NASHVILLE, Tenn., Nov. 11, 2010 /PRNewswire-FirstCall/ -- Cumberland Pharmaceuticals Inc. (Nasdaq: CPIX), a specialty pharmaceutical company focused on the hospital acute care and gastroenterology markets, today announced financial results for the third quarter ending September 30, 2010, increasing revenue guidance for 2010.
Net Revenue: For the three months ended September 30, 2010, net revenue was $12.2 million, compared with $13.6 million for the same period in 2009. Excluding initial wholesaler stocking of $3.2 million for Caldolor in 2009, net product revenues were up 19% year over year. Net revenue for the nine months ended September 30, 2010, was $33.1 million, up from $32.8 million for the corresponding prior year period.
Operating Expenses: Total operating expenses for the three months ended September 30, 2010, decreased 13% to $9.7 million, compared to $11.2 million for the same period in 2009. This decrease was primarily due to significant initial launch costs related to Caldolor in 2009, as well as changes in the Company's product mix that reduced cost of products sold. The decrease in operating expenses coupled with strong revenue performance during the third quarter of 2010 resulted in an increase in operating income over the prior year to $2.4 million.
Operating expenses for the nine-month period ended September 30, 2010, were $28.8 million compared with $27.7 million for the same period in 2009. The difference was primarily due to increased selling and marketing expense from expansion of the Company's hospital sales force in the third quarter of 2009, resulting in operating income of $4.3 million for the nine-month period ended September 30, 2010.
Net Income: Net income for the three months ended September 30, 2010, was $1.0 million, or $0.05 per diluted share, compared with $1.3 million, or $0.07 per diluted share, for the prior year period. Both net income and earnings per share for the third quarter of 2009 were impacted by initial stocking of Caldolor. The decrease in earnings per share was also driven by an increase in shares outstanding related to the Company's initial public offering in August 2009.
Net income for the nine months ended September 30, 2010, was $1.6 million, compared with $2.8 million for the same period in 2009. The difference in net income for the nine-month periods resulted from increases in 2010 of selling and marketing expense as well as interest expense from the Company's term loan, which it entered into in the third quarter of 2009.
EBITDA: Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) for the three months ended September 30, 2010, was $2.7 million compared with $2.6 million for the same period in the prior year. Excluding $0.2 million in non-cash stock compensation expense for the periods ended September 30, 2010 and September 30, 2009, adjusted EBITDA was $2.9 million and $2.8 million, respectively.
For the nine months ended September 30, 2010, EBITDA was $5.0 million compared with $5.7 million for the prior year period. Excluding $0.6 million and $1.5 million in non-cash stock compensation expense for the periods ended September 30, 2010 and September 30, 2009, respectively, adjusted EBITDA was $5.6 million and $7.2 million, respectively.
Balance Sheet: During the quarter the Company amended its senior credit facilities, reducing its term loan balance to $6 million and expanding availability under its line of credit from $4.0 million to $6 million. As a result of these activities, Cumberland had $65.5 million in cash and cash equivalents at September 30, 2010, compared with $71.5 million at June 30, 2010. The Company's outstanding debt decreased to $7.8 million at the end of the third quarter 2010, compared with $13.8 million at June 30, 2010. Total assets as of September 30, 2010, were $89.9 million compared with $96.7 million at June 30, 2010.
"We continue to grow our established brands, Acetadote and Kristalose, and to progress our efforts to gain wide formulary acceptance for Caldolor," said A.J. Kazimi, Chief Executive Officer of Cumberland Pharmaceuticals. "As we prepare to drive pull-through sales for Caldolor in 2011, we are assembling a growing armamentarium of training and marketing tools to shift efforts within hospitals and surgery centers to reach a much larger target audience."
Cumberland is raising its full year 2010 revenue guidance from its previous expectations of $42 - $43 million. The Company now expects to see net revenue of $43 - $45 million for the twelve-month period ended December 31, 2010. This guidance represents the Company's best estimate of future results, which may be affected by factors described below in "Forward-Looking Statements."
RECENT DEVELOPMENTSSubmission of Supplemental New Drug Application for New Formulation of Acetadote
In October 2010, Cumberland submitted a supplemental new drug application (sNDA) to the U.S. Food and Drug Administration (FDA) for approval of a new formulation of Acetadote, which is designed to replace the currently marketed product and is the result of the Company's commitment to further developing its products. Cumberland is supporting the FDA's review of the application and is preparing to make this new formulation available to patients.
The Company expects to receive a response from the FDA regarding the new formulation by early January 2011 and, if approved, would commence with the new product launch immediately. Cumberland has filed a patent application with the U.S. Patent and Trademark Office to protect this proprietary new formulation.
Supplemental New Drug Application for Acetadote in Treating Acute Liver Failure
In March 2010, Cumberland submitted its sNDA to the FDA for the use of Acetadote in patients with non-acetaminophen acute liver failure. The sNDA includes data from a clinical trial led by investigators at the University of Texas Southwestern Medical Center indicating that acute liver failure patients treated with Acetadote have an improved chance of survival without a transplant. The study showed that these patients can also survive a significant number of days longer without transplant, which would provide patients requiring transplant increased time for a donor organ to become available.
In May 2010, the FDA accepted the sNDA and granted a priority review with a response expected in September 2010. In August 2010, the FDA extended its review of the sNDA by three months. Cumberland now anticipates a response from the FDA regarding the sNDA in December 2010.
Launch of Acetadote in Australia
In April 2010, the Therapeutic Goods Administration granted approval to Cumberland's partner Phebra Pty Ltd., an Australian-based specialty pharmaceutical company, for the commercialization of Acetadote in Australia. In October 2010, Phebra commenced with the Australian launch of Acetadote and began promoting wide distribution of the product. This introduction of Acetadote in Australia marked the introduction of Cumberland's products into international markets.
In addition to Australia, Phebra has exclusive marketing rights to Acetadote for New Zealand and has obtained marketing approval in that country. Phebra is also Cumberland's marketing partner for Acetadote in certain Asia Pacific markets, and continues to work toward obtaining approval for the product in those areas as well.
SUPPLEMENTAL FINANCIAL INFORMATIONThe following table presents a reconciliation of Cumberland's net income to EBITDA and adjusted EBITDA. The Company defines EBITDA as net income plus interest, income tax, depreciation and amortization, and presents these measures to assist investors in evaluating Cumberland's operating performance and comparing the Company's results with those of other companies. EBITDA and adjusted EBITDA should not be considered in isolation from or as a substitute for net income.Three Months Ended September, 30,20102009Net income$
,282,412Income tax expense943,141855,660Depreciation & amortization260,011207,173Interest expense, net499,120233,987EBITDA$
2,579,232Adjustments: Non-cash stock compensation202,300180,249Adjusted EBITDA$
2,759,481Nine Months Ended September 30,20102009Net income$
2,775,678Income tax expense1,529,3391,919,356Depreciation & amortization723,687605,514Interest expense, net1,140,015388,166EBITDA$
5,688,714Adjustments: Non-cash stock compensation565,9931,501,694Adjusted EBITDA$
7,190,408CONFERENCE CALL AND WEBCASTA conference call and live Internet webcast will be held on Thursday, November 11, 2010, at 5:00 p.m. Eastern Time to discuss the Company's third quarter 2010 financial results. To participate in the call, please dial 877-303-1298 (for U.S. callers) or 253-237-1032 (for international callers). A rebroadcast of the teleconference will be available for one week and can be accessed by dialing 800-642-1687 (for U.S. callers) or 706-645-9291 (for international callers). The Conference ID for the rebroadcast is 21780077. The live webcast and rebroadcast can be accessed via Cumberland's website at http://investor.shareholder.com/cpix/events.cfm.
ABOUT CUMBERLAND PHARMACEUTICALSCumberland Pharmaceuticals Inc. is a Tennessee-based specialty pharmaceutical company focused on the acquisition, development and commercialization of branded prescription products. The Company's primary target markets include hospital acute care and gastroenterology. Cumberland's product portfolio includes Acetadote® (acetylcysteine) Injection for the treatment of acetaminophen poisoning, Caldolor® (ibuprofen) Injection, the first injectable treatment for pain and fever available in the United States, and Kristalose® (lactulose) for Oral Solution, a prescription laxative. Cumberland is dedicated to providing innovative products which improve quality of care for patients. For more information on Cumberland Pharmaceuticals, please visit the Company's website at www.cumberlandpharma.com.
ABOUT CALDOLORCaldolor is indicated for the management of mild to moderate pain and management of moderate to severe pain as an adjunct to opioid analgesics, as well as the reduction of fever in adults. It is the first FDA-approved intravenous therapy for fever. Caldolor is contraindicated in patients with known hypersensitivity to ibuprofen or other NSAIDs, patients with asthma, urticaria, or allergic type reactions after taking aspirin or other NSAIDs. Caldolor is contraindicated for use during the peri-operative period in the setting of coronary artery bypass graft (CABG) surgery. Caldolor should be used with caution in patients with prior history of ulcer disease or GI bleeding, in patients with fluid retention or heart failure, in the elderly, those with renal impairment, heart failure, liver impairment, and those taking diuretics or ACE inhibitors. Blood pressure should be monitored during treatment with Caldolor. For full prescribing information, including boxed warning, visit www.caldolor.com.
ABOUT ACETADOTEAcetadote, administered intravenously within 8 to 10 hours after ingestion of a potentially hepatotoxic quantity of acetaminophen, is indicated to prevent or lessen hepatic injury. Used in the emergency department, Acetadote is the only injectable product approved in the United States to treat overdose of acetaminophen, a common ingredient in many over-the-counter painkillers. Acetadote is contraindicated in patients with hypersensitivity or previous anaphylactoid reactions to acetylcysteine or any components of the preparation. Serious anaphylactoid reactions, including death in a patient with asthma, have been reported in patients administered acetylcysteine intravenously. Acetadote should be used with caution in patients with asthma, or where there is a history of bronchospasm. The total volume administered should be adjusted for patients weighing less than 40 kg and for those requiring fluid restriction. To avoid fluid overload, the volume of diluent should be reduced as needed. If volume is not adjusted fluid overload can occur, potentially resulting in hyponatremia, seizure, and death. For full prescribing information, visit www.acetadote.net.
ABOUT KRISTALOSEKristalose is indicated for the treatment of acute and chronic constipation. It is a unique, proprietary, crystalline form of lactulose, with no restrictions on length of therapy or patient age. Initial dosing may produce flatulence and intestinal cramps, which are usually transient. Excessive dosage can lead to diarrhea with potential complications such as loss of fluids, hypokalemia and hypernatremia. Nausea and vomiting have been reported. Use with caution in diabetics. Kristalose is contraindicated in patients who require a low-galactose diet. Elderly, debilitated patients who receive lactulose for more than six months should have serum electrolytes (potassium, chloride, carbon dioxide) measured periodically. For full prescribing information, visit www.kristalose.com.
FORWARD-LOOKING STATEMENTSThis press release contains forward-looking statements, which are subject to certain risks and reflect Cumberland's current views on future events based on what it believes are reasonable assumptions. No assurance can be given that these events will occur. As with any business, all phases of Cumberland's operations are subject to factors outside its control, and any one or combination of these factors could materially affect Cumberland's results of operations. These factors include market conditions, competition, an inability of manufacturers to produce Cumberland's products on a timely basis or a failure of manufacturers to comply with regulations applicable to pharmaceutical manufacturers, maintaining an effective sales and marketing infrastructure and other factors set forth under the headings "Risk factors" and "Management's discussion and analysis of financial condition and results of operations" in Cumberland's Form 10-K filed with the SEC on March 19, 2010. There can be no assurance that results anticipated by the Company will be realized or that they will have the expected effects. Readers are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date hereof. The Company does not undertake any obligation to publicly revise these statements to reflect events after the date hereof. Investor Contact:
Media Contact:Angela Novak
Rebecca KirkhamCorporate Relations
Lovell Communications(615) 255-0068
firstname.lastname@example.orgCUMBERLAND PHARMACEUTICALS INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(Unaudited)September 30,December 31,20102009ASSETSCurrent assets:Cash and cash equivalents
$ 65,518,340$ 78,701,682Accounts receivable, net of allowances
7,646,2284,822,873Other current assets
1,940,7783,472,455Total current assets
79,897,02893,173,595Property and equipment, net
1,139,946918,412Intangible assets, net
$ 89,909,866$ 103,724,320LIABILITIES AND EQUITYCurrent liabilities:Current portion of long-term debt
9,061,973Current portion of other long-term obligations
3,416,3705,632,796Other accrued liabilities
3,817,8223,784,777Total current liabilities
9,912,89518,624,374Revolving line of credit
1,825,9511,825,951Long-term debt, excluding current portion
3,333,3328,938,027Other long-term obligations, excluding current portion
15,283,93529,572,984Commitments and contingenciesRedeemable common stock
-1,930,000Equity:Shareholders' equity:Common stock - no par value; 100,000,000 shares authorized;20,353,849 and 20,180,486(1) shares issued and outstandingas of September 30, 2010 and December 31, 2009, respectively
6,161,2524,542,126Total shareholders' equity
74,625,93172,221,336Total liabilities and equity
$ 89,909,866$ 103,724,320(1) Number of shares issued and outstanding represent total shares of common stock regardless of classification on the consolidated balance sheet. The number of shares of redeemable common stock at December 31, 2009 was 142,016.CUMBERLAND PHARMACEUTICALS INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Income
(Unaudited)Three months ended September 30,Nine months ended September 30,2010200920102009Net revenues
32,822,972Costs and expenses:Cost of products sold
909,4341,761,0692,632,4473,271,363Selling and marketing
5,692,0486,087,80717,147,68314,611,796Research and development
1,138,955640,8772,947,6234,041,719General and administrative
1,806,9752,537,6275,471,0125,218,925Amortization of productlicense right
27,86926,59583,28380,791Total costs and expenses
(547,795)(248,272)(1,299,703)(430,207)Income before income taxes
1,944,7372,138,0723,124,2104,695,034Income tax expense
1,001,5961,282,4121,594,8712,775,678Net loss at subsidiary attributable tononcontrolling interests
6,6485,72524,25526,420Net income attributable tocommon shareholders
2,802,098Earnings per share attributable to common shareholders- basic
.16Weighted-average shares outstanding- basic
20,803,18219,183,60621,135,76217,143,348CUMBERLAND PHARMACEUTICALS INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows
(Unaudited)Nine Months Ended September 30,20102009Cash flows from operating activities:Net income
2,775,678Adjustments to reconcile net income to net cash flows fromoperating activities:Depreciation and amortization expense
723,687605,514Non-employee equity compensation
62,5471,046,192Stock-based compensation - employee stock options
503,446455,502Excess tax benefit derived from exercise of stock options
(1,256,913)(2,842,825)Non-cash interest expense
328,47583,420Net changes in assets and liabilities affectingoperating activities:Accounts receivable
(2,823,355)75,185Other current assets and other assets
1,461,538936,286Accounts payable and other accrued liabilities
(840,429)3,299,235Other long-term obligations
(105,668)(455,723)Net cash provided by operating activities
1,033,1021,923,754Cash flows from investing activities:Additions to property and equipment
(311,301)(199,312)Additions to patents
(132,047)(71,358)Net cash used in investment activities
(443,348)(270,670)Cash flows from financing activities:Proceeds from initial public offering
-85,000,000Costs of initial public offering
-(7,385,124)Proceeds from borrowings on long-term debt
-18,000,000Principal payments on note payable
(12,000,000)(5,000,000)Costs of financing for long-term debt and credit facility
(82,500)(189,660)Proceeds from exercise of stock options
1,182,13964,275Excess tax benefit derived from exercise of stock options
1,256,9132,842,825Repurchase of common shares
(4,129,648)(27,273,677)Net cash (used in) provided by financing activities
(13,773,096)66,058,639Net (decrease) increase in cash and cash equivalents
(13,183,342)67,711,723Cash and cash equivalents at beginning of period
78,701,68211,829,551Cash and cash equivalents at end of period
79,541,274Supplemental disclosure of cash flow information:Non-cash investing and financing activities:Deferred financing costs
-335,075Common shares repurchased during period but not paidas of the end of the period
|SOURCE Cumberland Pharmaceuticals Inc.|
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