PRESS RELEASE LIFE SCIENCES RESEARCH, INC.
(OTCBB: LSRI)
PO Box 2360
Mettlers Road
East Millstone, NJ 08875-2360
For Further Information:
Richard Michaelson
Phone: US: (732) 649-9961
e-mail: LifeSciencesResearch@LSRinc.net
August 8, 2003
LSR ANNOUNCES SECOND QUARTER RESULTS
East Millstone, New Jersey, August 8, 2003 - Life Sciences Research, Inc.
(OTCBB:LSRI) announced today that revenues for the quarter ended June 30, 2003
were $32.7 million, 14% above the revenues for same period in the prior year of
$28.6 million. Excluding the effects of exchange rate movements the increase was
7%. The Company reported net income for the quarter ended June 30, 2003 of $1.9
million, compared with net income of $2.9 million for the quarter ended June 30,
2002. Net income per share for the quarter ended June 30, 2003 was $0.16
compared with a net income of $0.24 in the quarter ended June 30, 2002. Net
income included non-cash exchange gains on the conversion of the Company's
dollar denominated liabilities including bonds into UK sterling of $2.0 million
compared to exchange gains in the same period last year of $3.2 million. In
addition, Convertible Capital Bonds of $450 thousand were repurchased or
cancelled in the quarter producing a net income of $0.2 million. Excluding that
non-cash currency gain, and the gain on the repurchase of the Bonds, Earnings
before Interest, Taxes, Depreciation and Amortization ("EBITDA") was $3.8
million for the second quarter, or 11.7% of revenues, compared with $3.0
million, or 10.6% of revenues, for the same period in the prior year.
Revenues for the six months ended June 30, 2003 at $64.6 million were 18% above
the revenues for the same period in the prior year of $54.7 million. Excluding
the effect of exchange rate movements, the increase was 9%. The Company reported
net income for the six months ended June 30, 2003 of $1.5 million compared with
a net loss of $0.4 million in the six months ended June 30, 2002. The income per
share for the six months ended June 30, 2003 was $0.13 compared with a loss of
$0.04 in the six months ended June 30, 2002. Net income included non-cash
exchange gains on the conversion of the Company's dollar denominated liabilities
including bonds into UK sterling of $1.1 million compared to exchange gains in
the same period last year of $2.1 million. In addition, there was Other income
in 2003 of $0.6 associated with the repurchase of Convertible Capital Bonds.
Other income in the prior year was offset by merger/offer costs of $1.5 million.
Excluding these Other income items, EBITDA was $7.6 million for the first half
of the year, or 11.7% of revenues, compared with $5.1 million, or 9.3% of
revenues, for the same period in the prior year.
Brian Cass, LSR's President and Managing Director said "We're proud to report
another quarter of steadily improving results. Revenue, operating profit, and
net income from operations are all ahead sequentially and compared to prior
year. First half revenue, adjusted for exchange rate movements, is 9% above
prior year, despite some study cancellations and delays. Operating profits
during that same period more than doubled, benefiting from economies of scale
and attention to expenses."
Andrew Baker, LSR's Chairman and CEO, said "This quarter marks another financial
milestone for LSR, getting down to a 4.8 multiple of trailing annual EBITDA to
total debt minus cash. With our growing margins, solid cash position, and
reduced debt levels over the last few quarters, we're pleased to be moving in
the right direction. We're committed to remaining focused on continued
improvement in this important metric in the coming one to two years."
Life Sciences Research, Inc. is one of the world's leading Contract Research
Organizations providing product development services to the pharmaceutical,
agrochemical and biotechnology industries. LSR brings leading technology and
capability to support its clients in non-clinical safety testing of new
compounds in early stage development and assessment. The purpose of this work is
to identify risks to humans, animals or the environment resulting from the use
or manufacture of a wide range of chemicals which are essential components of
LSR's clients' products. The Company's services are designed to meet the
regulatory requirements of governments around the world. LSR operates research
facilities in the United States (the Princeton Research Center, New Jersey) and
the United Kingdom (Huntingdon and Eye, England).
This announcement contains statements that may be forward-looking as defined by
the USA's Private Securities Litigation Reform Act of 1995. These statements are
based largely on LSR's expectations and are subject to a number of risks and
uncertainties, certain of which are beyond LSR's control, as more fully
described in LSR's Registration Statement on Form S-1, dated July 12, 2002, and
the Company's Form 10-K for the fiscal year ended December 31, 2002, each as
filed with the US Securities and Exchange Commission.
- tables to follow -
Life Sciences Research Inc.
Statement of Operations
(amounts in thousands, except per share data)
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Three months ended Six months ended
June 30 June 30
Unaudited Unaudited
(Dollars in thousands, except per share data) 2003 2002 2003 2002
Net revenues $32,663 $28,590 $64,564 $54,725
Cost of revenue (25,442) (23,069) (50,815) (44,665)
------------ ------------ ------------- -------------
Gross profit 7,221 5,521 13,749 10,060
Selling , general and administrative expenses (5,527) (4,375) (10,448) (8,727)
------------- ------------ ------------ -------------
Operating income 1,694 1,146 3,301 1,333
Interest income 23 27 39 33
Interest expense (1,444) (1,524) (3,152) (3,151)
Other income 2,179 3,241 1,729 618
------------ ------------ ------------- -------------
Income/(loss) before income taxes 2,452 2,890 1,917 (1,167)
Income tax (expense)/benefit (592) 26 (415) 768
------------ ------------ ------------- -------------
Net income/(loss) $1,860 $2,916 $1,502 $(399)
------------- ------------ ------------ -------------
------------- ------------ ------------ -------------
Net income/(loss) per common share
- - Basic $0.16 $0.24 $0.13 $(0.04)
- - Diluted $0.15 $0.24 $0.12 $(0.04)
Weighted average common shares outstanding
- - Basic (000's) 11,932 11,932 11,932 9,428
- - Diluted (000's) 12,244 12,053 12,754 9,428
Life Sciences Research Inc.
Statement of Operations
(amounts in thousands, except per share data)
(Dollars in thousands) June 30, December 31,
2003 2002
Unaudited Audited
ASSETS
Current assets:
Cash and cash equivalents $10,645 $14,644
Accounts receivable, net of allowance of $415 and $287 in
2003 and 2002 respectively 20,349 20,176
Unbilled receivables 10,873 9,108
Inventories 1,619 1,556
Prepaid expenses and other current assets 2,897 3,075
---------------- ----------------
Total current assets $46,383 $48,559
---------------- ----------------
Property and equipment, net 96,358 94,574
Investments 245 248
Unamortized capital bonds issue costs 479 563
Deferred income taxes 4,668 4,466
---------------- ----------------
Total assets $148,133 $148,410
---------------- ----------------
---------------- ----------------
LIABILITIES AND SHAREHOLDERS' EQUITY/(DEFICIT)
Current liabilities:
Accounts payable $9,669 $8,574
Accrued payroll and other benefits 1,867 1,773
Accrued expenses and other liabilities 12,952 12,990
Fees invoiced in advance 24,202 26,066
--------------- ----------------
Total current liabilities $48,690 $49,403
--------------- ----------------
Long-term debt 83,192 83,717
Related party loans - 358
Pension liabilities 17,492 17,712
Deferred income taxes 5,648 5,024
--------------- ----------------
Total liabilities $155,022 $156,214
--------------- ----------------
Commitments and contingencies
Shareholders' equity/(deficit)
Voting Common Stock, $0.01 par value. Authorized 50,000,000
Issued and outstanding at June 30, 2003: 11,932,338 (December
31, 2002: 11,932,338) 119 119
Non-Voting Common Stock, $0.01 par value. Authorized 5,000,000 - -
Issued and oustanding: None
Preferred Stock, $0.01 par value. Authorized 5,000,000 - -
Issued and outstanding: None
Paid in capital 75,098 75,098
Less Promissory notes for the issuance of common stock (636) (684)
Accumulated comprehensive loss (19,211) (18,576)
Accumulated deficit (62,259) (63,761)
--------------- ----------------
Total shareholders' equity /(deficit) $(6,889) $(7,804)
--------------- ----------------
Total liabilities and shareholders' equity /(deficit) $148,133 $148,410
--------------- ----------------