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AT THE COMPANY:
John Funkhouser, President, CEO
Paul Storey, Director of Finance
(919) 954-9871
INVESTOR CONTACTS:
Lippert/Heilshorn & Associates, Inc.
Bruce Voss (bruce)
(310) 575-4848
Ruth Abeshaus (ruth)
(212) 838-3777
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FOR IMMEDIATE RELEASE
July 23, 1999
PHARMANETICS REPORTS SECOND QUARTER RESULTS
--Sale of Coeur Laboratories Increases Liquidity--
RALEIGH, N.C. (July 23, 1999) - PharmaNetics, Inc. (NASDAQ NM: PHAR), the holding company of Cardiovascular Diagnostics, Inc. ("CVDI") today announced its financial results for the three and six months ended June 30, 1999.
Revenues for the CVDI subsidiary for the 1999 second quarter were $1,125,000, an increase of 18% compared to revenues of $952,000 for the same period in 1998. Total company revenues for the quarter decreased $429,000 to $1,763,000, as a direct result of lower revenue from Coeur’s operations. With operating expenses for the quarter essentially flat with the same period in 1998, the operating loss for the 1999 second quarter was $1,495,000 compared with a loss of $968,262 for the 1998 second quarter. The loss on the disposal of the discontinued operations of Coeur, primarily related to the write-off of goodwill, amounted to $826,000 or $0.11 per basic share. After the loss on disposal, the net loss for the 1999 second quarter was $2,338,000, or $0.31 per basic share, compared with a net loss of $1,005,000, or $0.15 per basic share, for the 1998 second quarter. During the second quarter, sales by the Company’s distribution partner, Bayer Diagnostics, began to increase as cards and analyzers were placed with new customers and the Company expects sales to continue to increase the remainder of the year.
For the six months ended June 30, 1999, revenues for the CVDI subsidiary were $2,136,000, an increase of 5% compared to revenues of $2,033,000 for the same period last year. Due to decreased revenue from Coeur, total company revenue for the six months of 1999 was $3,937,000 compared to revenues of $4,596,000 for the same period in 1998. Year-to-date operating expenses increased 1% to $3,324,000, compared with $3,279,000 for the same period last year. This resulted in a six-month operating loss of $2,513,000, compared with the six-month 1998 operating loss of $1,832,000. After the loss on the disposal of the Coeur operations, the Company reported a net loss of $3,370,000, or $0.45 per basic share for the six months ended June 30, 1999, compared with a net loss of $1,524,000, or $0.23 per basic share, for the same period in 1998.
Commenting on the quarter, John Funkhouser, President and Chief Executive Officer, stated, "With the sale of substantially all of the operating assets of the Coeur Laboratories subsidiary, we realize our future earnings will see additional pressure. However, as we continue to become fully focused on developing our routine and specialty diagnostic tests and adding additional collaborations, we should create additional momentum going forward."
As previously reported during the second quarter, the Company entered into a definitive asset purchase agreement to transfer substantially all of the operating assets and liabilities of Coeur Laboratories, Inc., a wholly owned subsidiary of CVDI, to Coeur Acquisition, LLC, a private investment firm backed by Bison Investments of Tampa, Florida for $1.7 million in cash, plus the Company retained Coeur’s cash and receivables for total consideration of approximately $4.2 million. The transaction resulted in a loss of $826,000 primarily due to the write-off of goodwill related to Coeur.
Funkhouser continued, "The Coeur transaction added to the Company’s cash position which will help to fuel the future development of products that are key to the Company’s growth. We believe our strategy of building the routine test business with our distribution partner, Bayer Diagnostics, and developing specialty theranostic tests in collaboration with pharmaceutical partners can bring significant shareholder value in the future."
PharmaNetics, Inc. develops, manufactures and markets rapid turnaround diagnostics to assess blood clot formation and dissolution. The Company develops tests based on its proprietary, dry chemistry Thrombolytic Assessment System for its principal target market of powerful new drug compounds, some of which have narrow therapeutic ranges, as well as for monitoring routine anticoagulants. The Company’s therapeutic diagnostics are used to monitor the effect of antithrombotic agents in the treatment of angina, myocardial infarction (heart attack), stroke, deep venous thrombosis, and pulmonary and arterial emboli.
This press release contains forward-looking statements regarding future events and the future performance of PharmaNetics that involve risks and uncertainties, such as risks related to market acceptance, clinical trials, dependence on third-party distributors and collaborative partners, and continuing losses that could cause actual results to differ materially from those projected in the forward-looking statements. Information concerning these and other of the factors that could cause actual results to materially differ from those in the forward-looking statements is contained in the Company’s SEC filings, including Form 10-K, Form 10-Q and Form 8-K reports.
PharmaNetics, Inc.
Selected Financial Summary |
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| CONSOLIDATED INCOME (LOSS) STATEMENTS |
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Three Months Ended
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Six Months Ended
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June 30
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June 30
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June 30
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June 30
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1999
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1998
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1999
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1998
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| Net Revenue |
$1,762,964
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$2,191,526
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$3,937,227
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$4,595,532
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| Cost of Goods Sold |
1,569,500
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1,503,596
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3,125,700
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3,148,423
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| Gross Profit |
193,464
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687,930
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811,527
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1,447,109
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| Operating Expenses |
1,688,694
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1,656,192
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3,324,152
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3,278,984
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| Operating Loss |
(1,495,230)
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(968,262)
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(2,512,625)
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(1,831,875)
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| Other Income (Expense) |
(13,383)
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(10,685)
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(14,188)
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360,558
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| Net Loss From Continuing Operations Before Tax |
(1,508,613)
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(978,947)
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(2,526,813)
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(1,471,317)
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__________ |
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__________ |
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__________ |
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__________ |
| Provision for Income Taxes |
(3,286)
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(26,250)
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(16,971)
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(52,500)
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| Net Loss From Continuing Operations |
($1,511,899)
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($1,005,197)
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($2,543,784) |
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($1,523,817) |
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| Loss on Disposal of Segment |
($826,093)
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-
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($826,093)
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-
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__________ |
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__________ |
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__________ |
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__________ |
| Net Loss |
($2,337,992)
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($1,005,197)
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($3,369,877)
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($1,523,817)
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| Basic and Diluted Loss Per Common Share |
($0.31)
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($0.15)
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($0.45)
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($0.23)
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| Weighted Average Common Shares Outstanding |
7,467,338
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6,800,332
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7,460,506
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6,782,388
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| CONSOLIDATED BALANCE SHEETS |
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June 30
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December 31
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1999
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1998
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| Cash and Investments |
$7,311,383
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$7,701,035
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| Other Current Assets |
3,695,436
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4,765,205
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| Total Assets |
$15,234,376
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$18,693,211
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| Current Liabilities |
$1,470,461
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$1,322,824
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| Total Liabilities |
2,754,277
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2,949,107
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| Total Shareholders' Equity |
12,480,099
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15,744,104
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| Total Liabilities and Shareholders' Equity |
$15,234,376
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$18,693,211
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