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Akorn, Inc. Reports Record Second Quarter & Six Months Results; Second Quarter Sales Increase 37% and Net Income Increases 48%
LINCOLNSHIRE, Ill.--(BUSINESS WIRE)--July 21, 1998--Akorn, Inc.
(NASDAQ: AKRN) today announced record results for the second quarter
ended June 30, 1998.
For the second quarter ended June 30, 1998, Akorn reported sales
of $13,987,000, up 37% compared to sales of $10,176,000 reported for
the second quarter of 1997. Net income for the quarter was $1,101,000,
up 48%compared to $742,000 for the second quarter of 1997. This
translates into diluted earnings per share in 1998 of $0.06, compared
to earnings per share of $0.04 in 1997. Diluted number of shares
outstanding were 19,094,000 in 1998 and 16,800,000 in 1997.
For the six months ended June 30, 1998, sales were $26,038,000,
up 37% compared to $19,044,000 reported for the six months of 1997.
Net income for the six month period was $2,149,000, or $0.11 per
diluted share, a 12 fold increase compared to $164,000, or $0.01 per
share in the 1997 six month period. There were 18,837,000 diluted
shares outstanding in the 1998 six month period compared with
16,802,000 shares outstanding for the 1997 six months.
Analysis of Results
For the 1998 second quarter compared to the 1997 second quarter,
sales increased 37%; gross profits increased 43%; gross profit margins
increased to 50% from 48%; selling, general and administrative costs
increased 13%; operating income rose 36%; and net income rose 48%.
Research and development expenses increased 239% over the second
quarter of 1997 and 71% over the first quarter of 1998, reflecting
increased development of proprietary, patented products. The Company
is investing heavily in three NDA products in various stages of
development. Two of these products, piroxicam and a combination of
miotic, are being developed by the ophthalmic division, and a third,
TP-100 for migraine, is being developed by the injectable division.
Increased gross profits have allowed the Company to devote substantial
resources to developing patented products as part of its long-term
growth strategy.
For the first six months of 1998 compared to the 1997 equivalent
period, sales increased 37%; gross profits increased 59%; gross profit
margins increased to 51% from 44%; selling, general and administrative
costs increased 28%; operating income increased more than nine fold;
and net income increased over twelve fold. Research and development
expenses increased 171%, reflecting the additional development
activities noted above.
Dr. John N. Kapoor, Chairman and Chief Executive officer of
Akorn, attributed the strong improvement in performance across the
board, especially in gross margins and higher profits, to a strategy
of successful product acquisitions, a higher margin product mix, and
greater manufacturing plant operating efficiencies.
Dr. Kapoor added, "Our strategy of adding complementary products
to our portfolio through acquisition or internal development is paying
off both in increased sales to existing customers and in expansion of
Akorn's customer base."
Since the beginning of 1998, Akorn has announced the acquisitions
of eight products and an exclusive licensing arrangement for an
additional product. These acquisitions included ophthalmic products
Paremyd, Fluress, Ful-Glo and Rose Bengal from Allergan; Ocusert
Pilo-20 and Pilo-40 from Alza and injectable products Sufenta and
Alfenta from Jansen Pharmaceutica. The Ocusert acquisition also
included non-exclusive rights to the drug delivery technology for all
ophthalmic applications. Akorn obtained exclusive distribution rights
to Biolon, a high-viscosity viscoelastic solution, from Bio-Technology
General.
R. Scott Zion, General Manager of the Ophthalmic Division,
commented, "Ophthalmic Division sales increased 23% for the quarter
and 19% year to date, reflecting our increased national accounts
presence as well as strategic product acquisitions. The Division is
actively continuing to evaluate both proprietary and multisource
products for development or acquisition."
Floyd Benjamin, President of Taylor Pharmaceuticals, Inc.,
Akorn's Injectable Division, commented, "Injectable sales increased
57% for the quarter and 65% year to date, reflecting strong sales of
acquired products. Favorable product mix has resulted in gross margins
of 49% in the second quarter. The Division's product development and
acquisition pipeline contains numerous multisource and proprietary
products."
Akorn, Inc. manufactures and markets sterile ophthalmic and
injectable pharmaceuticals, and markets and distributes an extensive
line of pharmaceuticals, ophthalmic surgical supplies and related
products.
Akorn, Inc.
Consolidated Statement of Earnings
(In Thousands, Except Per Share Amounts)
(unaudited)
Three months ended Six months ended
June 30, June 30,
1998 1997 1998 1997
Net sales:
Ophthalmic $ 7,334 $ 5,949 $ 13,815 $ 11,625
Injectible 6,653 4,227 12,223 7,419
Total sales 13,987 10,176 26,038 19,044
Cost of sales 6,966 5,260 12,775 10,700
Gross profit 7,021 4,916 13,263 8,344
Selling, general and
administrative 3,675 3,246 7,420 5,804
Research and development 1,246 368 1,974 729
Relocation charges -- -- -- 1,451
4,921 3,614 9,394 7,984
Operating income 2,100 1,302 3,869 360
Interest & other income
(expense), net (301) (124) (490) (99)
Income before taxes 1,799 1,178 3,379 261
Income taxes 698 436 1,230 97
Net income $ 1,101 $ 742 $ 2,149 $ 164
Per Share:
Net income - basic $ 0.06 $ 0.04 $ 0.12 $ 0.01
Net income - diluted $ 0.06 $ 0.04 $ 0.11 $ 0.01
Weighted average shares:
Basic 17,850 16,598 17,769 16,596
Diluted 19,094 16,800 18,837 16,802
meaning of the Private Securities Litigation Reform Act of 1995.
Actual results may differ materially from anticipated results as a
result of certain risks and uncertainties, including but not limited
to the effects of federal, state and other governmental regulation of
the Company's business; the company's success in acquiring,
developing, manufacturing and marketing new products; the effects of
competition from generic pharmaceuticals and other pharmaceutical
companies; and other risks and uncertainties identified in the
Company's Securities and Exchange Commission Filings.
This release is available on the KCSA Worldwide Public Relations
Website at www.kcsa.com.
CONTACT:
AKORN, INC.
Rita McConville, Chief Financial Officer
(847) 236-3851
or
KCSA Worldwide, New York
Paul Holm/Joseph A. Mansi
(212) 682-6300, ext.201/205
KEYWORD: ILLINOIS
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