Senetek PLC Announces Continued Second Quarter Gains in Profitability And Cash Flow
NAPA, Calif., Aug. 6 /PRNewswire-FirstCall/ -- Senetek PLC (Nasdaq: SNTK - News), www.senetekplc.com, a biopharmaceutical company focused on developing and co-marketing products in the key skincare/dermatologicals and sexual dysfunction categories worldwide, today announced sharply higher second quarter operating and net income, cash flow and current ratio, continuing its trend of profitability started in the second quarter of 2001.
Revenues for the quarter ended June 30, 2002 were $3.30 million compared to $2.43 million for the quarter ended June 30, 2001, an increase of 36%. The gain in revenues was due to increased sales by Revlon and The Body Shop, the recognition of $230,000 of royalty income earned by Senetek in past periods arising as a result of an audit of one of its licensees and the recognition of $870,000 of non refundable deferred licensing fee paid to Senetek by OMP as a result of the termination and settlement of the licensing agreement with OMP on May 31, 2002. 90% of total revenues for the second quarter 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 six months ended June 30, 2002 were $5.87 million compared to $4.20 million for the six months ended June 30, 2001, an increase of 40%. The increase reflects the ongoing success of Revlon's Almay Kinetin skin care line and The Body Shop's Kinetin Skin Re-Leaf product line, and the above non-recurring items. The mix of royalty and other licensing revenue to total revenue increased to 80% in the first six months of 2002 compared to 53% in the first six 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 June 30, 2002 was $3.13 million compared to gross profit of $2.08 million for the quarter ended June 30, 2001, an increase of 50%. Gross margin (gross profit divided by revenues) for the period increased to 95% in the second quarter of 2002 from 85% for the second quarter of 2001, reflecting 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 six months ended June 30, 2002 was $5.30 million compared to gross profit of $3.41 million for the six months ended June 30, 2001, and gross margin for the period increased to 90% compared to 81% for the first six months of 2001.
Operating expenses for the quarter ended June 30, 2002 were $1.61 million, or 49% of revenue, compared to $1.41 million, or 58% of revenue, for the quarter ended June 30, 2001. The quarter ended June 30, 2002 expenses include a $149,000 increase mainly for developmental and regulatory spending in connection with the European marketing approval process for Senetek's Invicorp(TM) erectile dysfunction product, as well as non-recurring expenses of $65,000 for reaching a settlement, returning distribution rights for Invicorp(TM) to Senetek and thus freeing up Invicorp(TM) for sale in Denmark.
Operating expenses for the six months ended June 30, 2002 were $2.93 million, or 50% of revenue, compared to $2.80 million, or 67% of revenue, for the six months ended June 30, 2001. The first six months to June 30, 2002 expenses include a $199,000 increase in developmental and regulatory spending, mainly for Invicorp(TM), as well as the above described non-recurring settlement expense. Developmental and regulatory spending totaled $368,000 for the six months ended June 30, 2002, and the Company anticipates that full year spending on research and development will reach approximately $1 million as it continues to progress its Invicorp(TM) product through the European Mutual Recognition Procedure.
Operating income for the quarter ended June 30, 2002 was $1.52 million, an increase of 126% compared to $672,000 for the quarter ended June 30, 2001.
Operating income for the six months ended June 30, 2002 was $2.37 million, an increase of 292% compared to $604,000 for the six months ended June 30, 2001.
Net income for the quarter ended June 30, 2002 was $1.17 million or $0.02 per fully diluted share compared to $88,000 or $Nil per fully diluted share for the quarter ended June 30, 2001.
Net income for the six months ended June 30, 2002 was $1.67 million or $0.03 per fully diluted share compared to a net loss of $(505,000) or $(0.01) per fully diluted share for the quarter ended June 30, 2001.
Senetek's current ratio (i.e. current assets divided by current liabilities) was 3.48 at June 30, 2002, an improvement of 79% from its current ratio of 1.94 at December 31, 2001.
Commenting on the results for the quarter and the first six months, Frank J. Massino, Senetek's Chairman and CEO, said, "Our business paradigm continues to enhance our key performance indicators -- profitability and cash generation, which continue to boost our current ratio and strengthen our cash position. We expect to further leverage our strong skincare results in 2002 by increasing our business base with existing licensees through new product launches and expanded geographic territories and by entering into additional licensing agreements with market leaders in currently unlicensed territories and classes of trade. Our program to gain approval for Invicorp(TM), our unique erectile dysfunction product, across the European Union countries is on course requiring a larger investment without compromising profitability. We are working with Quintiles (the world's leading provider of information and regulatory support services to the pharmaceutical industry) towards this objective."
Visit Senetek PLC's web site: senetekplc.com .
Safe Harbor Statement:
This press release and Web site contain certain forward-looking statements, including statements as to the Company's expectations concerning continued improvement in financial results, achieving broadened product offerings by Kinetin licensees, negotiating new licensing agreements, receiving product approval for Invicorp(TM) in key European markets, and achieving other significant business developments. Forward-looking statements by their nature involve substantial uncertainties and actual results may differ materially from those expressed in such statements. Important factors identified by the Company that it believes could result in such material differences are described in the Company's Annual Report on Form 10-K for the year 2001 and its Quarterly Report on Form 10-Q for the three months ended March 31, 2002, but the Company can give no assurance that it has identified all of the factors that may result in any particular forward-looking statement materially differing from actual results and assumes no obligation to correct or update any forward-looking statements which may prove to be inaccurate, whether as a result of new information, future events or otherwise.
SENETEK PLC AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands except per share data) (Unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
------------------- ------------------
2002 2001 2002 2001
------- ------- ------- -------
Revenues:
Product Sales $107 $ 1,111 $ 1,174 $ 1,953
Royalties & Licensing 3,191 1,322 4,698 2,243
------- ------- ------- -------
Total Revenue 3,298 2,433 5,872 4,196
Cost of Sales - Products 38 234 281 506
Cost of Sales - Royalty 133 122 294 285
------- ------- ------- -------
Total Cost of Sales 171 356 575 791
Gross Profit 3,127 2,077 5,297 3,405
Operating Expenses:
Research & Development 207 58 368 169
General & Administration 1,401 1,347 2,562 2,632
------- ------- ------- -------
Total Operating Expenses 1,608 1,405 2,930 2,801
------- ------- ------- -------
Income from Operations 1,519 672 2,367 604
Other income (expense):
Interest Income 9 6 17 12
Interest Expense (Including
amortization of deferred
financing costs
and discount) (364) (532) (729) (1,048)
Other 2 (58) 24 (73)
------- ------- ------- -------
Net income(loss)
before taxation 1,166 88 1,679 (505)
Provision for
Income Taxes (4) -- 5 --
------- ------- ------- --------
Net Income 1,170 88 1,674 (505)
Basic and diluted income(loss)
per Ordinary share
outstanding $0.02 $ 0.00 $0.03 $(0.01)
Weighted average
Ordinary shares
Outstanding 59,052 58,473 59,052 58,452
SENETEK PLC AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS (in thousands)
June 30, December 31,
2002 2001
(unaudited)
----------- ------------
ASSETS
Current Assets:
Cash and Cash Equivalents $2,216 $1,814
Trade Receivables
(net of provisions of $107,000 at
June 30, 2002 and $127,000 at December
31, 2001) 2,134 1,892
Non-Trade Receivables
(net of provisions of $136,000 at June
30, 2002 and December 31, 2001) 62 62
Inventory
(net of provisions of $72,000
at June 30, 2002 and December 31, 2001) 349 312
Prepaids and Deposits 96 122
----------- ------------
Total Current Assets 4,857 4,202
Property & Equipment, net 3,260 3,299
Goodwill - net 1,308 1,308
----------- ----------
TOTAL ASSETS $9,425 $8,809
=========== =========
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current Liabilities
Accounts Payable 657 962
Accrued Liabilities 739 1,189
Short Term Debt -- 20
----------- ------------
Total Current Liabilities 1,396 2,171
Long Term Liabilities
Notes Payable
(net of unamortized discount of
$1,550,000 at June 30, 2002
and $1,982,000 at December 31, 2001) 5,839 5,407
Deferred License Fees 1,734 2,621
Stockholders' Equity (Deficit):
Ordinary shares $0.07 (5 pence) par value:
Authorized shares: 100,000,000
Issued and outstanding shares:
June 30, 2002 - 59,052,153
December 31, 2001 - 59,052,153 4,763 4,763
Share Premium 82,100 81,926
Accumulated Deficit (86,425) (88,099)
Equity Adjustment from Foreign
Currency Translation 18 20
----------- ------------
Total Stockholders' Equity (Deficit) $456 $(1,390)
----------- ------------
Total Liabilities and Stockholders'
Equity (Deficit) $9,425 $8,809
=========== ============
SOURCE: Senetek PLC |
