Medicis Reports First Quarter Fiscal 2005 Financial Results
October 19, 2004 4:05:00 PM ET
Medicis MRX today announced first quarter fiscal 2005 net revenue growth of approximately 40% to $88.8 million with "if-converted" net income of $21.2 million, or $0.32 per diluted share, absent a $19.4 million tax-effected special charge associated with the SubQ(TM) transaction. Including this special charge, the Company reported Generally Accepted Accounting Principles ("GAAP") net income of $1.0 million, or $0.02 per diluted share. In the first quarter of fiscal 2004, Medicis reported net revenues of $63.3 million with net income of $10.3 million, or $0.18 per diluted share, absent a $37.5 million tax-effected loss associated with the early extinguishment of debt. Including the loss on early extinguishment of debt, the Company reported a first quarter fiscal 2004 GAAP net loss of $27.2 million, or $0.50 per diluted share.
"We are pleased to announce a solid first quarter in line with our expectations as we begin our fiscal 2005 year," said Jonah Shacknai, Chairman and Chief Executive Officer of Medicis. "We continue to concentrate on advancing our research and development pipeline illustrated by our investment in SubQ(TM) and the significant increase in research and development as a percentage of revenue. Future commitments will focus on proprietary technologies that we expect will continue to add shareholder value and enhance our mission in helping patients attain a healthy and youthful appearance and self-image."
First quarter fiscal 2005 revenues increased primarily due to sales of RESTYLANE(R) and growth of DYNACIN(R). The Company's core brands include: RESTYLANE(R), DYNACIN(R), LOPROX(R), OMNICEF(R), PLEXION(R) and TRIAZ(R). The Company recorded contract revenue of approximately $16 million for the first quarter fiscal 2005. Contract revenue includes license revenues associated with the outlicensing of the ORAPRED(R) and LUSTRA(R) brands. Core brand revenues for first quarter fiscal 2005 represented approximately 75% of total revenue, or $67.0 million, an increase of approximately 26%, compared to core brand revenues of $53.0 million for first quarter fiscal 2004. The Company's gross profit margins were 84.4%.
Selling, general and administrative expenses for the first quarter of fiscal 2005 decreased as a percentage of revenues approximately 11 percentage points to $32.2 million, or approximately 36% of revenues, from $30.0 million, or approximately 47% of revenues, in first quarter fiscal 2004. The $2.2 million increase in selling, general and administrative expenses primarily was due to incremental expenses associated with the RESTYLANE(R) product. The decrease in percentage of revenues primarily was due to first quarter fiscal 2005 revenues outpacing the increase in selling, general and administrative spending. Research and development expenses for the first quarter of fiscal 2005 increased 63% to $5.8 million, or approximately 6% of revenues, absent special charges, compared to $3.5 million, or approximately 6% of revenues, in first quarter fiscal 2004.
In May 2003, the Company's Board of Directors approved a new stock repurchase program that authorized the repurchase of up to $75 million of our common stock. This program provided for the repurchase of Class A common stock at such time as management determined. As of June 30, 2004, Medicis had not repurchased any shares of our common stock under this program. In August 2004, the Company's Board of Directors approved a new program that replaces the May 2003 program and authorizes the repurchase of up to $150 million of our common stock. As of September 30, 2004, approximately $66 million of common shares have been repurchased under this program (1,743,800 common shares at an average market price of $37.76).