SAN DIEGO, July 30, 2002 (PRIMEZONE) -- Women First HealthCare, Inc. (Nasdaq:WFHC), a specialty pharmaceutical company, today announced record revenues of $12.1 million and record net income of $1.1 million, or $.05 per fully diluted share, for the second quarter ended June 30, 2002. The results compare with revenue of $5.6 million and a net loss of $1.5 million, or $.08 per share, in the prior year period. The current quarter fully diluted per share calculation is based on 23.9 million shares. The prior year per share calculation is based on 17.8 million shares. After giving effect to a non-recurring, non-cash charge related to acquisition financing for the recent purchase of Vaniqa(r) (eflornithine hydrochloride) Cream, 13.9%, the Company reported net income available to common shareholders of $61,000 in the second quarter.
For the six months ended June 30, 2002, revenues were $21.6 million and net income was $1.3 million, or $.06 per fully diluted share. The results compare with revenue of $12.7 million and a net loss of $2.4 million, or $.14 per share, in the first six months of 2001. The current year fully diluted per share calculation is based on 23.9 million shares. The prior year per share calculation is based on 17.7 million shares. After giving effect to the one-time charge referred to above, the Company earned $.01 per share for the current six-month period.
Commenting on the results, Chairman, President and CEO Edward F. Calesa said "There were two significant events in the second quarter, both of which affirm our belief in the soundness of our business model and our ability to build shareholder value. One, we booked record revenues in the quarter and achieved record earnings. Our pharmaceutical division almost tripled revenues quarter over quarter. Two, in late June we acquired Vaniqa(r), a product we believe will further solidify our position in the women's health care market. Vaniqa(r) is our first acquisition this year and our eighth over all. We expect Vaniqa(r) will provide significant cash flow accretion and long-term earnings potential. In the short term, financing charges will moderate the product's contribution to our bottom line but we still expect the acquisition to be accretive."
Vice president and CFO Charles Caporale said "As noted in our release announcing Vaniqa(r), we incurred a one time, non-cash charge of $1.0 million for the beneficial conversion feature of the convertible preferred stock we issued in conjunction with the financing. In addition, five days worth of dividends accrued on the preferred stock during the quarter. Both of these charges are shown below the net income line and are subtracted to arrive at net income available to common stockholders."
The Company reports results in two segments as follows:
The Pharmaceutical Division recorded revenues of $9.9 million in the second quarter 2002, almost triple the $3.5 million recorded in the second quarter of 2001. For the six-month period, the Division recorded revenues of $17.3 million, double last year's $8.6 million. Pharmaceutical revenue accounts for 80.2% of consolidated revenue for the current six months versus 67.6% in the prior year period. Gross margin for the six-month period was 75.5% compared to 77.7% last year, primarily the result of including $1.2 million of product rights amortization in cost of sales this year. There was no product rights amortization in the prior year.
The Consumer Business Division recorded revenues of $2.2 million in the second quarter 2002, up 7.6% from $2.1 million recorded in the year earlier period. For the six-month period, the Division recorded revenues of $4.3 million, 3.7% ahead of the prior year amount. The division's gross margin for the six month period improved to 58.1%, up from last year's 54.9%.
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. Further information about Women First HealthCare can be found online at www.womenfirst.com, About Us and Investor Relations.
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 acquisition, licensing, or co-promotion candidates in the future or to take advantage of the opportunities we identify; (iv) we and our products face significant competition; (v) our products may not achieve or maintain market acceptance for a variety of reasons, including as a result of recent research published by the National Cancer Institute and the National Institutes of Health concerning estrogen replenishment therapy and combination estrogen/progestin hormonal replenishment therapy in healthy menopausal women, respectively; (vi) 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) our third party suppliers and licensors may terminate their agreements with us earlier than we expect, and as a result we may be unable to continue to market and sell the related pharmaceutical products on an exclusive basis or at all; (ix ) we have incurred significant debt obligations which will require us to make debt service payments in the future; and (x) 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, 2001 and its Form 10-Q for the period ended March 31, 2002.
Women First HealthCare, Inc.
Consolidated Balance Sheets
(in thousands)
June 30, Dec. 31,
2002 2001
--------- ---------
Unaudited
Assets
Current assets:
Cash and cash equivalents $ 15,431 $ 19,378
Accounts receivable, net 9,689 7,666
Inventory 4,413 1,422
Prepaid expenses and other current assets 1,570 986
--------- ---------
Total current assets 31,103 29,452
Property and equipment, net 1,015 1,066
Product rights, net 77,424 36,205
Intangible assets, net 2,780 2,809
Restricted cash 100 100
Deferred financing expenses 1,679 --
Other assets, net 3,678 1,406
--------- ---------
Total assets $ 117,779 $ 71,038
========= =========
Liabilities and stockholders' equity
Current liabilities:
Accounts payable $ 3,084 $ 2,139
Payable to related party 301 419
Accrued salaries and employee benefits 668 646
Accrued payroll taxes 149 1,350
Assumed liability for product returns 2,500 --
Other accrued liabilities 1,674 769
Note payable and accrued interest payable 3,069 2,728
--------- ---------
Total current liabilities 11,445 8,051
Notes payable and accrued interest payable 39,941 17,267
Senior convertible redeemable
preferred stock 13,018 --
Commitments -- --
Stockholders' equity:
Preferred stock -- --
Common stock 23 22
Treasury stock (100) (100)
Additional paid-in capital 122,077 114,771
Deferred compensation (43) (87)
Accumulated deficit (68,582) (68,886)
--------- ---------
Total stockholders' equity 53,375 45,720
--------- ---------
Total liabilities and
stockholders' equity $ 117,779 $ 71,038
========= =========
Women First HealthCare, Inc.
Unaudited Consolidated Statements of Operations
(in thousands, except per share data)
Three months Six months
ending June 30, ending June 30,
2002 2001 2002 2001
-------- -------- -------- --------
Net product revenue $ 12,085 $ 5,557 $ 21,548 $ 12,621
Net service revenue
from related party -- -- -- 44
-------- -------- -------- --------
Total net revenues 12,085 5,557 21,548 12,665
Cost of sales 3,265 1,306 6,011 3,764
Marketing and sales 5,747 3,330 10,423 7,566
General and
administrative 1,495 2,361 2,847 3,963
Regulatory, research
and development 138 102 261 226
-------- -------- -------- --------
Total costs and
expenses 10,645 7,099 19,542 15,519
-------- -------- -------- --------
Income (loss) from
operations 1,440 (1,542) 2,006 (2,854)
Interest and other
income 86 88 109 443
Interest expense (423) -- (769) --
-------- -------- -------- --------
Net income (loss) 1,103 (1,454) 1,346 (2,411)
Accretion of beneficial
conversion feature
related to convertible
preferred stock (1,024) -- (1,024) --
Accrued dividends on
convertible preferred
stock (18) -- (18) --
-------- -------- -------- --------
Net income (loss)
available to common
stockholders $ 61 $ (1,454) $ 304 $ (2,411)
======== ======== ======== ========
Net income (loss)
per share:
Basic and diluted $ 0.05 $ (0.08) $ 0.06 $ (0.14)
======== ======== ======== ========
Net income (loss) per
share available to
common stockholders:
Basic and diluted $ 0.00 $ (0.08) $ 0.01 $ (0.14)
======== ======== ======== ========
Weighted average
shares used in
computing net income
per share:
Basic 22,866 17,760 22,752 17,686
======== ======== ======== ========
Diluted 23,885 17,760 23,887 17,686
======== ======== ======== ========