Hehe!! Silly me! EMBX Ceo says 10-20% rev and earnings growth over next couple of years: Tuesday July 30, 7:30 am Eastern Time
Press Release
SOURCE: Embrex, Inc.
Embrex Reports Second Quarter 2002 Financial Results
RESEARCH TRIANGLE PARK, N.C., July 30 /PRNewswire-FirstCall/ --
Embrex, Inc. (Nasdaq: EMBX - News), The In Ovo Company(SM), today announced financial results for the second quarter ended June 30, 2002.
Highlights
* Year-to-date gross profit increases to $13.7 million, up 8% over the
same period in 2001
* Year-to-date revenues of $22.2 million rise 3% over the same period 2001
* Second quarter diluted EPS of $0.19 versus $0.22 for comparable period
2001
* Bursaplex(R) receives approval in Mexico
Financial Summary Table
Embrex, Inc.
Condensed Consolidated Statements of Operations (Unaudited)
(In thousands except per share amounts)
Three Months Six Months
Ended June 30 Ended June 30
2002 2001 2002 2001
Revenues 10,846 10,759 22,202 21,561
Cost of revenues 4,379 4,539 8,455 8,846
Gross profit 6,467 6,220 13,747 12,715
Operating expenses 4,354 4,098 9,022 8,285
Other income (55) (36) (106) (62)
Income before taxes 2,168 2,158 4,831 4,492
Income tax expense 450 244 846 513
Net income 1,718 1,914 3,985 3,979
Net income per share:
Basic $0.21 $0.24 $0.49 $0.50
Diluted $0.19 $0.22 $0.45 $0.46
No. of shares of Common
Stock used in per
share calculation:
Basic 8,125 8,057 8,078 7,992
Diluted 8,985 8,673 8,863 8,625
Second-quarter revenues for 2002 of $10.8 million were the same as the comparable period in 2001. Second-quarter net income was $1.7 million, a decrease of 10% over net income of $1.9 million for the same period in 2001. Second-quarter income before taxes was $2.2 million, which held constant with income before taxes for the same period in 2001. The quarterly effective tax rate increased to 21% from 11% in the second-quarter of 2001 as net operating loss carry-forwards were utilized and earnings outside the United States increased income taxes. As the Company's net operating loss carry-forwards are utilized during 2002, the consolidated tax rate is expected to remain at 21% through the rest of the year compared to 11% for full year 2001. Diluted earnings per share for the second quarter were $0.19 per share on 9.0 million average shares outstanding, compared to diluted earnings of $0.22 per share on 8.7 million average shares outstanding for the same period in 2001.
The company's second-quarter revenue remained constant due to an increase in non-operating other revenue and Inovoject® system fee revenue which was offset by a 90% decrease in Inovoject® system sales as well as an 8% decrease in Bursaplex® sales. As previously noted, Inovoject® system sales are non-recurring events that may cause periodic fluctuations in quarter-to-quarter revenue gross margin and operating profit comparisons. Second-quarter gross margin increased from 58% in the second quarter 2001 to 59% for 2002 on an operating basis and to 60% when non-operating other revenue from the U.S. Advanced Technology Program (ATP) grant is included.
For the six months ended June 30, 2002, revenues were $22.2 million, a 3% increase over revenues of $21.6 million during the same period of 2001. This is primarily attributable to a three-fold increase in other revenue, which included research and development funding from Cobb-Vantress and the ATP grant for the early delivery project. A 5% increase in Bursaplex® sales and a 3% increase in Inovoject® system fees offset an 82% decrease in Inovoject® system sales. June 2002 year-to-date gross margin increased from 59% for the June 2001 year-to-date gross margin to 60% on an operating basis and to 62% when non-operating other revenue is included.
EBITDA increased 7% to $7.2 million for the second half of 2002 from $6.7 million during the same period of 2001. At June 30, 2002, cash and cash equivalents totaling $7.6 million were $3.7 million higher than the $3.9 million on hand at December 31, 2001. This was principally due to cash provided from operating activities of $5.7 million and proceeds of $1.5 million from the issuance of common stock, primarily due to the exercise of employee stock options. These proceeds were offset by capital expenditures of $2.5 million and currency translation adjustments of $1.0 million. Currency translation adjustments also had a $0.3 million negative impact on sales revenue for 2002, reflecting the effect of the weakening Brazilian real and Argentine peso.
"Our second quarter was challenging as the U.S. poultry industry dealt with an over abundance of all types of meat and an embargo on exports to Russia, which still has not been entirely resolved," said Randall L. Marcuson, President and Chief Executive Officer of Embrex. "Also, as we have stated in the past, Inovoject® system sales will continue to show quarter-to-quarter variability particularly since the Japanese poultry industry recently was negatively impacted by illegally relabeled imported chicken meat. This issue has delayed sales of Inovoject® systems into that market. We believe, however, that sales should occur in the fourth quarter and the first half of 2003 as the industry regains its footing.
"Bursaplex® is still being evaluated by the Chinese authorities and it appears that it is being handled in the normal course. The Evaluation Committee meets twice a year, in April and in October to evaluate and approve the products seeking registration. This year, we are told, the Committee may add an evaluation meeting in August, due to its heavy workload. Notification after the Evaluation Committee meetings is not immediate. As in the past, we will communicate to shareholders any developments in this area as soon as we are notified. On a similar note, however, we were gratified to receive Bursaplex® registration in Mexico recently as this was somewhat earlier than expected."
Added Marcuson: "We're pleased that for the balance of Asia and Latin America, year-to-date revenues are up 31% and 29% respectively reflecting solid progress in these markets despite a challenging economic environment. Conversely, our European operations are hampered since, as previously announced, our former partner Fort Dodge Animal Health, a division of Wyeth, stopped supporting its VNF®-based in ovo bursal disease vaccine Bursamune® in Europe. We believe Fort Dodge remains obligated under its agreements with Embrex, therefore, this development is the subject of legal proceedings we initiated in April 2002. Last year, we began registration activity for our in ovo bursal disease vaccine Bursaplex® in Middle Eastern and Eastern European countries and we anticipate those will be obtained in a majority of these countries before year end.
"Our research and development projects are meeting internal timelines. The gender sort commercial prototype relocated in June from headquarters to a commercial hatchery for further field development as planned. Likewise, Inovocox(TM) and Newplex(TM) are routinely meeting their milestones," said Marcuson.
"Given the uncertainties mentioned above and the fact that our growth for the next several years will come largely from international expansion, we believe it is appropriate to update revenue growth and pre-tax income estimates for the next few years to the 10% to 20% range for both," Marcuson concluded.
This doesn't look that terrible to me....what do you think Dave.....tuna |
