000 in 1999 to approximately $1,363,000 in 2000.
Net license fees of $387,500 in 1999 represent an upfront payment received in
connection with a licensing agreement entered into in March 1999. No such fees
were received in 2000.
Interest expense related to the convertible subordinated note payable totaled
approximately $189,000 in 2000 and 1999.
In 1999, the Company recorded a $25,000 alternative minimum tax provision for
U.S. federal taxes. No provision is required in 2000.
As a result, the net loss for the three months ended March 31, 2000 was
$1,361,696 or $(.05) per common share as compared to a net income for the three
months ended March 31, 1999 of $140,110 or $.00 per common share.
13
COLUMBIA LABORATORIES, INC. AND SUBSIDIARIES
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
The Company filed an action in the United States District
Court for the Southern District of Florida ("Florida Action") in
November 1997 seeking a declaratory judgment on certain issues related
to its relationship with Lake Consumer Products, Inc. ("Lake") as
governed in the contract between the Company and Lake. Lake filed an
action against the Company in the United States District Court,
Northern District of Illinois ("Illinois Action"), for damages alleged
by Lake to have been suffered by it as a result of the FDA's
allegations in July 1997 that the Company's nonoxynol-9 product, then
marketed by Lake under the tradename Advantage 24, was not permitted to
be sold under the monograph. The Illinois Action was dismissed by the
Illinois Court and transferred to the Florida Court for consolidation
as a counterclaim in the Florida Action. On March 16, 2000, the Company
and Lake settled all outstanding issues in the consolidated Florida
Action by the Company having bought out the contract for the sum of
$1,200,000 ($600,000 in cash and $600,000 in the form of Company common
stock). As a result, the Company reacquired the U.S. rights to the
Advantage product and both parties agreed to have their legal actions
dismissed.
Other claims and lawsuits have been filed against the Company.
In the opinion of management and counsel, none of these lawsuits are
material and they are all adequately reserved for or covered by
insurance or, if not so covered, are without any or have little merit
or involve such amounts that if disposed of unfavorably would not have
a material adverse effect on the Company.
ITEM 2. CHANGES IN SECURITIES
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
ITEM 5. OTHER INFORMATION
ACQUISITION OR DISPOSITION OF ASSETS
Effective May 5, 2000, the Company sold various tangible and intangible
assets related to the U.S. rights for Replens for a total of $4.5
million cash. Additionally, the purchaser agreed to buy up to $500,000
of Replens inventory from the Company and to pay future royalties of up
to $2 million equal to 10% of future U.S. sales of Replens.
14
Additionally, effective May 5, 2000, the Company licensed its Legatrin
PM, Legatrin GCM, Vaporizer in a Bottle and Diasorb brands to the same
purchaser mentioned above. Under the terms of these agreements, the
Company will receive license fees equal to 20% of the licensee's net
sales of these brands. These agreements each have five-year terms with
provisions for renewal and contain options that allow the licensee to
acquire the brands from the Company.
FINANCIAL STATEMENTS OF BUSINESS ACQUIRED
Not Applicable
PRO FORMA FINANCIAL STATEMENTS
Unaudited Pro Forma Condensed Consolidated Financial Information of
Columbia Laboratories, Inc. and Subsidiaries
The following unaudited pro forma condensed consolidated financial
information is being filed herewith:
Unaudited Pro Forma Condensed Consolidated Balance Sheet at
March 31, 2000
Unaudited Pro Forma Condensed Consolidated Statement of Income
for the three months ended March 31, 2000
Unaudited Pro Forma Condensed Consolidated Statement of Income
for the year ended December 31, 1999
Notes to Unaudited Pro Forma Condensed Consolidated Financial
Information
15
COLUMBIA LABORATORIES, INC. AND SUBSIDIARIES
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEETS
March 31, 2000
-------------------------------------------------
Pro Forma
Historical Adjustments Pro Forma (a)
-------------- ------------ --------------
(Unaudited)
ASSETS
Current assets-
Cash and cash equivalents $ 5,501,774 $ 4,165,000 (b) $ 9,666,774
Accounts receivable, net 2,438,558 412,235 (c) 2,850,793
Inventories 1,428,843 (412,235)(c) 1,016,608
Prepaid expenses 407,254 -- 407,254
Other current assets 311,442 (66,624)(d) 244,818
-------------- ------------ --------------
Total current assets 10,087,871 4,098,376 14,186,247
Property and equipment, net 902,709 -- 902,709
Intangible assets, net 5,955,088 (3,986,658)(e) 1,968,430
Other assets 408,588 -- 408,588
-------------- ------------ --------------
TOTAL ASSETS $ 17,354,256 $ 111,718 $ 17,465,974
============== ============ ==============
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIENCY)
Current liabilities-
Accounts payable $ 1,492,949 -- $ 1,492,949
Accrued expenses 1,072,250 -- 1,072,250
Deferred revenue 100,000 -- 100,000
-------------- ------------ --------------
Total current liabilities 2,665,199 -- 2,665,199
Convertible subordinated note payable 10,000,000 -- 10,000,000
-------------- ------------ --------------
TOTAL LIABILITIES 12,665,199 -- 12,665,199
-------------- ------------ --------------
Stockholders' equity (deficiency)-
Preferred stock, $.01 par value; 1,000,000 shares authorized:
Series A Convertible Preferred Stock, 33
shares issued and outstanding in 2000 -- -- --
Series B Convertible Preferred Stock, 1,630
shares issued and outstanding in 2000 16 -- 16
Series C Convertible Preferred Stock, 4,310
shares issued and outstanding in 2000 43 -- 43
Common stock, $.01 par value; 40,000,000 shares
authorized; 30,412,641 shares
issued and outstanding in 2000 304,126 -- 304,126
Capital in excess of par value 105,939,456 60,009 (f) 105,999,465
Accumulated deficit (101,560,544) 51,709 (101,508,835)
Accumulated other comprehensive income 5,960 -- 5,960
-------------- ------------ --------------
TOTAL STOCKHOLDERS' EQUITY (DEFICIENCY) 4,689,057 111,718 4,800,775
-------------- ------------ --------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIENCY) $ 17,354,256 $ 111,718 $ 17,465,974
============== ============ ==============
See accompanying notes to unaudited pro forma condensed consolidated
financial information.
16
COLUMBIA LABORATORIES, INC. & SUBSIDIARIES
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
YEAR ENDED DECEMBER 31, 1999 QUARTER ENDED MARCH 31, 2000
------------------------------------------ ------------------------------------------
PRO FORMA PRO FORMA
HISTORICAL ADJUSTMENTS PRO FORMA HISTORICAL ADJUSTMENTS PRO FORMA
------------ ------------ ------------ ------------ ------------ ------------
NET SALES $18,921,074 ($5,547,259)(g) $13,373,815 $2,989,930 ($1,266,245)(g) $1,723,685
COST OF GOODS SOLD 5,655,350 (2,072,637)(h) 3,582,713 1,219,848 (555,005)(h) 664,843
------------ ------------ ------------ ------------ ------------ ------------
Gross Profit 13,265,724 (3,474,622) 9,791,102 1,770,082 (711,240) 1,058,842
------------ ------------ ------------ ------------ ------------ ------------
OPERATING EXPENSES:
Selling and distribution 3,938,756 (2,507,342)(i) 1,431,414 812,870 (439,005)(i) 373,865
General and administrative 4,575,702 (588,151)(j) 3,987,551 788,128 (26,836)(j) 761,292
Research and development 6,652,096 (109,607)(k) 6,542,489 1,363,412 (48,175)(k) 1,315,237
------------ ------------ ------------ ------------ ------------ ------------
Total operating expenses 15,166,554 (3,205,100) 11,961,454 2,964,410 (514,016) 2,450,394
------------ ------------ ------------ ------------ ------------ ------------
Loss from operations (1,900,830) (269,522) (2,170,352) (1,194,328) (197,224) (1,391,552)
------------ ------------ ------------ ------------ ------------ ------------
Other Income (Expense):
License fees, net of expenses 462,500 -- 462,500 -- --
Interest income 134,795 -- 134,795 28,304 -- 28,304
Interest expense (755,352) -- (755,352) (188,838) -- (188,838)
Other, Net (82,321) -- (82,321) (6,834) -- (6,834)
------------ ------------ ------------ ------------ ------------ ------------
(240,378) -- (240,378) (167,368) -- (167,368)
------------ ------------ ------------ ------------ ------------ ------------
Income (loss) before income taxes (2,141,208) (269,522) (2,410,730) (1,361,696) (197,224) (1,558,920)
Provision for income taxes 69,000 -- 69,000 -- -- --
------------ ------------ ------------ ------------ ------------ ------------
Net Income/(Loss) ($2,210,208) ($269,522) ($2,479,730) ($1,361,696) ($197,224) ($1,558,920)
============ ============ ============ ============ ============ ============
NET LOSS PER COMMON SHARE:
Basic and Diluted ($0.09) ($0.01) ($0.10) ($0.05) -- ($0.05)
============ ============ ============ ============ ============ ============
WEIGHTED AVERAGE NUMBER
OF COMMON AND POTENTIAL
COMMON SHARES OUTSTANDING:
Basic and Diluted 28,853,000 -- 28,853,000 29,527,163 -- 29,527,163
============ ============ ============ ============ ============ ============
See accompanying notes to unaudited pro forma condensed consolidated
financial information.
17
COLUMBIA LABORATORIES, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL INFORMATION
(a) The unaudited pro forma condensed consolidated balance sheet gives
retroactive effect to the sale and license of certain assets related to
Columbia's over-the-counter products to Lil' Drug Store Products, Inc.
("Lil' Drug") as if the sale and license had occurred as of March 31,
2000. The unaudited pro forma condensed consolidated statements of
income give retroactive effect as if the sale had occurred as of the
beginning of the periods represented.
(b) Reflects the initial cash proceeds received by Columbia, net of
expenses related to the transaction.
(c) Reflects inventory to be purchased by Lil' Drug.
(d) Reflects expenses of the transaction previously deferred.
(e) Reflects Replens trademark, net of accumulated amortization.
(f) Reflects stock warrants issued to Columbia's advisor on the
transaction.
(g) Reflects revenues related to the over-the-counter products to be
assumed by Lil' Drug, offset by royalty revenue from Lil' Drug as a
result of the sale and license.
(h) Reflects cost of sales related to the over-the-counter products to be
assumed by Lil' Drug.
(i) Reflects selling and distribution expenses related to the
over-the-counter products to be assumed by Lil' Drug.
(j) Reflects general and administrative expenses related to the
over-the-counter products to be assumed by Lil' Drug.
(k) Reflects research and development expenses related to the
over-the-counter products to be assumed by Lil' Drug.
18
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
Exhibits
10.22 - Replens Purchase and License Agreement dated April 18, 2000,
between the Company and Lil' Drug Store Products, Inc.
10.23 - License Agreement dated April 18, 2000, between the Company and
Lil' Drug Store Products, Inc.
10.24 - Distribution Agreement dated April 18, 2000, between the
Company and Lil' Drug Store Products, Inc.
27.1 - Financial Data Schedule (for SEC use only)
Reports on Form 8-K
None.
19
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
COLUMBIA LABORATORIES, INC.
/S/ DAVID L. WEINBERG
----------------------------------
DAVID L. WEINBERG, Vice President-
Finance and Administration,
Chief Financial Officer
DATE: MAY 15, 2000
20
INDEX TO EXHIBITS
EXHIBIT
NUMBERS
10.22 - Replens Purchase and License Agreement dated April 18, 2000,
between the Company and Lil' Drug Store Products, Inc.
10.23 - License Agreement dated April 18, 2000, between the Company and
Lil' Drug Store Products, Inc.
10.24 - Distribution Agreement dated April 18, 2000, between the
Company and Lil' Drug Store Products, Inc.
27.1 - Financial Data Schedule (for SEC use only)