Medicis Reports Third Quarter Fiscal 2002 Financial Results
SCOTTSDALE, Ariz.--April 18, 2002--Medicis (NYSE:MRX) today reported third quarter fiscal 2002 net revenue growth of 34% to $56.6 million with net income of $15.9 million, or $0.50 per diluted share, representing 19% growth in net income and EPS as compared to the same period in the previous fiscal year. In the third quarter of fiscal 2001, Medicis reported net revenues of $42.3 million with net income of $13.3 million, or $0.42 per diluted share.
Third quarter net revenue increased primarily as a result of net overall growth in sales of the Company's eight core brands. In the third quarter of fiscal 2002, the Company's core brands represented approximately 90% of total product sales on a collective basis and increased approximately 76% in total reported prescription volume. The Company's core brands include DYNACIN(R), LOPROX(R), LUSTRA(R), OMNICEF(R), ORAPRED(R), OVIDE(R), PLEXION(R) and TRIAZ(R). Cash flow from operations for the third quarter of fiscal 2002 was $14.8 million. The change in cash flow for the third quarter was primarily due to the timing of certain working capital components. The Company's gross profit margin for the third quarter of fiscal 2002 was 83.4%, a one percentage point increase, compared to 82.4% for the third quarter of fiscal 2001.
For the first nine months of fiscal 2002, Medicis reported net revenue growth of 25% to $155.2 million with net income of $44.5 million, or $1.41 per diluted share (absent special charges), representing 17% growth in net income and 18% growth in EPS, as compared to the same period in the previous fiscal year of $124.0 million in net revenues, with net income of $38.0 million, or $1.19 per diluted share (absent special charges). Including special charges reported in the first nine months of fiscal 2002 for purchased in-process research and development associated with the Ascent Pediatrics merger, the Company reported net income of $38.3 million, or $1.21 per diluted share.
For the first nine months of fiscal 2002, net revenue increased primarily as a result of net overall growth in sales of the Company's eight core brands. In the first nine months of fiscal 2002, the Company's core brands represented approximately 89% of total product sales and increased approximately 34% in total reported prescription volume. Cash flow from operations for the first nine months of fiscal 2002 was $53.4 million. The Company's gross profit margin for the first nine months of fiscal 2002 was 83.2%, a 1.5 percentage point increase, compared to 81.7% for the first nine months of fiscal 2001.
"We are pleased to announce another quarter of growth and strong results of operations," said Jonah Shacknai, Chairman and Chief Executive Officer of Medicis. "Prescription trends for our core brands promoted in the dermatology and pediatric specialties have been consistently solid. Our business development group has been actively pursuing several important projects which we believe may yield valuable additions to the Company's broad line of dermatologic and pediatric products. Early results from our Ascent subsidiary promotion to pediatricians of Medicis brands have been encouraging. The Company's foundation in pediatrics is strong, and will be augmented by future product introductions."
Medicis previously released fiscal year 2002 revenue guidance of $212.0 million and earnings per share guidance of $1.94. The impact of the third quarter's results improve the fiscal year 2002 guidance to $212.7 million in revenue and $1.95 in earnings per share, excluding special charges. Fourth quarter fiscal year 2002 (for the quarter ending June 30, 2002) revenue guidance of $57.5 million and earnings per share guidance of $0.54 remain unchanged. The Company expects to provide quarterly guidance for the fiscal year 2003 before the end of the current fiscal year. At the time of this disclosure, Medicis believes the objectives are attainable based upon information currently available to the Company. The Company's business is subject to all risk factors outlined in the Company's Form 10-K and other publicly filed documents including significant competition within the Company's industry. At the time of this release, the Company cannot, among other things, assess the forthcoming results of the Company's research and development projects and the risks associated with the FDA approval process, nor can the Company validate its assumptions of the full impact on its business of the approval of competitive generic versions of the Company's core brands, or any future competitive product approvals that may affect the Company's brands.
Medicis is a specialty pharmaceutical company and the leading independent pharmaceutical company in the United States focusing primarily on the treatment of dermatological and pediatric conditions. Medicis develops and markets leading products for major segments within dermatology, including acne, fungal infections, rosacea, hyperpigmentation, photoaging, psoriasis, eczema, skin and skin-structure infections, seborrheic dermatitis, head lice and cosmesis (improvement in the texture and appearance of skin). Ascent Pediatrics, Inc., the Company's wholly owned subsidiary, markets leading pediatric products for the treatment of asthma and other respiratory inflammatory conditions; acute otitis media, or middle ear infections; and an over-the-counter saline nasal mist.
The Company's brands include the prescription brands DYNACIN(R) (minocycline HCl), LOPROX(R) (ciclopirox), LUSTRA(R) (hydroquinone), LUSTRA-AF(R) (hydroquinone) with sunscreen, ALUSTRA(TM) (hydroquinone) with retinol, PLEXION(R) Cleanser (sodium sulfacetamide/sulfur), PLEXION TS(TM) (sodium sulfacetamide/sulfur), TRIAZ(R) (benzoyl peroxide), OMNICEF(R) (cefdinir), ORAPRED(R) (prednisolone sodium phosphate), OVIDE(R) (malathion), LIDEX(R) (fluocinonide), SYNALAR(R) (fluocinolone acetonide) and TOPICORT(R) (desoximetasone); the over-the-counter brand ESOTERICA(R); and BUPHENYL(R) (sodium phenylbutyrate), a prescription product indicated in the treatment of Urea Cycle Disorder.
Except for historical information, this press release includes "forward-looking statements" within the meaning of the Securities Litigation Reform Act. All statements included in this press release that address activities, events or developments that Medicis expects, believes or anticipates will or may occur in the future are forward-looking statements. This includes earnings estimates, future financial performance and other matters. These statements are based on certain assumptions made by Medicis based on its experience and perception of historical trends, current conditions, expected future developments and other factors it believes are appropriate in the circumstances. The Company cannot validate its assumptions of the full impact on its business of the approval of competitive generic versions of the Company's core brands, or any future competitive product approvals that may affect the Company's brands. Such statements are subject to a number of assumptions, risks and uncertainties, many of which are beyond the control of Medicis. Any such projections or statements include the current views of Medicis with respect to future events and financial performance. No assurances can be given, however, that these events will occur or that such results will be achieved and there are a number of important factors that could cause actual results to differ materially from those projected, including the ability of Medicis to successfully integrate Ascent's operations, the ability to realize anticipated synergies and benefits of the transaction, the risks and uncertainties normally incident to the pharmaceutical industry, dependence on sales of key products, the uncertainty of future financial results and fluctuations in operating results, dependence on Medicis' strategy including the uncertainty of license payments and/or other payments due from third parties, the timing and success of new product introductions and other risks described from time to time in Medicis' SEC filings including its Annual Report on Form 10-K for the year ended June 30, 2001. Forward-looking statements represent the judgment of Medicis' management as of the date of this release, and Medicis disclaims any intent or obligation to update any forward-looking statements.
NOTE: Full prescribing information for any Medicis prescription product is available by contacting the Company. OMNICEF(R)is a registered trademark of Abbott Laboratories, Inc. under a license from Fujisawa Pharmaceutical Co., Ltd. All other marks (or brands) and names are the property of Medicis or its affiliates.
Medicis
(in thousands, except per share data)
Summary Statements of Operations
--------------------------------
(unaudited)
Three Months Ended Nine Months Ended
March 31, March 31,
-------------------- --------------------
2002 2001 2002 2001
-------------------- --------------------
Revenues $56,623 $42,346 $155,179 $123,967
Cost of sales 9,397 7,470 26,065 22,741
------- ------- ------- -------
Gross profit 47,226 34,876 129,114 101,226
Operating expenses:
Selling, general
and administrative 21,544 14,785 57,488 44,281
Research and development 1,935 1,763 5,220 22,430(a)
Depreciation and
amortization 1,968 2,039 5,892 6,033
------- ------- ------- -------
Total operating
expenses 25,447 18,587 68,600 72,744
Purchased in-process
research & development - - - - - - 6,217 - - -
------- ------- ------- -------
Operating income 21,779 16,289 54,297 28,482
Interest income, net 2,274 3,866 7,168 12,221
Income tax expense (8,178) (6,853) (23,178) (14,147)
------- ------- ------- -------
Net income $15,875 $13,302 $38,287 $26,556
======= ======= ======= =======
Basic net income per
common share $0.52 $0.44 $1.26 $0.88
===== ===== ===== =====
Diluted net income per
common share $0.50 $0.42 $1.21 $0.83
===== ===== ===== =====
Shares used in basic net
income per common share 30,647 30,414 30,423 30,109
Shares used in diluted
net income per common
share 31,858 31,787 31,636 31,835
Cash flow from operations $14,783 $21,264 $53,368 $46,707
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Absent special charge for
in-process R&D of $6,217
in fiscal 2002 and
tax-effected adjustment
for special R&D charge of
$11,473 in fiscal 2001:
Net income $15,875 $13,302 $44,504 $38,029
======= ======= ======= =======
Basic net income per
common share $0.52 $0.44 $1.46 $1.26
===== ===== ===== =====
Diluted net income per
common share $0.50 $0.42 $1.41 $1.19
===== ===== ===== =====
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(a) Reported R&D expenses include special charge of $17,788 relating to
a research collaboration
Balance Sheets
--------------
At March 31, 2002 At June 30, 2001
----------------- ----------------
(unaudited)
Assets
Cash, cash equivalents & short-term
investments $310,598 $334,157
Accounts receivable, net 48,869 36,841
Inventory, net 10,983 8,750
Other current assets 26,258 19,131
-------- --------
Total current assets 396,708 398,879
Property and equipment, net 2,339 1,964
Deferred tax asset 16,218 - - -
Intangible assets, net 178,785 147,277
Other assets 51 576
-------- --------
Total assets $594,101 $548,696
======== ========
Liabilities and stockholders' equity
Current liabilities $ 36,977 $ 40,410
Deferred tax liabilities - - - 4,832
Stockholders' equity 557,124 503,454
-------- --------
Total liabilities and
stockholders' equity $594,101 $548,696
======== ========
Working capital $359,731 $358,469
======== ========
Contacts: Medicis, Scottsdale Libby Ivy, 602/808-3854 www.medicis.com