Exhibit 99.1
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Bradley Pharmaceuticals, Inc. (NYSE: BDY) was founded in 1985 as a specialty
pharmaceutical company marketing to niche physician specialties in the U.S. and
38 international markets. Bradley's success is based on the strategy of Acquire,
Enhance and Grow. Bradley Acquires non-strategic brands, Enhances these brands
with line extensions and improved formulations and Grows the products through
promotion, advertising and selling activities to optimize life cycle management.
Bradley Pharmaceuticals is comprised of Doak Dermatologics, specializing in
topical therapies for dermatology and podiatry, and Kenwood Therapeutics,
providing gastroenterology, respiratory and other internal medicine brands.
Important announcement:
Daniel Glassman, CEO, will present at the CIBC World Markets' 15th Annual
Healthcare Conference, November 8-10 at the Plaza Hotel in New York City.
To view the Business World Review interview with Daniel Glassman, visit:
www.bradpharm.com
Please visit Bradley Pharmaceuticals web site at: www.bradpharm.com
Bradley Pharmaceuticals common stock is listed on the NYSE under the symbol BDY.
Contact: Anthony Griffo
Investor Relations
For Immediate Release Bradley Pharmaceuticals, Inc.
973-882-1505, ext. 313
BRADLEY PHARMACEUTICALS
SALES OF $28.5 MILLION,
EARNINGS OF $3.7 MILLION
Fairfield, NJ - October 28, 2004 - BRADLEY PHARMACEUTICALS, INC. (NYSE: BDY),
today announced Net Sales for the Third Quarter ended September 30, 2004 totaled
approximately $28.5 million, an increase of $8.5 million, or 43%, compared to
Net Sales of $20 million for the Third Quarter 2003. Net Income for the Third
Quarter reached $3.7 million, down $1.4 million, or 28%, compared to the same
period in 2003. Earnings Per Diluted Share in the Third Quarter 2004 reached
$0.21, based on 18.4 million shares being outstanding, representing a decrease
of $0.18 from last year's Third Quarter, when only 13.6 million shares were
outstanding.
Net Sales for the nine months ended September 30, 2004 reached $76.5 million, an
increase of $25.3 million, or 49%, over Net Sales for the first nine months of
2003. Net Income for the first nine months of 2004 reached $14.4 million, an
increase of $3.1 million, or 27% over Net Income for the nine months ending
September 30, 2003. Earnings Per Diluted Share for the nine months ending
September 30, 2004 amounted to $0.82, versus $0.94 for the same nine-month
period a year ago.
Bradley's performance for the Third Quarter and first nine months of 2004
reflects the successful launch of key brands, such as ZODERM and KERALAC™, the
growth of in-line brands, such as ANAMANTLE HC and PAMINE, the inclusion of new
sales personnel, and the addition of selling, general and administrative
expenses of the recently acquired Bioglan Pharmaceuticals operation. Sales
contributions from the Bioglan brands are expected to increase in the Fourth
Quarter 2004 as Bradley realizes a full three months of Bioglan operations and
benefits from wholesaler purchases more reflective of demand. The Company, based
upon Third Quarter and anticipated Fourth Quarter results, reaffirms its
previously issued 2004 earnings guidance of Net Sales of $115.8 million with
Earnings Per Diluted Share of $1.23 to $1.25. In addition, the Company reaffirms
its previously issued 2005 earnings guidance of Net Sales of $190 million with
Earnings Per Diluted Share of $1.90.
President and CEO Daniel Glassman, stated, "The Third Quarter 2004 sales reflect
the continuing momentum of new product introductions, including ZODERM 6.5%
Cream, Cleanser and Gel and ROSULA NS Medicated Pads, and the continuing success
of KERALAC™ . TheZODERM and KERALAC™ lines,marketed by the Company's Doak
Dermatologics subsidiary, represent the strongest launches in Bradley history.
The integration of Bioglan's operations is proceeding ahead of schedule. In
addition, sales from Bradley's Kenwood Therapeutics division have escalated, led
by the growth of ANAMANTLE HC hemorrhoid therapy. Focused strategic planning and
active life cycle management of the company's key brands are supported by a
strong marketing team and motivated sales force. Investments into the marketing
and sales areas, including an increase in the sales force, position Bradley for
continued growth."
Results of Operations
The following table sets forth certain data as a percentage of net revenues for
the periods indicated:
Three Months Ended Nine Months Ended
September 30, September 30,
2004 2003 2004 2003
Net sales 100% 100% 100% 100%
Gross profit 91.3% 92.0% 91.4% 91.6%
Operating expenses 65.5% 49.7% 59.1% 55.3%
Operating income 25.8% 42.3% 32.3% 36.3%
Interest income 1.3% 1.4% 2.5% 1.0%
Interest expense 5.9% 2.2% 3.6% 1.1%
Income tax expense 8.4% 16.2% 12.4% 14.1%
Net income 12.8% 25.3% 18.8% 22.1%
NET SALES for the three months ended September 30, 2004 were $28,497,000,
representing an increase of $8,514,000, or approximately 43%, from $19,983,000
for the three months ended September 30, 2003.
For the three months ended September 30, 2004, Doak Dermatologics' Net
Sales were $17,461,000, representing an increase of $1,407,000, or approximately
9%, from $16,054,000 for the three months ended September 30, 2003. The increase
in Net Sales was led by new product sales from LIDAMANTLE LOTION, launched in
the Fourth Quarter 2003, of $252,000; LIDAMANTLE HC LOTION, launched in the
Fourth Quarter 2003, of $343,000; ZODERM GEL 4.5%, launched in the First Quarter
2004, of $175,000; ZODERM GEL 8.5%, launched in the First Quarter 2004, of
$20,000; ZODERM CREAM 4.5%, launched in the First Quarter 2004, of $387,000;
ZODERM CREAM 8.5%, launched in the First Quarter 2004, of $45,000; ZODERM
CLEANSER 4.5%, launched in the First Quarter 2004, of $476,000; ZODERM CLEANSER
8.5%, launched in the First Quarter 2004, of $344,000; KERALAC™ LOTION 7oz,
launched in the Second Quarter 2004, of $965,000; KERALAC™ LOTION 11oz, launched
in the Second Quarter 2004, of $1,287,000; KERALAC™ GEL, launched in the Second
Quarter 2004, of $2,007,000; ROSULA NS, launched in the Third Quarter 2004, of
$1,952,000; ZODERM GEL 6.5%, launched in the Third Quarter 2004, of $799,000;
ZODERM CREAM 6.5%, launched in the Third Quarter 2004, of $705,000; and ZODERM
CLEANSER 6.5%, launched in the Third Quarter 2004, of $1,191,000. Doak's new
product sales were offset by declines in CARMOL40 CREAM of $3,126,000, CARMOL40
LOTION of $870,000, CARMOL40 GEL of $952,000, LIDAMANTLE CREAM of $508,000,
LIDAMANTLE HC CREAM of $710,000, and in comparison to a newly launched products
during the same period last year, ROSULA AQUEOUS GEL declined $479,000 and
ROSULA AQUEOUS CLEANSER declined $1,983,000. The total Net Sales for CARMOL40
CREAM, LOTION and GEL for the three months ended September 30, 2004 were
$4,220,000.
For the three months ended September 30, 2004, Kenwood Therapeutics' Net
Sales were $7,326,000, representing an increase of $3,398,000, or approximately
87%, from $3,928,000 for the three months ended September 30, 2003. The increase
in Net Sales were led by new product sales of FLORA-Q™, launched in First
Quarter 2004, of $61,000 and product sales growth from ANAMANTLEHC of $2,708,000
and DECONAMINE products of $1,264,000, which were partially offset by a decline
in GLUTOFAC ZX of $377,000, and in comparison to a newly launched product during
the same period last year, PAMINE FORTE 5 mg declined $337,000.
On August 10, 2004, we acquired certain assets of Bioglan Pharmaceuticals
Company. The Bioglan Net Sales, for the period from the purchase date through
September 30, 2004 were $3,709,000, which were comprised of Net Sales of ADOXA
of $2,469,000, SOLARAZE of $643,000, ZONALON of $292,000 and other products of
$305,000. Bioglan Net Sales during the period were negatively impacted by lower
wholesaler purchases as wholesalers reduced their inventory levels. We expect
normalized wholesaler purchasing patterns to begin in the Fourth Quarter 2004.
For the nine months ended September 30, 2004, Doak Dermatologics' Net Sales
were $52,316,000, representing an increase of $12,726,000, or approximately 32%,
from $39,590,000 for the nine months ended September 30, 2003. The increase in
Net Sales was led by new product sales from LIDAMANTLE LOTION, launched in the
Fourth Quarter 2003, of $985,000; LIDAMANTLE HC LOTION, launched in the Fourth
Quarter 2003, of $1,426,000; ZODERM GEL 4.5%, launched in the First Quarter
2004, of $778,000; ZODERM GEL 8.5%, launched in the First Quarter 2004, of
$906,000; ZODERM CREAM 4.5%, launched in the First Quarter 2004, of $1,163,000;
ZODERMCREAM 8.5%, launched in the First Quarter 2004, of $1,061,000; ZODERM
CLEANSER 4.5%, launched in the First Quarter 2004, of $1,481,000; ZODERM
CLEANSER 8.5%, launched in the First Quarter 2004, of $1,436,000; KERALAC™
LOTION 7oz, launched in the Second Quarter 2004, of $1,853,000; KERALAC™ LOTION
11oz, launched in the Second Quarter 2004, of $2,753,000; KERALAC™ GEL, launched
in the Second Quarter 2004, of $3,957,000; ROSULA NS, launched in the Third
Quarter 2004, of $1,952,000; ZODERM GEL 6.5%, launched in the Third Quarter
2004, of $799,000; ZODERM CREAM 6.5%, launched in the Third Quarter 2004, of
$705,000; and ZODERM CLEANSER 6.5%, launched in the Third Quarter 2004, of
$1,191,000. Doak's new product sales were offset by declines in CARMOL40 CREAM
of $5,489,000,
CARMOL40 LOTION of $2,019,000, LIDAMANTLE CREAM of $601,000, LIDAMANTLE HC CREAM
of $665,000, and ROSULAAQUEOUS GEL of $1,390,000. The total Net Sales for
CARMOL40CREAM, LOTION and GEL for the nine months ended September 30, 2004 were
$18,332,000.
For the nine months ended September 30, 2004, Kenwood Therapeutics' Net
Sales were $20,494,000, representing an increase of $8,836,000, or approximately
76%, from $11,658,000 for the nine months ended September 30, 2003. The increase
in Net Sales were led by new product sales of FLORA-Q™, launched in First
Quarter 2004, of $505,000 and product sales growth from ANAMANTLE HC of
$6,803,000, PAMINE 2.5mg of $649,000, PAMINE FORTE 5mg of $486,000 and
DECONAMINE products of $1,020,000, which were partially offset by a decline in
GLUTOFAC-ZX of $212,000.
The overall increase in the sales of ANAMANTLE HC and new product sales,
excluding sales as a result of initial stocking relating to ZODERM products,
KERALAC™ products and ROSULA NS, during the three and nine months ended
September 30, 2004 were primarily due to promotional efforts, including an
increase in the number of sales representatives detailing those products to high
potential physicians. The increase in DECONAMINE products was primarily due to
an increase in wholesaler buying patterns. In addition, initial stocking sales
from ZODERM products in the First Quarter and Third Quarter 2004, KERALAC™
LOTION and GEL in the Second Quarter 2004 and ROSULA NS in the Third Quarter
2004 significantly contributed to the increased sales in comparison to the same
periods in the prior year. As a result of certain ZODERM products sales being
initial stocking by our customers during the First Quarter 2004, ZODERM sales
during Second Quarter and Third Quarter 2004 were significantly less than the
First Quarter 2004. Further, as a result of certain other ZODERM products and
ROSULA NS being initial stocking by our customers during the Third Quarter 2004,
sales of those products during Fourth Quarter 2004 will most likely be
significantly less than the Third Quarter 2004.
During the Second Quarter 2003, a competitor launched a competing product
with the same active ingredient as CARMOL 40 CREAM. During the Fourth Quarter
2003, generic competitors introduced less expensive comparable products to
CARMOL 40 CREAM, LOTION and GEL, also with the same active ingredient. These
introductions of competing products resulted in reduced demand for our CARMOL 40
CREAM and LOTION products during the three and nine months ended September 30,
2004, and CARMOL 40 GELduring the three months ending September 30, 2004, in
comparison to the same periods in the prior year. In order to minimize a
reduction in our overall Net Sales arising from increased competition related to
the CARMOL 40 products, the Company has implemented life cycle management
techniques, including launching new products KERALAC™ LOTION and GEL.
During October 2004, generic competitors introduced less expensive
comparable products to ANAMANTLE HC. As a result of the increased competition
for ANAMANTLE HC based on price, we expect lower Net Sales for this existing
ANAMANTLEHC product in the upcoming quarters. In order to minimize an aggregated
reduction in Net Sales related to increased competition for ANAMANTLE HC, the
Company will attempt to implement life cycle management techniques by launching
line extensions. If sales of the CARMOL40 product line or any other material
product line decreases, including ZODERM products, KERALAC™ LOTION and GEL,
ANAMANTLE HC, PAMINE or other Company products, as a result of increased
competition, government regulations, wholesaler buying patterns, physicians
prescribing habits or for any other reason and we fail to replace those sales,
our revenues and profitability would decrease.
COST OF SALES for the three months ended September 30, 2004 were
$2,460,000, representing an increase of $852,000, or approximately 53%, from
$1,608,000 for the three months ended September 30, 2003. Cost of sales for the
nine months ended September 30, 2004 were $6,616,000, representing an increase
of $2,300,000, or approximately 53%, from $4,316,000 for the nine months ended
September 30, 2003. The gross profit percentage for the three and nine months
ended September 30, 2004 was 91% in comparison to 92% for the same periods the
prior year. The gross profit percentage for Bioglan products was 80% for the
period from August 10, 2004, to the date of acquisition, through September 30,
2004. As a result of the Bioglan purchase occurring in the middle of the Third
Quarter 2004, Bioglan's lower gross profit percentage was offset by a price
increase on our legacy products. We expect a lower gross profit percentage
during the Fourth Quarter 2004 due to inclusion of a three full months of
Bioglan operations.
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES for the three months ended
September 30, 2004 were $17,038,000, representing an increase of $7,355,000, or
76%, compared to $9,683,000 for the three months ended September 30, 2003.
Selling, general and administrative expenses for the nine months ended
September 30, 2004 were $42,977,000, representing an increase of $15,470,000, or
56%, compared to $27,507,000 for the nine months ended September 30, 2003. The
increase in selling, general and administrative expenses reflects increased
spending on sales and marketing to implement our strategy of aggressively
marketing our dermatology, podiatry and gastrointestinal brands. The following
table sets forth the increase in certain expenditures for the periods indicated:
Change from the Change from the
Three Months Ended Nine Months Ended
September 30, 2004 September 30, 2004
in comparison to in comparison to
September 30, 2003 September 30, 2003
Sales Payroll $ 940,000 $3,071,000
Bioglan Sales Payroll $ 428,000 $ 428,000
Travel and Entertainment* $ 581,000 $1,856,000
ZODERM® Promotional Costs $ 454,000 $1,710,000
KERALAC™ Promotional Costs $1,246,000 $1,352,000
Other Promotional Costs $ 371,000 $ 795,000
Bioglan Products Promotional Costs $ 125,000 $ 125,000
Research and Development Costs** $ 27,000 $ 180,000
Insurance $ 251,000 $ 542,000
Marketing, General and Administrative
Payroll $ 735,000 $2,157,000
* Increases in travel and entertainment primarily relate to increased number of
sales representatives and travel associated with increased number of conventions
attended by Company personnel.
** Total research and development expenses for the three and nine months ended
September 30, 2004 were $114,000 and $629,000, respectively.
Selling, general and administrative expenses as a percentage of Net Sales
were 60% for the three months ended September 30, 2004, representing an increase
of 12% compared to 48% for the three months ended September 30, 2003. Selling,
general and administrative expenses as a percentage of Net Sales were 56% for
the nine months ended September 30, 2004, representing an increase of 2%
compared to 54% for the nine months ended September 30, 2003.
DEPRECIATION AND AMORTIZATION EXPENSES for the three months ended September
30, 2004 were $1,618,000, representing an increase of $1,309,000 from $309,000
for the three months ended September 30, 2003. Depreciation and amortization
expenses for the nine months ended September 30, 2004 were $2,260,000,
representing an increase of $1,364,000 from $896,000 in the nine months ended
September 30, 2003. The increase in depreciation and amortization expenses was
primarily due to the purchase of amortizable intangibles and property and
equipment relating to the Bioglan acquisition.
GAIN ON INVESTMENT for the three months ended September 30, 2004 was
$4,000, representing a decrease of $60,000 from $64,000 in the three months
ended September 30, 2003. Gain on investment for the nine months ended September
30, 2004 was $35,000, representing a decrease of $29,000 from $64,000 for the
nine months ended September 30, 2003.
INTEREST INCOME for the three months ended September 30, 2004 was $368,000,
representing an increase of $85,000 from the three months ended September 30,
2003. Interest income for the nine months ended September 30, 2004 was
$1,904,000, representing an increase of $1,409,000 from the nine months ended
September 30, 2003. The increases were principally due to investment of the net
proceeds of $96,205,000 from the issuance of 4.6 million shares of common stock
in December 2003. As a result of the Bioglan acquisition, cash and cash
equivalents and short-term investments at September 30, 2004 decreased in
comparison to the same date last year, and we expect a decrease in interest
income during the Fourth Quarter 2004.
INTEREST EXPENSE for the three months ended September 30, 2004 was
$1,691,000, representing an increase of $1,251,000 from the three months ended
September 30, 2003. Interest expense for the nine months ended September 30,
2004 was $2,736,000,
representing an increase of $2,188,000 from the nine months ended September 30,
2003. The increases were principally due to interest expense related to our
convertible notes, bridge loan and the credit facility which replaced the bridge
loan.
INCOME TAX EXPENSE for the three months ended September 30, 2004 was
$2,401,000, representing a decrease of $832,000 from $3,233,000 for the three
months ended September 30, 2003. Income tax expense for the nine months ended
September 30, 2004 was $9,452,000, representing an increase of $2,222,000 from
$7,230,000 for the nine months ended September 30, 2003. The effective tax rate
used to calculate the income tax expense for the three and nine months ended
September 30, 2004 was approximately 40%. The effective tax rate used to
calculate the income tax expense for the three and nine months ended September
30, 2003 was approximately 39%. The increase in the effective tax rate during
the three and nine months ended September 30, 2004 was principally due to a
projected increase in the federal statutory rate, as our estimated pretax income
for 2004 will result in a higher tax bracket.
NET INCOME for the three months ended September 30, 2004 was $3,661,000,
representing a decrease of $1,396,000, or 28%, from $5,058,000 for the three
months ended September 30, 2003. Net income as a percentage of Net Sales for the
three months ended September 30, 2004 was 13%, representing a decrease of 12%
compared to 25% for the three months ended September 30, 2003. Net income for
the nine months ended September 30, 2004 was $14,417,000 representing an
increase of $3,108,000, or 27%, from $11,309,000 for the nine months ended
September 30, 2003. Net income as a percentage of Net Sales for the nine months
ended September 30, 2004 was 19%, representing a decrease of 3% compared to 22%
for the nine months ended September 30, 2003. The decrease in net income for the
three months ended September 30, 2004 was principally due to an increase in
selling, general and administrative expenses, depreciation and amortization
expenses and interest expense partially offset by an increase in Net Sales and
interest income. The increase in net income in the aggregate for the nine months
ended September 30, 2004 was principally due to an increase in Net Sales and
interest income partially offset by an increase in selling, general and
administrative expenses, depreciation and amortization expenses and interest
expense.
Liquidity and Capital Resources
Our cash and cash equivalents and short-term investments were $70,284,000
at September 30, 2004 and $182,503,000 at December 31, 2003. Cash provided by
operating activities for the nine months ended September 30, 2004 was
$8,281,000. The sources of cash primarily resulted from net income of
$14,417,000 plus non-cash charges for depreciation and amortization of
$2,260,000; non-cash charges for amortization of deferred financing costs of
$351,000; non-cash compensation for services of $125,000; tax benefit from
exercise of non-qualified stock options and warrants of $362,000; a decrease in
deferred income tax assets of $217,000; and an increase in accrued expenses of
$1,474,000. The sources of cash were partially offset by a gain on investment of
$35,000 from sales of short-term investments; an increase in accounts receivable
of $5,315,000, primarily due to the initial sales of the newly launched products
being recorded during the Third Quarter 2004; an increase in inventories of
$1,118,000, primarily due to initial purchases of finished goods of our newly
launched products; an increase in prepaid expenses and other of $1,258,000; a
decrease in accounts payable of $580,000 primarily due to increased payments
during the period; and a decrease in income taxes payable of $2,619,000,
primarily due to increased tax payments.
Cash used in investing activities for the nine months ended September 30,
2004 was $182,316,000, resulting from purchase of intangible assets of
$2,600,000 relating to an international distribution agreement with Dermik
Laboratories; purchase of certain assets of Bioglan Pharmaceuticals Company on
August 10, 2004 and related acquisition costs of $189,761,000, which was
partially financed by a $50 million bridge loan and purchases of property and
equipment of $556,000. The uses of cash were partially offset by net sales of
short-term investments of $10,601,000.
Cash provided by financing activities for the nine months ended September
30, 2004 was $72,413,000, resulting from proceeds from term note included in the
credit facility dated September 28, 2004 of $75,000,000; proceeds from exercise
of stock options and warrants of $1,133,000; proceeds from bridge loan of
$50,000,000; and distribution of treasury shares valued at $145,000 to fund our
401(k) plan, partially offset by deferred financing costs associated with the
term note of $3,347,000; payments of registration costs associated with the sale
of our common stock during December 2003 of $77,000; payments of notes payable
of $24,000; payment of bridge loan of $50,000,000; and the purchase of treasury
shares for $418,000.
Our previous loan agreement with respect to a $5 million revolving
asset-based credit facility and a $10 million acquisition facility was replaced
on August 10, 2004 with a $50 million bridge loan, which was replaced on
September 28, 2004 with a $125 million credit facility.
The $125 million credit facility is comprised of a $75 million term loan and
a $50 million revolving line of credit. The credit facility expires and becomes
due upon the earlier to occur of (i) September 28, 2009; and (ii) May 15, 2008
if, after giving effect to a redemption of our outstanding $37 million of
convertible senior subordinated notes due 2013 that may be compelled by the
noteholders on June 15, 2008, we would fail to meet certain financial ratios
described in the credit agreement. The credit facility is secured by a lien upon
substantially all of our assets, including those of our subsidiaries, and is
guaranteed by our operating subsidiaries. We intend to use the credit facility
for general corporate purposes, including potential acquisitions and the
repayment we made of the former bridge loan.
Amounts outstanding under the credit facility accrue interest at our choice
from time to time of either (i) the base rate (which is equal to the greater of
the applicable prime rate or the federal funds rate plus 1/2 of 1%) plus 1.00%
to 1.75%, depending upon our leverage ratio; or (ii) a rate equal to the sum of
the applicable LIBOR rate plus 2.00% to 2.75%, depending upon our leverage
ratio. In addition, the lenders under the credit facility are entitled to
customary facility fees based on unused commitments under the facility and
outstanding letters of credit.
The financial covenants under the credit facility require that we maintain
(i) a senior funded debt to EBITDA ratio less than or equal to 2.50 to 1.00
prior to June 20, 2005, 2.25 to 1.00 from July 1, 2005 through June 30, 2006 and
2.00 to 1.00 from July 1, 2006 through maturity; (ii) a funded debt to EBITDA
ratio less than or equal to 3.00 to 1.00 prior to June 30, 2005, 2.75 to 1.00
from July 1, 2005 through June 30, 2006 and 2.50 to 1.00 from July 1, 2006
through maturity; and (iii) a fixed charge coverage ratio (which is a ratio of
(A) EBITDA minus consolidated capital expenditures to (B) the sum of
consolidated interest expenses, funded debt payments, cash taxes paid and
certain restricted payments) greater than or equal to 1.20 to 1.00. As of
September 30, 2004, we are in compliance with those covenants, the entire $75
million term loan is outstanding and no amounts are outstanding under the
revolving credit facility.
Bradley Pharmaceuticals (BDY) invites you to participate in the 3rd Qtr. 2004
Earnings conference call Thursday, October 28, 2004, at 9 AM (ET), Questions &
Answers to follow. Please dial 1-888-573-3046 approximately 10 minutes prior to
the start time of the call. Playback of the conference call will be available on
Thursday after 1 PM (ET) for 24 hours, by calling 1-800-642-1687 and entering
reservation number 309538. This call also will be available online at
www.bradpharm.com for 30 days.
Please visit Bradley Pharmaceuticals web site at: www.bradpharm.com
Bradley Pharmaceuticals common stock is listed on the NYSE under the symbol BDY.
Except for historical and factual information, this press release contains
"forward-looking statements" within the meaning of the Private Securities
Litigation Reform Act of 1995. These forward-looking statements include
statements that address activities, events or developments that Bradley expects,
believes or anticipates will or may occur in the future, such as earnings
estimates, launches of new products, market acceptance of products, and
predictions of future financial performance. All forward-looking statements are
based on assumptions made by Bradley based on its experience and perception of
historical trends, current conditions, expected future developments and other
factors it believes are appropriate under the circumstances. These statements
are subject to numerous risks and uncertainties, many of which are beyond
Bradley's control, including Bradley's ability to maintain sales and the
introduction of new and future competing products, whether branded, or generic,
or comparable, effectively purchase or integrate new products into its portfolio
or effectively react to other risks described from time to time in Bradley's SEC
filings. Further, Bradley cannot predict the impact on its business of any
introduction, or future approvals, of generic or therapeutically equivalent or
comparable versions of its products or of other competing products. No
forward-looking statement can be guaranteed, and actual results may differ
materially from those projected. Bradley undertakes no obligation to publicly
update any forward-looking statement, whether as a result of new information,
future events or otherwise.
BRADLEY PHARMACEUTICALS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
September 30, 2004 December 31, 2003
(unaudited) (a)
Assets
Current assets:
Cash and cash equivalents $ 42,865,701 $144,488,208
Short-term investments 27,418,651 38,014,672
Accounts receivable, net 7,299,736 2,610,715
Inventories, net 9,564,287 2,393,690
Deferred tax assets 4,215,557 2,676,208
Prepaid income taxes 1,913,759 -
Prepaid expenses and other 3,290,388 1,640,188
Total current assets 96,568,079 191,823,681
Property and equipment, net 1,677,456 952,436
Intangible assets, net 163,052,370 5,238,532
Goodwill 26,296,719 289,328
Deferred tax assets 1,900,046 2,474,990
Deferred financing costs 5,616,941 2,620,161
Other assets 11,706 13,555
Total assets $295,123,317 $203,412,683
(a) Derived from audited financial statements.
BRADLEY PHARMACEUTICALS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
September 30, 2004 December 31, 2003
(unaudited) (a)
Liabilities
Current liabilities:
Current maturities of long-term debt $ 15,105,774 $ 91,677
Accounts payable 4,427,756 4,340,000
Accrued expenses 9,977,078 8,330,198
Income taxes payable - 705,308
Total current liabilities 29,510,608 13,467,183
Long-term debt, less current maturities 60,060,056 49,831
Convertible senior subordinated notes due 2013 37,000,000 37,000,000
Stockholders' Equity
Preferred stock, $0.01 par value; shares authorized:
2,000,000;
no shares issued - -
Common stock, $0.01 par value; shares authorized:
26,400,000; issued and
outstanding: 16,097,297 and 15,752,287 at September
30, 2004 and at
December 31, 2003, respectively 160,973 157,523
Class B common stock, $0.01 par value; shares
authorized: 900,000;
issued and outstanding: 429,752 at September 30, 2004
and
at December 31, 2003 4,298 4,298
Additional paid-in capital 131,301,301 129,626,913
Retained earnings 39,810,882 25,393,778
Accumulated other comprehensive loss (47,562 ) (17,045 )
Treasury stock, 845,658 and 831,286 shares at cost at
September 30, 2004
and at December 31, 2003, respectively (2,677,239 ) (2,269,798 )
Total stockholders' equity 168,552,653 152,895,669
Total liabilities and stockholders' equity $ 295,123,317 $ 203,412,683
(a) Derived from audited financial statements.
BRADLEY PHARMACEUTICALS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
2004 2003 2004 2003
Net sales $ 28,496,605 $ 19,982,531 $ 76,518,627 $ 51,248,129
Cost of sales 2,460,223 1,607,955 6,615,705 4,316,447
26,036,382 18,374,576 69,902,922 46,931,682
Selling, general and
administrative 17,037,808 9,683,140 42,976,542 27,507,165
Depreciation and
amortization 1,617,615 308,648 2,260,094 896,458
Gain on investment (3,952 ) (64,136 ) (35,328 ) (64,136 )
Interest income (368,135 ) (283,360 ) (1,903,896 ) (495,169 )
Interest expense 1,690,663 439,574 2,736,406 548,833
19,973,999 10,083,866 46,033,818 28,393,151
Income before income tax
expense 6,062,383 8,290,710 23,869,104 18,538,531
Income tax expense 2,401,000 3,233,000 9,452,000 7,230,000
Net income $ 3,661,383 $ 5,057,710 $ 14,417,104 $ 11,308,531
Basic net income per common
share $ 0.23 $ 0.47 $ 0.92 $ 1.07
Diluted net income per
common share $ 0.21 $ 0.39 $ 0.82 $ 0.94
Shares used in computing
basic net
income per common share 15,690,000 10,680,000 15,610,000 10,600,000
Shares used in computing
diluted net
income per common share 18,410,000 13,550,000 18,400,000 12,290,000
Three Months Ended Nine Months Ended
September 30, September 30, September 30,
2004 September 30, 2003 2004 2003
Basic shares 15,690,000 10,680,000 15,610,000 10,600,000
Dilution:
Stock options and warrants 870,000 1,170,000 940,000 1,040,000
Convertible notes 1,850,000 1,700,000 1,850,000 650,000
Diluted shares 18,410,000 13,550,000 18,400,000 12,290,000
Net income as reported $ 3,661,383 $ 5,057,710 $14,417,104 $11,308,531
After-tax interest expense
and other
from convertible notes 253,723 199,858 761,170 231,398
Adjusted net income $ 3,915,106 $ 5,257,568 $15,178,274 $11,539,929
Basic income per share $ 0.23 $ 0.47 $ 0.92 $ 1.07
Diluted income per share $ 0.21 $ 0.39 $ 0.82 $ 0.94
BRADLEY PHARMACEUTICALS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
Nine Months Ended
September 30, 2004 September 30, 2003
Cash flows from operating activities:
Net income $ 14,417,104 $ 11,308,531
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 2,260,094 896,458
Amortization of deferred financing costs 350,617 107,840
Deferred income taxes 216,900 (463,716 )
Gains on short-term investments (35,328 ) -
Tax benefit due to exercise of non-qualified
options and warrants 361,653 1,137,456
Noncash compensation for services 125,036 11,041
Changes in operating assets and liabilities:
Accounts receivable (5,314,548 ) (1,002,899 )
Inventories (1,117,720 ) (776,896 )
Prepaid expenses and other (1,258,167 ) (536,571 )
Accounts payable (579,658 ) 499,551
Accrued expenses 1,473,898 2,661,643
Income taxes payable (2,619,067 ) 1,027,390
Net cash provided by operating activities 8,280,814 14,869,828
Cash flows from investing activities:
Sale (purchase) of short-term investments- net 10,600,832 (20,452,287 )
Purchase of international distribution rights (2,600,000 ) -
Purchase of Bioglan Pharmaceuticals (189,760,615 ) -
Purchases of property and equipment (556,338 ) (378,649 )
Net cash used in investing activities (182,316,121 ) (20,830,936 )
Cash flows from financing activities:
Payment of notes payable (23,511 ) (228,792 )
Proceeds from sale of 4% convertible senior
subordinated notes - 37,000,000
Payment of deferred financing costs associated with
the sale of 4% convertible
senior subordinated notes - (2,676,779 )
Proceeds from term note 75,000,000 -
Proceeds from bridge loan 50,000,000 -
Payment of bridge loan (50,000,000 ) -
Payment of deferred financing costs associated with
term note (3,347,397 ) -
Proceeds from exercise of stock options and warrants 1,133,412 943,378
Payment of registration costs (76,963 ) -
Purchase of treasury shares (418,077 ) (545,055 )
Distribution of treasury shares 145,336 107,378
Net cash provided by financing activities 72,412,800 34,600,130
Net (decrease) increase in cash and cash equivalents (101,622,507 ) 28,639,022
Cash and cash equivalents at beginning of period 144,488,208 20,820,725
Cash and cash equivalents at end of period $ 42,865,701 $ 49,459,747
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