SAN DIEGO, Oct. 30, 2001 (PRIMEZONE) -- Women First HealthCare, Inc. (Nasdaq:WFHC) today announced financial results for the third quarter and nine months ended September 30, 2001 that demonstrate continuing progress under the Company's new specialty pharmaceutical model and show significant improvement over last year's comparable periods. The Company reported a quarterly net loss of $1.1 million or $0.05 per share for the third quarter 2001, which is a 57.6% improvement over the $2.5 million or $0.15 per share loss reported in third quarter 2000. For the nine months ended September 30, 2001, the Company lost $3.5 million or $0.19 per share, an 83.5% improvement over last year's net loss of $21.2 million or $1.22 per share.
The Company reported third quarter 2001 total net revenue of $5.9 million as compared to $7.4 million for third quarter 2000, a decrease of $1.5 million or 19.9%. Excluding $5.4 million in related party service revenue earned last year as a result of contract revisions with Ortho-McNeil Pharmaceutical, Inc., third quarter 2001 total net revenue was up over 200% from last year's third quarter. The plunge in consumer confidence in the wake of the September 11 terrorist attacks negatively impacted the Company's Consumer Division in third quarter 2001, while the Pharmaceutical Division revenue was unaffected. For the nine-month period ended September 30, 2001, total revenue decreased $2.1 million or 10.3% to $18.6 million compared to $20.7 million for the same period in 2000. Related party service revenue in the comparable 2000 period was $9.7 million; without this non-recurring revenue, the 2001 period was $7.5 million ahead of the prior year.
Commenting on the results, Edward F. Calesa, chairman, president and CEO, said, "We continue to be encouraged with our movement toward profitability. Pharmaceutical product revenues increased dramatically in 2001. Of particular note in third quarter 2001, we were able to raise net proceeds of $29.3 million in August in a private placement of common stock. We acquired rights to a development-stage prenatal vitamin softgel, which we expect to be available for sale toward the end of 2002. Esclim(tm) was selected by AdvancePCS to their highest priority drug list effective January 1, 2002. We are currently in the process of increasing our pharmaceutical sales force by 25%. We have completed three pharmaceutical product acquisitions so far in 2001. Finally, we started the year with two pharmaceutical products. Today we have five and the year is not over. We have both the capital and the commitment to acquire additional products. Because of this, we are evaluating the efficiency of our current business structure of three operating units to determine if it is well suited to our current and future operations."
Charles M. Caporale, vice president and CFO, added, "This year is not directly comparable to last year because of the significance of non-recurring, related party revenue in 2000. We have been able to reduce the drain of working capital so that the funds raised in the private placement can be earmarked for product acquisition and marketing initiatives. The private placement tripled stockholders' equity at September 30 from year-end."
Business Segments
The Company reports results in three segments as follows:
The Pharmaceutical Division recorded total net revenue of $4.3 million in third quarter 2001, a decrease of 17.8% from the comparable prior year period. For the nine-month period, total net revenue was $12.9 million, 20.1% ahead of the prior year. Both the three-month and nine-month prior periods included substantial non-recurring related party revenue. In the third quarter 2000, the Pharmaceutical Division recognized revenue of $5.1 million for work performed under contract revisions in the Company's co-promotion agreement with Ortho-McNeil Pharmaceutical, Inc. for their combination HRT product. For the first nine months of 2000, there was an additional $1.5 million recognized for the Company's co-promotion efforts on behalf of Ortho-McNeil for an oral contraceptive. Excluding these one-time revenue items, the current three-month period is $4.2 million ahead of the comparable prior year period and the current nine-month period is $8.8 million ahead of the prior year. In 2001, the Pharmaceutical Division had net income of $286,000 in the third quarter and $1.2 million in the nine-month period compared to a net loss of $1.0 million and $15.1 million in the prior periods. The Company's pharmaceutical portfolio includes estrogen replenishment products ORTHO-EST(r) Tablets and Esclim(tm) (estradiol transdermal system); the headache management product, Midrin(r), acquired July 2001; and the Bactrim(tm) family of antibacterial products, acquired in early October 2001.
The Consumer Business Division recorded net revenue of $1.5 million and $5.7 million for the three-month and nine-month periods respectively. This compares to net revenue of $1.8 million and $6.5 million respectively in the comparable prior periods. The Division incurred a loss of $55,000 in the third quarter and has lost $300,000 in the nine months ended September 30, 2001. This compares to a loss of $385,000 and $928,000 in the respective prior year periods.
The Trialogue(tm) Division recorded no revenue in the third quarter or first nine months of 2001. The three-month and nine-month 2000 periods include $269,000 and $3.0 million respectively in related party service revenue, which is non-recurring. The Company is de-emphasizing this segment of the business to concentrate efforts on managing its expanding portfolio of pharmaceutical products.
Financial Position
The Company's working capital at September 30, 2001 was $38.1 million, up from $9.3 million at June 30, 2001 as a result of the improvement in operating results and the private placement completed in August 2001, and up from $9.5 million at year-end. Stockholders' equity increased to $45.6 million from $15.0 million at year-end.
About Women First HealthCare, Inc.
Women First HealthCare, Inc. (Nasdaq:WFHC) is a San Diego-based specialty pharmaceutical company. Founded in 1996, its mission is to help midlife women make informed choices regarding their health care and to provide pharmaceutical products -- the Company's primary emphasis -- and lifestyle products to meet their needs. Women First HealthCare is specifically targeted to women age 40+ and their clinicians. An internationally recognized Health Advisory Board of experts in women's health guides Women First HealthCare in the development of information and products for women and clinicians as women transition from perimenopause through postmenopause. The Company operates in three segments: Pharmaceuticals, Consumer Business, and Corporate Marketing. Product focus currently includes estrogen replenishment, headache management, antibacterial/urinary tract infection management, dietary supplementation, and self-care/lifestyle. Further information about Women First HealthCare can be found online at www.womenfirst.com, About Us and Investor Relations. Information about the Company's As We Change(r) national mail order catalog and Internet retailer can also be found online at www.aswechange.com.
Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995: This press release may contain certain "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are subject to various risks, and Women First HealthCare, Inc. cautions you that any forward-looking information is not a guarantee of future performance. Women First HealthCare, Inc. disclaims any intent or obligation to update these forward-looking statements. Actual results could differ materially due to a number of factors, including (i) we have incurred significant losses since we were founded in November 1996, and if midlife women do not use, and their clinicians do not recommend, the products we offer, we will continue to experience losses; (ii) there is a limited market awareness of our Company and the products and services we offer; (iii) we may not be able to identify appropriate licensing, co-promotion or acquisition candidates in the future or to take advantage of the opportunities we identify; (iv) we and our products face significant competition; (v) if we do not successfully manage any growth we experience, we may experience increased expenses without corresponding revenue increases; (vi) we are dependent on single sources of supply for all of the products we offer; (vii) reduced consumer confidence could adversely affect sales by our Consumer Business Division; and (viii) additional factors set forth in the Company's Securities and Exchange Commission filings including its Annual Report on Form 10-K for the period ended December 31, 2000 and its Form 10-Q for the period ended June 30, 2001.
Women First HealthCare, Inc.
Consolidated Statements of Operations
(Unaudited)
Three months ended Nine months ended
September 30, September 30,
------------------------ -------------------------
2001 2000 2001 2000
----------- ----------- ----------- ------------
Net product
revenue $ 5,889,834 $ 1,934,393 $18,511,028 $ 10,541,621
Net service
revenue -- -- -- 462,000
Net service
revenue from
related party -- 5,415,034 43,843 9,691,373
----------- ----------- ----------- ------------
Total service
revenues -- 5,415,034 43,843 10,153,373
----------- ----------- ----------- ------------
Total net
revenues 5,889,834 7,349,427 18,554,871 20,694,994
Costs and expenses:
Cost of sales
(including
purchases from
a related party
of $138,225 and
$1,185,298 for
the three and
nine months
ended September
30, 2001) 1,497,904 3,000,059 5,261,814 9,417,972
Marketing
and sales 3,828,639 5,678,223 11,394,802 26,472,101
General and
administrative 1,703,879 1,435,930 5,666,941 5,819,614
Research and
development 111,284 86,657 337,120 475,014
Restructuring
charges -- -- -- 734,665
----------- ----------- ----------- ------------
Total costs
and expenses 7,141,706 10,200,869 22,660,677 42,919,366
----------- ----------- ----------- ------------
Loss from
operations (1,251,872) (2,851,442) (4,105,806) (22,224,372)
Interest and
other income, net 170,944 305,926 614,269 1,016,382
----------- ----------- ----------- ------------
Net loss $(1,080,928) $(2,545,516) $(3,491,537) $(21,207,990)
=========== =========== =========== ============
Net loss per
share (basic
and diluted) $ (0.05) $ (0.15) $ (0.19) $ (1.22)
=========== =========== =========== ============
Weighted average
shares used in
computing net
loss per share
(basic and
diluted) 20,924,003 17,492,279 18,777,073 17,448,032
=========== =========== =========== ============
Women First HealthCare, Inc.
Consolidated Balance Sheets
September 30, December 31,
2001 2000
------------- -------------
(Unaudited)
Assets
Current assets:
Cash and cash equivalents $ 35,617,485 $ 9,507,865
Accounts receivable, net 4,476,870 421,435
Inventory 1,940,990 1,387,872
Receivable from related party -- 2,682,468
Prepaid expenses and
other current assets 839,259 544,283
------------- -------------
Total current assets 42,874,604 14,543,923
Property and equipment, net 989,796 1,081,214
Product rights, net 13,671,157 --
Intangible assets, net 2,899,066 3,266,840
Other assets 1,174,962 1,152,398
============= =============
Total assets $ 61,609,585 $ 20,044,375
============= =============
Liabilities and stockholders' equity
Current liabilities:
Accounts payable $ 1,562,750 $ 1,052,322
Payable to related party 120,681 992,745
Accrued salaries and
employee benefits 1,803,991 750,902
Other accrued liabilities 1,327,256 2,213,245
------------- -------------
Total current liabilities 4,814,678 5,009,214
Note payable 11,194,610 --
Commitments -- --
Stockholders' equity:
Preferred stock, $.001 par value;
5,000,000 shares authorized -- --
Common stock, $.001 par value;
40,000,000 shares authorized;
22,432,642 and 17,593,826 shares
issued and outstanding, respectively 22,433 17,593
Treasury stock (99,660) (99,660)
Additional paid-in capital 114,723,119 80,794,541
Deferred compensation (108,427) (231,682)
Accumulated deficit (68,937,168) (65,445,631)
------------- -------------
Total stockholders' equity 45,600,297 15,035,161
============= =============
Total liabilities and
stockholders' equity $ 61,609,585 $ 20,044,375
============= =============