Medicis Reports Second Quarter Fiscal 2005 Financial Results; 31% Increase in Revenues and 50% Increase in Earnings Per Share, Absent Special Charges
January 20, 2005 4:05:00 PM ET
Medicis MRX today announced second quarter fiscal 2005 net revenue growth of approximately 31% to $92.3 million with "if-converted" net income of $25.4 million, or $0.36 per diluted share, absent a $3.5 million tax-effected special charge associated with a research and development collaboration, compared to second quarter fiscal 2004 net revenues of $70.6 million with "if-converted" net income of $16.9 million, or $0.24 per diluted share, absent a $1.6 million tax-effected special charge associated with a research and development collaboration. Including the tax-effected special charge of $3.5 million, the Company reported Generally Accepted Accounting Principles ("GAAP") net income of $20.2 million, or $0.31 per diluted share for the second quarter of fiscal 2005. Including the tax-effected special charge of $1.6 million, the Company reported GAAP net income of $13.6 million, or $0.21 per diluted share for the second quarter of fiscal 2004. Diluted per share amounts are calculated using the "if-converted" method of accounting in accordance with GAAP.
Second quarter fiscal 2005 net revenues increased primarily due to RESTYLANE(R) and PLEXION(R). At the end of the second quarter, the Company's core brands included RESTYLANE(R), DYNACIN(R), LOPROX(R), OMNICEF(R), PLEXION(R) and TRIAZ(R). For the second quarter of fiscal 2005, the Company's core brands represented approximately 78% of total revenue. Additionally, the Company's gross profit margin for second quarter fiscal 2005 increased to approximately 85% from approximately 84% over the prior year.
For the first six months of fiscal 2005, Medicis reported net revenue growth of approximately 35% to $181.2 million with "if-converted" net income of $47.4 million, or $0.66 per diluted share, absent a $19.4 million tax-effected special charge associated with the SubQ(TM) transaction reported in the first quarter of fiscal 2005 and absent a $3.5 million tax-effected special charge associated with a research and development collaboration with Ansata Therapeutics reported in second quarter fiscal 2005. Including the tax-effected special charges of $22.9 million reported in the first half of fiscal 2005, Medicis reported net income of $21.2 million, or $0.34 per diluted share for the first six months of fiscal 2005.
For the first six months of fiscal 2004, Medicis reported net revenues of $133.9 million with "if-converted" net income of $29.0 million, or $0.41 per diluted share, absent a $37.5 million tax-effected loss associated with the early extinguishment of debt reported in the first quarter of fiscal 2004 and absent a $1.6 million tax-effected special charge associated with a research and development collaboration reported in second quarter fiscal 2004. Including the tax-effected special charges of $37.5 million and $1.6 million reported in the first half of fiscal 2004, Medicis reported a net loss of $13.5 million, or $(0.25) per diluted share for the first six months of fiscal 2004.
The 35% increase in net revenues for the first six months of fiscal 2005 was primarily attributable to growth in the RESTYLANE(R), DYNACIN(R) and PLEXION(R) brands. In the first half of fiscal 2005, the Company's core brands represented approximately 77% of total revenue. Additionally, the Company's gross profit margin for the first half of fiscal 2005 increased to approximately 85% from 84% over the prior year.
Selling, general and administrative expenses in second quarter fiscal 2005 were $32.3 million, or approximately 35% of revenues compared to $29.1 million, or approximately 41% of revenues in the second quarter fiscal 2004, a decrease as a percentage of revenues of approximately 6 percentage points. The $3.2 million increase in selling, general and administrative expenses primarily was due to incremental costs associated with RESTYLANE(R). The decrease in percentage of revenues primarily was due to second quarter fiscal 2005 revenues outpacing the increase in selling, general and administrative spending.
Research and development expenses for the second quarter of fiscal 2005 increased approximately 31% to $4.4 million, or approximately 5% of revenues, absent special charges, compared to $3.3 million, or approximately 5% of revenues, in second quarter fiscal 2004.
"We are pleased to announce a solid second quarter," said Jonah Shacknai, Chairman and Chief Executive Officer of Medicis. "Continued growth of RESTYLANE(R), LOPROX(R) Shampoo and DYNACIN(R) Tablets highlighted the quarter, along with the introduction of our innovative PLEXION(R) Cleansing Cloths. We were delighted to enter into a research and development collaboration with Ansata Therapeutics for a unique peptide technology. As we enter the second half of fiscal 2005, we anticipate continuation of our 'emergence' theme with the goal of introducing at least one new product from our vigorous research and development pipeline. Our commitment to shareholder value, physicians and patients remains resolute."
In second quarter fiscal 2005, approximately $84 million of common shares were repurchased under the stock repurchase program approved by the Company's Board of Directors in August 2004 (2,177,286 shares at an average market price of $38.65). As of December 31, 2004, the repurchase authorization amount of up to $150 million in common stock under the new program has been met.
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