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FOR IMMEDIATE RELEASE: Contact: John M. Siebert, Ph.D.
President and Chief Executive Officer
CIMA LABS INC.
(952) 947-8700
David Feste
Vice President of Finance and
Chief Financial Officer
CIMA LABS INC.
(952) 947-8700
CIMA LABS ANNOUNCES RECORD THIRD QUARTER RESULTS
EDEN PRAIRIE, MINNESOTA - OCTOBER 26, 2000 - CIMA LABS INC. (NASDAQ: CIMA) today
announced record third quarter sales and earnings. During the third quarter,
CIMA commenced manufacturing and shipping launch supplies of
Remeron(R) SolTab(TM)to N.V. Organon.
Revenues for the third quarter of 2000 were $5.4 million compared to $4.2
million for the third quarter of 1999. Net income was $623,000 or $0.06 per
basic and $0.05 per diluted share for the third quarter of 2000 compared to a
net loss of $(181,000) or $(0.02) per basic and diluted share for the third
quarter of 1999. Revenues for the first nine months of 2000 were $16.8 million
compared to $9.2 million for the first nine months of 1999. Net income was
$766,000 or $0.07 per basic and diluted share for the first nine months of 2000
compared to a net loss of $(1.4) million or $(0.14) per basic and diluted share
for the first nine months of 1999. As previously announced, CIMA changed its
revenue recognition policy in the second quarter of the current year with
respect to licensing revenues in response to an SEC accounting bulletin issued
in December of 1999. As a result, CIMA's 2000 operating results, specifically
its product development fees and licensing revenues, are not directly comparable
with its 1999 results.
Product sales were $3.2 million and $9.3 million for the three-month and
nine-month periods ended September 30, 2000, respectively, compared to $2.0
million and $3.5 million for the comparable periods in 1999. Branded
prescription product sales were $2.2 million and $2.6 million and
over-the-counter product sales were $1.0 million and $6.7 million, respectively,
for the three-month and nine-month periods ended September 30, 2000. The Company
expects product sales in the fourth quarter to be comprised principally of
branded prescription products.
Product development fees and licensing revenues were $2.0 million and $6.4
million for the three-month and nine-month periods ended September 30, 2000
compared to $2.0 million and $5.4 million for the comparable periods in 1999.
Amortization of deferred revenue added $100,000 and $899,000 to licensing
revenues for the three-month and nine-month periods ended September 30, 2000,
respectively.
Royalties were $188,000 and $1.2 million for the three-month and nine-month
periods ended September 30, 2000 compared to $172,000 and $366,000 for the
comparable periods in 1999.
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Royalties from the European distribution of Zomig Rapimelt were lower than
expected in the third quarter due to a delay in the launching the product in
France, which has since occurred.
At September 30, 2000, CIMA had $12.3 million of cash, cash equivalents and
available-for-sale securities and working capital of $18.0 million. CIMA repaid
a $3.5 million unsecured, long-term loan to AstraZeneca in September and
obtained a release from AstraZeneca of all further liabilities and obligations
under the loan agreement.
CIMA develops and manufactures fast dissolve and enhanced-absorption drug
delivery systems. OraSolv(R) and DuraSolv(TM), CIMA's proprietary drug delivery
technologies, are oral dosage forms that dissolve quickly in the mouth without
chewing or water. CIMA currently manufactures six commercial products
incorporating these technologies. In addition, CIMA is developing several new
drug delivery technologies, including sustained release versions of CIMA's fast
dissolve systems and OraVescent, a transmucosal drug delivery system.
In connection with the adoption of the new SEC rules governing fair disclosure
(Regulation FD), CIMA is adopting a policy of providing financial information
and projections only through means that are designed to provide broad
distribution of the information to the public. CIMA will continue its practice
of meeting privately with investors, the media, investment analysts and others,
but will refrain from making or updating projections or otherwise providing
material non-public information during these meetings.
The information in this press release, including the information related to the
Company's expectations about product introductions, FDA approvals and sources of
future revenues, contain forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995. A number of factors could
cause actual results to differ materially from CIMA's assumptions and
expectations. These factors include the receipt and timing of FDA approval for
marketing of the products CIMA produces, consumer acceptance of the products
CIMA produces and the success of pharmaceutical companies in marketing the
products CIMA produces. Additional factors that may cause actual results to
differ from CIMA's assumptions and expectations include those set forth under
the heading "Risk Factors" in Amendment No. 1 to a Registration Statement on
Form S-3 (No. 333-47558) filed by CIMA with the Securities and Exchange
Commission. All forward-looking statements are qualified by, and should be
considered in conjunction with, such cautionary statements.
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CONDENSED STATEMENTS OF OPERATIONS
(in thousands, except per share)
<TABLE>
<CAPTION>
(Unaudited) (Unaudited)
For the Three Months Ended For the Nine Months Ended
----------------------------------- ------------------------------------
September 30, September 30, September 30, September 30,
2000 1999 2000 1999
----------------- ----------------- ----------------- -----------------
<S> <C> <C> <C> <C>
Revenues:
Net sales $ 3,195 $ 2,031 $ 9,291 $ 3,464
Product development fees and licensing 1,984 2,005 6,375 5,388
Royalties 188 172 1,167 366
-------- -------- -------- --------
Total revenues 5,367 4,208 16,833 9,218
Operating expenses:
Cost of sales 2,693 2,488 9,418 5,456
Research and product development 1,268 1,217 3,485 3,044
Sales, general and administrative 996 682 2,845 2,125
-------- -------- -------- --------
Total operating expenses 4,957 4,387 15,748 10,625
Other income (expense) 213 (2) 480 42
-------- -------- -------- --------
Income (loss) before cumulative effect of a
change in accounting principle 623 (181) 1,565 (1,365)
Cumulative effect of a change in accounting
principle, net of income taxes - - (799) -
-------- -------- -------- --------
Net income (loss) $ 623 $ (181) $ 766 $ (1,365)
======== ======== ======== ========
Net income (loss) per share:
Basic
Net income (loss) per share before cumulative
effect of a change in accounting principle $ .06 $ (.02) $ .15 $ (.14)
Net loss per share from cumulative
effect of a change in accounting principle .00 .00 (.08) .00
-------- -------- -------- --------
Net income (loss) per basic share $ .06 $ (.02) $ .07 $ (.14)
======== ======== ======== ========
Diluted
Net income (loss) per share before cumulative
effect of a change in accounting principle $ .05 $ (.02) $ .13 $ (.14)
Net loss per share from cumulative
effect of a change in accounting principle .00 .00 (.06) .00
-------- -------- -------- --------
Net income (loss) per diluted share $ .05 $ (.02) $ .07 $ (.14)
======== ======== ======== ========
Weighted average of number of shares:
Basic 10,896 9,615 10,552 9,612
Diluted 12,195 9,615 11,682 9,612
</TABLE>
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BALANCE SHEET DATA
(IN THOUSANDS)
<TABLE>
<CAPTION>
September 30, December 31,
2000 1999
(Unaudited) (Audited)
--------------------- ---------------------
<S> <C> <C>
Cash, cash equivalents and available-for-
sale securities $ 12,262 $ 2,481
Working capital 18,033 4,198
Total Assets 35,215 19,270
Long-term debt 101 3,510
Stockholders' Equity 32,773 11,574
</TABLE>
