SAN DIEGO, Feb. 27, 2001 (PRIMEZONE) -- Women First HealthCare, Inc. (Nasdaq:WFHC) today announced the continued improvement in its financial results for the fourth quarter and fiscal year ended December 31, 2000.
The Company reported the fourth quarter 2000 net loss narrowed to $1.4 million or $0.08 per share, continuing the improvement achieved in the third quarter, when the Company lost $2.5 million or $0.15 per share. Per share calculations for both quarters are based on 17.5 million shares outstanding. In the fourth quarter of 1999, the Company's net loss was $8.2 million or $0.48 per share based on 17.3 million shares. The Company also reported a lowered net loss for the fiscal year ended December 31, 2000 of $22.6 million or $1.29 per share based on 17.5 million shares compared with a net loss of $30.1 million in 1999. The 1999 period included a charge for conversion of preferred stock, which increased the loss available to common stockholders to $33.5 million or $2.67 per share based on 12.5 million shares. The Company went public on June 28, 1999.
The Company reported total net revenue of $6.4 million in the fourth quarter of 2000 compared to $7.1 million in the fourth quarter of 1999, a decrease of $0.7 million or 9.7%. The 1999 period included the launch of the Esclim(tm) transdermal patch. For the full year, total net revenue was $27.1 million, an increase of $4.6 million or 20.4% from the prior year. Included in the current year's three-month and full-year figures are $2.6 million and $12.3 million respectively in related party revenue earned as a result of contract revisions with Ortho-McNeil Pharmaceutical, Inc. The 1999 comparable figures for related party revenue were $1.2 million for the quarter and $2.3 million for the year.
Related party revenue grew considerably in the 2000 periods versus the prior year's as a result of contract revisions with Ortho-McNeil Pharmaceutical announced October 17, 2000. The contract revisions modified the compensation the Company received for co-promoting sales of ORTHO-PREFEST(r) Tablets. As a result, the Company recorded related party revenue of $2.6 million in the fourth quarter of 2000 and $12.3 million for the full year 2000. Because the Company's ORTHO-PREFEST(r) contract expired on December 31, 2000, these revenues will be nonrecurring in 2001. The Company expects that in 2001 revenues from its newly acquired asset, ORTHO-EST(r) Tablets, in addition to Esclim(tm), should replace this nonrecurring revenue.
The Company reports results in three segments as follows:
The Pharmaceutical Division's net revenue for the fourth quarter and fiscal year ended December 31, 2000 totaled $3.3 million and $14.2 million respectively as compared to $3.7 million and $12.5 million for the comparable prior year periods. The Pharmaceutical Division accounted for 52.5% of total net revenues in 2000, down from 55.6% in 1999. The Company has notified Bristol-Myers Squibb of its intention to terminate the co-promotion agreement for PRAVACHOL(r) Tablets effective March 31, 2001 consistent with its strategy of pursuing product acquisition and license.
The Consumer Business Division markets and sells the Company's line of self-care products available through its As We Change(r) national mail order catalog and Internet retailer, www.aswechange.com. Consumer net revenue for the fourth quarter and fiscal year ended December 31, 2000 totaled $2.1 million and $8.5 million respectively. This represents an increase of $0.1 million, or 2.1%, and $1.7 million, or 24.8%, respectively over the prior year periods. Consumer Business accounted for 31.5% of total net revenues in 2000, up slightly from 30.4% in 1999. Following two years of double digit revenue growth, the Company is focusing on profitability in the Consumer Business in 2001.
The Trialogue(tm) Division provides strategic marketing programs for sale to major pharmaceutical companies. Trialogue(tm) net revenue for the fourth quarter and fiscal year ended December 31, 2000 totaled $1.0 million and $4.3 million respectively versus $1.4 million and $3.1 million in the comparable 1999 periods.
At December 31, 2000 the Company reported assets totaling $20.0 million, cash of $9.5 million, and stockholders' equity of $15.0 million. Management believes the Company has adequate working capital to sustain its operations at least through the end of fiscal year 2001. The Company has no long-term debt.
The year ended December 31, 2000 was a challenging one for the Company. During the first half of the year, the Company lost $18.6 million or $1.07 per share. Following a change in management and a corporate restructuring in June 2000, the Company dramatically improved its results in the second half of 2000, reporting a $3.9 million loss, or $0.22 per share. The Company announced the following key strategic initiatives in 2000:
-- Revised agreement with Ortho-McNeil Pharmaceutical, Inc., which
resulted in the acquisition of ORTHO-EST(r) Tablets effective
January 1, 2001 (announced in October 2000).
-- Revised agreement with Laboratoires Fournier S. A., which made
possible the Company's agreement with Novation, the largest supply
cost management company in health care, for Esclim(tm) (announced
in December 2000).
Commenting on the results for the year, Edward F. Calesa, chairman, president and CEO, said, "The fourth quarter continues the improvement in results that began in the third quarter 2000, and we are encouraged by the progress we have made since July 2000. We have cut the burn rate from $3.1 million per month in the first half of the year to $0.4 million per month in the fourth quarter, and we anticipate additional reduction in 2001. By aligning costs and revenues we have been able to focus our efforts on building a platform for accelerated and sustainable growth in the future. The improvements made in the second half of 2000 are a testament to our employees' resolve to survive and prosper."
Looking forward, Mr. Calesa stated, "We are reaffirming our goal of profitability by year-end 2001. In the Pharmaceutical Division, we are putting a concerted marketing effort behind both ORTHO-EST(r) Tablets and Esclim(tm) in 2001, as well as pursuing the acquisition and licensing of additional prescription products to grow the business. In the Consumer Business, our focus is on building profitability. With Trialogue(tm), we are offering pharmaceutical companies a unique new marketing program called Integrated Marketing Platform. We are all energized to succeed and to build the value our shareholders deserve."
About Women First HealthCare, Inc.
Founded in 1996, Women First HealthCare, Inc. is a San Diego-based specialty pharmaceutical company. Its mission is to help midlife women make informed choices regarding their health care needs and to provide pharmaceutical and lifestyle product solutions to meet those needs. Women First is specifically targeted to women age 40+ and their clinicians. The Company's Pharmaceutical Division, which includes a nationwide team of experienced sales specialists, contacts primarily OB/GYNs and Nurse Practitioners with estrogen replenishment options-ORTHO-EST(r) Tablets and Esclim(tm) (estradiol transdermal system). The Consumer Business is responsible for Daily Difference(tm) dietary supplements, developed in consultation with Tufts University School of Nutrition Science and Policy, and the Company's line of self-care products available through its As We Change(r) national mail order catalog and Internet retailer, www.aswechange.com. Trialogue(tm), the Corporate Marketing Division, is responsible for providing access to Women First's network of opinion leaders and clinicians through strategic marketing programs for sale to major pharmaceutical companies. The Company's business strategy includes the acquisition and licensing of additional prescription products that support its mission. Further information about Women First can be found online at www.womenfirst.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 significant losses; (ii) there is a limited market awareness of our company and the products and services we offer; (iii) we may need additional financing in 2001 to fund our operations, acquire new products, and make planned capital expenditures, which financing may not be available on acceptable terms, if at all; (iv) 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; (v) we are obligated to find replacement sources of supply of ORTHO-EST(r) Tablets before April 2002, and if we fail to do so we will be required to pay significantly higher prices for product acquired from Ortho-McNeil Pharmaceutical; (vi) we and our products face significant competition; (vii) if we do not successfully manage any growth we experience, we may experience increased expenses without corresponding revenue increases; (viii) we are dependent on single sources of supply for all of the products we offer; and (ix) 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, 1999 and its Quarterly Report on Form 10-Q for the nine-month period ended September 30, 2000.
Women First HealthCare, Inc.
Consolidated Balance Sheets
(in thousands)
December 31,
--------------------
2000 1999
--------- ---------
Assets
Current Assets:
Cash and cash equivalents $ 9,508 $ 32,719
Accounts receivable, net 421 1,916
Inventory 1,388 1,460
Receivable from related party 2,683 683
Prepaid expenses and
other current assets 544 650
--------- ---------
Total current assets 14,544 37,428
Property and equipment, net 1,081 1,035
Intangible assets, net 3,267 3,745
Other assets 1,152 1,440
========= =========
Total assets $ 20,044 $ 43,648
========= =========
Liabilities and stockholders' equity
Current Liabilities:
Accounts payable $ 1,052 $ 2,482
Payable to related party 993 482
Accrued salaries and employee benefits 751 1,973
Other accrued liabilities 2,213 1,991
--------- ---------
Total current liabilities 5,009 6,928
Commitments
Stockholders' equity:
Preferred stock - -
Common stock 18 17
Treasury stock (100) (100)
Additional paid-in capital 80,795 80,762
Deferred compensation (232) (1,080)
Accumulated deficit (65,446) (42,879)
--------- ---------
Total stockholders' equity 15,035 36,720
========= =========
Total liabilities and
stockholders' equity $ 20,044 $ 43,648
========= =========
Women First HealthCare, Inc.
Statements of Operations
(in thousands, except per share data)
Three Months ended Year ended
December 31, December 31,
2000 1999 2000 1999
----------- ----------- ----------- -----------
Net revenue $ 3,744 $ 5,897 $ 14,748 $ 20,152
Net revenue
with related party 2,646 1,182 12,337 2,349
----------- ----------- ----------- -----------
6,390 7,079 27,085 22,501
Costs and expenses:
Cost of sales 1,111 2,750 10,528 12,327
Marketing and sales 5,293 9,651 31,766 26,827
General and
administrative 1,722 2,927 7,541 10,793
Research and
development 64 435 539 1,697
Write-down of assets
and other charges - - - 1,638
Restructuring charges - - 735 -
----------- ----------- ----------- -----------
Total costs
and expenses 8,190 15,763 51,109 53,282
----------- ----------- ----------- -----------
Loss from operations (1,800) (8,684) (24,024) (30,781)
Interest income and
other income, net 442 483 1,458 646
----------- ----------- ----------- -----------
Net loss (1,358) (8,201) (22,566) (30,135)
Accretion of
beneficial
conversion feature
related to
convertible
preferred stock - - - (3,362)
=========== =========== =========== ===========
Net loss available
to common
stockholders $(1,358) $(8,201) $(22,566) $(33,497)
=========== =========== =========== ===========
Net loss per share
(basic and diluted) $ (0.08) $ (0.48) $ (1.29) $ (2.67)
=========== =========== =========== ===========
Weighted average
shares used in
computing net loss
per share
(basic and diluted)17,525,549 17,255,284 17,467,517 12,547,154
=========== =========== =========== ===========