Chirex earnings: biz.yahoo.com
Any thoughts on Chirex as another play in the chiral area? I'd expect them to get some of SEPR's manufacturing business, once approvals come.
ChiRex Reports Financial Results for Fourth-Quarter and Full-Year 1998
STAMFORD, Conn., Feb. 10 /PRNewswire/ -- ChiRex Inc. (Nasdaq: CHRX - news) announced today fourth-quarter and full-year results for the periods ending December 31, 1998.
For the fourth quarter ended December 31, 1998, the Company reported a net profit before non-recurring expenses of $4.0 million, or $0.34 per share, compared to a net profit before non-recurring expenses of $0.3 million, or $0.03 per share, in the comparable period in 1997. Results in the fourth quarter of 1998 were significantly better than results reported for the third quarter of 1998 due to continuing improvement in performance at the Company's Dudley, England facility and start-up of production of two new products at the Company's Annan, Scotland facility. Since its acquisition in October of 1997, the Annan facility has been under construction to convert it to a multi- product pharmaceutical fine chemical manufacturing facility.
Total revenues increased $9.9 million, or 38%, to $35.7 million in the fourth quarter of 1998, from $25.8 million in the comparable period in 1997. Core revenues increased $13.6 million, or 62%, from $22.0 million to $35.7 million due to the effect of the disposition of the Company's acetaminophen business and other non-core revenues. Gross profit increased to $13.5 million in the fourth quarter of 1998, or 38% of total revenues, from $5.5 million, or 21% of total revenues, in 1997. Gross profit improved due to the contribution from production at the Annan facility, and improved performance at the Dudley facility reflecting higher sales volumes and lower expenses as cost reduction initiatives taken earlier in the year began to show results.
''Fourth quarter results have been driven by several complementary factors,'' said Michael A. Griffith, Chairman and Chief Executive Officer. ''During the fourth quarter we completed the first phase of the $30 million Annan re-conditioning project and commenced production of two new products under our five year $450 million supply agreement with Glaxo Wellcome. Since October 1997, the facility has been almost idle, which has had an adverse impact on our financial performance. Additionally, we have gained better control of our costs following our mid-year implementation of product management as the central organizational philosophy of the Company. Finally, the effect of our previously announced cost reduction and operational efficiency programs is beginning to be realized in the current operating results.''
For the full-year ended December 31, 1998, the Company reported net income before non-recurring expenses of $4.8 million, or $0.41 per share, compared to a net profit before non-recurring expenses of $4.8 million, or $0.42 per share, in the comparable period in 1997. Excluding the impact of its Annan facility the Company earned $12.2 million or $1.04 per share. Total revenues increased $25.6 million, or 27%, to $119.7 million in 1998 from $94.1 million in the comparable period in 1997. Core revenues increased $49.2 million, or 72% from $68.1 million to $117.4 million, during the period. Gross profit increased $9.1 million to $31.8 million in 1998, or 27% of total revenues, from $22.7 million, or 24% of total revenues, in 1997. Excluding the current year impact of the Annan acquisition, gross profit was $34.4 million or 30% of revenues. As previously announced, the Company recorded a net after-tax restructuring and other non-recurring expense charge of $2.6 million in fiscal year 1998, of which $0.6 million was taken in the fourth quarter.
''We made significant progress during the quarter towards the formation of the ChiRex Technology Center which brings together the best available chemical process technologies with world-renowned scientists to accelerate our proprietary research activities and to offer our customers full-service contract research and development. We believe that the combined offerings of contract research and development through the Technology Center, scale-up and clinical trial support through our Development Center and contract manufacturing through our two FDA cGMP manufacturing facilities, differentiates ChiRex from both the independent pharmaceutical laboratories and the dedicated contract manufacturers.'' Located in Boston, Massachusetts and under the scientific direction of Professor Eric Jacobsen of Harvard University, the Technology Center is a center of excellence devoted to proprietary research, the development of proprietary building blocks and contract process development. The Technology Center is expected to open during the late first quarter of 1999, and is intended to build a royalty stream from ChiRex's proprietary process chemistry technologies. Mr. Griffith continued, ''The reaction of our customers to the Technology Center has been overwhelming and we are already implementing plans to expand our capacity at the Center. We believe that our customers will reward the speed, cost and risk management advantages of in-house technology transfer and the credibility of our integrated service offerings.''
ChiRex also announced the addition of two key marketing professionals to the organization effective February 1, 1999. Stuart E. Needleman joined the Company as Vice President, Business Development and Michael J. Nicholds, Ph.D., joined the Company as Vice President, Sales and Marketing. Mr. Needleman formerly served as Vice President of Business Development, North America, for Oxford Asymmetry International. Dr. Nicholds formerly served as Business Manager, Pharmaceutical Intermediates at Zeneca LifeScience Molecules.
Mr. Griffith stated, ''These two professionals will work as partners to deliver the full service offerings of ChiRex to our customers worldwide. Based in Boston, Mr. Needleman is primarily responsible for building the business base of the Technology Center. Based in England, Dr. Nicholds is primarily responsible for continuing the strong growth of full-scale manufacturing products. Both these individuals have the training and experience to represent the full spectrum of ChiRex services to customers, and together they demonstrate the commitment of the Company to deliver in-house technology transfer from IND to active ingredient.'' |
