SAN DIEGO, Feb. 13, 2002 (PRIMEZONE) -- Women First HealthCare, Inc. (Nasdaq:WFHC) today announced its first-ever profit on record revenues in fourth quarter 2001.
The Company reported fourth quarter 2001 net income of $52,000 or less than $0.01 per fully diluted share, compared to a net loss of $1.4 million, or $0.08 per share, in the prior year period. The Company also reported a dramatic improvement in full year results, reducing the net loss for the fiscal year ended December 31, 2001 to $3.4 million or $0.17 per share, an improvement of $19.1 million, compared with a net loss of $22.6 million, or $1.29 per share, in 2000. Per share calculations are based on 23.7 million shares and 19.7 million shares for the fourth quarter and full year 2001 and on 17.5 million shares for the comparable 2000 periods.
The Company reported total net revenue of $9.9 million in the fourth quarter of 2001 compared to $6.4 million in the fourth quarter of 2000, an increase of $3.5 million or 54.2%. On a like-for-like basis, excluding $2.6 million in nonrecurring, related party revenue in the fourth quarter 2000, the quarter-over-quarter increase was $6.1 million, or 163%. For the full year, total net revenue was $28.4 million, an increase of $1.3 million or 4.9% from the prior year. On a like-for-like basis, excluding $12.3 million of nonrecurring, related party revenue, the increase from the prior year was $13.6 million, or 92.3%.
Commenting on the results, Edward F. Calesa, Women First chairman, president and CEO, said, "In our press release last year announcing our 2000 results, we reaffirmed our goal of profitability by year-end 2001, and we take great pride in delivering on that goal. Our turnaround is now complete. Profitability was the result of many successes in 2001 -- targeted marketing of our core estrogen products that led to a tripling of these revenues over 2000, our continuing focus on expense management, and the acquisition of seven pharmaceutical products during the year, five of which were accretive to earnings. That we have been able to reach this plateau in such a short period of time is especially gratifying. None of this would have been possible without the hard work and commitment of all of our people, and I thank them. Profitability for the full year 2002 and beyond is our current goal."
According to Charles M. Caporale, vice president and CFO, "We earned $52,000 in the fourth quarter on revenues of $9.9 million. Our current expense structure, which we expect to maintain in 2002, can support additional revenue and earnings growth and is the basis for our fiscal year 2002 guidance."
The Company reports results in two segments as follows:
The Pharmaceutical Division's net revenue for the fourth quarter and fiscal year ended December 31, 2001 totaled $8.2 million and $21.1 million respectively as compared to $3.5 million and $14.2 million for the comparable prior year periods. The Pharmaceutical Division accounted for 74.1% of total net revenues in 2001, up from 52.5% in 2000. New prescription products acquired during 2001 accounted for 26.1% of the Division's annual revenue. Co-promotion revenues, which accounted for $1.8 million and $8.5 million in the prior year's quarter and full-year periods, were less than $45,000 for the full year 2001, reflecting the Company's discontinuance of the co-promotion strategy and adoption of an acquisition and license strategy. That transition is now complete. The Division earned $1.9 million and $3.1 million in the fourth quarter and fiscal year ended December 31, 2001. In the year earlier periods, the Division earned $418,000 in the fourth quarter 2000 and lost $14.6 million for all of 2000.
The Consumer Business Division reported net revenue for the fourth quarter and fiscal year ended December 31, 2001 of $1.7 million and $7.3 million respectively. This represents decreases of $371,000, or 18.0%, and $1.2 million, or 14.0%, respectively over the prior year periods. Consumer Business accounted for 25.9% of total net revenues in 2001, down from 31.5% in 2000. The revenue decline follows two years of double-digit revenue growth and reflects the Company's decision to utilize the Division's resources to support the Pharmaceutical Division while at the same time reaching breakeven. The Division lost $81,000 and $381,000 in the fourth quarter and fiscal year ended December 31, 2001, an improvement of $918,000 and $1.5 million respectively over the prior year periods.
The Trialogue(tm) Division has been phased out by the Company. It produced no revenue in either the fourth quarter or the full year 2001 as the Company directed its resources to building its Pharmaceutical business. Revenues in 2000, which accounted for 16.0% of revenue, were primarily nonrecurring related party service revenues.
Reviewing other accomplishments of 2001, the Company reported the following:
The addition of Esclim(tm) to the AdvancePCS Performance Drug List effective January 1, 2002;
The launch of the "Test & Treat" physician education initiative in support of Esclim(tm);
The completion of enrollment for the Phase IV patient satisfaction study for Esclim(tm), which will be published in 2002;
The addition of three new Board members -- Dennis M. Jones, founder and former chairman and CEO of Jones Pharma, Michael T. Sember, executive vice president of Elan Corporation plc, and Ruth A. Wooden, senior counselor of Porter Novelli;
The raising of $31.5 million in a private offering adding several well known and respected institutions to its list of shareholders; and
The acquisition of seven pharmaceutical products from five different companies.
The Company's working capital at December 31, 2001 was $21.4 million, up from $9.5 million at year-end 2000, as a result of improved operating results and the private placement completed in August 2001. Debt and accrued interest at year-end 2001 was $20.0 million versus no debt at year-end 2000. The debt was used to purchase prescription products in 2001. Stockholders' equity increased to $45.7 million at year-end 2001 from $15.0 million at December 31, 2000.
Business Outlook
The Company also reaffirmed guidance for fiscal year 2002.
The Company expects revenue to be in the range of $43 million to $47 million in 2002 with gross margins in the 75% to 77% range. The expense run rate is expected to be in the $28 million to $30 million range and earnings are estimated to be between $0.20 and $0.23 per fully diluted share. Factors that could cause actual results to differ from these forward-looking statements include those described below.
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 two segments: Pharmaceuticals and Consumer Business. Product focus currently includes estrogen replenishment, headache/pain 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 experience losses in the future; (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 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; (viii) we have incurred significant debt obligations which will require us to make debt service payments in the future; 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, 2000 and its Form 10-Q for the period ended September 30, 2001.
Women First HealthCare, Inc.
Statements of Operations
(in thousands, except per share data)
Three months ended Year ended
Dec. 31, Dec. 31,
---------------------- -----------------------
2001 2000 2001 2000
---------- ---------- ---------- ----------
Net revenue $ 9,852 $ 3,744 $ 28,363 $ 14,748
Net revenue with
related party -- 2,646 44 12,337
---------- ---------- ---------- ----------
Total net
revenues 9,852 6,390 28,407 27,085
---------- ---------- ---------- ----------
Costs and expenses:
Cost of sales 2,238 1,111 7,500 10,528
Marketing and
sales 5,457 5,293 16,852 31,766
General and
administrative 1,872 1,722 7,539 7,541
Research and
development 126 64 464 539
Restructuring
charges -- -- -- 735
---------- ---------- ---------- ----------
Total costs and
expenses 9,693 8,190 32,355 51,109
---------- ---------- ---------- ----------
Income (Loss) from
operations 159 (1,800) (3,948) (24,024)
Interest and other
income (expense),
net (107) 442 507 1,458
---------- ---------- ---------- ----------
Net income (loss) $ 52 $ (1,358) $ (3,441) $ (22,566)
========== ========== ========== ==========
Net income (loss)
per share (basic
and diluted) $ 0.00 $ (0.08) $ (0.17) $ (1.29)
========== ========== ========== ==========
Weighted average
shares used in
computing basic
net income
(loss) per
share 22,464,672 17,525,549 19,706,550 17,467,517
========== ========== ========== ==========
Weighted average
shares used in
computing diluted
net income (loss)
per share 23,697,929 17,525,549 19,706,550 17,467,517
========== ========== ========== ==========
Women First HealthCare, Inc.
Consolidated Balance Sheets
(in thousands)
December 31,
------------------------
2001 2000
--------- ---------
Assets
Current assets:
Cash and cash equivalents $ 19,378 $ 9,508
Accounts receivable, net 7,666 421
Inventory 1,422 1,388
Receivable from related party -- 2,683
Prepaid expenses and other
current assets 986 544
--------- ---------
Total current assets 29,452 14,544
Property and equipment, net 1,066 1,081
Product rights, net 36,248 --
Intangible assets, net 2,766 3,267
Other assets 1,506 1,152
--------- ---------
Total assets $ 71,038 $ 20,044
========= =========
Liabilities and stockholders' equity
Current liabilities:
Accounts payable $ 2,138 $ 1,052
Payable to related party 419 993
Accrued salaries and
employee benefits 647 751
Other accrued liabilities 2,119 2,213
Note payable and accrued
interest payable 2,728 --
--------- ---------
Total current liabilities 8,051 5,009
Note payable and accrued
interest payable 17,267 --
Commitments
Stockholders' equity:
Preferred stock -- --
Common stock 22 18
Treasury stock (100) (100)
Additional paid-in capital 114,771 80,795
Deferred compensation (87) (232)
Accumulated deficit (68,886) (65,446)
--------- ---------
Total stockholders' equity 45,720 15,035
--------- ---------
Total liabilities and
stockholders' equity $ 71,038 $ 20,044
========= =========