DPII warns:
>>SAN DIEGO, Oct. 8 /PRNewswire/ -- Discovery Partners International, Inc. (Nasdaq: DPII - news) today announced that its Board of Directors has authorized a stock repurchase program under which Discovery Partners may acquire up to 2 million shares of its common stock in the open market. Shares may be repurchased from time to time, beginning immediately, at prevailing open market prices.
``We continue to have confidence in the long term value of DPI and believe that at current prices and in consideration of our positive cash flow and our medium term cash requirements, repurchasing some of our 24 million shares of outstanding stock represents an attractive investment opportunity,'' said Riccardo Pigliucci, President and CEO of Discovery Partners.
Discovery Partners also announced today a revision to its financial projections for the third and fourth quarters of 2001. ``In addition to the increased level of uncertainty in our customer base resulting from the current economic conditions and the tragic events of September 11th, during the past quarter we have experienced a major shift in the mix of our order bookings. Both of these factors are severely affecting our ability to meet previously communicated short-term financial expectations,'' said Pigliucci.
``Although we have seen a marked increase in our ability to win significant 'service' type contracts and collaboration agreements with large pharmaceutical as well as biotechnology companies, we are also experiencing an equally sharp reduction in our 'product' type business including the IRORI and NanoKan instrumentation line and existing inventoried chemical compound libraries. The net effect of these trends is reflected in our inability to recognize expected revenues and an increased backlog of collaborative 'service' type business that will be recognized as revenue over the next several quarters.
We are therefore reducing our revenue expectation for Q3 to $9.5 to $9.7 million and for Q4 to $10.0 to $10.5 million. The resulting EPS would be a loss of approximately $0.32 to $0.36 per share for the second half of the year (which includes a loss of $0.17 to $0.21 per share resulting from the need to increase inventory reserves primarily relating to synthesis grade chemical compounds produced by AAT prior to its acquisition by DPI in April 2000).
When financial results for the third quarter are reported on October 30, we will report an increase in cash over the second quarter. We also expect to continue to be cash flow positive (exclusive of any acquisitions) for the remainder of this year and for all of next year.``
A conference call to discuss the business trends outlined in this release and the actual results for the third quarter will be publicly available via the Company's website, www.discoverypartners.com. The live webcast will begin at 11:00 a.m. Eastern Time on Tuesday, October 30, 2001, shortly after the release of the third quarter financial results. In addition to the live webcast, replays will be available to the public on DPII's website and by calling 800-428-6051, access code: 212432 through Thursday, November 1, 2001.<<
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Cheers, Tuck |
