Senetek PLC Announces Its Sixth Consecutive Profitable Quarter
Tuesday November 12, 4:05 pm ET
NAPA, Calif., Nov. 12 /PRNewswire-FirstCall/ -- Senetek PLC (Nasdaq: SNTK - News), ( www.senetekplc.com ), today announced third quarter operating and net income, cash flow and current ratio, continuing its trend of six consecutive quarters of profitability started in the second quarter of 2001.
Revenues for the quarter ended September 30, 2002 were $2.21 million compared to $2.74 million for the quarter ended September 30, 2001, a decrease of 19%. The revenues for the same quarter of last year included a large inventory stocking order for ICN and the initial launch of Revlon's Almay product line. Eighty five percent of total revenues for the third quarter ended September 30, 2002 were attributable to Senetek's skincare/dermatologicals segment, with the balance attributable to sales of monoclonal antibodies and "named patient" sales of the Company's Invicorp(TM) erectile dysfunction product.
Revenues for the nine months ended September 30, 2002 were $8.09 million compared to $6.94 million for the nine months ended September 30, 2001, an increase of 17%. The increase reflects the ongoing success of our licensing programs, in particular, Revlon's Almay Kinetin skin care line and The Body Shop's Kinetin Skin Re-Leaf product line, and certain non-recurring items reported in the second quarter of 2002. The mix of royalty and other licensing revenue to total revenue was 77% in the first nine months of 2002 compared to 45% in the first nine months of 2001, reflecting the ongoing successful implementation of Senetek's business model which places primary emphasis on royalties and licensing income.
Gross profit for the quarter ended September 30, 2002 was $2.07 million, virtually comparable to the gross profit of $2.16 million for the quarter ended September 30, 2001. Gross margin (gross profit divided by revenues) for the period increased to 94% in the third quarter of 2002 from 79% for the third quarter of 2001. The slight decrease in gross profit was significantly less than the decrease in revenues because of the increased contribution to total revenue of Senetek's royalty and other licensing revenue, which has very low associated cost of sales.
Gross profit for the nine months ended September 30, 2002 was $7.37 million compared to gross profit of $5.56 million for the nine months ended September 30, 2001, and gross margin for the period increased to 91% compared to 80% for the first nine months of 2001.
Operating expenses for the quarter ended September 30, 2002 were $1.41 million, compared to $0.99 million, for the quarter ended September 30, 2001. The quarter ended September 30, 2002 expenses include a $300,000 increase mainly for research and development spending in connection with the European marketing approval process for Senetek's Invicorp(TM) erectile dysfunction product. Effective October 1, 2002, Senetek announced the appointment of a new Chief Operating Officer and a new Chief Technical Officer. Both parties had been previously engaged in a consulting capacity with Senetek. These new appointments will greatly enhance the Company's business development, operational and technical capabilities currently and in future periods.
Operating expenses for the nine months ended September 30, 2002 were $4.34 million, compared to $3.79 million, for the nine months ended September 30, 2001. The increased expenses include a $400,000 increase in research and development spending for Invicorp(TM). Research and development spending totaled $838,000 for the nine months ended September 30, 2002, and the Company anticipates that full year spending on research and development will reach approximately $1.1 million as it continues to progress its Invicorp(TM) product through the European Mutual Recognition Procedure in preparation for marketing in Europe.
Operating income for the quarter ended September 30, 2002 was $0.66 million, compared to $1.17 million for the quarter ended September 30, 2001, again attributable to the significant increase in research expenditures and the additional headcount.
Operating income for the nine months ended September 30, 2002 was $3.03 million, compared to $1.77 million for the nine months ended September 30, 2001.
Net income for the quarter ended September 30, 2002 was $0.21 million compared to $0.74 million for the quarter ended September 30, 2001. The net income for the quarter ended September 30, 2002, included a $92,000 state tax provision following recent California tax law changes, which suspended the application of net operating loss carry forwards against taxable income for fiscal years 2002 and 2003.
Net income for the nine months ended September 30, 2002 was $1.88 million compared to net income of $0.24 million for the nine months ended September 30, 2001.
Senetek's current ratio (current assets divided by current liabilities) was 3.31 at September 30, 2002, an improvement of 71% from its current ratio of 1.94 at December 31, 2001.
Commenting on the results for the quarter and the first nine months, Frank J. Massino, Senetek's Chairman and CEO, said, "Our business continues to be profitable, with six consecutive quarters showing net profits, beginning in the second quarter of 2001. Our cash position has increased by $1.2 million in the first nine months of 2002 compared to an increase of $0.7 million for the corresponding period of 2001. As of November 8, 2002, our current cash position was $4.0 million compared to $2.5 million one year ago and does not include any cash from the recently announced sale of the Mill Creek product line. We expect to further leverage our strong skincare results by entering into new licensing agreements with market leaders in currently unlicensed territories and classes of trade."
Mr. Massino also stated, "Our program to gain approval for Invicorp(TM), our unique erectile dysfunction product, across the European Union countries is on course. The new management appointments will make a significant contribution to this process."
Senetek PLC is a biopharmaceutical company focused on developing and co-marketing products in key skin care/dermatologicals and sexual dysfunction categories worldwide. Its patented Kinetin ingredient is currently licensed to some nine other companies with leading positions in their fields including Revlon, The Body Shop and ICN Pharmaceuticals.
Visit Senetek PLC's web site: senetekplc.com.
Safe Harbor Statement:
This news release may contain statements that may be considered "forward-looking statements" under the Federal securities laws, including statements concerning the revenue and licensing income the Company may receive in the future under licenses of the Company's products, and the additional licensing agreements the Company may enter into during 2002. No forward-looking statement the Company makes is a guarantee of future performance or events. Actual results or events may differ materially from those in the forward-looking statements as a result of various factors, including the risks and uncertainties described in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2001 and Quarterly Report on Form 10-Q for the three months ended June 30, 2002, filed with the Securities and Exchange Commission.
SENETEK PLC AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands except per share data) (Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
------------------- -----------------
2002 2001 2002 2001
------- ------- ------- -------
Revenues:
Product Sales $660 $1,880 $1,834 $3,833
Royalties & Licensing 1,553 863 6,251 3,106
------- ------- ------- -------
Total Revenue 2,213 2,743 8,085 6,939
Cost of Sales - Products 139 434 420 916
Cost of Sales - Royalty -- 154 294 463
------- ------- ------- -------
Total Cost of Sales 139 588 714 1,379
Gross Profit 2,074 2,155 7,371 5,560
Operating Expenses:
Research & Development 470 102 838 271
General & Administration 944 886 3,506 3,518
------- ------- ------- -------
Total Operating Expenses 1,414 988 4,344 3,789
------- ------- ------- -------
Income from Operations 660 1,167 3,027 1,771
Other income (expense):
Interest Income 9 8 26 20
Interest Expense (Including
amortization of debt discount) (364) (401) (1,093) (1,449)
Other (6) 14 18 (59)
------- ------- ------- -------
Net income before taxation 299 788 1,978 283
Provision for Income Taxes 92 45 97 45
------- ------- ------- -------
Net Income 207 743 1,881 238
Basic and diluted net income
per Ordinary share
outstanding $0.00 $0.01 $0.03 $0.00
Weighted average Basic
Ordinary shares Outstanding 59,052 59,052 59,052 58,657
Weighted average Diluted
Ordinary shares Outstanding 59,052 59,052 59,106 58,724
SENETEK PLC AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS (in thousands)
September 30, December 31,
2002 2001
(unaudited)
----------- ------------
ASSETS
Current Assets:
Cash and Cash Equivalents $2,991 $1,814
Trade Receivables (net of provisions
of $107,000 at September 30, 2002
and $127,000 December 31, 2001) 2,001 1,892
Non-Trade Receivables (net of provisions
of $136,000 at September 30, 2002 and
December 31, 2001) 62 62
Inventory (net of provisions of $72,000
at September 30, 2002 and December 31, 2001) 347 312
Prepaids and Deposits 76 122
----------- ------------
Total Current Assets 5,477 4,202
Property & Equipment, net 3,268 3,299
Goodwill - net 1,308 1,308
----------- ------------
TOTAL ASSETS $10,053 $8,809
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LIABILITIES AND STOCKHOLDERS' DEFICIT
Current Liabilities
Accounts Payable 721 962
Accrued Liabilities 934 1,189
Short Term Debt -- 20
----------- ------------
Total Current Liabilities 1,655 2,171
Long Term Liabilities
Notes Payable (net of unamortized
discount of $1,334,000 at September 30,
2002 and $1,982,000 at December 31, 2001) 6,055 5,407
Deferred License Fees 1,664 2,621
Stockholders' Equity (Deficit):
Ordinary shares $0.07 (5 pence) par value:
Authorized shares: 100,000,000
Issued and outstanding shares:
September 30, 2002 - 59,052,153
December 31, 2001 - 59,052,153 4,763 4,763
Share Premium 82,125 81,926
Accumulated Deficit (86,218) (88,099)
Equity Adjustment from Foreign
Currency Translation 9 20
----------- ------------
Total Stockholders' Equity (Deficit) $679 $(1,390)
----------- ------------
Total Liabilities and
Stockholders' Equity (Deficit) $10,053 $8,809
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Source: Senetek PLC |
