Archive for March, 2010
BARRINGTON, IL — (Marketwire) — 03/22/10 — CTI Industries Corporation (NASDAQ: CTIB), a manufacturer and marketer of novelty balloons, printed and laminated films and flexible packaging and storage products, today announced its full-year results of operations for 2009, as well as for the three months ended December 31, 2009.
Fourth Quarter Results
Consolidated net sales for the fourth quarter 2009 were $10,738,000 compared to consolidated net sales of $9,832,000 for the fourth quarter of 2008, an increase of 9.2%. For the quarter, CTI had net income of $296,000, or $0.11 per share (basic and diluted), compared to net income of $121,000, or $0.04 per share (basic and diluted), for the fourth quarter of 2008, an increase of 145%.
Year-End Results
For the year ended December 31, 2009, consolidated net sales totaled $41,295,000, compared to consolidated net sales of $44,981,000 for the year ended December 31, 2008. For the year, CTI achieved net income of $1,003,000, or $0.36 per share (basic and diluted). For the year ended December 31, 2008, CTI had a net profit of $1,154,000, representing $0.42 per share (basic) and $0.40 per share (diluted).
Key Factors and Trends
During 2009, CTI experienced a modest decline in revenues of 8.2% compared to 2008 revenues. However, fourth quarter revenues increased by 9.2% over the same period of 2008, reflecting improved prospects toward the end of the year. For the year, revenues from the sale of foil balloon products increased by 12.5%, from $17,629,000 in 2008 to $19,824,000 in 2009. Revenues from the sale of pouch products declined in 2009 to $6,895,000 from $10,893,000 in 2008. However, 2008 pouch revenues included significant sales in the first half of the year due to the initial purchases arising from the introduction of a vacuumable pouch product line for S.C. Johnson & Son. In the second half of 2009, revenues from pouch sales were up substantially over the same period of 2008, reflecting CTI’s strong pouch sales in that period.
Gross margin levels declined modestly in 2009 to 22.3% from 22.9% in 2008. This decline resulted principally from an increase in sales of certain novelty items that have higher costs in relation to their selling price.
CTI Industries Corporation, based in suburban Chicago, designs, develops, produces and markets a line of novelty balloon products, laminated and printed films for packaging applications and flexible packaging and storage products.
Statements made in this release that are not historical facts are “forward-looking” statement (as defined in the Private Securities Litigation Reform Act of 1995) that involve risks and uncertainties and are subject to change at any time. These “forward-looking” statements may include, but are not limited to, statements containing words such as “may,” “should,” “could,” “would,” “expect,” “plan,” “goal,” “anticipate,” “believe,” “estimate,” “predict,” “potential,” “continue,” or similar expressions. Factors that could cause results to differ are identified in the public filings of the Company with the Securities and Exchange Commission, including its Annual Report on Form 10-K and Quarterly Reports on Form 10-Q.
— FINANCIAL HIGHLIGHTS FOLLOW —
CTI Industries Corporation and Subsidiaries
Condensed Consolidated Balance Sheets
December 31, December 31,
2009 2008
--------------- ---------------
ASSETS
Current assets:
Cash $ 870,446 $ 180,578
Accounts receivable, (less allowance
for doubtful accounts of $57,000 and
$39,000 respectively) 7,320,181 5,821,593
Inventories, net 9,643,914 10,504,769
Net deferred income tax asset 706,754 674,872
Prepaid expenses and other current
assets 607,127 506,225
--------------- ---------------
Total current assets 19,148,422 17,688,037
Total property, plant and equipment,
net 9,533,411 10,575,982
Total other assets 1,713,476 1,724,172
--------------- ---------------
TOTAL ASSETS $ 30,395,309 $ 29,988,191
=============== ===============
LIABILITIES AND STOCKHOLDERS' EQUITY
Total current liabilities 16,734,520 16,222,180
Total long-term liabilities, less
current maturities 4,881,568 6,018,655
--------------- ---------------
Total Liabilities 21,616,088 22,240,835
Total CTI Industries Corporation
stockholders' equity 8,762,663 7,734,600
Noncontrolling Interest 16,558 12,756
--------------- ---------------
Total Equity 8,779,221 7,747,356
TOTAL LIABILITIES & STOCKHOLDERS' EQUITY $ 30,395,309 $ 29,988,191
=============== ===============
CTI Industries Corporation and Subsidiaries
Condensed Consolidated Statements of Operations
Three months ended
Year ended December 31, December 31,
2009 2008 2009 2008
------------ ------------ ------------ ------------
Net sales $ 41,295,152 $ 44,980,674 $ 10,737,583 $ 9,832,048
Cost of sales 32,081,779 34,658,271 8,369,364 7,496,480
------------ ------------ ------------ ------------
Gross profit 9,213,373 10,322,403 2,368,219 2,335,568
Operating expenses:
General and
administrative 4,539,494 5,375,526 1,151,999 1,311,912
Selling 871,258 886,391 269,438 176,195
Advertising and
marketing 1,576,225 1,677,900 363,059 413,016
------------ ------------ ------------ ------------
Total
operating
expenses 6,986,977 7,939,817 1,784,496 1,901,123
------------ ------------ ------------ ------------
Income from
operations 2,226,396 2,382,586 583,723 434,445
Other (expense)
income:
Interest expense (1,085,107) (1,031,457) (260,355) (232,146)
Other (19,956) 50,003 (13,509) (17,118)
------------ ------------ ------------ ------------
Total other
expense (1,105,063) (981,454) (273,864) (249,264)
------------ ------------ ------------ ------------
Income before taxes 1,121,333 1,401,132 309,859 185,181
Income tax expense 114,391 246,779 12,604 64,454
------------ ------------ ------------ ------------
Net Income 1,006,942 1,154,353 297,255 120,727
Less: Net income
(loss)
attributable to
noncontrolling
interest 3,802 222 779 (18)
------------ ------------ ------------ ------------
Net income
attributable
to CTI
Industries
Corporation $ 1,003,140 $ 1,154,131 $ 296,476 $ 120,745
============ ============ ============ ============
Income applicable
to common shares $ 1,003,140 $ 1,154,131 $ 296,476 $ 120,745
============ ============ ============ ============
Basic income per
common share $ 0.36 $ 0.42 $ 0.11 $ 0.04
============ ============ ============ ============
Diluted income per
common share $ 0.36 $ 0.40 $ 0.11 $ 0.04
============ ============ ============ ============
Weighted average
number of shares
and equivalent
shares of common
stock outstanding:
Basic 2,765,277 2,763,017 2,738,063 2,808,720
============ ============ ============ ============
Diluted 2,775,062 2,898,681 2,757,058 2,843,196
============ ============ ============ ============
MILPITAS, CA and SAN JOSE, CA — (Marketwire) — 03/22/10 — Intersil Corporation (NASDAQ: ISIL)
- Establishes Intersil as #1 Video IC Supplier in Security Surveillance Market
- Creates Leadership Position in Automotive Infotainment Market
- Acquisition Expected to be Accretive to 2010 EPS, excluding acquisition-related charges
Intersil Corporation (NASDAQ: ISIL) and Techwell, Inc. (NASDAQ: TWLL) announced today they have entered into a definitive agreement for Intersil to acquire Techwell through a cash tender offer at $18.50 per share. Net of Techwell’s cash and equivalents, the transaction values Techwell at approximately $370 million.
Techwell, with over 200 employees in the U.S., China, Japan, South Korea and Taiwan, is a fabless semiconductor company that designs and sells mixed signal video solutions for the security surveillance and automotive infotainment markets. Techwell’s products enable the conversion of analog video signals to digital form and perform advanced digital video processing to facilitate the display, storage and transport of video content. Major applications using Techwell products include industrial DVRs, networked video recorders, multiplexers, as well as automotive front consoles, rearview mirrors and rear seat LCD displays.
“Techwell’s team and products will expand our leadership in two high-growth industrial markets,” said Dave Bell, Intersil’s President and Chief Executive Officer. “The addition of Techwell’s mixed signal video products will help our customers build solutions that improve performance, reduce overall cost and shorten time-to-market. In addition, the acquisition will significantly increase our overall industrial business, which will become our largest end market at approximately 31% of revenue,” continued Mr. Bell.
“We are very excited to join the Intersil family,” said Hiro Kozato, Techwell’s President and Chief Executive Officer. “This combination will help us deliver a much broader product offering in Techwell’s end markets. Intersil’s customer relationships will create numerous new opportunities for the combined company,” said Mr. Kozato.
The acquisition is expected to be accretive to Intersil’s 2010 earnings, excluding one-time costs and other acquisition-related charges.
Tender Offer and Closing
Under the terms of the agreement, Intersil will commence a cash tender offer to acquire Techwell’s outstanding shares of common stock at $18.50 per share. Terms of the agreement were unanimously approved by Techwell’s board of directors, and Techwell’s board has recommended that Techwell shareholders tender their shares into the offer. Techwell’s directors, entities affiliated with Technology Crossover Ventures, and certain executive officers of Techwell (in total representing approximately 23% of the outstanding shares) have already agreed to tender their shares into the offer.
Intersil expects to finance the acquisition by issuing debt; however, the transaction is not subject to a financing condition. Intersil has received a financing commitment of $390 million from Morgan Stanley Senior Funding, Inc. in connection with the acquisition. Morgan Stanley is acting as financial advisor to Intersil in connection with the acquisition, and Dechert LLP is acting as Intersil’s legal counsel. Deutsche Bank Securities Inc. is acting as financial advisor to Techwell in connection with the acquisition, and Pillsbury, Winthrop, Shaw and Pittman is acting as Techwell’s legal counsel.
The acquisition is expected to close during Intersil’s second quarter and is subject to customary regulatory approvals and the satisfaction of other transaction conditions including the tender of at least 50% of Techwell’s outstanding shares.
Conference Call
Dave Bell, Intersil’s President and Chief Executive Officer, and Jonathan Kennedy, Senior Vice President and Chief Financial Officer, will host a brief conference call at 8:00 a.m. Pacific Time to discuss the details of the proposed acquisition.
Those wishing to participate in the conference call please dial (800) 561-2813, and international participants please dial +1 (617) 614-3529, using the passcode 53602928 at approximately 7:50 a.m. Pacific Time. Those wishing to listen to the call may also do so via webcast on the company’s Web site: http://www.intersil.com/investor.
A replay of the call will be available for two weeks following the conference call on the company Web site, or may be accessed by dialing (888) 286-8010, international dial +1 (617) 801-6888, using the passcode 14786787.
About Intersil
Intersil Corporation is a leader in the design and manufacture of high-performance analog and mixed signal semiconductors. The Company’s products address some of the industry’s fastest growing markets, such as flat panel displays, cell phones, notebooks and other handheld systems. Intersil’s product families address power management functions and analog signal processing functions. Intersil products include ICs for battery management, hot-plug controllers, linear regulators, power sequencers, supervisory ICs, bridge drivers, PWM controllers, switching DC/DC regulators, Zilker Labs Digital Power ICs and power MOSFET drivers; optical storage laser diode drivers; DSL line drivers; D2Audio products; video and high-performance operational amplifiers; high-speed data converters; interface ICs; analog switches and multiplexers; crosspoint switches; voice-over-IP devices; and ICs for military, space and radiation-hardened applications. For more information about Intersil or to find out how to become a member of our winning team, visit the Company’s web site and career page at www.intersil.com.
About Techwell
Techwell is a fabless semiconductor company that designs, markets and sells mixed signal video semiconductor solutions for the security surveillance and automotive infotainment markets. Headquartered in San Jose, CA, Techwell currently has over 200 employees in the U.S., China, Japan, South Korea and Taiwan. Please visit http://www.techwellinc.com for more information.
Securities Law Disclosure and Additional Information
The tender offer for the outstanding shares of common stock of Techwell, Inc. (“Techwell”) has not yet commenced. No statement in this document is an offer to purchase or a solicitation of an offer to sell securities. At the time the tender offer is commenced, Intersil Corporation and an indirect wholly-owned subsidiary of Intersil Corporation will file a tender offer statement on Schedule TO with the Securities and Exchange Commission, and Techwell will file a solicitation/recommendation statement on Schedule 14D-9 with respect to the tender offer. Any offers to purchase or solicitations of offers to sell will be made only pursuant to such tender offer statement. The tender offer statement (including an offer to purchase, a related letter of transmittal and other offer documents) and the related solicitation/recommendation statement will contain important information, including the various terms of, and conditions to, the tender offer, that should be read carefully by Techwell’s stockholders before they make any decision with respect to the tender offer. Such materials, when prepared and ready for release, will be made available to Techwell’s stockholders at no expense to them. In addition, at such time such materials (and all other offer documents filed with the SEC) will be available at no charge on the SEC’s Web site: www.sec.gov.
Press Release Source: Versar, Inc. On Thursday March 18, 2010, 9:15 am EDT
SPRINGFIELD, Va.–(BUSINESS WIRE)–Versar, Inc. (NYSE Amex: VSR) announced today that it has acquired ADVENT Environmental, Inc. (“Advent”). Advent, headquartered in Charleston, South Carolina, is a Department of Defense, full service environmental contractor with significant capabilities in Military Munitions Response Plans (MMRP) and Unexploded Ordinance (UXO) clean-up.
The Advent acquisition was accomplished with cash, note and an earn-out and is expected to be accretive in the first year. Advent will add over $12 million in annualized gross revenue and provide Versar additional overall contract capacity with the Department of Defense in excess of $100 million and a funded backlog of $10 million. Advent’s clients include the U.S. Army Corps of Engineers (USACE), The Air Force Center of Environmental Excellence (AFCEE) and the U.S. Navy.
Tony Otten, CEO of Versar, said, “The acquisition of Advent Environmental is a great strategic fit for Versar. We are extremely excited about the opportunities this combination offers. Our cultures are similar and Advent’s technical capabilities compliment our own. MMRP and UXO clean-up are a major new Versar initiative which will move ahead faster and become stronger with the joint Advent-Versar resources.”
Advent’s management will stay intact and report to Jeff Moran, Versar’s Compliance and Environmental Group’s Sr. Vice President. Kenna Sellers, Advent’s CEO said, “The combination of two outstanding under – 500 Federal contractors will allow us to combine our resources and deliver outstanding service to our clients.”
VERSAR, INC., headquartered in Springfield, VA, is a publicly held international professional services firm supporting government and industry in national defense/homeland defense programs, environmental health and safety and infrastructure revitalization. VERSAR operates a number of web sites, including the corporate Web sites, http://www.versar.com, http://www.homelanddefense.com, http://www.geomet.com; http://www.viap.com; http://www.dtaps.com; http://cts.businesswire.com/ct/CT?id=smartlink&url=http%3A%2F%2Fwww.ppsgb.com&esheet=6218837&lan=en_US&anchor=www.ppsgb.com&index=6&md5=1eb09e818de3ee3c07a1a13b3eec74f4; http://cts.businesswire.com/ct/CT?id=smartlink&url=http%3A%2F%2Fwww.adventenv.com&esheet=6218837&lan=en_US&anchor=www.adventenv.com&index=7&md5=d98997aa08bf76562d31b18c6e3943c5.
This press release contains forward-looking information. The forward-looking statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements may be significantly impacted by certain risks and uncertainties described herein and in Versar’s Annual Report on Form 10-K filed with the Securities and Exchange Commission for the year ended June 26, 2009. The forward-looking statements are made as of the date hereof and Versar does not undertake to update its forward-looking statements.
Press Release Source: Hyperdynamics Corporation On Friday March 19, 2010, 8:45 am EDT
HOUSTON, March 19 /PRNewswire-FirstCall/ — Hyperdynamics Corporation (NYSE Amex: HDY) today announced that it has agreed in writing with the government of the Republic of Guinea to extend for an additional five working days their Memorandum of Understanding (MOU). The MOU was entered into in September 2009 and called for a review of the commercial terms of the 2006 Production Sharing Contract (PSC) among Hyperdynamics, Dana Petroleum and the Republic to bring them in line with international standards. The MOU provided for a six-month negotiating period intended to culminate in an agreed PSC amendment.
About Hyperdynamics
Hyperdynamics is an emerging independent oil and gas exploration and production company that is exploring for oil and gas offshore the Republic of Guinea in West Africa. To find out more, visit our website at http://www.hyperdynamics.com/.
Forward Looking Statements
This news release and the Company’s website referenced in this news release contain forward looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, regarding Hyperdynamics Corporation’s future plans and expected performance that are based on assumptions the Company believes to be reasonable. Statements preceded by, followed by or that otherwise include the words “believes”, “expects”, “anticipates”, “intends”, “projects”, “estimates”, “plans”, “may increase”, “may result”, “will result”, “may fluctuate” and similar expressions or future or conditional verbs such as “will”, “should”, “would”, “may” and “could” are generally forward-looking in nature and not historical facts. A number of risks and uncertainties could cause actual results to differ materially from these statements, including without limitation, funding and exploration efforts, fluctuations in oil and gas prices and other risk factors described from time to time in the Company’s reports filed with the SEC. The Company undertakes no obligation to publicly update these forward looking statements to reflect events or circumstances that occur after the issuance of this news release or to reflect any change in the Company’s expectations with respect to these forward looking statements.
Press Release Source: Bovie Medical Corporation On Friday March 19, 2010, 9:00 am EDT
MELVILLE, N.Y.–(BUSINESS WIRE)–Bovie Medical Corporation (the “Company”) (NYSE-AMEX Symbol: BVX), a manufacturer and marketer of electrosurgical products, today announced the Company received clearance from the Food and Drug Administration (FDA) to market its proprietary BOSS™ bipolar sintered steel coagulation device. The BOSS™ is the latest device based on Bovie’s saline enhanced sintered steel technology.
The BOSS™ delivers RF energy simultaneously with saline to perform coagulation of soft tissue and bone resulting in reduced blood loss while minimizing charring and sticking of tissue. Saline enhanced surgeries reduce operating time while improving post-operative outcomes leading to shortened recovery time.
The BOSS™ will primarily be targeted to orthopedic surgeons performing hip and knee arthroplasty; a market comprised of approximately 1.1 million procedures performed annually in the United States. These orthopedic procedures represent large and growing markets due to a more active and aging population. Additional markets for the BOSS™ include spine, endoscopic, abdominal and thoracic surgeries. The worldwide market is expected to exceed $500 million in 2010.
Andrew Makrides, president of Bovie, stated, “Receiving FDA clearance to market the BOSS™ is a significant milestone in Bovie’s development of disposable high margin proprietary products for fast growing markets.”
For further information about the Company’s current and new products, please refer to the Investor Relations section of Bovie’s website http://cts.businesswire.com/ct/CT?id=smartlink&url=http%3A%2F%2Fwww.boviemedical.com&esheet=6220641&lan=en_US&anchor=www.boviemedical.com&index=1&md5=515aca9ead8f80e1157e316828228f12.
Certain matters discussed in this news release and oral statements made from time to time by representatives of the Company may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and the Federal securities laws. Although the Company believes that the expectations reflected in such forward-looking statements are based upon reasonable assumptions, it can give no assurance that its expectations will be achieved.
Forward-looking information is subject to certain risks, trends and uncertainties that could cause actual results to differ materially from those projected. Many of these factors are beyond the Company’s ability to control or predict. Important factors that may cause actual results to differ materially and that could impact the Company and the statements contained in this news release can be found in the Company’s filings with the Securities and Exchange Commission. For forward-looking statements in this new release, the Company claims the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. The Company assumes no obligation to update or supplement any forward-looking statements whether as a result of new information, future events or otherwise.
Press Release Source: Celsion Corporation On Thursday March 18, 2010, 7:30 am EDT
COLUMBIA, Md., March 18 /PRNewswire-FirstCall/ — Celsion Corporation (Nasdaq:CLSN – News) today announced that an abstract about the Phase I/II trial of ThermoDox® in Recurrent Chest Wall Cancer (RCW) has been accepted for presentation at the American Society of Clinical Oncology (ASCO) 2010 Annual Meeting. The abstract presents the background, rationale, and design of the DIGNITY study which is ongoing and evaluating ThermoDox in combination with hyperthermia in women with recurrent breast cancer on their chest wall. The ASCO Annual Meeting will be held June 4 – 8, 2010 at the McCormick Place Convention Center in Chicago, Illinois.
The abstract, titled “Phase I/II study evaluating the maximum tolerated dose, pharmacokinetics, safety, and efficacy of approved hyperthermia and lyso-thermosensitive liposomal doxorubicin in patients with breast cancer recurrence at the chest wall” will be presented by Nicholas Borys, M.D., Celsion’s Chief Medical Officer.
“We are pleased that our study was among those that were accepted providing continued evidence of the medical community’s high interest level in ThermoDox, the progress of our clinical program, and our focus on a cancer that is very difficult to treat,” commented Michael H. Tardugno, Celsion’s President and Chief Executive Officer. “We are grateful for the commitment of our clinical investigators to this important work and look forward to their on-going participation in the DIGNITY trial.”
Dr. Borys commented, “Our Phase I/II trial combines ThermoDox with hyperthermia, offering a unique approach to treating patients with difficult loco-regional recurrence of breast cancer at the chest wall. In a separate trial of similar design being conducted at Duke University Medical Center, researchers are reporting convincing evidence of clinical activity. I look forward to the continuation of our trial and the potential to provide an improvement in the standard of care for this devastating disease.”
About the DIGNITY Clinical Trial
The DIGNITY clinical trial is a Phase I/II open label, dose escalating trial to evaluate the safety and efficacy of ThermoDox® with hyperthermia for the treatment of Recurrent Chest Wall (RCW) Breast Cancer, an aggressive form of cancer with a poor prognosis and limited treatment options. The primary endpoint in the DIGNITY trial is durable complete local response at the tumor site. Once the safe dose is determined Celsion intends to enroll up to 100 patients to establish efficacy. The results from the DIGNITY trial are expected to build on the promising data from the Phase I dose escalation study currently being conducted at Duke University Medical Center.
About ThermoDox(R)
ThermoDox® is a proprietary heat-activated liposomal encapsulation of doxorubicin, an approved and frequently used oncology drug for the treatment of a wide range of cancers including breast cancer. ThermoDox® is administered intravenously and in combination with hyperthermia has the potential to provide local tumor control and improve quality of life. Localized mild hyperthermia (39.5-42 degrees Celsius) releases the entrapped doxorubicin from the liposome. This delivery technology enables high concentrations of doxorubicin to be deposited preferentially in a targeted tumor.
ThermoDox® has also demonstrated evidence of efficacy in a Phase I study for primary liver cancer. Celsion has been granted FDA Orphan Drug designation for ThermoDox® and is conducting a pivotal 600 patient global Phase III study in primary liver cancer under a FDA Special Protocol Assessment.
Additional information on ThermoDox® clinical studies for RCW breast cancer and primary liver cancer can be found at: http://www.clinicaltrials.gov/.
ThermoDox® is a registered trademark of Celsion Corporation.
About Celsion
Celsion is dedicated to the development and commercialization of innovative oncology drugs including tumor-targeting treatments using focused heat energy in combination with heat-activated drug delivery systems. Celsion has licensed ThermoDox(R) to Yakult-Honsha for the Japanese market and has a partnership agreement with Phillips Medical to jointly develop its heat activated liposomal technology in combination with high intensity focused ultrasound to treat difficult cancers. Celsion has research, license, or commercialization agreements with leading institutions such as the National Institutes of Health, Duke University Medical Center, University of Hong Kong, Cleveland Clinic, and the North Shore Long Island Jewish Health System.
For more information on Celsion, visit our website: http://www.celsion.com.
Celsion wishes to inform readers that forward-looking statements in this release are made pursuant to the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. Readers are cautioned that such forward-looking statements involve risks and uncertainties including, without limitation, unforeseen changes in the course of research and development activities and in clinical trials by others; possible acquisitions of other technologies, assets or businesses; possible actions by customers, suppliers, competitors, regulatory authorities; and other risks detailed from time to time in the Company’s periodic reports filed with the Securities and Exchange Commission.
Press Release Source: Heritage Financial Group On Friday March 19, 2010, 7:30 am EDT
ALBANY, Ga.–(BUSINESS WIRE)–Heritage Financial Group (NASDAQ: HBOS – News), the mid-tier holding company for HeritageBank of the South, today announced that it has adopted a plan to reorganize from a two-tier mutual holding company to a full stock holding company and will undertake a “second-step” offering of additional shares of common stock. The conversion and offering is expected to be completed in the third quarter of 2010, subject to regulatory, stockholder and depositor approvals.
“This is an important milestone in our company’s growth strategy,” said Leonard Dorminey, President and Chief Executive Officer of Heritage Financial Group. “While our total risk-based capital ratio at year-end was significantly higher than the required minimum of 10% to be considered a well-capitalized institution, we believe this step will enhance our ability to take advantage of attractive expansion opportunities and better position us for continued growth.”
Heritage MHC, a mutual holding company formed in 2002, holds approximately 76% of the shares of Heritage Financial Group, which in turn owns HeritageBank of the South. The remaining 24% of Heritage Financial Group’s shares currently are held by public stockholders.
As part of the reorganization, HeritageBank of the South will become a wholly owned subsidiary of a to-be-formed stock corporation, Heritage Financial Group, Inc. Shares of the common stock of the Company, other than those held by Heritage MHC, will be converted into shares of common stock in Heritage Financial Group, Inc., using an exchange ratio designed to preserve current percentage ownership interests. Shares owned by Heritage MHC will be retired, and new shares representing that ownership will be offered and sold to the Bank’s eligible depositors, the Bank’s tax-qualified employee benefit plans and to members of the general public as set forth in the Plan of Conversion and Reorganization of Heritage MHC.
Heritage Financial Group, Inc. intends to retain the Company’s NASDAQ symbol, HBOS, and will continue to be headquartered in Albany, Georgia.
The Plan of Conversion and Reorganization of Heritage MHC will be submitted to the Office of Thrift Supervision and the Georgia Department of Banking and Finance for regulatory approval. Upon receipt of regulatory approvals, the Company will seek approval from its stockholders and HeritageBank of the South depositors.
The Company’s reorganization will not affect the existing terms and conditions of deposit accounts and loans with HeritageBank of the South. Deposit accounts will continue to be insured by the Federal Deposit Insurance Corporation, and the Bank’s normal business operations will continue without interruption during the conversion and offering process.
Silver, Freedman & Taff, LLP is legal counsel to the Company and is advising Heritage Financial Group and Heritage MHC in this conversion.
As previously announced, the Company also has signed a definitive agreement to purchase five bank branches in Georgia from PAB Bankshares, Inc., the holding company for The Park Avenue Bank. These branches include two in Statesboro and one each in Baxley, Hazlehurst, and Adel. This transaction, which is expected to close in the second quarter of 2010, subject to regulatory approval and other usual conditions, is expected to result in the transfer of approximately $52 million in loans and approximately $72 million in deposits, including all demand deposits, savings accounts, and money market accounts. HeritageBank of the South also is expected to assume approximately $26 million in certificates of deposit maturing within 45 days of date of closing.
Heritage Financial Group is the mid-tier holding company for HeritageBank of the South, a community-oriented bank serving primarily South Georgia and North Central Florida through 10 full-service banking offices. As of December 31, 2009, the Company reported total assets of approximately $573.2 million, total stockholders’ equity of approximately $62.1 million and a Total Risk-Based capital ratio of 17.0%.
For more information about the Company, visit HeritageBank of the South on the Web at http://cts.businesswire.com/ct/CT?id=smartlink&url=http%3A%2F%2Fwww.eheritagebank.com&esheet=6218612&lan=en_US&anchor=www.eheritagebank.com&index=1&md5=75e970c0a1e3abc76fa39c291bb171a8, and see Investor Relations under About Us.
Except for historical information contained herein, the matters included in this news release and other information in the Company’s filings with the Securities and Exchange Commission may contain certain “forward-looking statements,” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. We intend such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Reform Act of 1995 and include this statement for purposes of these safe harbor provisions. Further information concerning the Company and its business, including additional factors that could materially affect our financial results, is included in our other filings with the SEC.
This news release is not an offer to sell or the solicitation of an offer to buy common stock, which is made only pursuant to a prospectus, nor shall there be any sale of common stock in any state in which such offer, solicitation or sale would be unlawful before registration or qualification under the securities laws of any such state.
PLEASANTON, Calif., March 18 /PRNewswire-FirstCall/ — Ross Stores, Inc. (Nasdaq: ROST) today reported earnings per share for the 13 weeks ended January 30, 2010 of $1.16, up 53% from $.76 for the 13 weeks ended January 31, 2009. Net earnings for the 13 weeks ended January 30, 2010 grew to a record $142.9 million, up 47% from $97.4 million for the 13 weeks ended January 31, 2009. Sales for the fourth quarter ended January 30, 2010 grew 14% to $1.980 billion, with comparable store sales up 10% over the prior year.
For the 52 weeks ended January 30, 2010, earnings per share grew 52% to $3.54, up from $2.33 for the 52 weeks ended January 31, 2009. Net earnings for the 2009 fiscal year ended January 30, 2010 grew 45% to a record $442.8 million, from $305.4 million for the 2008 fiscal year ended January 31, 2009. Sales for the 2009 fiscal year increased 11% to $7.184 billion, with comparable store sales up 6% on top of a 2% gain in the prior year.
Michael Balmuth, Vice Chairman and Chief Executive Officer, commented, “We are exceptionally pleased with our outstanding sales and earnings results for the fourth quarter and full year. During one of the most challenging economic and retail environments, we not only generated stronger-than-planned revenues, but did so with record merchandise gross margins that drove double digit operating profits as a percent of sales. The best performing merchandise categories for both the quarter and the year were Shoes, Dresses and Home, while geographic trends were broadbased, with all regions posting healthy comparable store sales gains for both periods.”
Mr. Balmuth continued, “Earnings before interest and taxes for the 2009 fourth quarter grew about 260 basis points to 11.7% of sales, up from 9.1% in the prior year period. This higher profit margin was mainly due to a 230 basis point improvement in cost of goods sold along with a 30 basis point decline in selling, general and administrative costs. For the 2009 fiscal year, operating margin increased about 250 basis points over the prior year to 10.1% of sales, driven by a 230 basis point decline in cost of goods sold combined with a 20 basis point reduction in selling, general and administrative expenses. Key drivers of our improved profitability for both the fourth quarter and the year were much higher merchandise gross margin, lower shortage costs and leverage on operating expenses from the strong gains in same store sales.”
“Healthy operating cash flows during the year continued to provide the resources to make capital investments in new store growth and infrastructure and fund our ongoing stock repurchase and dividend programs. During 2009, we repurchased a total of 7.4 million shares of common stock for an aggregate purchase price of $300 million, completing the two-year $600 million stock repurchase program announced in early 2008. In January 2010, our Board of Directors approved a new two-year $750 million stock repurchase program along with a 45% increase in our quarterly cash dividend to $.16 per common share. These actions reflect our confidence in the Company’s ongoing ability to generate healthy amounts of excess cash and our commitment to enhancing stockholder returns,” Mr. Balmuth said.
Looking ahead to 2010, Mr. Balmuth commented, “Our past results demonstrate that we can deliver consistent growth in both healthy and challenging economic climates if we execute our strategies well. This long-term record gives us the confidence to project strong cash flows from additional increases in both comparable store sales and earnings per share during 2010 and beyond.”
The Company will host a conference call on Thursday, March 18, 2010 at 11:00 a.m. Eastern time to provide additional details concerning the fourth quarter and fiscal year 2009 results and management’s outlook and plans for 2010. A real time audio webcast of the conference call will be available in the Investors section of the Company’s website, located at www.rossstores.com. An audio playback will be available at 706-645-9291, ID #55962140 until 8:00 p.m. Eastern time on March 25, 2010, as well as at the Company’s website address.
Forward-Looking Statements: This press release and the recorded conference call on our corporate website contain forward-looking statements regarding expected sales and earnings levels in future periods that are subject to risks and uncertainties which could cause our actual results to differ materially from management’s current expectations. The words “plan,” “expect,” “target,” “anticipate,” “estimate,” “believe,” “forecast,” “projected,” “guidance,” “looking ahead” and similar expressions identify forward-looking statements. Risk factors for Ross Dress for Less® (“Ross”) and dd’s DISCOUNTS® include without limitation, competitive pressures in the apparel or home-related merchandise industry; changes in the level of consumer spending on or preferences for apparel or home-related merchandise, including the potential impact from the macro-economic environment, uncertainty in financial and credit markets, and changes in geopolitical conditions; unseasonable weather trends; disruptions in supply chain; lower than planned gross margin, including higher than planned markdowns and higher than expected inventory shortage; greater than planned operating costs; our ability to continue to purchase attractive brand-name merchandise at desirable discounts; our ability to attract and retain personnel with the retail talent necessary to execute our strategies; our ability to effectively operate our various supply chain, core merchandising and other information systems; our ability to improve our merchandising capabilities through the recent implementation of new processes and systems enhancements; achieving and maintaining targeted levels of productivity and efficiency in our distribution centers; and obtaining acceptable new store locations. Other risk factors are detailed in our SEC filings including, without limitation, the Form 10-K for fiscal 2008, Form 10-Qs for fiscal 2009 and Form 8-Ks for fiscal 2009 and 2010. The factors underlying our forecasts are dynamic and subject to change. As a result, our forecasts speak only as of the date they are given and do not necessarily reflect our outlook at any other point in time. We do not undertake to update or revise these forward-looking statements.
Ross Stores, Inc., an S&P 500, Fortune 500 and Nasdaq 100 (ROST) company headquartered in Pleasanton, California, is the nation’s second largest off-price retailer with fiscal 2009 revenues of $7.2 billion. As of February 27, 2010 the Company operated 953 Ross Dress for Less® (“Ross”) stores and 54 dd’s DISCOUNTS® locations, compared to 904 Ross and 53 dd’s DISCOUNTS locations at the end of the same period last year. Ross offers first-quality, in-season, name brand and designer apparel, accessories, footwear and home fashions for the entire family at everyday savings of 20 to 60 percent off department and specialty store regular prices. dd’s DISCOUNTS features a more moderately-priced assortment of first-quality, in-season, name brand apparel, accessories, footwear and home fashions for the entire family at everyday savings of 20 to 70 percent off moderate department and discount store regular prices. Additional information is available at www.rossstores.com.
Ross Stores, Inc.
Condensed Consolidated Statements of Earnings
Three Months Ended Twelve Months Ended
January 30, January 31, January 30, January 31,
($000, except stores and
per share data, unaudited) 2010 2009 2010 2009
Sales $ 1,979,839 $1,734,112 $ 7,184,213 $6,486,139
Costs and Expenses
Costs of goods sold 1,462,581 1,321,346 5,327,278 4,956,576
Selling, general and
administrative 286,114 255,312 1,130,813 1,034,357
Interest expense (income),
net 2,604 2,531 7,593 (157)
Total costs and
expenses 1,751,299 1,579,189 6,465,684 5,990,776
Earnings before taxes 228,540 154,923 718,529 495,363
Provision for taxes on
earnings 85,657 57,536 275,772 189,922
Net earnings $ 142,883 $ 97,387 $ 442,757 $ 305,441
Earnings per share
Basic $ 1.18 $ 0.77 $ 3.60 $ 2.36
Diluted $ 1.16 $ 0.76 $ 3.54 $ 2.33
Weighted average shares
outstanding (000)
Basic 121,013 126,580 122,887 129,235
Diluted 123,355 128,175 125,014 131,315
Dividends
Cash dividends declared
per share $ 0.270 $ 0.205 $ 0.490 $ 0.395
Stores open at end of
period 1,005 956 1,005 956
Ross Stores, Inc.
Condensed Consolidated Balance Sheets
January 30, January 31,
($000, unaudited) 2010 2009
Assets
Current Assets
Cash and cash equivalents $ 768,343 $ 321,355
Short-term investments 1,754 798
Accounts receivable 44,234 41,170
Merchandise inventory 872,498 881,058
Prepaid expenses and other 58,618 55,241
Deferred income taxes - 14,093
Total current assets 1,745,447 1,313,715
Property and equipment, net 942,999 951,656
Long-term investments 16,848 38,014
Other long-term assets 63,339 52,126
Total assets $ 2,768,633 $2,355,511
Liabilities and Stockholders’ Equity
Current Liabilities
Accounts payable $ 658,299 $ 536,745
Accrued expenses and other 259,582 238,516
Accrued payroll and benefits 218,234 170,878
Income taxes payable 51,505 9,120
Deferred income taxes 2,894 -
Total current liabilities 1,190,514 955,259
Long-term debt 150,000 150,000
Other long-term liabilities 174,543 156,726
Deferred income taxes 96,283 97,157
Commitments and contingencies
Stockholders’ Equity 1,157,293 996,369
Total liabilities and stockholders’ equity $ 2,768,633 $2,355,511
Ross Stores, Inc.
Condensed Consolidated Statements of Cash Flows
Twelve Months Ended
January 30, January 31,
($000, unaudited) 2010 2009
Cash Flows From Operating Activities
Net earnings $ 442,757 $ 305,441
Adjustments to reconcile net earnings to net cash
provided by operating activities:
Depreciation and amortization 159,043 141,802
Stock-based compensation 25,746 22,575
Deferred income taxes 16,113 23,804
Tax benefit from equity issuance 8,582 8,532
Excess tax benefit from stock-based compensation (7,291) (5,973)
Change in assets and liabilities:
Merchandise inventory 8,560 144,237
Other current assets (6,441) (6,089)
Accounts payable 115,893 (101,682)
Other current liabilities 118,980 43,249
Other long-term, net 6,442 7,543
Net cash provided by operating activities 888,384 583,439
Cash Flows From Investing Activities
Additions to property and equipment (158,487) (224,418)
Proceeds from sales of property and equipment 10 117
Purchases of investments (2,904) (36,984)
Proceeds from investments 24,548 42,522
Net cash used in investing activities (136,833) (218,763)
Cash Flows From Financing Activities
Excess tax benefit from stock-based compensation 7,291 5,973
Issuance of common stock related to stock plans 49,393 47,873
Treasury stock purchased (6,045) (4,909)
Repurchase of common stock (300,000) (300,000)
Dividends paid (55,202) (49,838)
Net cash used in financing activities (304,563) (300,901)
Net increase in cash and cash equivalents 446,988 63,775
Cash and cash equivalents:
Beginning of year 321,355 257,580
End of year $ 768,343 $ 321,355
Supplemental Cash Flow Disclosures
Interest paid $ 9,668 $ 9,676
Income taxes paid $ 201,232 $ 167,478
Non-Cash Investing Activities
Increase (decrease) in fair value of investment
securities $ 1,435 $ (2,514)
Mar. 18, 2010 (GlobeNewswire) –ROBBINSVILLE and MOUNT LAUREL, N.J., March 18, 2010 (GLOBE NEWSWIRE) — Roma Financial Corporation (Nasdaq:ROMA), the holding company of Roma Bank, and Sterling Banks, Inc. (Nasdaq:STBK), the holding company for Sterling Bank, jointly announced today that their Boards of Directors have approved an Agreement and Plan of Merger providing for Sterling to merge with and into a subsidiary of Roma Financial in exchange for a cash payment to Sterling shareholders. Under the terms of the merger agreement, which has been approved by the boards of directors of both companies, Roma Financial will acquire all of the outstanding shares of Sterling for a total purchase price of approximately $14.7 million in cash, or $2.52 per share for each share of Sterling common stock outstanding. The transaction is subject to receipt of all required banking regulatory approvals, Sterling stockholder approval and certain financial and other contingencies.
Peter A. Inverso, President and Chief Executive Officer of Roma Financial Corporation, commented, “We believe that our shareholders recognize the commitment of Roma Bank to our community banking philosophy. This is an opportunity to expand our geographic reach into attractive markets and acquire a community bank franchise with minimum impact on our capital and early earnings accretion. This acquisition allows us to expand our market presence in Burlington County and enter Camden County. We look forward to servicing Sterling’s loyal customers with the same customer centric focus that distinguishes Roma in our dealings with our customers, and are excited to add Sterling’s 10 branch network and its employees to our existing franchise.”
“We are pleased to be able to partner with Roma Financial and Roma Bank. Both companies have earned a great reputation in the market in Central and Southern New Jersey. The combination of talent, locations and increased presence in the market will enable us to better serve our customers,” noted Robert H. King, President and CEO of Sterling.
Financial highlights include:
- The pro forma institution is projected to have $1.7 billion in assets and $1.3 billion in deposits.
- The transaction is expected to be accretive to Roma’s earnings in the first full year of operations.
- The projected dilution to tangible book value is less than 2% and the projected tangible book value work back is less than 3 years.
- Roma expects to be able to utilize a large portion of Sterling’s deferred tax asset.
Sterling Bank will merge with and into Roma Bank, with Roma Bank as the surviving bank. Roma will appoint one of Sterling’s directors to its Board of Directors, and Robert H. King, President and CEO of Sterling, will join Roma Bank as a senior officer. It is expected that the merger will be consummated in the third quarter of 2010.
The transaction is subject to certain conditions, including requisite regulatory approval, the approval of Sterling’s stockholders, and Sterling maintaining its financial condition through the closing such that Sterling’s nonperforming assets, inclusive of troubled debt restructurings, do not exceed $30.0 million for the period from January 1, 2010 through the Closing Date, and Sterling’s tangible common equity capital being not less than $9.9 million on the Closing Date. At December 31, 2009, Sterling’s tangible common equity was $15.0 million, and its non-performing assets, inclusive of troubled debt restructurings, were $23.9 million.
Sterling Banks, Inc. is the holding company of Sterling Bank, a community bank headquartered in Mount Laurel, New Jersey. Sterling Bank’s 10 offices are located in Burlington and Camden Counties in New Jersey. The common stock of Sterling Banks, Inc. is traded on NASDAQ under the symbol “STBK”. For additional information about Sterling Bank, visit our website at http://www.sterlingnj.com.
Roma Financial Corporation is the holding company of Roma Bank, a community bank headquartered in Robbinsville, New Jersey. Roma Bank has been serving families, businesses and the communities of Central New Jersey for over 89 years with a complete line of financial products and services. Roma Bank has 14 branch locations in Mercer, Burlington and Ocean counties in New Jersey. Visit Roma online at http://www.romabank.com
FinPro served as financial advisor to Roma and Malizia Spidi & Fisch, PC was Roma’s legal counsel in the transaction. Sterling’s financial advisor was Griffin Financial, and its legal counsel was Stevens & Lee.
Forward Looking Statements
The foregoing material contains forward-looking statements concerning Sterling and Roma. We caution that such statements are subject to a number of uncertainties and readers should not place undue reliance on any forward-looking statements. Sterling and Roma do not undertake, and specifically disclaim, any obligation to publicly release the results of any revisions that may be made to any forward-looking statements to reflect the occurrence of anticipated or unanticipated events or circumstances after the date of such statements.
In connection with the merger, Sterling will file a proxy statement with the Securities and Exchange Commission to be distributed to the stockholders of Sterling. Stockholders are urged to read the proxy statement regarding the proposed transaction when it becomes available and any other relevant documents filed with the SEC, as well as any amendments or supplements to those documents, because they will contain important information. Stockholders will be able to obtain a free copy of the proxy statement, as well as other filings containing information about Sterling and Roma, free of charge from the SEC’s website (http://www.sec.gov), by contacting Sterling Banks, Attention: Robert H. King, telephone 856-273-5900. Sterling and its directors, executive officers, and certain other members of management and employees may be soliciting proxies from Sterling’s stockholders in favor of the transaction. Information regarding the persons who may, under the rules of the SEC, be considered participants in the solicitation of Sterling stockholders in connection with the proposed transaction will be set forth in the proxy statement when it is filed with the SEC. You can find information about Sterling’s executive officers and directors in its most recent proxy statement filed with the SEC, which is available at the SEC’s website (http://www.sec.gov). You can also obtain free copies of these documents from Sterling using the contact information above.
CONTACT: Roma Financial Corporation
Peter A. Inverso, President and Chief Executive Officer
Sharon Lamont, Chief Financial Officer
609 223 8300
Sterling Banks, Inc.
Robert H. King, President
rking@sterlingnj.com
R. Scott Horner, Executive Vice President
shorner@sterlingnj.com
856 273 5900
Mar. 18, 2010 (Business Wire) — Somaxon Pharmaceuticals, Inc. (Nasdaq: SOMX) today announced that the U.S. Food and Drug Administration (FDA) has approved the New Drug Application (NDA) for Silenor® (doxepin) for the treatment of insomnia characterized by difficulty with sleep maintenance.
Sleep maintenance difficulty, defined as waking frequently during the night and/or waking too early and being unable to return to sleep, is the most commonly reported nighttime symptom of insomnia. Silenor is approved for the treatment of both transient (short term) and chronic (long term) insomnia characterized by difficulty with sleep maintenance in both adults and elderly patients. In clinical trials, Silenor demonstrated maintenance of sleep into the 7th and 8th hours of the night, with no meaningful evidence of next day residual effects.
Silenor has not been designated as a controlled substance by the U.S. Drug Enforcement Administration (DEA) because of its demonstrated lack of abuse potential. In addition, in the Silenor clinical development program, no withdrawal effects or other adverse events were observed that were indicative of physical dependence. In Somaxon’s market research, abuse potential/risk of dependence was one of the most common safety concerns cited by patients as a reason for not seeking prescription treatment for insomnia, switching medications or discontinuing treatment. The Silenor clinical trial program demonstrated a favorable safety and tolerability profile, with the overall incidence of adverse events comparable to placebo, a low discontinuation rate and no evidence of tolerance, amnesia or complex sleep behaviors (e.g. sleep driving, sleep eating).
“The approval of Silenor represents an important milestone for Somaxon and will allow us to provide physicians and patients with a highly differentiated treatment option for insomnia,” said Richard W. Pascoe, Somaxon’s president and chief executive officer. “We believe that Silenor’s ability to treat sleep maintenance insomnia into the final hours of the night without meaningful next-day residual effects and without abuse potential uniquely positions Silenor for commercial success.”
“Looking forward, we will continue to execute on our business strategy, focusing on seeking a U.S. commercial partnership, building a U.S. commercial presence and preparing to launch Silenor in the second half of 2010,” continued Pascoe.
“The management of insomnia has important implications for the patient’s overall health, productivity and quality of life,” said Thomas Roth, Ph.D., chief, division head, Sleep Disorders & Research Center, Henry Ford Hospital. “The introduction of Silenor, a sleep promoting medication that works through the histamine system, provides the clinician an important addition to his armamentarium needed for the management of insomnia patients.”
Silenor binds with high affinity to histamine (H1) receptors. This is believed to be the mechanism by which Silenor promotes the maintenance of sleep. This mechanism of action is different from that of any other prescription medication currently approved for the treatment of insomnia.
As result of the NDA approval for Silenor, Somaxon will be required to make a $1.0 million milestone payment to its licensor for Silenor pursuant to its existing license agreement.
Conference Call Information and Forward-Looking Statements
On Thursday, March 18, 2010, the company will host a conference call with interested parties beginning at 9:00 a.m. PT (12:00 p.m. ET). The conference call will be available to interested parties through a live audio Internet broadcast at http://investors.somaxon.com/eventdetail.cfm. The call will also be archived and accessible at this site for approximately two weeks. Alternatively, callers may participate in the conference call by dialing (888) 549-7750 (domestic) or (480) 629-9866 (international). A telephonic replay will be available for approximately one week following the conclusion of the call by dialing (800) 406-7325 (domestic) or (303) 590-3030 (international), and entering passcode 4271296.
Discussion during the conference call may include forward-looking statements regarding such topics as, but not limited to, the FDA’s approval of Silenor, Somaxon’s commercialization plans for Silenor, the company’s financial status and performance, and any comments the company may make about its future plans or prospects in response to questions from participants on the conference call.
About Silenor®
Silenor is a low-dose (3 mg, 6 mg) oral tablet formulation of doxepin that is patent protected for use in insomnia. The Silenor NDA included all of the data from the company’s development program, including data from Somaxon’s clinical trial program that evaluated 1,017 adult and elderly subjects with chronic and transient insomnia.
For more information, please see the complete Silenor Prescribing Information, including the Medication Guide, at www.silenor.com or www.somaxon.com.
Important Safety Information
Because sleep disturbances may be caused by underlying physical and/or psychiatric disorders, symptomatic treatment of insomnia should be initiated only after a careful evaluation of the patient. The failure of insomnia to remit after 7-10 days of treatment may indicate the presence of a primary psychiatric and/or medical illness that should be evaluated.
Patients should only take Silenor when they are prepared to get a full night’s sleep. Silenor should be taken within 30 minutes of bedtime, and patients should confine their activities after ingestion to those necessary to prepare for bed. Patients should not consume alcohol or take other drugs that cause drowsiness with Silenor. Co-administration of monoamine oxidase inhibitors (MAOIs) with Silenor has not been studied and is not recommended. Patients should not take Silenor if they have untreated narrow angle glaucoma, severe urinary retention, severe sleep apnea or hypersensitivity to any of the ingredients in Silenor. Patients should avoid engaging in hazardous activities such as operating a motor vehicle or heavy machinery at night after taking Silenor, and patients should be cautioned about potential impairment in the performance of such activities that may occur during the day following ingestion. Before taking Silenor, patients should tell their doctors if they have a history of depression, mental illness or suicidal thoughts.
Hypnotics have been associated with complex behaviors such as sleep driving, preparing and eating food, making phone calls, or having sex. Drowsiness, upper respiratory tract infections and nausea were the most common adverse events observed in Silenor clinical trials.
About Insomnia
It is estimated that approximately 70 million American adults are affected by insomnia – characterized by difficulty falling asleep, waking frequently during the night, waking too early and not being able to return to sleep, or waking up not feeling refreshed. One study has found that only 20% of insomnia sufferers are being treated with a prescription sleep medication.
Results from a recent National Sleep Foundation Sleep in America poll reported that respondents experienced the following at least a few nights a week:
- 65% experience insomnia symptoms,
- nearly 50% wake up feeling unrefreshed,
- 42% awake often during the night, and
- nearly 30% wake up too early and can not get back to sleep.
An estimated 20% to 40% of all adults complain of acute, or transient, insomnia, generally defined as a complaint lasting several days up to a couple of weeks, while 10% to 15% complain of chronic insomnia, generally defined as a complaint lasting approximately four weeks or longer.
The negative health consequences of insomnia are becoming better understood. Studies have shown that insomnia lasting more than four weeks is associated with a wide range of adverse health conditions, including mood disturbances, depression, difficulties with concentration and memory, and certain cardiovascular, pulmonary and gastrointestinal disorders. Chronic sleep deprivation has also been associated with an increased risk of diabetes and obesity. One study showed that when normal sleep was restricted by as little as two hours per night across two weeks, the affected person experienced a significant decrease in cognitive function that resulted in reaction time and other performance measures resembling those of a person who stayed up for 48 hours straight.
About Somaxon Pharmaceuticals, Inc.
Headquartered in San Diego, CA, Somaxon Pharmaceuticals, Inc. is a specialty pharmaceutical company focused on the in-licensing, development and commercialization of proprietary branded pharmaceutical products and late-stage product candidates for the treatment of diseases and disorders in the central nervous system therapeutic area. Somaxon’s product Silenor® (doxepin) has been approved by the FDA for the treatment of insomnia characterized by difficulty with sleep maintenance.
For more information, please visit the company’s web site at www.somaxon.com.
Somaxon cautions readers that statements included in this press release and the conference call that are not a description of historical facts are forward-looking statements. For example, statements regarding the potential commercialization of Silenor and the potential to establish a commercial partnership or other strategic transaction are forward-looking statements. The inclusion of forward-looking statements should not be regarded as a representation by Somaxon that any of its plans will be achieved. Actual results may differ materially from those set forth in this release due to the risks and uncertainties inherent in Somaxon’s business, including, without limitation, Somaxon’s ability to successfully commercialize Silenor; Somaxon’s ability to raise sufficient capital and meet its obligations to parties under financing agreements, and the impact of any such financing activity on the level of Somaxon’s stock price; the impact of any inability to raise sufficient capital to fund ongoing operations, including the potential to be required to restructure the company or to be unable to continue as a going concern; the potential to enter into and the terms of any commercial partnership or other strategic transaction relating to Silenor; the scope, validity and duration of patent protection and other intellectual property rights for Silenor; whether the approved label for Silenor is sufficiently consistent with such patent protection to provide exclusivity for Silenor; Somaxon’s ability to operate its business without infringing the intellectual property rights of others; the timing and results of non-clinical studies and other post-approval regulatory requirements for Silenor, and the FDA’s agreement with Somaxon’s interpretation of such results; the market potential for insomnia treatments, and Somaxon’s ability to compete within that market; inadequate therapeutic efficacy or unexpected adverse side effects relating to Silenor that could delay or prevent commercialization, or that could result in recalls or product liability claims; the ability of Somaxon to ensure adequate and continued supply of Silenor to successfully launch commercial sales or meet anticipated market demand; other difficulties or delays in development, testing, manufacturing and marketing of Silenor; and other risks detailed in Somaxon’s prior press releases as well as in its periodic filings with the Securities and Exchange Commission.
Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. All forward-looking statements are qualified in their entirety by this cautionary statement, and Somaxon undertakes no obligation to revise or update this press release to reflect events or circumstances after the date hereof. This caution is made under the safe harbor provisions of Section 21E of the Securities Exchange Act of 1934.
Press Release Source: Document Security Systems, Inc. On Wednesday March 17, 2010, 11:24 am EDT
ROCHESTER, N.Y., March 17 /PRNewswire-FirstCall/ — Document Security Systems, Inc. (NYSE Amex: DMC; “DSS”), a world leader in the development and manufacturing of products and packaging containing optical deterrent and authentication technologies that help prevent counterfeiting and brand fraud from the use of desktop scanners and copiers, is pleased to announce today that it has been issued nine new patents covering seven European Countries and Canada.
All patents are associated with DSS’s new digital “Prism” authentication and anti-counterfeiting technology which was recently highlighted as a “Covert security technology for plastic smart cards” on page 39 of a comprehensive industry white paper by Imperial Capital entitled, “Anti-Counterfeiting & Brand Protection. A copy of the white paper may be found here: http://www.imperialcapital.com/rpt/Industry/user/f554d9e1.PDF.
In addition to “Smart Cards,” Prism also can protect labels, packaging, documents, currency and vital records.
Michael Caton, Chief Technology Officer of Document Security Systems, Inc., stated, “Based on our testing, Prism technology is the most powerful anti-scanning technology on the market. That’s important because according to the U.S. Secret Service, scanning is the most prevalent method used by counterfeiters. Prism has never been captured by any scanning device regardless of the resolution which makes it 100% effective as an inexpensive authentication technology for all brand owners. The technology is inexpensive since it is easily applied in the traditional or digital print production process and it does not require expensive, slow, hardware and software add-ons like competitors are offering.”
Patrick White, CEO, stated, “I am really proud of the innovation of our engineers and our legal team at Harter Secrest & Emery LLP for their excellent work on our valuable and growing intellectual property portfolio.”
About Document Security Systems, Inc
Document Security Systems is a technology company in the security and protection services sector which develops and manufactures products and packaging containing patented and patent pending optical deterrent technologies that help prevent counterfeiting and brand fraud from the use of the most advanced scanners, copiers and imaging systems in the market. The company owns over 30 different patented and patent-pending technologies and products which protect valuable documents and printed products from counterfeiters and identity thieves. The company has 3 manufacturing facilities which produce secure printing, packaging and plastic ID cards. Document Security Systems’ customers, which include international governments, major corporations and world financial institutions, use its covert and overt technologies to protect a number of applications including, but not limited to, currency, vital records, brand protection, ID Cards, Smart Cards internet commerce, passports, gift certificates and packaging. Document Security Systems’ strategy is to become the world’s leading producer of cutting-edge security technologies for paper, plastic and electronically generated printed assets
More information about Document Security Systems, Inc. and its products and services can be found at http://www.documentsecurity.com/, http://www.plasticprintingprofessionals.com/, http://www.protectedpaper.com/, http://www.dpirochester.com/ and http://www.premiercustompkg.com/.
Safe Harbor Statement
This release contains forward-looking statements regarding expectations for future financial performance, which involve uncertainty and risk. It is possible the Company’s future financial performance may differ from expectations due to a variety of factors including, but not limited to, changes in economic and business conditions in the world, increased competitive activity, achieving sales levels to fulfill revenue expectations, consolidation among its competitors and customers, technology advancements, unexpected costs and charges, adequate funding for plans, changes in interest and foreign exchange rates, regulatory and other approvals and failure to implement all plans, for whatever reason. It is not possible to foresee or identify all such factors. Any forward-looking statements in this report are based on current conditions; expected future developments and other factors it believes are appropriate in the circumstances. Prospective investors are cautioned that such statements are not a guarantee of future performance and actual results or developments may differ materially from those projected. The Company makes no commitment to update any forward-looking statement included herein, or disclose any facts, events or circumstances that may affect the accuracy of any forward-looking statement.
| For information contact |
|
| Jody Janson |
|
| Document Security Systems, Inc. |
|
| Title: Shareholder Relations |
|
| Voice: 585-232-5440 |
|
| Email: ir@documentsecurity.com |
Mar. 17, 2010 (Business Wire) — FSI International, Inc. (Nasdaq: FSII), a leading manufacturer of wafer cleaning systems used in the fabrication of integrated circuits, announced today that it received an order for an FSI ORION® system with ViPR™ technology from a major semiconductor manufacturer based in Asia. The FSI ORION system will be used for the development and qualification of front-end-of-line (FEOL) cleaning processes in advanced IC manufacturing. After a comparison of competitive alternatives, this customer determined that the FSI ORION ViPR technology was the ideal solution for meeting its anticipated resist stripping requirements. FSI expects to ship this evaluation FSI ORION single wafer cleaning system to this customer during its fiscal 2010 third quarter.
IC manufacturers are finding that the unique closed chamber design of the FSI ORION system permits safe use of aggressive, high-temperature ViPR process technology for all-wet removal of highly implanted photoresist. FSI’s differentiated ViPR technology minimizes material loss and lowers defectivity. The FSI ORION process chamber design, with an integrated spray bar, improves process uniformity, shortens process time, reduces chemical consumption and enhances particle removal.
“With this order we have accomplished a key fiscal 2010 objective to place FSI ORION systems at strategic logic, memory and foundry producers,” said Don Mitchell, FSI chairman and chief executive officer. “We have taken a very deliberate approach in the development of our single wafer cleaning technology, focusing on translating our considerable experience and expertise into a tool that will meet the industry’s advancing surface conditioning requirements,” continued Mitchell.
About FSI
FSI International, Inc. is a global supplier of surface conditioning equipment, technology and support services for microelectronics manufacturing. Using the company’s broad portfolio of cleaning products, which include batch and single-wafer platforms for immersion, spray, vapor and cryokinetic technologies, customers are able to achieve their process performance flexibility and productivity goals. The company’s support services programs provide product and process enhancements to extend the life of installed FSI equipment, enabling worldwide customers to realize a higher return on their capital investment. For more information, visit FSI’s website at http://www.fsi-intl.com.
Mar. 17, 2010 (PR Newswire) —
TROY, Mich., March 17 /PRNewswire-FirstCall/ —
First Quarter Highlights
-- Net revenues of $13.1 million, up 18 percent.
-- Income before income taxes of $3.1 million, up 45 percent.
-- Net income of $2.0 million, up 57 percent; $0.16 per diluted share.
-- Somanetics adjusts full-year guidance to net revenues increasing 12 to
15 percent over 2009 to approximately $56 million to $57.5 million, and
operating margin to be approximately 17 to 20 percent, excluding
litigation expense.
Somanetics Corporation (Nasdaq: SMTS) reported net revenues of $13.1 million for the first quarter ended February 28, 2010, an 18 percent increase from $11.2 million in the same period of 2009.
U.S. net revenues increased 20 percent to $10.5 million from $8.7 million in the same period last year. International net revenues increased 11 percent to $2.7 million from $2.4 million.
First quarter income before income taxes was $3.1 million, compared to $2.1 million for the first quarter of 2009. Net income was $2.0 million, or $0.16 per diluted share, compared with net income of $1.3 million, or $0.10 per diluted share, in the first quarter of 2009.
Gross margin was 87 percent in the first quarter, compared with 86 percent in the first quarter of 2009. As of February 28, 2010, Somanetics’ cash, marketable securities and long-term investments balance was $76.8 million, with no borrowings.
In the first quarter Somanetics purchased 401,992 common shares pursuant to its stock repurchase plan for approximately $6.4 million including commissions. Somanetics has approximately $7.1 million remaining under its $45 million stock repurchase program.
“We are off to a solid start for the year with sales and earnings exceeding our internal plans for the first quarter,” said Bruce Barrett, Somanetics’ president and chief executive officer.
“We also are continuing to execute our investments to increase the size of our U.S. field sales and clinical education team and implement technological advances that promise to further our lead in this developing marketplace.”
Company to Participate in Upcoming Medical Conferences
Somanetics will participate in approximately 20 medical conferences during the second quarter, including the 2010 annual meeting of the American Association for Thoracic Surgery and various regional and state cardiothoracic, perfusion, anesthesia, pediatric cardiac and neonatology association meetings. At the International Anesthesia Research Society (IARS) meeting this month, a number of abstracts will be presented on the use of the INVOS System in cardiac and carotid endarterectomy surgery.
At the Anesthesia Patient Safety Foundation’s Excellence in Safety Research Symposium, being held in conjunction with the IARS, John Murkin, MD will receive the “Excellence in Device Innovations” award and speak on the topic of Clinical Uses of Non-Invasive Cerebral Oximetry.
New Clinical Data Published
In January, Sean Bailey, MD and colleagues from New York University School of Medicine published study results in the American Journal of Perinatology. They studied cerebral and somatic regional saturation of oxygen (rSO2) using the INVOS System before and after transfusion of packed red blood cells (PBRCs) and found that transfusions of PBRCs in anemic preterm infants were associated with significant increases in both cerebral and splanchnic (abdominal) oxygen saturation, an indication of increased oxygen delivery. Additionally, neither cerebral nor splanchnic (abdominal) rSO2 correlated with hemoglobin concentration in the blood, a relatively insensitive marker that is sometimes used to evaluate the need for transfusion. Because there currently is no universal method for determining when a transfusion is necessary, the study highlights the importance of monitoring organ perfusion as a means of evaluating the benefits of transfusion in this population. These results were essentially the same as those of Carlo Dani, MD and colleagues at Careggi University Hospital in Florence, Italy, whose publication in the journal Transfusion appeared at the same time.
In addition, Somanetics expects other articles will be published in the next few months, on such topics as the establishment of rSO2 baseline values for cerebral, peri-renal and abdominal monitoring in neonates and the management of surgical neonatal patients with necrotizing enterocolitis.
“We believe that peer-reviewed articles will continue to build the foundation of clinical evidence of the benefits of using the INVOS Cerebral/Somatic Oximeter in the neonatal ICU,” Barrett said.
Technological Advances
Somanetics has developed a sensor for use in the neonatal ICU that has features that are important to the customers including a smaller size, more flexibility and a lighter weight than the current model. The sensor is expected to be introduced to customers beginning in the second quarter.
Work is continuing on the development of a single integrated INVOS System and Vital Sync System device for bedside data collection, storage, display and analysis. In addition, pursuant to the rights Somanetics recently obtained to new cerebral autoregulation technology developed at The Johns Hopkins University, Somanetics is working on the integration of the technology into the INVOS System, which would yield the first noninvasive monitor providing cerebral autoregulation data for routine clinical use.
Business Outlook
Based on its first quarter results and the current outlook for the year, Somanetics is adjusting its financial guidance for fiscal year 2010. Somanetics is currently forecasting:
-- Fiscal 2010 net revenues increasing 12 to 15 percent over 2009 to
approximately $56 million to $57.5 million; Somanetics previously guided
to revenue growth of 12 percent.
-- Gross margin of approximately 87 percent and operating margin of
approximately 17 to 20 percent, excluding litigation expense; Somanetics
previously guided to gross margin of approximately 87 percent and
operating margin of approximately 17 percent, excluding litigation
expense.
Current estimates are based on market and economic conditions, including the assumption that the recovery in capital spending at hospitals will be slow to develop. These estimates reflect management’s plan to invest in the clinical research, medical education and research and development projects focused on the pediatric and neonatal ICU markets, the development of new technologies and the addition of employees in sales, research and development and administration. Somanetics undertakes no obligation to update its estimates.
Somanetics to Host Conference Call
Somanetics will webcast its 2010 first quarter conference call at 10:00 a.m. (ET) today. To join the web cast, visit the Presentations & Webcasts page in the Investor Relations section of Somanetics’ website at www.somanetics.com and click on the “Q1 2010 Somanetics Corporation Conference Call” link. The call also will be archived on the website.
About Somanetics
Somanetics Corporation (Nasdaq: SMTS) develops, manufactures and markets the INVOS® Cerebral/Somatic Oximeter which noninvasively provides accurate, real-time blood oxygen measurements in patients greater than 2.5 kilograms, and trend monitoring of this parameter for individuals of any weight. The INVOS System is the only commercially-available cerebral/somatic oximeter proven to improve outcomes. Surgeons, anesthesiologists and other medical professionals can use data provided by the INVOS System, in conjunction with other available data, to identify oxygen imbalances in brain or other body tissue beneath the sensor and take necessary corrective action, potentially improving patient outcomes and reducing the costs of care. The INVOS System is the clinical reference standard in cerebral/somatic oximetry, with a 12-year market track record, more than 750 clinical references and implementation at approximately 800 U.S. hospitals. Somanetics also develops, manufactures and markets the Vital Sync(TM) System, a device that integrates data from bedside devices into a single system for enhanced patient assessment and decision making, data management and data storage. Somanetics supports its customers through a direct U.S. sales force and clinical education team. Covidien markets INVOS System products in Europe, Canada, the Middle East and South Africa and Edwards Lifesciences represents INVOS System products in Japan. For more information visit www.somanetics.com.
Safe-Harbor Statement
Except for historical information contained herein, the matters discussed in this news release, including financial guidance for fiscal year 2010, are forward-looking statements, the accuracy of which is necessarily subject to risks and uncertainties. Actual results may differ significantly from results discussed in the forward-looking statements and may be affected by, among other things, economic conditions in general and in the healthcare market, including the current global economic difficulties, the demand for and market acceptance of our products in existing market segments and in new market segments we plan to pursue, our current dependence on the INVOS Cerebral/Somatic Oximeter and disposable sensors, our dependence on distributors for a substantial portion of our sales, our dependence on single-source suppliers, potential competition, the effective management of our growth, our ability to attract and retain key personnel, the potential for products liability claims, government regulation of our business, future equity compensation expenses, the challenges associated with developing new products and obtaining and maintaining regulatory approvals if necessary, research and development activities, the lengthy sales cycle for our products, sales employee turnover, changes in our actual or estimated future taxable income, changes in accounting rules, enforceability and the costs of enforcement of our patents, potential infringements of others’ patents and the other factors set forth from time to time in Somanetics’ Securities and Exchange Commission filings, including Somanetics’ 2009 Annual Report on Form 10-K filed on February 3, 2010.
(Tables to follow)
SOMANETICS CORPORATION
BALANCE SHEETS
February 28, November 30,
2010 2009
------------ ------------
ASSETS (Unaudited) (Audited)
CURRENT ASSETS:
Cash and cash equivalents $24,660,515 $28,964,273
Marketable securities 8,381,289 24,763,854
Accounts receivable 7,374,943 8,878,942
Inventory 3,336,832 3,622,531
Prepaid expenses 545,819 1,087,450
Accrued interest receivable 94,483 138,099
Deferred tax asset - current 51,060 51,060
------ ------
Total current assets 44,444,941 67,506,209
---------- ----------
PROPERTY AND EQUIPMENT (at cost):
Demonstration and no capital cost
sales equipment at customers 4,407,883 4,285,163
Machinery and equipment 2,058,911 1,886,582
Furniture and fixtures 990,817 545,796
Leasehold improvements 454,423 197,450
------- -------
Total 7,912,034 6,914,991
Less accumulated depreciation and
amortization (3,787,422) (3,966,645)
----------- -----------
Net property and equipment 4,124,612 2,948,346
--------- ---------
OTHER ASSETS:
Long-term investments 43,792,506 26,004,995
Deferred tax asset - non-current 2,961,381 2,795,963
Intangible assets, net 230,924 234,003
Goodwill 1,783,712 1,783,712
Other 15,000 15,000
------ ------
Total other assets 48,783,523 30,833,673
---------- ----------
TOTAL ASSETS $97,353,076 $101,288,228
=========== ============
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $1,301,686 $1,466,497
Accrued liabilities $ 703,021 $1,788,552
Deferred rent 102,153 -
------- ---
Total current liabilities 2,106,860 3,255,049
--------- ---------
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS' EQUITY:
Preferred shares; authorized, 1,000,000
shares of $.01 par value;
no shares issued or outstanding - -
Common shares; authorized, 20,000,000
shares of $.01 par value; issued and
outstanding, 11,909,200 shares at
February 28, 2010, and 12,104,462 shares
at November 30, 2009 119,092 121,045
Additional paid-in capital 92,864,993 97,696,229
Retained Earnings 2,262,131 215,905
--------- -------
Total shareholders' equity 95,246,216 98,033,179
---------- ----------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $97,353,076 $101,288,228
=========== ============
SOMANETICS CORPORATION
STATEMENTS OF OPERATIONS
(Unaudited)
For the Three-Month
Periods Ended
--------------------------
February 28, February 28,
2010 2009
------------ ------------
NET REVENUES $13,139,684 $11,155,354
COST OF SALES 1,745,454 1,580,481
--------- ---------
Gross Margin 11,394,230 9,574,873
---------- ---------
OPERATING EXPENSES:
Research, development and engineering 613,153 423,161
Selling, general and administrative 7,976,276 7,314,699
--------- ---------
Total operating expenses 8,589,429 7,737,860
--------- ---------
OPERATING INCOME 2,804,801 1,837,013
--------- ---------
OTHER INCOME:
Interest income 252,468 271,386
------- -------
Total other income 252,468 271,386
------- -------
INCOME BEFORE INCOME TAXES 3,057,269 2,108,399
--------- ---------
INCOME TAX EXPENSE (1,011,044) (806,220)
----------- ---------
NET INCOME $2,046,225 $1,302,179
========== ==========
NET INCOME PER COMMON SHARE - BASIC $ .17 $ .11
=== ===
NET INCOME PER COMMON SHARE - DILUTED $ .16 $ .10
=== ===
WEIGHTED AVERAGE SHARES OUTSTANDING - BASIC 12,029,231 12,038,368
========== ==========
WEIGHTED AVERAGE SHARES OUTSTANDING
- DILUTED 12,907,776 12,898,920
========== ==========
BEIJING, Mar. 17, 2010 (Xinhua News Agency) — KongZhong (NASDAQ:KONG) Corp. (KONG.NASDAQ), a China-based mobile Internet company, on Wednesday announced net profits of 2.02 million US dollars for the final quarter of 2009, which represented a surge of 286 percent year on year.
The following table details from KongZhong’s financial results for the fourth quarter and the whole year of 2009: Total revenue (Million USD) Growth on year (%) Gross margin (%) Net profit (Million USD) Growth on year (%) Q4, 2009 34.3 28 46 2.02 286 2009 131.3 – 48 12.58 –
KongZhong achieved total revenues of 131.3 million dollars in 2009, including 98.24 million dollars from wireless value-added services, 27.3 million dollars from mobile phone games business, and 5.76 million dollars from wireless Internet business.
The company forecasts that its revenue for the first quarter of this year will top 37.5 million dollars, including 24 million dollars from wireless value-added services, 8.5 million dollars from mobile phone game business, 1 million dollars from wireless Internet business, and 4 million dollars from its Internet mobile phone game business unit, which was established after the acquisition of Shanghai Dacheng Network. (Edited by Luo Jingjing, luojj@xinhua.org)
Mar. 17, 2010 (Business Wire) — Abraxis BioScience, Inc. (NASDAQ:ABII) today announced that its randomized registrational Phase 3 clinical trial comparing ABRAXANE® (protein-bound paclitaxel) with Taxol® (paclitaxel) injection, both in combination with carboplatin, met the study’s primary endpoint by demonstrating that ABRAXANE showed a significant improvement in overall response rate as compared to Taxol, in the first-line treatment of patients with advanced non-small cell lung cancer (NSCLC), as assessed by independent radiologist review.
The Phase 3 trial completed enrollment of 1,052 patients in July 2009 at 102 sites globally and was led by principal investigator Mark Socinski, M.D., at the University of North Carolina Lineberger Comprehensive Cancer Center. It is one of the largest NSCLC clinical studies to be conducted. “This is exciting news for lung cancer patients and has important implications not only in late stage cancer but also in earlier stages of the disease,” Socinski said. The data will be submitted for consideration as a late breaking presentation at the upcoming American Society of Clinical Oncology (ASCO) meeting.
This trial is the subject of a special protocol assessment (SPA) with the FDA, which means that the design, clinical endpoints and statistical analyses of the trial have been previously agreed upon by the FDA. Specifically, the FDA agreed that the demonstration of a statistically superior response rate of the ABRAXANE and carboplatin combination over the Taxol and carboplatin combination would be sufficient to submit a supplemental new drug application (sNDA)(as a 505(b)(2) submission) for approval of ABRAXANE in combination with carboplatin for first line NSCLC.
“NSCLC is the most common form of lung cancer and is very difficult to treat. We are extremely pleased with the data from this Phase 3 combination study that demonstrated superiority of ABRAXANE over Taxol as we seek to bring new treatment options to these patients,” said Patrick Soon-Shiong, M.D., Executive Chairman and founder of Abraxis BioScience. “We anticipate filing an sNDA to the FDA during 2011 for what will be the second indication for ABRAXANE in the U.S.”
NSCLC accounts for approximately 85% of all lung cancer cases. The American Cancer Society (ACS) estimates that approximately 219,440 people will be diagnosed with lung cancer in the United States in 2009, and that approximately 159,000 deaths occur each year due to this cancer.i
About ABRAXANE®
ABRAXANE is a solvent-free chemotherapy treatment option for metastatic breast cancer which was developed using Abraxis BioScience’s proprietary nab® technology platform. This protein-bound chemotherapy agent combines paclitaxel with albumin, a naturally-occurring human protein. By wrapping the albumin around the active drug, ABRAXANE can be administered to patients at higher doses, delivering higher concentrations of paclitaxel to the tumor site than solvent-based paclitaxel. ABRAXANE is currently in various stages of investigation for the treatment of the following cancers: expanded applications for metastatic breast, non-small cell lung, malignant melanoma, pancreatic and gastric.
The U.S. Food and Drug Administration approved ABRAXANE for Injectable Suspension (paclitaxel protein-bound particles for injectable suspension) (albumin-bound) in January 2005 for the treatment of breast cancer after failure of combination chemotherapy for metastatic disease or relapse within six months of adjuvant chemotherapy. Prior therapy should have included an anthracycline unless clinically contraindicated. For the full prescribing information for ABRAXANE please visit www.abraxane.com.
IMPORTANT SAFETY INFORMATION
The use of ABRAXANE has not been studied in patients with hepatic or renal dysfunction. In the randomized controlled trial, patients were excluded for baseline serum bilirubin >1.5 mg/dL or baseline serum creatinine >2 mg/dL.
ABRAXANE can cause fetal harm when administered to a pregnant woman. Women of childbearing potential should be advised to avoid becoming pregnant while receiving treatment with ABRAXANE.
Men should be advised to not father a child while receiving treatment with ABRAXANE.
It is recommended that nursing be discontinued when receiving ABRAXANE therapy.
ABRAXANE contains albumin (human), a derivative of human blood.
Caution should be exercised when administering ABRAXANE concomitantly with known substrates or inhibitors of CYP2C8 and CYP3A4.
ABRAXANE therapy should not be administered to patients with metastatic breast cancer who have baseline neutrophil counts of less than 1,500 cells/mm3. It is recommended that frequent peripheral blood cell counts be performed on all patients receiving ABRAXANE. Patients should not be retreated with subsequent cycles of ABRAXANE until neutrophils recover to a level >1,500 cells/mm3 and platelets recover to a level >100,000 cells/mm3
In the case of severe neutropenia (<500 cells/mm3 for 7 days or more) during a course of ABRAXANE therapy, a dose reduction for subsequent courses is recommended.
Sensory neuropathy occurs frequently with ABRAXANE.
If grade 3 sensory neuropathy develops, treatment should be withheld until resolution to grade 1 or 2 followed by a dose reduction for all subsequent courses of ABRAXANE.
Severe cardiovascular events possibly related to single-agent ABRAXANE occurred in approximately 3% of patients in the randomized trial. These events included chest pain, cardiac arrest, supraventricular tachycardia, edema, thrombosis, pulmonary thromboembolism, pulmonary embolism, and hypertension.
In the randomized metastatic breast cancer study, the most important adverse events included alopecia (90%), neutropenia (all cases 80%; severe 9%), sensory neuropathy (any symptoms 71%; severe 10%), asthenia (any 47%; severe 8%), myalgia/arthralgia (any 44%; severe 8%), anemia (all 33%; severe 1%), infections (24%), nausea (any 30%; severe 3%), vomiting (any 18%; severe 4%), diarrhea (any 27%; severe <1%), and mucositis (any 7%; severe <1%).
Other adverse reactions have included ocular/visual disturbances (any 13%; severe 1%), fluid retention (any 10%; severe 0%), hepatic dysfunction (elevations in bilirubin 7%, alkaline phosphatase 36%, AST [SGOT] 39%), renal dysfunction (any 11%; severe 1%), thrombocytopenia (any 2%; severe <1%), hypersensitivity reactions (any 4%; severe 0%), cardiovascular reactions (severe 3%), and injection site reactions (<1%). During postmarketing surveillance, rare occurrences of severe hypersensitivity reactions have been reported with ABRAXANE.
About Abraxis BioScience, Inc.
Abraxis BioScience is a fully integrated global biotechnology company dedicated to the discovery, development and delivery of next-generation therapeutics and core technologies that offer patients safer and more effective treatments for cancer and other critical illnesses. The company’s portfolio includes chemotherapeutic compound (ABRAXANE®), which is based on the company’s proprietary tumor targeting technology known as the nab® platform. The first FDA approved product to use this nab platform, ABRAXANE, was launched in 2005 for the treatment of metastatic breast cancer and is now approved in 39 countries. The company continues to expand the nab platform through a robust clinical program and deep product pipeline. Abraxis trades on the NASDAQ Global Market under the symbol ABII. For more information about the company and its products, please visit www.abraxisbio.com.
FORWARD-LOOKING STATEMENTS
The statements contained in this press release that are not purely historical are forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements in this press release include statements regarding our expectations, beliefs, hopes, goals, intentions, initiatives or strategies, including statements regarding the clinical development plan, and the timing and scope of clinical studies and trials, for ABRAXANE and the global commercialization of ABRAXANE. Because these forward-looking statements involve risks and uncertainties, there are important factors that could cause actual results to differ materially from those in the forward-looking statements. These factors include, without limitation, the fact that results from pre-clinical studies may not be predictive of results to be obtained in other pre-clinical studies or future clinical trials; delays in commencement and completion of clinical studies or trials, including slower than anticipated patient enrollment and adverse events occurring during the clinical trials; decisions by regulatory authorities regarding whether and when to approve ABRAXANE or product candidates for various indications as well as their decisions regarding labeling and other matters that could affect the availability or commercial potential of ABRAXANE and other products and product candidates; unexpected safety, efficacy or manufacturing issues with respect to ABRAXANE or product candidates; the need for additional data or clinical studies for ABRAXANE or product candidates; regulatory developments (domestic or foreign) involving the company’s manufacturing facilities; the market adoption and demand of ABRAXANE and other products, the costs associated with the ongoing launch of ABRAXANE; research and development associated with the nab® technology platform; the impact of pharmaceutical industry regulation; the impact of competitive products and pricing; the availability and pricing of ingredients used in the manufacture of pharmaceutical products; the ability to successfully manufacture products in a time-sensitive and cost effective manner; the acceptance and demand of new pharmaceutical products; and the impact of patents and other proprietary rights held by competitors and other third parties. Additional relevant information concerning risks can be found in the company’s Annual Report on Form 10-K for the year ended December 31, 2009 and in other documents it has filed with the Securities and Exchange Commission.
The information contained in this press release is as of the date of this release. Abraxis assumes no obligations to update any forward-looking statements contained in this press release as the result of new information or future events or developments.
MONTREAL, QUEBEC — (Marketwire) — 03/17/10 — Optimal Group Inc. (NASDAQ: OPMR) today announced that it has entered into a support agreement with a corporation established by Richard Yanofsky, President of WowWee Canada Inc., and Peter Yanofsky, President of WowWee USA, Inc., for the purpose of making an offer to acquire, by way of a take-over bid to Optimal Group shareholders, all of the outstanding Class “A” shares of the Company, including shares issuable upon the conversion, exchange or exercise of options and warrants, at a price of US$2.40 per share in cash. WowWee Canada Inc. and WowWee USA, Inc. are wholly-owned subsidiaries of Optimal Group. The offer represents a premium of approximately 50% over the closing price of the Class “A” shares of US$1.60 on the NASDAQ, on March 16, 2010. Under the terms of the support agreement, Optimal Group may solicit, respond to and consider competing third-party proposals until closing of the offer.
As a result of Richard and Peter Yanofsky’s involvement with the offeror, the offer will be an “insider bid” and a going private transaction for purposes of applicable securities laws. Accordingly, the Board of Directors of the Company established a special committee of independent directors to review the terms of the offer and to supervise the preparation of a formal valuation of the Class “A” shares.
The special committee retained PricewaterhouseCoopers LLP as independent valuator to prepare a formal valuation of the Class “A” shares. Based on the information considered and valuation approaches utilized, PricewaterhouseCoopers LLP concluded that the fair market value of the shares was in the range of US$2.01 to US$2.55 per share. The special committee also retained Genuity Capital Markets to act as financial advisor to Optimal Group and the special committee and Ogilvy Renault LLP as legal advisor to the special committee to advise it in connection with the offer. Genuity Capital Markets provided an opinion to the Board of Directors of the Company and to the special committee that, based upon and subject to the analyses, assumptions, qualifications and limitations set out in such opinion, the consideration offered pursuant to the offer is fair, from a financial point of view, to all shareholders of the Company (other than the insiders and related entities making the offer).
The Board of Directors of the Company, after consultation with its legal and financial advisors, and following the receipt and review of recommendations from its special committee, the opinion of its financial advisor as to the fairness of the offer, from a financial point of view, to shareholders of the Company (other than the insiders and related entities making the offer) and the independent formal valuation prepared by PricewaterhouseCoopers, determined that the offer is in the best interests of the Company and is fair, from a financial point of view, to the shareholders of the Company (other than the insiders and related entities making the offer), approved the execution of the support agreement and resolved to recommend that the shareholders of the Company (other than the insiders and related entities making the offer) accept the offer.
The offer will be subject to customary conditions including the valid deposit under the offer of at least 66 2/3% of the outstanding Class “A” shares and the absence of a material adverse effect to the Company and its subsidiaries.
Under the terms of the support agreement, the Company has agreed to pay a termination fee of approximately US$500,000 to the offeror if the support agreement is terminated in certain circumstances.
Under the terms of the support agreement, the Company has retained the ability to solicit, respond to and consider competing acquisition proposals which the Board of Directors of the Company believes, in the exercise of its fiduciary duties, represent, or could reasonably be expected to lead to, a superior proposal, and to terminate the support agreement in the event the Company proposes to enter into any agreement with respect to a superior proposal, subject to the offeror’s right to match or be paid the termination fee.
The take-over bid circular containing the full terms of the offer is expected to be mailed to shareholders on or before March 31, 2010. The full text of the valuation prepared by PricewaterhouseCoopers and the fairness opinion prepared by Genuity Capital Markets, which the shareholders are urged to read in their entirety, will be set forth in the directors’ circular. The offer will remain open for acceptance for a period of not less than 35 days following the mailing of the offer.
In connection with the offer, Neil S. Wechsler, Co-Chairman and Chief Executive Officer, Holden L. Ostrin, Co-Chairman, and Gary S. Wechsler, Chief Financial Officer, of the Company have entered into an agreement with the offeror pursuant to which they or a corporation controlled by them will acquire all of the outstanding shares of Optimal Merchant Services Inc. (formerly Optimal Payments Corp.), a wholly-owned subsidiary of Optimal Group, in partial satisfaction of the severance payments that will become owing to them on closing of the transactions contemplated in the support agreement. These executives have agreed to enter into such agreement with any other person making an offer for the Class “A” shares of the Company.
The offer described in this press release has not yet commenced, and this press release does not constitute an offer to purchase or a solicitation of an offer to sell any securities. At the time the expected tender offer is commenced, the offeror will file a tender offer statement with the U.S. Securities and Exchange Commission and mail and file offer materials as required by Canadian and U.S. laws, and the Company will also file required solicitation/recommendation materials. The tender offer materials will contain important information and shareholders of the Company should read this information carefully before making any decision about the tender offer.
The tender offer materials, certain other offer materials and the solicitation/recommendation materials will be sent to all shareholders of the Company free of charge and will also be available free of charge on the SEC’s website at www.sec.gov and on SEDAR at www.sedar.com.
For information about Optimal Group, please visit the Company’s website at www.optimalgrp.com.
Contacts:
Optimal Group Inc.
Leon P. Garfinkle
Senior Vice President and General Counsel
514-738-8885
leon@optimalgrp.com
www.optimalgrp.com
Press Release Source: International Tower Hill Mines Ltd. On Tuesday March 16, 2010, 2:13 pm EDT
VANCOUVER, BRITISH COLUMBIA–(Marketwire – 03/16/10) – International Tower Hill Mines Ltd. (“ITH” or the “Company”) (TSX:ITH – News)(AMEX:THM – News)(Frankfurt:IW9 – News) is pleased to announce a proposed non-brokered financing of up to 5,000,000 common shares of the Company at a price of CAD 6.00 per common share (the “Offering”) in the United States and Canada. The Company will pay a 6% finder’s fee payable in cash and/or common shares on a portion of the Offering.
All common shares issued in the Offering will have a hold period in Canada of four months and a day from the closing of the Offering. All common shares issued in the United States will be subject to resale restrictions under U.S. federal and state securities laws. Completion of the Offering is subject to the Company obtaining all necessary regulatory approvals, including acceptance for filing by the Toronto Stock Exchange and the approval of the NYSE Amex.
The net proceeds from the private placement are anticipated to be used by the Company for the pre-feasibility study on the Livengood Gold project in Alaska and general working capital.
The common shares have not been and will not be registered under the U.S. Securities Act of 1933, as amended, (the “U.S. Securities Act”), or any applicable state securities laws, and may not be offered or sold in the United States absent such registration or pursuant to an applicable exemption from such registration requirements. This press release shall not constitute an offer to sell or the solicitation of an offer to buy the common shares, nor shall there be any offer or sale of the common shares in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction.
About International Tower Hill Mines Ltd.
International Tower Hill Mines Ltd. is a resource exploration company, focused in Alaska and Nevada, which controls a number of exploration projects representing a spectrum of early stage to the advanced exploration projects, including the Livengood Gold project.
On behalf of INTERNATIONAL TOWER HILL MINES LTD.
Jeffrey A. Pontius, President and Chief Executive Officer
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act and Section 27E of the Exchange Act. All statements, other than statements of historical fact, included herein including, without limitation, statements regarding the anticipated completion of the Offering and the proposed use of the proceeds of the Offering by the Company, are forward-looking statements. Although the Company believes that such statements are reasonable, it can give no assurance that such expectations will prove to be correct. Forward-looking statements are typically identified by words such as: believe, expect, anticipate, intend, estimate, postulate and similar expressions, or are those, which, by their nature, refer to future events. The Company cautions investors that any forward-looking statements by the Company are not guarantees of future results or performance, and that actual results may differ materially from those in forward looking statements as a result of various factors, including, but not limited to, risks associated with the timing and pricing of the Offering, completion of the Offering, regulatory approval/acceptance of the Offering, and the use of proceeds from the Offering. Other risks and uncertainties are disclosed in the Company’s annual information form filed with certain Canadian securities commissions and its annual report on Form 40-F filed with the United States Securities and Exchange Commission, and other information released by the Company and filed with the appropriate regulatory agencies. All of the Company’s Canadian public disclosure filings may be accessed via http://www.sedar.com/ and its United States public disclosure filings may be accessed via http://www.sec.gov/, and readers are urged to review these materials, including the technical reports filed with respect to the Company’s mineral properties.
Feb. 16, 2010 (Business Wire) — Innovative Solutions & Support, Inc. (NASDAQ:ISSC) (the “Company”) today announced that the Board of Directors has approved a stock repurchase program pursuant to which the Company may repurchase up to 1 million shares of its common stock. The program will remain in effect until February 10, 2011, unless extended by the Board of Directors. This program replaces the Company’s previous stock repurchase program, which expires as of February 22, 2010.
Geoffrey S. M. Hedrick, Chief Executive Officer of Innovative Solutions & Support, said, “The Board’s repurchase authorization demonstrates our commitment to improve shareholder value. Given the Company’s strong financial position, our Board has encouraged us to opportunistically use this repurchase authorization so long as our stock remains at a level they believe is significantly below our intrinsic value.”
Under the repurchase program, the Company may purchase shares of its common stock through open market transactions or in privately negotiated block purchases or other private transactions (either solicited or unsolicited). The timing and amount of repurchase transactions under this program will depend on market conditions and corporate and regulatory considerations, and the program may be discontinued or suspended at any time. The Company anticipates funding for this program to come from available corporate funds, including cash on hand and future cash flow.
About Innovative Solutions & Support, Inc.
Headquartered in Exton, Pa., Innovative Solutions & Support, Inc. (www.innovative-ss.com) designs, manufactures and markets flight information computers, electronic displays and advanced monitoring systems that measure and display critical flight information. This includes data relative to aircraft separation (RVSM), airspeed and altitude, as well as engine and fuel data measurements.
Certain matters contained herein that are not descriptions of historical facts are “forward-looking” (as such term is defined in the Private Securities Litigation Reform Act of 1995). Because such statements include risks and uncertainties, actual results may differ materially from those expressed or implied by such forward-looking statements. Factors that could cause results to differ materially from those expressed or implied by such forward-looking statements include, but are not limited to, those discussed in filings made by the Company with the Securities and Exchange Commission. Many of the factors that will determine the Company’s future results are beyond the ability of management to control or predict. Readers should not place undue reliance on forward-looking statements, which reflects management’s views only as of the date hereof. The Company undertakes no obligation to revise or update any forward-looking statements, or to make any other forward-looking statements, whether as a result of new information, future events or otherwise.
Mar. 15, 2010 (PR Newswire) —
OR-YEHUDA, Israel, March 15 /PRNewswire-FirstCall/ — Magic Software Enterprises Ltd. (Nasdaq: MGIC), a global provider of application platforms and business and process integration solutions, today announced new partnerships agreements with IT software solution providers Accantum GmbH and AZTEKA Consulting GmbH.
The AZTEKA partnership enables the IT consulting company to use Magic Software’s iBOLT business integration suite to connect their customer’s SAP R/3, Opacc One and Lotus Notes systems. According to Wolfgang Plitzko, CEO of AZTEKA Consulting GmbH, “The iBOLT system offers our customers in the ERP segment a fast and cost-effective integration. There is a demand for the combination of ERP systems and other software solutions and we can now offer an enormous added value to our customers.”
Accantum will be using the iBOLT code-free business integration platform to integrate their web-based document management and archiving system (DMS) with their customer’s enterprise applications.
Hans Lemke, CEO of Accantum GmbH describes the deal as a win-win situation, “iBOLT helps us to close customer projects must faster. The customer gets a productive system in shorter time, we need fewer resources to complete each project and we increase the satisfaction of all parties involved.”
In addition, Magic Software will be using the [accantum] DMS system in its own projects to archive data and make it available for various other IT systems.
Commenting on the two new deals, Stephan Romeder, Managing Director for Magic Software GmbH said, “We are very happy to be partnering with both AZTEKA and Accantum. Both partners will help us provide our business-focused integration technology for projects that demand speed of delivery coupled with an intuitive and adaptable framework for future growth and cost-effective customization.”
With more than 50 adapters together with intuitive wizards and drag-and-drop functionality, iBOLT utilizes Magic Software’s proven metadata-based framework to enable fast, business-focused integration.
Through integration, iBOLT helps users get more value from their IT investments by automating manual and repetitive workflows. With an integrated view of company data in real-time, management and employees can make more informed business decisions, get more value from each business interaction and achieve faster time to market for their products and services.
iBOLT Resources
-- iBOLT White Papers
-- Video: iBOLT for SAP
-- iBOLT for SAP R/3
-- Find out more about iBOLT
-- iBOLT customer stories
Notes for Editors
iBOLT’s code-free approach is facilitated by a pre-compiled and pre-configured coding engine based upon Magic Software’s 25 years of application development experience. This enables both simple and complex business processes to be designed and implemented quickly – and also makes it more cost-efficient to assimilate and integrate future IT application acquisitions.
iBOLT works natively with systems such as SAP Business One, SAP Business All in One, SAP R/3, Salesforce.com, Oracle JD Edwards, IBM i applications and databases (AS/400), Lotus Notes applications, forms and databases, Health Care systems using HL7, EDI systems, and many more.
The iBOLT business and process integration suite has won SAP’s quality and innovation awards for three consecutive years in a row, from 2006 to 2008.
About AZTEKA Consulting GmbH
As a major reseller of software solutions AZTEKA Consulting GmbH today serves more than 7,000 users. Our priorities include ERP solutions, software for document management and archiving, human resources and finance and accounting. For more information, please visit www.azteka.de.
About Accantum GmbH
Founded in 2000 with Rosenheim in Bavaria, Accantum GmbH today is a provider of archival and document management systems in Germany. For more information, please visit www.accantum.de.
About Magic Software
Magic Software Enterprises Ltd. (NASDAQ: MGIC) is a global provider of hybrid business application platforms – including Client/Server, Rich Internet Applications (RIA), Mobile, Software-as-a-Service (SaaS) and cloud modes – and integration solutions. Magic Software has 13 offices worldwide and a presence in over 50 countries with a global network of ISV’s, system integrators, value-added distributors and resellers, and consulting and OEM partners. The company’s award-winning code-free solutions give partners and customers the power to leverage existing IT resources, enhance business agility and focus on core business priorities. Magic Software’s technological approach, product roadmap and corporate strategy are recognized by leading industry analysts. Magic Software has partnerships with global IT leaders including SAP AG, salesforce.com, IBM and Oracle. For more information about Magic Software and its products and services, visit www.magicsoftware.com, and for more about our industry related news, business issues and trends, read the Magic Software Blog.
Except for the historical information contained herein, the matters discussed in this news release include forward-looking statements that may involve a number of risks and uncertainties. Actual results may vary significantly based upon a number of factors including, but not limited to, risks in product and technology development, market acceptance of new products and continuing product conditions, both here and abroad, release and sales of new products by strategic resellers and customers, and other risk factors detailed in the Company’s most recent annual report and other filings with the Securities and Exchange Commission.
Magic is the trademark of Magic Software Enterprises Ltd. All other trademarks are the trademarks of their respective owners.
USA UK
Cathy Caldeira Ranbir Sahota
Metis Communications Vitis PR Agency
Tel: +1-617-236-0500 Tel: +44 (0)121 242 8048
Email: magicsoftware@metiscomm.com Email: ranbir@vitispr.com
Germany Others
Hartmut Giesen Arita Mattsoff
Publizistik Projekte Magic Software
Tel. +49 (0)2471 921301 Tel. +972 (0)3 538 9292
Email: giesen@publizistik-projekte.de Email: arita@magicsoftware.com
Mar. 15, 2010 (Business Wire) — Town Sports International Holdings, Inc. (“TSI” or the “Company”) (NASDAQ: CLUB), a leading owner and operator of health clubs located primarily in major cities from Washington, DC north through New England, operating under the brand names “New York Sports Clubs,” “Boston Sports Clubs,” “Washington Sports Clubs” and “Philadelphia Sports Clubs,” announced its results for the fourth quarter and full-year ended December 31, 2009.
4th Quarter and Full-Year Overview:
- Revenue decreased 7.0% in Q4 2009 compared to Q4 2008 and 4.2% in full-year 2009 compared with full-year 2008.
- Comparable club revenue decreased 7.1% in Q4 2009 compared to Q4 2008 and 5.6% in full-year 2009 compared to full-year 2008.
- Total member count decreased 4.7% to 486,000 at December 31, 2009, compared to December 31, 2008.
- Membership attrition averaged 3.6% per month in Q4 2009 and 3.8% per month in full-year 2009 compared to 3.5% per month in Q4 2008 and 3.4% in full-year 2008.
- Loss per share was ($0.33) in Q4 2009 and ($0.25) in the full-year 2009.
- Q4 2009 results reflected internal use software and fixed asset impairment charges and the effect of an accounting error, which collectively resulted in charges, net of taxes, of $7.4 million, or ($0.33) per share.
Alex Alimanestianu, Chief Executive Officer of TSI, commented: “We are starting to see early indications that our business is turning the corner. Membership trends began to move in the right direction in the fourth quarter; and the improvement, though modest, is continuing in the first quarter of 2010. While we expect to produce member growth during 2010, we started the year with 24,000 or 4.7% less members than we had at the start of 2009, and as a result we do not expect quarter on quarter revenue improvements before the fourth quarter. Over the past two years we have strengthened the executive and operating organization and pursued broad initiatives to enhance the member experience in our clubs. With the economy beginning to improve, and our increased focus on sales and marketing initiatives, we expect to see improved results as we progress through this year and work back towards year-over-year membership and revenue gains later in the year.”
Correction of an Accounting Error:
The results for Q4 and full-year 2009 include the correction of an accounting error that resulted in a cumulative pre-tax charge of $751,000 to payroll and related expense and a related decrease in deferred membership costs on our consolidated statement of operations and consolidated balance sheet, respectively. Historically, we applied an accounting policy of capitalizing and then amortizing membership consultants’ commissions, bonuses and a portion of their base salaries, and related taxes and benefits, as direct costs of obtaining new members. Company policy limited the costs that could be capitalized to the amount of initiation fee revenue deferred for new memberships. The application of this policy required us to make certain estimates. In connection with a review of the accounting treatment for membership consultant salaries, including the application of the accounting policy and appropriateness of its estimate methodology, we determined that our previous estimates were incorrect. We concluded that it was not clear whether any portion of the consultants’ base salaries and the taxes and benefits related to those base salaries should have been capitalized. While we are no longer deferring a portion of membership consultants’ salaries and related taxes and benefits, we will continue to defer membership consultants’ commissions and bonuses and portions of taxes and benefits related to those commissions and bonuses. Although we believe that our accounting policy for deferred membership costs was not unreasonable, the errors in our estimates combined with our review of the policy have led us to conclude that the capitalization of any portion of membership consultant salaries and related taxes and benefits should be regarded as an accounting error. We have recorded a one-time adjustment in Q4 2009 to correct this error. The effect of the accounting error, net of taxes, was a charge of $424,000, or $0.02 per share. See Note 2— Correction of an Accounting Error to our consolidated financial statements in our 2009 Annual Report for further details.
|
|
|
|
| Quarter and Full-Year Ended December 31, 2009 Financial Results:
Revenue (in $000’s) was comprised of the following: |
|
|
|
|
|
Quarter Ended December 31, |
|
Year-Ended December 31, |
|
2009 |
|
|
2008 |
|
|
2009 |
|
|
2008 |
|
|
Revenue |
|
% Revenue |
|
Revenue |
|
% Revenue |
|
Revenue |
|
% Revenue |
|
Revenue |
|
% Revenue |
| Membership dues |
$ |
92,658 |
|
81.1 |
% |
|
$ |
99,179 |
|
80.7 |
% |
|
$ |
387,123 |
|
79.7 |
% |
|
$ |
400,874 |
|
79.1 |
% |
| Initiation fees |
|
2,426 |
|
2.1 |
% |
|
|
3,330 |
|
2.7 |
% |
|
|
12,048 |
|
2.5 |
% |
|
|
13,723 |
|
2.7 |
% |
| Membership revenue |
|
95,084 |
|
83.2 |
% |
|
|
102,509 |
|
83.4 |
% |
|
|
399,171 |
|
82.2 |
% |
|
|
414,597 |
|
81.8 |
% |
| Personal training revenue |
|
13,275 |
|
11.6 |
% |
|
|
14,040 |
|
11.4 |
% |
|
|
56,971 |
|
11.7 |
% |
|
|
61,752 |
|
12.2 |
% |
| Other ancillary club revenue |
|
5,002 |
|
4.4 |
% |
|
|
4,812 |
|
3.9 |
% |
|
|
24,589 |
|
5.1 |
% |
|
|
24,329 |
|
4.8 |
% |
| Ancillary club revenue |
|
18,277 |
|
16.0 |
% |
|
|
18,852 |
|
15.4 |
% |
|
|
81,560 |
|
16.8 |
% |
|
|
86,081 |
|
17.0 |
% |
| Fees and other revenue |
|
961 |
|
0.8 |
% |
|
|
1,526 |
|
1.2 |
% |
|
|
4,661 |
|
1.0 |
% |
|
|
6,031 |
|
1.2 |
% |
| Total revenue |
$ |
114,322 |
|
100.0 |
% |
|
$ |
122,887 |
|
100.0 |
% |
|
$ |
485,392 |
|
100.0 |
% |
|
$ |
506,709 |
|
100.0 |
% |
|
|
|
|
| Period-over-period revenue variances: |
|
|
|
|
|
|
|
|
Q4 2009 vs.Q4 2008 |
|
Full-Year 2009 vs.
Full-Year 2008 |
|
% Increase (Decrease) |
|
% Increase (Decrease) |
| Membership dues |
(6.6) % |
|
(3.4)% |
| Initiation fees |
(27.1)% |
|
(12.2)% |
| Membership revenue |
(7.2)% |
|
(3.7)% |
| Personal training revenue |
(5.4)% |
|
(7.7)% |
| Other ancillary club revenue |
3.9% |
|
1.1% |
| Ancillary club revenue |
(3.1)% |
|
(5.2)% |
| Fees and other revenue |
(37.0)% |
|
(22.7)% |
| Total revenue |
(7.0)% |
|
(4.2)% |
Total revenue for Q4 2009 decreased $8.6 million, or 7.0%, compared to Q4 2008. For Q4 2009, revenues increased $3.9 million at the 13 clubs opened or acquired subsequent to December 31, 2007, offset by decreases in revenue of 8.9% or $10.2 million at our clubs opened or acquired prior to December 31, 2007 and $2.3 million related to the 13 clubs that were closed subsequent to December 31, 2007.
Total revenue for the year ended December 31, 2009 decreased $21.3 million, or 4.2%, compared to the year ended December 31, 2008. Revenue increased $19.6 million at the 13 clubs opened or acquired subsequent to December 31, 2007, offset by decreases in revenue of 6.8%, or $32.7 million, at clubs opened or acquired prior to December 31, 2007 and $8.2 million related to the 13 clubs that were closed subsequent to December 31, 2007.
Revenue at clubs operated for over 12 months (“comparable club revenue”) decreased 7.1% in Q4 2009 compared to Q4 2008 and 5.6% in the full-year 2009 compared to the full-year 2008.
|
|
|
|
|
|
| Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
Quarter Ended December 31, |
|
Year-Ended December 31, |
|
2009 |
|
2008 |
|
|
|
|
|
2009 |
|
2008 |
|
|
|
|
|
Expense % of Revenue |
|
Expense %
Increase
(Decrease) |
|
Expense % of Revenue |
|
Expense %
Increase
(Decrease) |
| Payroll and related |
41.5 |
% |
38.5 |
% |
|
0.1 |
% |
|
39.9 |
% |
38.2 |
% |
|
0.2 |
% |
| Club operating |
36.6 |
% |
35.5 |
% |
|
(4.1 |
)% |
|
36.9 |
% |
34.0 |
% |
|
3.7 |
% |
| General and administrative |
6.3 |
% |
6.6 |
% |
|
(10.7 |
)% |
|
6.5 |
% |
6.7 |
% |
|
(7.0 |
)% |
| Depreciation and amortization |
11.8 |
% |
11.1 |
% |
|
(1.1 |
)% |
|
11.7 |
% |
10.4 |
% |
|
7.7 |
% |
| Impairment of fixed assets |
1.8 |
% |
1.5 |
% |
|
11.6 |
% |
|
1.4 |
% |
0.8 |
% |
|
73.5 |
% |
| Impairment of internal use software |
8.9 |
% |
0.0 |
% |
|
NA |
|
|
2.1 |
% |
0.0 |
% |
|
NA |
|
| Impairment of goodwill |
0.0 |
% |
14.3 |
% |
|
NA |
|
|
0.0 |
% |
3.5 |
% |
|
NA |
|
| Operating expenses |
106.9 |
% |
107.6 |
% |
|
(7.5 |
)% |
|
98.4 |
% |
93.5 |
% |
|
0.8 |
% |
Total operating expenses decreased 7.5% for Q4 2009 compared to Q4 2008 and increased 0.8% for full-year 2009 compared to full-year 2008. Operating margin was (6.9)% for Q4 2009 compared to (7.6)% for Q4 2008 and 1.6% for full-year 2009 compared to 6.5% in full-year 2008. Operating expenses were impacted by the following:
|
Q4 2009 vs.Q4 2008 |
|
|
|
Full-Year 2009 vs.
Full-Year 2008 |
|
% Increase |
|
|
|
% Increase |
|
(Decrease) |
|
|
|
(Decrease) |
| Total member club usage |
2.9% |
|
|
|
8.2% |
| Total months of club operation |
(0.6)% |
|
|
|
1.8% |
Club operating. In Q4 and full-year 2009, we had decreases in operating expenses related to laundry and towels of $808,000 and $1.2 million, respectively. In the full-year 2009, club operating expenses increased 3.7% as these laundry and towel efficiencies were offset primarily by a $7.8 million net increase in rent and occupancy expense. Included in this net increase were $1.3 million of early lease termination costs at five clubs which were closed prior to their lease expiration dates.
General and administrative. Decreases in Q4 2009 and full-year 2009 general and administrative expenses compared to the same periods in 2008 were principally attributable to decreases in general liability insurance expense due to a reduction in claims activity and therefore a reduction of claims reserves. The remainder of the expense decrease was due to cost reduction efforts realized within various general and administrative expense accounts, including data and phone lines, office supplies and travel.
Depreciation and amortization. For full-year 2009 compared to 2008, depreciation and amortization increased due to 13 clubs opened subsequent to December 31, 2007 and depreciation expense accelerated at clubs that were closed prior to the lease termination dates.
Impairment of fixed assets. For Q4 2009, losses of $2.1 million were recorded representing impairment of fixed assets at four underperforming clubs. For Q4 2008, losses of $1.9 million were recorded representing impairment of fixed assets at six underperforming clubs.
For the full-year 2009, losses of $6.7 million were recorded representing impairment of fixed assets at nine underperforming clubs. For the full-year 2008, losses of $2.7 million were recorded representing impairment of fixed assets at seven underperforming clubs and an impairment loss of $1.2 million related to the planned closures of two clubs prior to their lease expiration dates.
Impairment of internal-use software. For Q4 2009, we recorded a $10.2 million impairment charge related to an internally developed software project. Although the software project was not yet completed and is the subject of litigation, we determined that it is not probable that we will continue in the development of this project.
Impairment of goodwill. In Q4 and full-year 2008, we recorded a goodwill impairment charge of $17.6 million, representing a $15.8 million write-off of the total goodwill amount in our Boston Sports Clubs region and $1.8 million of goodwill at two of our remote clubs that did not benefit from being part of a regional cluster. There were no goodwill impairments in 2009.
Net Loss for Q4 2009 was $7.3 million compared to $13.1 million for Q4 2008. For full-year 2009, net loss was $5.7 million compared to net income of $2.3 million for full-year 2008.
Cash flow from operating activities for the full-year 2009 totaled $76.2 million, a decrease of $19.4 million from full-year 2008, which was primarily related to the decrease in overall earnings. Also contributing to the decrease were the effects of an increase in cash paid for interest and reductions in deferred revenue. Total cash paid for interest increased $3.8 million to $13.8 million. Deferred revenue decreased $8.2 million in the year ended December 31, 2009 and $4.2 million in the prior year. In 2009, we had tax refunds, net of tax payments, of $3.9 million while in 2008 we had tax payments, net of refunds, of $15.9 million for an increase in cash of $19.8 million.
Share Repurchases: The Company did not repurchase shares during Q4 2009. The Company repurchased 2.1 million shares at a total cost of $5.4 million in Q1 2009, resulting in a decrease in the number of total common shares outstanding. A total of 1.8 million shares were repurchased during Q4 2008 at a cost of $4.6 million.
First Quarter 2010 Business Outlook:
The Company is limiting its guidance to the first quarter of 2010. Based on the current business environment, recent performance and current trends in the marketplace, and subject to the risks and uncertainties inherent in forward-looking statements, the Company’s outlook for the first quarter of 2010 includes the following:
- Revenue for Q1 2010 is expected to be between $117.0 million and $118.0 million versus $126.7 million for Q1 2009. As percentages of revenue, the Company expects Q1 2010 payroll and related expenses to approximate 41.0%, club operating expenses to approximate 37.0%, general and administrative expenses to approximate 7.7% and depreciation and amortization expenses to approximate 11.6%.
- The Company expects a net loss for Q1 2010 of between $750,000 and $1.25 million, and loss per share to be in the range of $0.03 per share to $0.06 per share, assuming a 50% effective tax rate and 22.6 million weighted average fully diluted shares outstanding.
Investing Activities Outlook:
For the year ending December 31, 2010, we currently plan to invest $34.0 million to $37.0 million in capital expenditures. This is down from $49.3 million of capital expenditure investing activity in 2009. We expect that this 2010 amount will include $25.0 million to continue to upgrade existing clubs and $7.0 million principally related to major renovations at clubs with recent lease renewals and upgrading our in club entertainment system network. We also expect to invest $3.0 million to enhance our management information systems.
Forward-Looking Statements:
Statements in this release that do not constitute historical facts, including, without limitation, statements under the captions “First Quarter 2010 Business Outlook” and “Investing Activities Outlook”, other statements regarding future financial results and performance and potential sales revenue and other statements that are predictive in nature or depend upon or refer to events or conditions, or that include words such as “expects,” “anticipated,” “intends,” “plans,” “believes,” “estimates” or “could”, are “forward-looking” statements made pursuant to the safe harbor provision of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are subject to various risks and uncertainties, many of which are outside the Company’s control, including, among others, the level of market demand for the Company’s services, economic conditions affecting the Company’s business, the geographic concentration of the Company’s clubs, competitive pressures, the ability to achieve reductions in operating costs and to continue to integrate acquisitions, environmental initiatives, any security and privacy breaches involving customer data, the application of Federal and state tax laws and regulations, the levels and terms of the Company’s indebtedness, and other specific factors discussed herein and in other releases and public filings made by the Company (including the Company’s reports on Forms 10-K and 10-Q filed with the Securities and Exchange Commission). The Company believes that all forward-looking statements are based on reasonable assumptions when made; however, the Company cautions that it is impossible to predict actual results or outcomes or the effects of risks, uncertainties or other factors on anticipated results or outcomes and that, accordingly, one should not place undue reliance on these statements. Forward-looking statements speak only as of the date they were made, and the Company undertakes no obligation to update these statements in light of subsequent events or developments. Actual results may differ materially from anticipated results or outcomes discussed in any forward-looking statement.
About Town Sports International Holdings, Inc.:
New York-based Town Sports International Holdings, Inc. is a leading owner and operator of fitness clubs in the Northeast and mid-Atlantic regions of the United States and, through its subsidiaries, operated 161 fitness clubs as of December 31, 2009, comprising 109 New York Sports Clubs, 25 Boston Sports Clubs, 18 Washington Sports Clubs (two of which are partly-owned), six Philadelphia Sports Clubs, and three clubs located in Switzerland. These clubs collectively served approximately 486,000 members. For more information on TSI, visit http://www.mysportsclubs.com.
The Company will hold a conference call on Tuesday, March 16, 2010 at 8:30 AM (Eastern) to discuss the fourth quarter 2009 and full-year 2009 results. Alex Alimanestianu, Chief Executive Officer, and Dan Gallagher, Chief Financial Officer, will host the conference call. The conference call will be Web cast and may be accessed via the Company’s Investor Relations section of its Website at www.mysportsclubs.com. A replay and transcript of the call will be available via the Company’s Website beginning March 17, 2010.
From time to time we may use our Web site as a channel of distribution of material company information. Financial and other material information regarding the Company is routinely posted on and accessible at http://www.mysportsclubs.com. In addition, you may automatically receive email alerts and other information about us by enrolling your email by visiting the “Email Alert” section at http://www.mysportsclubs.com/.
|
|
|
|
|
| TOWN SPORTS INTERNATIONAL HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
December 31, 2009 and 2008
(All figures in $’000s)
(Unaudited) |
|
|
|
|
|
|
|
December 31,2009 |
|
December 31,2008 |
| ASSETS |
|
|
|
|
| Current assets: |
|
|
|
|
| Cash and cash equivalents |
|
$ |
10,758 |
|
|
$ |
10,399 |
|
| Accounts receivable, net |
|
|
4,295 |
|
|
|
4,508 |
|
| Inventory |
|
|
224 |
|
|
|
143 |
|
| Prepaid corporate income taxes |
|
|
1,274 |
|
|
|
8,116 |
|
| Prepaid expenses and other current assets |
|
|
10,264 |
|
|
|
14,154 |
|
| Total current assets |
|
|
26,815 |
|
|
|
37,320 |
|
| Fixed assets, net |
|
|
340,277 |
|
|
|
373,120 |
|
| Goodwill |
|
|
32,636 |
|
|
|
32,610 |
|
| Intangible assets, net |
|
|
149 |
|
|
|
281 |
|
| Deferred tax assets, net |
|
|
50,581 |
|
|
|
42,266 |
|
| Deferred membership costs |
|
|
7,736 |
|
|
|
14,462 |
|
| Other assets |
|
|
9,272 |
|
|
|
11,579 |
|
| Total assets |
|
$ |
467,466 |
|
|
$ |
511,638 |
|
|
|
|
|
|
| LIABILITIES AND STOCKHOLDERS’ (DEFICIT) EQUITY |
|
|
|
|
| Current liabilities: |
|
|
|
|
| Current portion of long-term debt |
|
$ |
1,850 |
|
|
$ |
20,850 |
|
| Accounts payable |
|
|
6,011 |
|
|
|
7,267 |
|
| Accrued expenses |
|
|
23,656 |
|
|
|
35,565 |
|
| Accrued interest |
|
|
6,573 |
|
|
|
523 |
|
| Deferred revenue |
|
|
35,346 |
|
|
|
40,326 |
|
| Total current liabilities |
|
|
73,436 |
|
|
|
104,531 |
|
| Long-term debt |
|
|
316,513 |
|
|
|
317,160 |
|
| Deferred lease liabilities |
|
|
71,438 |
|
|
|
69,719 |
|
| Deferred revenue |
|
|
1,488 |
|
|
|
4,554 |
|
| Other liabilities |
|
|
12,824 |
|
|
|
14,902 |
|
| Total liabilities |
|
|
475,699 |
|
|
|
510,866 |
|
| Stockholders’ (deficit) equity: |
|
|
|
|
| Common stock |
|
|
23 |
|
|
|
25 |
|
| Paid-in capital |
|
|
(22,572 |
) |
|
|
(18,980 |
) |
| Accumulated other comprehensive income (currency translation adjustment) |
|
|
1,327 |
|
|
|
1,070 |
|
| Retained earnings |
|
|
12,989 |
|
|
|
18,657 |
|
| Total stockholders’ (deficit) equity |
|
|
(8,233 |
) |
|
|
772 |
|
| Total liabilities and stockholders’ (deficit) equity |
|
$ |
467,466 |
|
|
$ |
511,638 |
|
|
|
|
|
|
| TOWN SPORTS INTERNATIONAL HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF NET INCOME
For the quarters and years ended December 31, 2009 and 2008
(All figures in $’000s except share and per share data)
(Unaudited) |
|
|
|
|
|
|
|
Quarter Ended December 31, |
|
Year Ended December 31, |
|
|
|
2009 |
|
|
|
2008 |
|
|
|
2009 |
|
|
|
2008 |
|
| Revenues: |
|
|
|
|
|
|
|
|
| Club operations |
|
$ |
113,361 |
|
|
$ |
121,360 |
|
|
$ |
480,731 |
|
|
$ |
500,678 |
|
| Fees and other |
|
|
961 |
|
|
|
1,527 |
|
|
|
4,661 |
|
|
|
6,031 |
|
|
|
|
114,322 |
|
|
|
122,887 |
|
|
|
485,392 |
|
|
|
506,709 |
|
| Operating Expenses: |
|
|
|
|
|
|
|
|
| Payroll and related |
|
|
47,411 |
|
|
|
47,352 |
|
|
|
193,891 |
|
|
|
193,580 |
|
| Club operating |
|
|
41,808 |
|
|
|
43,610 |
|
|
|
178,854 |
|
|
|
172,409 |
|
| General and administrative |
|
|
7,196 |
|
|
|
8,054 |
|
|
|
31,587 |
|
|
|
33,952 |
|
| Depreciation and amortization |
|
|
13,538 |
|
|
|
13,687 |
|
|
|
56,533 |
|
|
|
52,475 |
|
| Impairment of fixed assets |
|
|
2,104 |
|
|
|
1,886 |
|
|
|
6,708 |
|
|
|
3,867 |
|
| Impairment of internal use software |
|
|
10,194 |
|
|
|
— |
|
|
|
10,194 |
|
|
|
— |
|
| Impairment of goodwill |
|
|
— |
|
|
|
17,609 |
|
|
|
— |
|
|
|
17,609 |
|
|
|
|
122,251 |
|
|
|
132,198 |
|
|
|
477,767 |
|
|
|
473,892 |
|
| Operating (loss) income |
|
|
(7,929 |
) |
|
|
(9,311 |
) |
|
|
7,625 |
|
|
|
32,817 |
|
| Interest expense |
|
|
5,028 |
|
|
|
5,972 |
|
|
|
20,972 |
|
|
|
23,902 |
|
| Interest income |
|
|
(1 |
) |
|
|
(28 |
) |
|
|
(3 |
) |
|
|
(319 |
) |
| Equity in the earnings of investees and rental income |
|
|
(424 |
) |
|
|
(606 |
) |
|
|
(1,876 |
) |
|
|
(2,307 |
) |
| (Loss) income before (benefit) provision for corporate income taxes |
|
|
(12,532 |
) |
|
|
(14,649 |
) |
|
|
(11,468 |
) |
|
|
11,541 |
|
| (Benefit) provision for corporate income taxes |
|
|
(5,186 |
) |
|
|
(1,534 |
) |
|
|
(5,800 |
) |
|
|
9,204 |
|
| Net (loss) income |
|
$ |
(7,346 |
) |
|
$ |
(13,115 |
) |
|
$ |
(5,668 |
) |
|
$ |
2,337 |
|
|
|
|
|
|
|
|
|
|
| (Loss) earnings per share: |
|
|
|
|
|
|
|
|
| Basic |
|
$ |
(0.33 |
) |
|
$ |
(0.51 |
) |
|
$ |
(0.25 |
) |
|
$ |
0.09 |
|
| Diluted |
|
$ |
(0.33 |
) |
|
$ |
(0.51 |
) |
|
$ |
(0.25 |
) |
|
$ |
0.09 |
|
| Weighted average number of shares used in calculating (loss) earnings per share: |
|
|
|
|
|
|
|
|
| Basic |
|
|
22,572,990 |
|
|
|
25,818,958 |
|
|
|
22,720,935 |
|
|
|
26,247,398 |
|
| Diluted |
|
|
22,572,990 |
|
|
|
25,818,958 |
|
|
|
22,720,935 |
|
|
|
26,314,950 |
|
|
|
|
| TOWN SPORTS INTERNATIONAL HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
For the years ended December 31, 2009 and 2008
(All figures in $’000s)
(Unaudited) |
|
|
|
|
|
Year Ended December 31, |
|
|
|
2009 |
|
|
2008 |
|
| Cash flows from operating activities: |
|
|
|
| Net (loss) income |
|
$ |
(5,668 |
) |
$ |
2,337 |
|
| Adjustments to reconcile net (loss) income to net cash provided by operating activities: |
|
|
|
| Depreciation and amortization |
|
|
56,533 |
|
|
52,475 |
|
| Impairment of fixed assets |
|
|
6,708 |
|
|
3,867 |
|
| Impairment of internal use software |
|
|
10,194 |
|
|
– |
|
| Impairment of goodwill |
|
|
– |
|
|
17,609 |
|
| Non cash interest expense on Senior Discount Notes |
|
|
1,203 |
|
|
13,937 |
|
| Write-off of deferred financing costs |
|
|
100 |
|
|
– |
|
| Amortization of debt issuance costs |
|
|
896 |
|
|
781 |
|
| Noncash rental expense, net of noncash rental income |
|
|
(2,494 |
) |
|
(411 |
) |
| Compensation expense incurred in connection with stock options and common stock grants |
|
|
1,704 |
|
|
1,268 |
|
| Net change in certain working capital components |
|
|
3,262 |
|
|
(10,258 |
) |
| Deferred income tax provision (benefit) |
|
|
(8,315 |
) |
|
2,079 |
|
| Landlord contributions to tenant improvements |
|
|
4,817 |
|
|
6,597 |
|
| Increase in insurance reserves |
|
|
601 |
|
|
2,038 |
|
| Decrease (increase) in deferred membership costs |
|
|
6,726 |
|
|
3,512 |
|
| Other |
|
|
(26 |
) |
|
(209 |
) |
| Total adjustments |
|
|
81,909 |
|
|
93,285 |
|
| Net cash provided by operating activities |
|
|
76,241 |
|
|
95,622 |
|
| Cash flows from investing activities: |
|
|
|
| Capital expenditures, net of effect of acquired businesses |
|
|
(49,277 |
) |
|
(96,182 |
) |
| Insurance proceeds received |
|
|
– |
|
|
1,074 |
|
| Net cash used in investing activities |
|
|
(49,277 |
) |
|
(95,108 |
) |
| Cash flows from financing activities: |
|
|
|
| Proceeds from borrowings on Revolving Loan Facility |
|
|
86,000 |
|
|
19,000 |
|
| Repayment of borrowings on Revolving Loan Facility |
|
|
(105,000 |
) |
|
(9,000 |
) |
| Repayment of long term borrowings |
|
|
(1,850 |
) |
|
(1,949 |
) |
| Costs related to deferred financing |
|
|
(615 |
) |
|
– |
|
| Change in book overdraft |
|
|
– |
|
|
(583 |
) |
| Repurchase of common stock |
|
|
(5,355 |
) |
|
(4,645 |
) |
| Proceeds from stock option exercises |
|
|
36 |
|
|
1,196 |
|
| Tax benefit from stock option exercises |
|
|
21 |
|
|
177 |
|
| Net cash (used in) provided by financing activities |
|
|
(26,763 |
) |
|
4,196 |
|
| Effect of exchange rate changes on cash |
|
|
158 |
|
|
226 |
|
| Net (decrease) increase in cash and cash equivalents |
|
|
359 |
|
|
4,936 |
|
| Cash and cash equivalents beginning of period |
|
|
10,399 |
|
|
5,463 |
|
| Cash and cash equivalents end of period |
|
$ |
10,758 |
|
$ |
10,399 |
|
| Summary of the change in certain working capital components, net of effects of acquired businesses |
|
|
|
| Decrease (increase) in accounts receivable |
|
$ |
222 |
|
$ |
1,786 |
|
| (Increase) decrease in inventory |
|
|
(80 |
) |
|
89 |
|
| Decrease in prepaid expenses and other current assets |
|
|
2,260 |
|
|
197 |
|
| Increase in accrued interest on Senior Discount Notes |
|
|
6,346 |
|
|
– |
|
| (Decrease) increase in accounts payable, accrued expenses |
|
|
(4,211 |
) |
|
778 |
|
| Change in prepaid corporate income taxes and corporate income taxes payable |
|
|
6,895 |
|
|
(8,874 |
) |
| Decrease in deferred revenue |
|
|
(8,170 |
) |
|
(4,234 |
) |
| Net change in certain working capital components |
|
$ |
3,262 |
|
$ |
(10,258 |
) |
Mar. 16, 2010 (Business Wire) — Optibase Ltd. (Nasdaq: OBAS) (the “Company”), a leader in advanced digital video solutions, today announced that it has entered into an asset purchase agreement with Optibase Technologies Ltd., a wholly owned subsidiary of VITEC Multimedia (“Vitec”) pursuant to which Optibase Ltd. and its subsidiary Optibase Inc. (collectively, “Optibase”) will sell their entire video business to Vitec (the “Business” and the “Transaction”, respectively).
Under the terms of the transaction, which was approved by the Board of Directors of both companies, in consideration for the sale of the Business, Vitec will pay the Company an aggregate amount of US $8 million in cash of which US $1 million will be deposited in escrow for a 2-year period as a security, inter alia, for breach or material inaccuracy relating to Optibase’s representations and warranties. In addition, Optibase and Vitec agreed on an earn-out mechanism pursuant to which 45% of Vitec’s revenues deriving from the Business exceeding $14 million in the year following the closing of the Transaction will be paid to Optibase.
Consummation of the Transaction is subject to the fulfillment of certain conditions precedent standard for transactions of this nature, including, inter alia, receipt of all necessary approvals and permits and the Company’s shareholders’ approval. The Transaction is expected to close during the second quarter of 2010. However, there is no assurance that the parties will be able to satisfy the conditions precedent to the Transaction by the time set in the agreement or at all.
Upon signing of the Transaction, Vitec deposited US $500,000 in escrow to be paid to Optibase if closing does not take place within a specific period of time from signing, subject to certain limited circumstances, principally relating to non fulfillment of certain closing conditions by Optibase, in which case, such funds will be returned to Vitec.
“Following an offer from Vitec, we have decided to pursue this opportunity as we believe that Vitec is the right company to ensure the continuity of the business in its existing markets as well as maintaining the Optibase brand,” commented Tom Wyler, President & Chief Executive Officer of the Company. “As a pioneer and a market leader in the field of digital video, Optibase proved to be a significant player in the market as well as being a greenhouse for such advanced technologies, and I’m sure that it will continue this course in its new form.”
“We are delighted to be a part of this significant agreement. The two pioneers in the Digital Video domain merge forces, thus providing the most complete offering on the market. We will continue to develop the growing Optibase markets such as the enterprise and IPTV markets and their related products, and support the needs of current and future customers,” commented Philippe Wetzel, President & CEO of VITEC Multimedia. “From Advanced Video Streaming and management solutions to Specialized Video Recorders, this joining of forces will introduce a wide array of products and solutions such as MPEG Encoders and Decoders, Smart Cameras, Digital Video converters, IPTV solutions, and much more.”
About Optibase
Optibase operates in the video technologies field in which it provides video over IP solutions, specializing in video encoding, decoding and streaming for federal and state government agencies, Telco operators, enterprise organizations and the world’s leading broadcast service providers and, in addition, Optibase have recently started operating in the fixed-income real-estate field. For further information, please visit www.optibase.com.
About VITEC Multimedia:
VITEC specializes in the development and industrialization of Advanced Digital Video solutions in the MPEG field for OEM and Integrators. Since 1988, VITEC Multimedia has been devoted to the development of MPEG Encoding and Decoding Solutions and the creation of innovative concepts intended for the digital video applications and since 1990 has focused its entire efforts on digital video, conforming to ISO standards (MPEG for video) and others.
Since its creation, VITEC Multimedia has been universally recognized for its groundbreaking product development. Its strengths are based on a team of skilled and experienced engineers who understand the challenge and nature of an ever demanding customer’s requirements.
VITEC Multimedia’s main objectives are to provide high-end Technology and complete solutions to the Digital Video Market.
For more information visit: www.vitecmm.com or www.stradis.com
This press release contains forward-looking statements concerning a business transaction. All statements other than statements of historical fact are statements that could be deemed forward-looking statements. All forward-looking statements in this press release are made based on management’s current expectations which involve risks, uncertainties and other factors that could cause results to differ materially from those expressed in forward-looking statements. These statements involve a number of risks and uncertainties including, but not limited to, risks related to the uncertainty that closing of the Transaction will take place and, in particular, the uncertainty relating to the occurrence or fulfillment of the conditions to closing of both Optibase and Vitec, risks relating to the requisite regulatory and other approvals that may not be obtained; and the other risks and uncertainties faced by each company, as reported, in the case of Optibase, in its most recent Forms 20-F and other filings with the Securities and Exchange Commission, including in the case of Optibase ,but not limited to, risks related to the video technologies market in general, and the evolving IPTV market in particular, competition and Optibase’s ability to manage growth and expansion. The Company does not undertake any obligation to update forward-looking statements made herein.
Mar. 16, 2010 (Business Wire) — The Orchard (NASDAQ: ORCD), a global leader in music and video distribution and comprehensive digital strategy, announced today that it has entered into a definitive merger agreement with Dimensional Associates, LLC, a private equity affiliate of JDS Capital, L.P. Dimensional currently owns approximately 42% of the Company’s outstanding common stock and 99% of the Company’s outstanding Series A Preferred Stock, representing an aggregate of approximately 53% of the Company’s voting securities.
Following the unanimous recommendation and approval of a Special Committee of independent and disinterested directors, the Board of Directors of The Orchard (other than Daniel C. Stein, who abstained from voting on the matter due to his position as an executive of Dimensional Associates) has approved the merger agreement and is recommending to The Orchard’s stockholders that they adopt and approve the merger agreement. Under the terms of the merger agreement, Dimensional Associates will acquire all of the common stock of The Orchard not currently owned by it or its affiliates for $2.05 per share and stockholders will also receive a contingent right to receive additional consideration, under certain circumstances post-closing if Dimensional Associates or any of its affiliates enters into a commitment to sell at least 80% of The Orchard’s voting securities or assets within six months of the consummation of the merger. The $2.05 per share consideration represents a 52% premium to the closing price of The Orchard’s common stock on October 14, 2010, the day before Dimensional Associates first presented its acquisition proposal to The Orchard’s Board of Directors and a 21% premium to the closing price of The Orchard’s common stock on March 15, 2010, the last trading day prior to the announcement of the execution of a definitive merger agreement.
The proposed transaction is expected to close in the third quarter of this calendar year, subject to customary closing conditions, including the absence of any material adverse change affecting The Orchard’s business prior to closing. In addition, the transaction is subject to the approval of the merger agreement by holders of a majority of the outstanding shares of The Orchard’s common stock not owned by Dimensional Associates or it’s affiliates, at a meeting of stockholders which will be held on a date to be announced. If The Orchard’s stockholders approve the merger, following the closing under the merger agreement, The Orchard will be owned by Dimensional Associates and will return to private company status.
Under the terms of the merger agreement, The Orchard’s Special Committee will oversee a 30 day go-shop period ending April 14, 2010 to determine if there are any other interested buyers for The Orchard. The Special Committee has retained Craig-Hallum Capital Group LLC to coordinate its solicitation activities during the go-shop period.
“The Special Committee of the Board has an obligation to our shareholders to review and evaluate The Orchard’s options for creating shareholder value,” said Michael Donahue, Chairman of the Board and the Special Committee for The Orchard. “We have undertaken an intensive review of The Orchard and its value, both independently and with the assistance of a financial advisor. We have negotiated a fair price, while also demanding the right to solicit additional potential buyers. In order to ensure that our shareholders concur with our conclusion, we have conditioned the consummation of the merger on its approval by a majority of the minority shareholders.”
“Dimensional Associates has always been a strong supporter of The Orchard and our management team in delivering services and content to our clients and retail partners,” said Brad Navin, CEO of The Orchard.
Dimensional Associates was the primary owner of The Orchard from 2003 until the reverse merger with DMGI in November 2007 and has continued to be the majority owner. Daniel C. Stein, an executive of Dimensional Associates, has been a member of The Orchard’s Board of Directors since 2007.
About The Orchard(R)
Headquartered in New York and London with operations in 25 markets around the world, The Orchard (NASDAQ: ORCD) is an independent music and video distributor specializing in comprehensive digital strategies for content owners. Through innovative global marketing and promotions, The Orchard drives sales across more than 660 digital and mobile storefronts in 75 countries, as well as physical retailers across North America and Europe. The company was founded in 1997 as a business partner that fosters creativity and independence within its global clients. For further information, please visit www.theorchard.com.
Forward Looking Statements
This release may contain certain forward-looking statements regarding The Orchard’s expectations regarding future events and operating performance within the meaning of Federal Securities laws that are subject to certain risks and uncertainties and involve factors that may cause actual results to differ materially from those projected or suggested. Factors that could cause actual results to differ include, but are not limited to: the growth of the digital music and video markets; the impact of the general economic recession and management’s ability to capitalize on our business strategy and take advantage of opportunities for revenue expansion; satisfaction of the conditions of the pending merger with Dimensional Associates, including the approval of a majority of the stockholders unaffiliated with Dimensional Associates; the costs and expenses associated with the pending merger; contractual restrictions on the conduct of The Orchard’s business included in the merger agreement; the potential loss of key personnel, disruption of our sales and operations or any impact on The Orchard’s relationships with third parties as a result of the pending merger; any delay in consummating the proposed merger with Dimensional Associates or the failure to consummate the transaction; and the outcome of, or expenses associated with, any litigation which may arise in connection with the pending merger with Dimensional Associates. Undue reliance should not be placed on such forward-looking statements as they speak only as of the date hereof, and The Orchard undertakes no obligation to update these statements to reflect subsequent events or circumstances except as may be required by law. Additional factors that could cause actual results to differ materially from those projected or suggested in any forward-looking statements are contained in The Orchard’s most recent periodic reports on Form 10-K and Form 10-Q that are filed with the Securities and Exchange Commission (the “SEC”). The Orchard intends to file with the SEC a preliminary proxy statement in connection with the proposed merger and to mail a definitive proxy statement and other relevant documents to The Orchard’s stockholders. Stockholders of The Orchard and other interested persons are advised to read, when available, The Orchard’s preliminary proxy statement, and amendments thereto, and definitive proxy statement in connection with The Orchard’s solicitation of proxies for the stockholders meeting to be held to approve the merger and the merger agreement because these proxy statements will contain important information about The Orchard, Dimensional and the proposed merger. The definitive proxy statement will be mailed to stockholders as of a record date to be established for voting on the merger and the merger agreement. Stockholders will also be able to obtain a copy of the preliminary and definitive proxy statements, without charge, once available, at the SEC’s internet site at http://www.sec.gov or by directing a request to: Attention: Secretary, The Orchard Enterprises, Inc., 23 East 4th Street, 3rd Floor, New York, New York 10003.
The Orchard and its directors and executive officers may be deemed participants in the solicitation of proxies from The Orchard’s stockholders. A list of the names of those directors and the executive officers and descriptions of their interests in The Orchard is contained in The Orchard’s proxy statement dated April 29, 2009, and The Orchard’s Form 8-K dated February 22, 2010, which are filed with the SEC, and will also be contained in The Orchard’s proxy statement when it becomes available. The Orchard’s stockholders may obtain additional information about the interests of its directors and executive officers in the merger by reading The Orchard’s proxy statement when it becomes available.
Press Release Source: Endeavour International Corporation On Monday March 15, 2010, 8:30 am EDT
HOUSTON, March 15 /PRNewswire-FirstCall/ — Endeavour International Corporation (NYSE-Amex: END) (LSE:ENDV.l – News) announced today that its board of directors has approved a review of strategic alternatives for its North Sea assets.
In an effort to unlock the value of its underlying North Sea assets, Endeavour will study a full range of options, including:
- Continuing to execute current operations plan
- Entering into a joint venture to accelerate activities in the North Sea
- Selling specific assets or the North Sea entire business
“Our board, management and shareholders continue to be disappointed by the dislocation between underlying asset values and our stock price. Last year, Endeavour sold just 19 percent of its reserves for $150 million, which was more than the market capitalization of the company at that time,” said William L. Transier, chairman, chief executive officer and president. “Since then, our stock price has traded back to pre-sale levels even though we believe the value of our remaining asset base represents a multiple of the existing share price. As fiduciaries of the capital entrusted to Endeavour, we want our stockholders and the market to recognize the full potential of their investment.”
“The board is committed to a thorough and systematic review for all of our North Sea alternatives,” Transier added “We have believed for some time that the discount in our stock price was related to the length of time between discovery and production and the relatively high development costs in the UK. Our entry into the US onshore arena balances this position with an inventory of properties that can be developed in a much shorter time period and at lower cost.”
Endeavour will announce the results of the effort once a course of action is chosen. At the end of this review process, the company may elect to make no changes. Jefferies International Limited and Lambert Energy Advisory Ltd. have been retained by the company to lead the review.
Originally founded as a North Sea-focused exploration and production company, Endeavour currently owns interests in four producing fields in the UK sector of the North Sea with four developments underway. In 2009, the company shifted its strategy to include a growth initiative in the United States. In January, Endeavour unveiled a new portfolio of domestic shale plays, including the highly prospective Haynesville and Marcellus formations and two frontier plays.
Endeavour International Corporation is an oil and gas exploration and production company focused on the acquisition, exploration and development of energy reserves in the North Sea and the United States. For more information, visit http://www.endeavourcorp.com.
Certain statements in this news release should be regarded as “forward-looking” statements within the meaning of the securities laws. These statements speak only as of the date made. Such statements are subject to assumptions, risk and uncertainty. Actual results or events may vary materially. The estimates of recoverable resources per well and completed well costs included herein are based upon other typical results in these shale plays and may not be indicative of actual results.
VANCOUVER, March 15 /PRNewswire-FirstCall/ – Angiotech Pharmaceuticals, Inc. (NASDAQ: ANPI, TSX: ANP) today announced that its corporate partner, Boston Scientific Corporation (NYSE: BSX), announced 12-month results from its PERSEUS clinical program that demonstrated positive safety and efficacy outcomes in workhorse lesions for the platinum chromium TAXUS(R) Element(TM) Paclitaxel-Eluting Stent System compared to the TAXUS(R) Express(2)(TM) Paclitaxel-Eluting Stent System. The results also reported a similar safety profile and statistically superior efficacy outcomes in small vessels for the TAXUS Element Stent compared to a historical control group of patients receiving the Express(R) bare-metal stent.
Analysis of the data was presented at the American College of Cardiology Annual Scientific Sessions during a late-breaking trial session by Dean Kereiakes, M.D., Medical Director at The Christ Hospital Heart and Vascular Center and The Lindner Research Center in Cincinnati and the Principal Investigator for the PERSEUS clinical program.
“We are very encouraged by the one-year data demonstrating positive safety and efficacy outcomes for the TAXUS Element Stent and its innovative platinum chromium alloy,” said Dr. Kereiakes. “In my experience, the TAXUS Element Stent offers increased flexibility, visibility and deliverability compared with currently available products. The PERSEUS data confirm that the proven TAXUS drug and polymer combination has been successfully transferred to the Element platform with excellent performance and comparable safety.”
The TAXUS Element Stent is designed specifically for coronary stenting. The novel stent architecture and proprietary platinum chromium alloy combine to offer greater radial strength and flexibility. The stent architecture helps create consistent lesion coverage and drug distribution while improving deliverability, which is enhanced by an advanced catheter delivery system. The higher density alloy provides superior visibility and reduced recoil while permitting thinner struts compared to prior-generation stents(1).
The PERSEUS clinical program compares the TAXUS Element Stent to prior-generation stents in more than 1,600 patients in two parallel trials at 90 centers worldwide.
Workhorse trial
---------------
The pivotal PERSEUS Workhorse trial is evaluating the safety and efficacy of the TAXUS Element Stent compared to Boston Scientific’s first-generation TAXUS Express Stent in 1,262 patients with de novo lesions.
The prospective, randomized (3:1) trial met its primary endpoint of non-inferiority for target lesion failure(2) (TLF) at 12 months with rates of 5.6 percent for the TAXUS Element Stent and 6.1 percent for the TAXUS Express Stent(3). The secondary endpoint of in-segment percent diameter stenosis at nine months as measured by quantitative coronary angiography (QCA) was also met.
The Workhorse results also demonstrated similar safety for the TAXUS Element Stent as demonstrated by low rates of Major Adverse Cardiac Events (MACE) and stent thrombosis. All components of MACE, including cardiac death, myocardial infarction (MI) and target vessel revascularization (TVR) were similar to the TAXUS Express Stent control. A numerically lower rate of non-Q-wave MI for the TAXUS Element Stent resulted in lower overall MI (2.2 vs. 2.9 percent, p=0.48). Stent thrombosis rates using the Academic Research Coalition (ARC) definite/probable definition were statistically similar for the TAXUS Element Stent and the TAXUS Express Stent (0.4 and 0.3 percent, p(greater than)0.99).
Small Vessel trial
------------------
Results were also presented from the PERSEUS Small Vessel trial, a single-arm study which compares the TAXUS Element Stent in 224 patients with small vessels ((greater than or equal to)2.25 to (less than)2.75 mm in diameter and (less than or equal to)20 mm in length) to a matched historical control group of 125 patients treated with the Express bare-metal stent. The trial met its primary endpoint of superiority for in-stent late loss at nine months with unadjusted values of 0.38 mm for the TAXUS Element Stent and 0.80 mm for the Express Stent (p(less than)0.001). The trial also met its secondary endpoint of superiority for TLF at 12 months, showing a statistically significant reduction with an unadjusted rate of 7.3 percent for the TAXUS Element Stent compared to a pre-specified performance goal of 19.5 percent (p(less than)0.001) based on historical outcomes for the control stent. The propensity-adjusted MACE rates were significantly lower for the TAXUS Element Stent compared to the bare-metal control stent (10.5 vs. 30.4 percent, p=0.002), showing a safety benefit for the TAXUS Element Stent. Stent thrombosis rates using the ARC definite/probable definition were comparable for the TAXUS Element Stent and Express Stent (0.3 vs. 0.6 percent, p=0.65).
“The PERSEUS trials build on the extensive data from the TAXUS clinical program and extend the consistent outcomes seen in the TAXUS trials to the novel Element Stent platform,” said Louis Cannon, M.D., of the Cardiac and Vascular Research Center of Northern Michigan in Petoskey, Michigan and the trial’s Co-Principal Investigator. “With the positive outcomes of the TAXUS Element Stent in workhorse lesions and the superior efficacy data in small vessels, platinum chromium promises to offer significant advantages in acute performance with no compromise to safety.”
Clinical data from the PERSEUS trials will support regulatory approval of the TAXUS Element Paclitaxel-Eluting Stent System in Europe, the U.S. and Japan. Boston Scientific is evaluating its PROMUS(R) Element(TM) Everolimus-Eluting Stent System in the PLATINUM clinical trial, which completed enrollment of 1,531 patients in September 2009 at 133 sites worldwide. PLATINUM is a randomized, controlled, pivotal trial designed to support U.S. and Japanese approval of the PROMUS Element Stent System. Results are expected to be presented in early 2011.
Boston Scientific received CE Mark approval for the PROMUS Element Stent System in October 2009 and expects CE Mark approval for the TAXUS Element Stent System in the second quarter of this year. In the U.S., the Company expects FDA approval for the TAXUS Element Stent System in the middle of next year and for the PROMUS Element Stent System in the middle of 2012. In Japan, the Company expects approval for the TAXUS Element Stent System in late 2011 or early 2012 and for the PROMUS Element Stent System in the middle of 2012.
The TAXUS Element Stent and the PROMUS Element Stent are investigational devices in the U.S. and are limited by applicable law to investigational use only and are not available for sale.
Forward Looking Statements
--------------------------
Statements contained in this press release that are not based on historical fact, including without limitation statements containing the words “believes,” “may,” “plans,” “will,” “estimates,” “continues,” “anticipates,” “intends,” “expects” and similar expressions, constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 and constitute “forward-looking information” within the meaning of applicable Canadian securities laws. All such statements are made pursuant to the “safe harbor” provisions of applicable securities legislation. Forward- looking statements may involve, but are not limited to, comments with respect to our objectives and priorities for the remainder of 2009 and beyond, our strategies or future actions, our targets, expectations for our financial condition and the results of, or outlook for, our operations, research and development and product and drug development. Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual results, events or developments to be materially different from any future results, events or developments expressed or implied by such forward-looking statements. Many such known risks, uncertainties and other factors are taken into account as part of our assumptions underlying these forward-looking statements and include, among others, the following: general economic and business conditions in the United States, Canada and the other regions in which we operate; market demand; technological changes that could impact our existing products or our ability to develop and commercialize future products; competition; existing governmental regulations and changes in, or the failure to comply with, governmental regulations; availability of financial reimbursement coverage from governmental and third-party payers for products and related treatments; adverse results or unexpected delays in pre-clinical and clinical product development processes; adverse findings related to the safety and/or efficacy of our products or products sold by our partners; decisions, and the timing of decisions, made by health regulatory agencies regarding approval of our technology and products; the requirement for substantial funding to conduct research and development, to expand manufacturing and commercialization activities; and any other factors that may affect our performance. In addition, our business is subject to certain operating risks that may cause any results expressed or implied by the forward-looking statements in this press release to differ materially from our actual results. These operating risks include: our ability to attract and retain qualified personnel; our ability to successfully complete pre-clinical and clinical development of our products; changes in our business strategy or development plans; our failure to obtain patent protection for discoveries; loss of patent protection resulting from third-party challenges to our patents; commercialization limitations imposed by patents owned or controlled by third parties; our ability to obtain rights to technology from licensors; liability for patent claims and other claims asserted against us; our ability to obtain and enforce timely patent and other intellectual property protection for our technology and products; the ability to enter into, and to maintain, corporate alliances relating to the development and commercialization of our technology and products; market acceptance of our technology and products; our ability to successfully manufacture, market and sell our products; the availability of capital to finance our activities; our ability to restructure and to service our debt obligations; and any other factors referenced in our other filings with the applicable Canadian securities regulatory authorities or the Securities and Exchange Commission (“SEC”). For a more thorough discussion of the risks associated with our business, see the “Risk Factors” section in our annual report for the year ended December 31, 2008 filed with the SEC on Form 10-K/A, as amended, and our quarterly reports for the first, second and third quarters of 2009 filed with the SEC on Form 10-Q.
Given these uncertainties, assumptions and risk factors, investors are cautioned not to place undue reliance on such forward-looking statements. Except as required by law, we disclaim any obligation to update any such factors or to publicly announce the result of any revisions to any of the forward-looking statements contained in this press release to reflect future results, events or developments.
(C)2010 Angiotech Pharmaceuticals, Inc. All Rights Reserved.
About Angiotech Pharmaceuticals
Angiotech Pharmaceuticals, Inc. is a global specialty pharmaceutical and medical device company. Angiotech discovers, develops and markets innovative treatment solutions for diseases or complications associated with medical device implants, surgical interventions and acute injury. To find out more about Angiotech (NASDAQ: ANPI, TSX: ANP), please visit our website at www.angiotech.com.
-------------------------------
(1) Based on bench testing. Data on file with Boston Scientific.
(2) TLF is defined as ischemia-driven target lesion revascularization
(TLR) or myocardial infarction/cardiac death related to the target
vessel. Complete trial design at Allocco et al., Trials 2010, 11:1.
(3) Bayesian probability of non-inferiority = 99.96 percent.
SAN DIEGO, INDIANAPOLIS, and WALTHAM, Mass., March 15, 2010 /PRNewswire-FirstCall/ — Amylin Pharmaceuticals, Inc. (Nasdaq: AMLN), Eli Lilly and Company (NYSE: LLY) and Alkermes, Inc. (Nasdaq: ALKS) today announced that the U.S. Food and Drug Administration (FDA) has issued a complete response letter regarding the New Drug Application (NDA) for BYDUREON(TM) (exenatide for extended-release injectable suspension).
In the complete response letter there are no requests for new pre-clinical or clinical trials. Requests raised in the letter primarily relate to the finalization of the product labeling with accompanying Risk Evaluation and Mitigation Strategy (REMS) and clarification of existing manufacturing processes.
The complete response letter does not contain requests related to the December 2009 observations from the FDA’s pre-approval inspection at the Ohio manufacturing facility. All of those observations have been addressed.
“This is a significant step forward in our ability to bring this important therapy to patients,” said Orville G. Kolterman, M.D., senior vice president of research and development, Amylin Pharmaceuticals. “We have a clear path forward and are working diligently to submit our response to the FDA in the next few weeks.”
BYDUREON (pronounced by-DUR-ee-on) is the proposed brand name for exenatide once weekly. It is an investigational, extended-release medication for type 2 diabetes designed to deliver continuous therapeutic levels of exenatide in a single weekly dose. BYDUREON is a once-weekly formulation of exenatide, the active ingredient in BYETTA® (exenatide) injection, which has been available in the U.S. since June 2005 and is used in approximately 60 countries worldwide to improve glycemic control in adults with type 2 diabetes. BYDUREON and BYETTA belong to the glucagon-like peptide-1 (GLP-1) receptor agonist class of medications.
The NDA for BYDUREON was submitted in May 2009 and accepted by the FDA in July 2009. It is based on data from the DURATION clinical trial program, as well as more than seven years of clinical experience with BYETTA.
Amylin to Host Investor Conference Call
Amylin will host a conference call to discuss the complete response letter for BYDUREON on Monday, March 15 at 8:30 a.m. ET/5:30 a.m. PT. Daniel M. Bradbury, president and chief executive officer, Amylin Pharmaceuticals, will lead the call.
The call will be webcast live through Amylin’s corporate Web site and a recording will be made available following the close of the call. To access the webcast, please log on to www.amylin.com approximately 15 minutes prior to the call to register, download and install any necessary audio software. For those without access to the Internet, the live call may be accessed by phone by calling (800) 291-9234 (U.S./Canada) or (617) 614-3923 (international), conference access code 12781062. A replay of the call will also be available by phone beginning approximately two hours after the close of the call and can be accessed at (888) 286-8010 (U.S./Canada) or (617) 801-6888 (international), conference access code 34108583.
About Diabetes
Diabetes affects more than 24 million people in the U.S. and an estimated 285 million adults worldwide.(i,ii) Approximately 90-95 percent of those affected have type 2 diabetes. Diabetes is the fifth leading cause of death by disease in the U.S. and costs approximately $174 billion per year in direct and indirect medical expenses.(iii)
According to the Centers for Disease Control and Prevention’s National Health and Nutrition Examination Survey, approximately 60 percent of people with diabetes do not achieve their target blood sugar levels with their current treatment regimen.(iv) In addition, 85 percent of type 2 diabetes patients are overweight and 55 percent are considered obese.(v) Data indicate that weight loss (even a modest amount) supports patients in their efforts to achieve and sustain glycemic control.(vi,vii)
About BYETTA® (exenatide) injection
BYETTA is the first FDA-approved GLP-1 receptor agonist for the treatment of type 2 diabetes. BYETTA exhibits many of the same effects as the human incretin hormone glucagon-like peptide-1 (GLP-1). GLP-1 improves blood sugar after food intake through multiple effects that work in concert on the stomach, liver, pancreas and brain.
BYETTA is an injectable prescription medicine that may improve blood sugar (glucose) control in adults with type 2 diabetes mellitus, when used with a diet and exercise program. BYETTA is not insulin and should not be taken instead of insulin. BYETTA is not recommended to be taken with insulin. BYETTA is not for people with type 1 diabetes or people with diabetic ketoacidosis.
BYETTA provides sustained A1C control and low incidence of hypoglycemia when used alone or in combination with metformin or a thiazolidinedione, with potential weight loss. BYETTA is not a weight-loss product. BYETTA was approved in April 2005 and has been used by more than one million patients since its introduction. See important safety information below. Additional information about BYETTA is at www.BYETTA.com.
Important Safety Information for BYETTA® (exenatide) injection
Based on post-marketing data, BYETTA has been associated with acute pancreatitis, including fatal and non-fatal hemorrhagic or necrotizing pancreatitis. The risk for getting low blood sugar is higher if BYETTA is taken with another medicine that can cause low blood sugar, such as a sulfonylurea. BYETTA should not be used in people who have severe kidney problems, and should be used with caution in people who have had a kidney transplant. Patients should talk with their healthcare provider if they have severe problems with their stomach, such as delayed emptying of the stomach (gastroparesis) or problems with digesting food. Severe allergic reactions can happen with BYETTA.
The most common side effects with BYETTA include nausea, vomiting, diarrhea, dizziness, headache, feeling jittery, and acid stomach. Nausea most commonly happens when first starting BYETTA, but may become less over time.
These are not all the side effects from use of BYETTA. A healthcare provider should be consulted about any side effect that is bothersome or does not go away.
For additional important safety information about BYETTA, please see the full Prescribing Information (http://pi.lilly.com/us/byetta-pi.pdf) and Medication Guide (http://pi.lilly.com/us/byetta-ppi.pdf).
About Amylin, Lilly and Alkermes
Amylin, Lilly and Alkermes are working together to develop BYDUREON, a subcutaneous injection of exenatide for the treatment of type 2 diabetes based on Alkermes’ proprietary Medisorb® technology for long-acting medications. BYDUREON is not currently approved by any regulatory agencies.
Amylin Pharmaceuticals is a biopharmaceutical company dedicated to improving lives of patients through the discovery, development and commercialization of innovative medicines. Amylin’s research and development activities leverage the Company’s expertise in metabolism to develop potential therapies to treat diabetes and obesity. Amylin is headquartered in San Diego, California.
Through a long-standing commitment to diabetes care, Lilly provides patients with breakthrough treatments that enable them to live longer, healthier and fuller lives. Since 1923, Lilly has been the industry leader in pioneering therapies to help healthcare professionals improve the lives of people with diabetes, and research continues on innovative medicines to address the unmet needs of patients.
Lilly, a leading innovation-driven corporation, is developing a growing portfolio of pharmaceutical products by applying the latest research from its own worldwide laboratories and from collaborations with eminent scientific organizations. Headquartered in Indianapolis, Indiana, Lilly provides answers – through medicines and information – for some of the world’s most urgent medical needs.
Alkermes, Inc. is a fully integrated biotechnology company committed to developing innovative medicines to improve patients’ lives. Alkermes’ robust pipeline includes extended-release injectable, pulmonary and oral products for the treatment of prevalent, chronic diseases, such as central nervous system disorders, addiction and diabetes. Headquartered in Waltham, Massachusetts, Alkermes has a research facility in Massachusetts and a commercial manufacturing facility in Ohio.
This press release contains forward-looking statements about Amylin, Lilly and Alkermes. Actual results could differ materially from those discussed or implied in this press release due to a number of risks and uncertainties, including the risk that BYDUREON may not be approved by the FDA in a timely manner or at all; the companies’ response to the complete response letter may not be submitted in a timely manner and/or the information provided in such a response may not satisfy the FDA; the FDA may request additional information prior to approval; BYETTA and/or the approval of BYDUREON and the revenues generated from these products may be affected by competition; unexpected new data; safety and technical issues; clinical trials not being completed in a timely manner, not confirming previous results, not being predictive of real world use or not achieving the intended clinical endpoints; label expansion requests or NDA filings, such as the NDA filing for BYDUREON mentioned in this press release, not receiving regulatory approval; the commercial launch of BYDUREON being delayed; or manufacturing and supply issues. The potential for BYETTA and/or BYDUREON may also be affected by government and commercial reimbursement and pricing decisions, the pace of market acceptance, or scientific, regulatory and other issues and risks inherent in the development and commercialization of pharmaceutical products including those inherent in the collaboration with and dependence upon Amylin, Lilly and/or Alkermes. These and additional risks and uncertainties are described more fully in Amylin’s, Lilly’s and Alkermes’ most recent SEC filings including their Quarterly Reports on Form 10-Q and Annual Reports on Form 10-K. Amylin, Lilly and Alkermes undertake no duty to update these forward-looking statements.
BYDUREON(TM) and BYETTA® are trademarks of Amylin Pharmaceuticals, Inc., and Medisorb® is a registered trademark of Alkermes, Inc.
CAMBRIDGE, MA and CUPERTINO, CA — (Marketwire) — 03/15/10 — Pegasystems Inc., (NASDAQ: PEGA), the leader in business process management (BPM) software solutions, and Chordiant Software, Inc.(NASDAQ: CHRD), a leading provider of customer relationship management (CRM) software and services, today announced they have entered into a definitive agreement for Pegasystems to acquire Chordiant.
Under the terms of the agreement, Pegasystems will make a cash tender offer of $5.00 per share for all outstanding shares of Chordiant common stock for a total purchase price of up to approximately $161.5 million, assuming all outstanding shares are tendered. Upon satisfaction of the conditions to the tender offer and after such time as all shares tendered in the tender offer are accepted for payment, the agreement provides for the parties to effect, subject to customary conditions, a merger to be completed following the completion of the tender offer which would result in all shares not tendered in the tender offer being converted into the right to receive $5.00 per share in cash. The transaction is subject to customary closing conditions, including regulatory approvals, and is expected to close in the second calendar quarter of 2010. Chordiant reported revenue of $76.3 million and $52.3 million of cash and investments for its four quarters ended December 31, 2009. The boards of directors of both Pegasystems and Chordiant unanimously approved the definitive agreement.
Pegasystems’ commitment to innovation and customer success has resulted in ten consecutive quarters of record revenue. Its industry-leading Build for Change® technology is both fueling widespread BPM adoption and being widely embraced to improve customer experience. Chordiant’s predictive decision management solutions are renowned for delivering increased customer lifetime value to their clients.
The combined company’s expanded global customer base, including many of the world’s largest organizations, can now take advantage of these complementary solutions. Chordiant clients will be able to incorporate Pegasystems intent-driven process automation to enhance customer experience in their existing foundation and marketing solutions. Pegasystems’ clients can take advantage of Chordiant’s predictive decision management solutions, extensive CRM assets, and expertise in customer experience.
Many of the leading global systems integrators, who are part of Pegasystems’ growing alliance program, have also built practices around Chordiant software. The combination of the two companies would enable an expanded partner network to enhance their practices and realize incremental growth.
“This combination creates a broader portfolio which will offer an expanded client base new capabilities to meet next-generation CRM needs,” said Alan Trefler, Founder and CEO of Pegasystems. “We are excited to add Chordiant’s technology and domain expertise to bolster our previously announced investment plans in BPM and CRM.”
“We expect this acquisition to be accretive, but under the new purchase accounting rules, transactional costs are now expensed rather than included in the calculation of goodwill,” said Craig Dynes, CFO for Pegasystems. “Accordingly, significant closing costs, integration expenses and other purchase accounting valuation charges will be dilutive to GAAP reported earnings. However, on a non GAAP basis, excluding these one-time charges and the reduction in maintenance and other revenues that are currently recorded as deferred revenue on Chordiant’s balance sheet, we expect this transaction to be accretive by as much as $0.03 to Pegasystems’ 2010 earnings per share and by as much as $0.20 to Pegasystems’ 2011 earnings per share. Pegasystems has not yet provided guidance on 2011 earnings. We anticipate providing revised guidance giving effect to these purchase accounting adjustments as the closing of this transaction approaches.”
“We are excited to bring Pegasystems’ industry-leading Build for Change technology to help our clients further optimize customer experience,” commented Steven Springsteel, Chairman, President and CEO of Chordiant Software. “We expect that our customer base will welcome this news, and can look forward to the increased innovation that Pegasystems is known for, along with the many other benefits resulting from the mutual strengths and combined scale of our companies.”
Bridge Street Advisory Services, a division of Financial Telesis Inc., is acting as financial advisor to Pegasystems, and Wilson Sonsini Goodrich & Rosati P.C., is acting as legal advisor to Pegasystems. Morgan Stanley & Co. Incorporated is acting as financial advisor to the Board of Chordiant, and Cooley Godward Kronish LLP is acting as legal advisor to Chordiant.
Pegasystems and Chordiant will be hosting a conference call and live Webcast associated with this announcement at 9:00 a.m. ET on March 15, 2010. Dial-in information is as follows: (877) 348-9349 (domestic) or (678) 809-1406 (international).
To listen to the Webcast, log onto www.pega.com at least 5 minutes prior to the event’s broadcast and click on the Webcast icon in the Investor Relations section. A replay of the call will also be available on www.pega.com in the Investor Relations section Audio Archives link.
Safe Harbor Statement: This press release contains forward-looking statements that involve risks and uncertainties, including statements regarding completion of the acquisition; the impact of the acquisition on Pegasystems’ earnings per share, business performance and product offerings; and the impact of the combined product capabilities. Factors that could cause actual results to differ materially include the following: costs related to the proposed acquisition; the risk of failing to obtain any regulatory approvals or satisfy other conditions to the acquisition; the risk that the transaction will not close or that closing will be delayed; the risk that our respective businesses will suffer due to uncertainty related to the transaction; difficulties encountered in integrating merged businesses; whether certain market segments grow as anticipated; the competitive environment in the software industry and competitive responses to the acquisition; and whether the companies can successfully develop new products or modify existing products and the degree to which these gain market acceptance. Further information on potential factors that could affect our respective businesses and financial results are included Pegasystems’ and Chordiant’s filings with the Securities and Exchange Commission, including Pegasystems’ report on Form 10-K for the year ended December 31, 2009 and Chordiant’s report on Form 10-K for the year ended September 30, 2009, and Form 10-Q for the quarter ended December 31, 2009, respectively, which are on file with the Securities and Exchange Commission. There can be no assurance that the acquisition or any other transaction will be consummated.
Additional Information: The tender offer has not yet commenced. This press release is for informational purposes only and is not an offer to buy or the solicitation of an offer to sell any securities. The tender offer will be made only pursuant to an offer to purchase and related materials that Pegasystems and its wholly-owned subsidiary intend to file with the Securities and Exchange Commission. Chordiant also intends to file a solicitation/recommendation statement on Schedule 14D-9 with respect to the tender offer. Chordiant stockholders and other investors should read these materials carefully when they are filed because they contain important information, including the terms and conditions of the tender offer. Chordiant stockholders and other investors will be able to obtain copies of these materials without charge from the Securities and Exchange Commission through its website at www.sec.gov, from Pegasystems (with respect to documents filed by Pegasystems with the Securities and Exchange Commission), or from Chordiant (with respect to documents filed by Chordiant with the Securities and Exchange Commission). Chordiant stockholders and other investors are urged to read carefully those materials prior to making any decisions with respect to the tender offer.
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About Chordiant Software, Inc.
Chordiant Software optimizes the customer experience to help global brands multiply customer lifetime value. Chordiant arms marketing, customer service and customer loyalty executives with a suite of intelligent conversation management applications to deliver an order of magnitude improvement in customer experience. By maximizing the value of every conversation across all channels, Chordiant enables today’s fast-paced brands to engage more effectively with customers and quickly measure whether business strategies are succeeding, resulting in faster acquisition, improved competitiveness, less churn, and superior customer service. For more information please visit www.chordiant.com.
About Pegasystems
Pegasystems, the leader in Business Process Management, provides software to drive revenue growth, productivity and agility for the world’s most sophisticated organizations. Customers use our award-winning SmartBPM® suite to improve customer service, reach new markets and boost operational effectiveness.
Our patented SmartBPM technology makes enterprise applications easy to build and change by directly capturing business objectives and eliminating manual programming. SmartBPM unifies business rules and processes into composite applications that leverage existing systems — empowering businesspeople and IT staff to Build for Change®, deliver value quickly and outperform their competitors.
Pegasystems’ suite is complemented by best-practice frameworks designed for leaders in financial services, insurance, healthcare, government, life sciences, communications, manufacturing and other industries.
Headquartered in Cambridge, MA, Pegasystems has offices in North America, Europe and Asia. Visit us at www.pega.com.
All trademarks are the property of their respective owners.
Media Contacts:
Brian Callahan
Pegasystems
brian.callahan@pega.com
(617) 866-6364
Twitter: @pegasystems
Erica Burns
PAN Communications
pega@pancomm.com
(978) 474-1900
Derek Van Bronkhorst
Chordiant Software
Derek.vanbronkhorst@chordiant.com
(408) 517-6219
Mo Mohmoud
Eastwick Communications
Chordiant@eastwick.com
(650) 480-4058
Press Release Source: ChinaEdu Corporation On Thursday March 11, 2010, 5:30 pm EST
BEIJING, March 11 /PRNewswire-Asia-FirstCall/ — ChinaEdu Corporation (Nasdaq:CEDU – News) (“ChinaEdu” or the “Company”), an educational services provider in China, today announced its unaudited financial results for the fourth quarter ended December 31, 2009.(1)
(in thousands,
unaudited) Three Months Ended Twelve Months Ended
December December Period December December Year
Period Ended 31, 2008 31, 2009 over 31, 2008 31, 2009 over
Currency USD USD Period % USD USD Year %
Financial Data:
Net revenue 12,678 13,993 10.4% 46,546 51,965 11.6%
Gross profit 6,965 8,481 21.8% 29,298 31,695 8.2%
Income from
operations (7,216) 2,913 N/A (1,912) 11,635 N/A
Net income
attributable
to ChinaEdu (5,711) 1,326 N/A (6,302) 5,096 N/A
Adjusted
EBITDA (2)
(non-GAAP) 1,539 4,004 160.2% 12,492 16,011 28.2%
Adjusted net
income attri-
butable to
ChinaEdu (3)
(non-GAAP) 2,491 1,722 -30.9% 6,198 6,904 11.4%
Net income
(loss)
attributable
to ChinaEdu
per ADS (4) (0.308) 0.082 N/A (0.330) 0.313 N/A
Adjusted net
income per
ADS (5)
(non-GAAP) 0.133 0.107 -19.5% 0.322 0.424 31.7%
Net income
per diluted
ADS (0.308) 0.075 N/A (0.330) 0.291 N/A
Adjusted net
income per
diluted ADS
(6) (non-
GAAP) 0.130 0.098 -24.6% 0.308 0.394 27.9%
Operating Data:
Revenue
students (7)
for online
degree
program 118,000 140,000 18.6% 243,000 287,000 18.1%
(1) The reporting currency of the Company is RMB, but for the convenience
of the reader, the amounts for the three and twelve months ended
December 31, 2009 and the years ended December 31, 2008 and 2009 are
presented in U.S. dollars. Unless otherwise stated, all translations
from RMB to U.S. dollars were made at the rate of RMB6.8259 to $1.00,
the noon buying rate in effect on December 31, 2009 in the H.10
statistical release of the Federal Reserve Board. The Company makes
no representation that the RMB or U.S. dollar amounts referred could
be converted into U.S. dollars or RMB, as the case may be, at any
particular rate or at all. For analytical presentation, all
percentages are calculated using the numbers presented in the
financial statements contained in this earnings release. An
explanation of the Company's non-GAAP financial measures is included
in the section entitled "Non-GAAP Financial Measures" below, and the
related reconciliations to GAAP financial measures are presented in
the accompanying financial statements.
(2) "Adjusted EBITDA" is a non-GAAP measure defined as net income before
interest income, taxes, exchange loss, depreciation, amortization of
intangible assets and land use rights, share-based compensation and
goodwill and intangible assets impairment charges, if applicable.
(3) "Adjusted net income attributable to ChinaEdu" is a non-GAAP measure
defined as net income attributable to ChinaEdu excluding share-based
compensation, exchange loss, noncontrolling interest for share-based
compensation, amortization of intangible assets and land use rights
and goodwill and intangible assets impairment charges, if applicable.
(4) "ADS" is American Depositary Share. Each ADS represents three ordinary
shares.
(5) "Adjusted net income per ADS" is a non-GAAP measure which is computed
using adjusted net income attributable to ChinaEdu over number of ADSs
used in net income (loss) attributable to ChinaEdu per ADS calculation.
(6) "Adjusted net income per diluted ADS" is a non-GAAP measure which is
computed using adjusted net income attributable to ChinaEdu over
number of ADSs used in net income per diluted ADS calculation.
(7) "Revenue students" refer to students of university online degree
programs who have paid tuitions in the applicable period.
Fourth Quarter 2009 Highlights
-- Total net revenue for the fourth quarter of 2009 increased by 10.4% to
$14.0 million from $12.7 million for the corresponding period in 2008,
exceeding our previously disclosed guidance for the fourth quarter of
2009 of $12.9 million to $13.5 million.
-- Net revenue from online degree programs, the Company's major business
segment, increased by 9.3% to $11.2 million for the fourth quarter of
2009 from $10.3 million for the corresponding period in 2008.
-- The number of revenue students in online degree programs during the
fourth quarter of 2009 increased by approximately 18.6% to over 140,000
from approximately 118,000 for the corresponding period in 2008.
-- Adjusted EBITDA increased by 160.2% to $4.0 million in the fourth
quarter of 2009 from $1.5 million for the corresponding period in 2008.
-- Net income attributable to ChinaEdu increased to $1.3 million in the
fourth quarter of 2009 from a loss $5.7 million for the corresponding
period in 2008.
-- Adjusted net income attributable to ChinaEdu decreased by 30.9% to $1.7
million in the fourth quarter of 2009 from $2.5 million for the
corresponding period in 2008.
-- Net income per diluted ADS was $0.075 for the fourth quarter of 2009 as
compared to a loss of $0.308 for the corresponding period in 2008.
-- Adjusted net income per diluted ADS was $0.098 for the fourth quarter
of 2009 as compared to $0.130 for the corresponding period in 2008.
Fiscal Year 2009 Highlights
-- Total net revenue for the fiscal year 2009 increased by 11.6% to $52.0
million from $46.5 million for the fiscal year 2008.
-- Net revenue from online degree programs for the fiscal year 2009
increased by 11.7% to $41.8 million from $37.4 million for the fiscal
year 2008.
-- The number of revenue students in online degree programs for the fiscal
year 2009 increased by approximately 18.1% to over 287,000 from
approximately 243,000 for the fiscal year 2008.
-- Adjusted EBITDA for the fiscal year 2009 increased by 28.2% to $16.0
million from $12.5 million for the fiscal year 2008.
-- Net income attributable to ChinaEdu increased to $5.1 million in the
fiscal year 2009 from a loss $6.3 million for the fiscal year 2008.
-- Adjusted net income attributable to ChinaEdu increased by 11.4% to $6.9
million in the fiscal year 2009 from $6.2 million for the fiscal year
2008.
-- Net income per diluted ADS was $0.291 for the fiscal year 2009 as
compared to a loss of $0.330 for the fiscal year 2008.
-- Adjusted net income per diluted ADS was $0.394 for the fiscal year 2009
as compared to $0.308 for the fiscal year 2008.
“We are pleased to report solid results for the fourth quarter of 2009, completing the fiscal year 2009 with 11.6% total net revenue growth over 2008. Adjusted net income per diluted ADS for the fiscal year 2009 increased 27.9% over 2008. In 2009, all of our major business lines have recorded strong growth and we are very confident of our future prospects,” said Ms. Julia Huang, ChinaEdu’s Chairman and Chief Executive Officer. “In 2009, we announced several strategic partnerships for our online degree programs, which we believe will contribute significantly to our company’s future growth. Our learning centers network continued to expand, reaching 60 learning centers at the end of 2009, contributing to over 5% of our total net revenue in the fourth quarter of 2009. We are also very pleased with our 101 online tutoring segment’s performance, which recorded nearly 27% of net revenue growth in 2009. Looking ahead, we are committed to continuing research and development efforts of the technology platform and the internet & mobile applications for the online degree and non-degree programs, while continue to maintain a tight control over our expenses. Overall, we believe our company is positioned strongly to capture the immense potential that online education can offer in the future.”
Financial Results for the Fourth Quarter Ended December 31, 2009
Net Revenue
Total net revenue for the fourth quarter of 2009 was $14.0 million, representing a 10.4% increase from the corresponding period in 2008. Net revenue from online degree programs for the fourth quarter of 2009 was $11.2 million, representing a 9.3% increase from $10.3 million for the corresponding period in 2008. The growth in net revenue was due to strong enrollment growth for the 2009 fall semester, which registered over 140,000 revenue students representing an increase of 18.6% as compared to 118,000 revenue students for the 2008 fall semester.
Net revenue from the Company’s non-online degree programs (online tutoring programs, international curriculum programs and private primary and secondary schools) for the fourth quarter of 2009 was $2.8 million, representing a 14.9% increase from $2.4 million for the corresponding period in 2008. This increase was attributable to a 23.2% increase in net revenue for the 101 online tutoring programs from increased sales and a 43.9% increase in net revenue at Anqing School due to increase in student enrollment from the academic year beginning in September 2008 as a result of the completion of construction of the new campus, but offset by a 29.6% decrease in net revenue for the international curriculum programs due to the termination of our New Zealand contract.
A refund of valued-added tax (“VAT”) of $0.6 million in the fourth quarter of 2009 and $0.9 million in the corresponding period in 2008 was recognized as net revenue primarily in online degree programs.
Cost of Revenue
Total cost of revenue for the fourth quarter of 2009 was $5.5 million, representing a decrease of 3.5% as compared to $5.7 million for the corresponding period of 2008. Cost of revenue for online degree programs for the fourth quarter of 2009 was $3.9 million, representing a decrease of 5.8% as compared to $4.1 million for the fourth quarter of 2008. The decrease in online degree programs’ cost of revenue was primarily due to a decrease in special courseware development in the fourth quarter of 2009 as compared to the fourth quarter of 2008, as well as a decrease in employee and recruiting commission related costs.
By the end of the fourth quarter of 2009, we had 60 operational learning centers of which 22 were proprietary and 38 were contracted locations, as compared to 37 operational learning centers as of the end of the fourth quarter of 2008, of which 16 were proprietary and 21 were contracted locations.
Cost of revenue for non-online degree programs for the fourth quarter of 2009 was $1.6 million, representing a 2.3% increase for the corresponding period in 2008. This increase was attributable primarily to an increase in cost of revenue related to Anqing School’s new campus, which was partially offset by a decrease in cost of revenue for the international curriculum programs and our 101 online tutoring programs.
Gross Profit and Gross Margin
Gross profit for the fourth quarter of 2009 was $8.5 million, representing a 21.8% increase from $7.0 million for the corresponding period of 2008. Total gross margin for the fourth quarter of 2009 was 60.6% as compared to 54.9% for the corresponding period of 2008. Gross margin for the online degree programs increased to 65.2% for the fourth quarter of 2009 as compared to 59.7% for the corresponding period of 2008. Gross margin for Anqing School improved significantly, due to increased enrollment at the new campus, as compared to the corresponding period in 2008 despite additional depreciation expenses resulting from the construction of the new campus. Gross margin for 101 online tutoring programs also improved due to tight cost controls.
Operating Expenses
Total operating expenses were $5.6 million for the fourth quarter of 2009, representing a 60.7% decrease from $14.2 million for the corresponding period in 2008. This decrease was attributable primarily to the factors discussed below:
-- General and administrative expenses for the fourth quarter of 2009 were
$3.4 million, which represented a 16.0% decrease from $4.0 million for
the corresponding period of 2008. This decrease was primarily
attributable to a decrease in headquarter employee related expenses of
approximately $0.3 million in the fourth quarter of 2009 as compared to
the corresponding period of 2008. General and administrative expenses
for the fourth quarter of 2008 were also higher due to an account
receivables write-off of approximately $0.2 million.
-- Selling and marketing expenses were $1.0 million for the fourth quarter
of 2009, which represented a 19.8% decrease from $1.2 million for the
corresponding period in 2008. This decrease was attributable primarily
to a decrease in the amount spent on conferences and other sales
activities at our 101 online tutoring programs in the fourth quarter of
2009.
-- Research and development expenses, mainly contributing to technology
platform upgrade and the internet & mobile applications development,
for the fourth quarter of 2009 were $1.2 million, representing a 6.0%
decrease from $1.3 million for the corresponding period in 2008. The
decrease was attributable primarily to a reduction in employee related
expenses in the fourth quarter of 2009 as compared to the fourth
quarter of 2008. However, research and development expenses for fiscal
year 2009 increased by 16.0% compared with fiscal year 2008.
-- There was no impairment charge of goodwill and intangible assets in the
fourth quarter of 2009, while such charge was $7.7 million in the
corresponding period of 2008.
-- Share-based compensation for the fourth quarter of 2009, which was
allocated to the related cost and operating expense line items,
remained flat at $0.2 million as compared to $0.2 million for the
corresponding period in 2008.
Income from Operations
As a result of the factors discussed above, income from operations for the fourth quarter of 2009 was $2.9 million, as compared to a loss of $7.2 million for the corresponding period of 2008. Operating margin was 20.8% for the fourth quarter of 2009 as compared to a loss of 56.9% in the corresponding period of 2008. The increase in income from operations and operating margin was primarily because there was not an impairment charge of goodwill and intangible assets in the fourth quarter of 2009, while such charge was $7.7 million in the corresponding period of 2008.
Adjusted income from operations, which is a non-GAAP measure defined as income from operations excluding share-based compensation, exchange loss, amortization of intangible assets and land use rights and goodwill and intangible assets impairment charges, if applicable, was $3.3 million for the fourth quarter of 2009, which increased by 228.3% as compared to $1.0 million in the corresponding period of 2008. Adjusted operating margin, which is a non-GAAP measure defined as a ratio of adjusted operating income from operations (non-GAAP) over net revenue, for the fourth quarter of 2009, was 23.9% as compared to 8.0% for the corresponding period of 2008.
Interest Income
Interest income was $0.2 million in the fourth quarter of 2009, as compared to $0.4 million in the corresponding quarter of 2008. This decrease was attributable primarily to (i) reduced interest-bearing cash and bank deposit balance of $47.7 million as of December 31, 2009, as compared to $61.2 million as of December 31, 2008, and (ii) a lower interest rate for the fourth quarter of 2009 as compared to the corresponding period of 2008.
Income Tax Expense
Income tax expense for the fourth quarter of 2009 was $0.8 million, as compared to income tax benefit of $2.9 million for the corresponding period in 2008. In December 2008, seven of our subsidiaries and affiliate companies obtained the “high and new technology enterprises” or “HNTE” status under the new PRC Enterprise Income Tax Law, which came into effect on January 1, 2008. The HNTE entities enjoy a 15% tax rate, which is lower than the statutory tax rate of 25%. A catch-up adjustment was recorded in the fourth quarter of 2008 to adjust our 2008 income tax expenses based on a decrease in tax rate from 25% to 15%. As a result, we had an income tax benefit in the fourth quarter of 2008.
Noncontrolling Interest
Noncontrolling interest was $1.1 million in the fourth quarter of 2009, representing a decrease from $1.8 million in the corresponding period in 2008, which was attributable primarily to the noncontrolling interest impact related to the reduction in our deferred tax liabilities for the fiscal year 2008 resulted from a change of tax rate from 25% to 15%.
Net Income (Loss) attributable to ChinaEdu
Net income (loss) attributable to ChinaEdu, which is net income excluding net income attributable to noncontrolling interest, was $1.3 million for the fourth quarter of 2009, as comparable to a net loss of $5.7 million for the corresponding period in 2008. The increase was primarily because there was not an impairment charge of goodwill and intangible assets in the fourth quarter of 2009, while such a charge was $7.7 million in the corresponding period of 2008.
Net income per basic and diluted ADS were $0.082 and $0.075, respectively, for the fourth quarter of 2009, which have improved significantly as compared to losses of $0.308 and $0.308, respectively, for the corresponding period in 2008.
Adjusted net income attributable to ChinaEdu (non-GAAP) decreased by 30.9% to $1.7 million for the fourth quarter of 2009, as compared to $2.5 million in the corresponding period of 2008. Adjusted net margin, which is a non-GAAP measure defined as a ratio of adjusted net income attributable to ChinaEdu (non-GAAP) over net revenue, was 12.3% in the fourth quarter of 2009 as compared to 19.6% in the corresponding period of 2008. The decrease in adjusted net income attributable to ChinaEdu (non-GAAP) was primarily due to a one-time reduction in income tax expenses in the fourth quarter of 2008.
Adjusted net income per basic and diluted ADS were $0.107 and $0.098, respectively, for the fourth quarter of 2009.
Adjusted EBITDA (Non-GAAP)
Adjusted EBITDA (non-GAAP) was $4.0 million for the fourth quarter of 2009, which increased by 160.2% as compared to $1.5 million for the corresponding period in 2008. This increase was attributable primarily to improved operating results from our learning centers network, 101 online tutoring programs and Anqing School.
Deferred Revenue
Deferred revenue at the end of the fourth quarter of 2009 was $15.5 million, with current deferred revenue of $14.3 million and non-current deferred revenue of $1.2 million. Deferred revenue at the end of the fourth quarter of 2009 increased significantly as compared to deferred revenue of $6.1 million at the end of the third quarter 2009 due to seasonality of enrollments, which results from tuition received generally during the second quarter (spring semester) and the fourth quarter (fall semester) of each year.
Cash and Cash Equivalents
As of December 31, 2009, ChinaEdu reported cash and cash equivalents of $29.8 million, which primarily consisted of cash-on-hand, demand deposits and term deposits with maturity periods of three months or less.
Term Deposits and Amount Due from Related Parties
Term deposits and amount due from related parties (which represents cash owed to us by our collaborative alliance partners) were $17.9 million and $25.9 million, respectively, on December 31, 2009.
Financial Results for the Fiscal Year Ended December 31, 2009
Net Revenue
Total net revenue for the fiscal year ended December 31, 2009 was $52.0 million, representing an 11.6% increase from $46.5 million for the fiscal year 2008. Net revenue from online degree programs for the fiscal year 2009 was $41.8 million, representing an 11.7% increase from $37.4 million for the fiscal year 2008. This increase was attributable primarily to enrollment growth at our university partners’ online degree programs in fiscal year 2009 as compared to fiscal year 2008. In the aggregate, our university partners had approximately 287,000 revenue students during fiscal year 2009, representing an 18.1% increase from approximately 243,000 revenue students in fiscal year 2008.
Net revenue from the Company’s non-online degree programs for the fiscal year 2009 was $10.2 million, representing an 11.5% increase compared to $9.1 million for the fiscal year 2008. This result was attributable primarily to the increase in student enrollment at the Anqing School and increase in net revenue from the 101 online tutoring programs in fiscal year 2009, which was offset by a decrease in net revenue from international curriculum programs.
Cost of Revenue
Total cost of revenue for the fiscal year 2009 was $20.3 million, representing an increase of 17.5% as compared to $17.2 million for the fiscal year 2008. Cost of revenue from our online degree programs for fiscal year 2009 was $14.0 million, representing a 25.2% increase from $11.2 million in fiscal year 2008. The increase was primarily due to the cost increase related to the expansion of our learning centers network and increase in employee related costs throughout fiscal year 2009.
Cost of revenue for non-online degree programs for the fiscal year 2009 was $6.3 million, representing a 3.5% increase from $6.1 million for the fiscal year 2008. This increase was attributable primarily to the increase in cost of revenue at Anqing School and 101 online tutoring programs, but was offset by a decrease in cost of revenue for the international curriculum programs.
Gross Profit
Gross profit for the fiscal year 2009 was $31.7 million as compared with $29.3 million for the fiscal year 2008, representing an increase of 8.2%.
Gross margin for the fiscal year 2009 was 61.0%, as compared with gross margin of 62.9% for the fiscal year 2008. Gross margin for the online degree programs was 66.5% in 2009 as compared with gross margin for the online degree programs of 70.2% for 2008. The decrease in gross margin was primarily due to investment in our learning centers network.
Operating Expenses
Total operating expenses for the fiscal year 2009 were $20.1 million, representing a 35.7% decrease from $31.2 million for fiscal year 2008. This decrease was attributable primarily to the factors discussed below:
-- General and administrative expenses for the fiscal year 2009 were $12.1
million, representing a 4.7% decrease from $12.7 million for fiscal
year 2008. The decrease was primarily because there was almost no
account receivables write off and exchange loss in 2009 as well as a
reduction in rent in fiscal year 2009 as compared to fiscal year 2008.
-- Selling and marketing expenses for the fiscal year 2009 were $3.5
million, representing a 20.6% decrease from $4.4 million for the fiscal
year 2008. The decrease was attributable primarily to a shift from
conducting general sales and marketing activities to focusing on direct
recruiting related activities at our learning centers network.
-- Research and development expenses for the fiscal year 2009 were $4.5
million, representing a 16.0% increase from $3.8 million for the fiscal
year 2008. This increase was attributable primarily to technology
platform upgrade and the internet & mobile applications development for
the online degree and non-degree programs.
-- There was not an impairment charge of goodwill and intangible assets in
the fiscal year 2009, while such charge was $10.3 million in the fiscal
year 2008.
-- Share-based compensation for the fiscal year 2009, which was allocated
to the related cost of revenue and operating expense line items, was
$1.1 million, representing an increase of $0.3 million from $0.8
million for the fiscal year 2008. This increase was attributable
primarily to the re-pricing for under-water options and an increase in
the number and fair value of options granted in fiscal year 2009 as
compared to fiscal year 2008.
Income (Loss) from Operations
Income from operations was $11.6 million for the fiscal year 2009, as compared to a loss of $1.9 million for the fiscal year 2008. Operating margin was 22.4% for the fiscal year 2009 as compared to a negative 4.1% for the fiscal year 2008. The increase was primarily because there was not an impairment charge of goodwill and intangible assets in the fiscal year 2009, while such charge was $10.3 million in the fiscal year 2008.
Adjusted income from operations was $13.6 million for fiscal year 2009, representing a 26.9% increase from $10.7 million for the fiscal year 2008. Correspondingly, adjusted operating margin for the fiscal year 2009 was 26.1% for the fiscal year 2009 as compared to 23.0% for the fiscal year 2008. The increase was primarily due to improved operating results from our learning centers network, 101 online tutoring programs and Anqing School.
Interest Income
Interest income decreased by 53.2% to $0.7 million in the fiscal year 2009, as compared to $1.6 million in the fiscal year 2008. This decrease was attributable primarily to (i) the reduced interest bearing cash and bank deposit balance of $47.7 million as of December 31, 2009, as compared to $61.2 million as of December 31, 2008, and (ii) a lower interest rate for the fiscal year 2009 as compared to the fiscal year 2008.
Income Tax Expense
Income tax expense for the fiscal year 2009 was $2.8 million, representing a significant increase from $0.5 million for the fiscal year 2008. In December 2008, seven of our subsidiaries and affiliate companies obtained the HNTE status under the new PRC Enterprise Income Tax Law, which came into effect on January 1, 2008. The HNTE entities enjoy a 15% tax rate, which is lower than the statutory tax rate of 25%. An adjustment was recorded in the fourth quarter of 2008 to adjust our deferred income tax expenses based on the decrease in tax rate from 25% to 15%, which resulted in a low deferred income tax expense in 2008.
In addition, 2008 income tax was lower because there was a significant decrease in deferred tax liabilities related to impairment of acquired intangible assets in our international curriculum programs, while there was no such charge in 2009.
Noncontrolling Interest
Noncontrolling interest was $4.7 million in the fiscal year 2009, representing an 11.9% decrease, as compared to $5.3 million in the fiscal year 2008, which was attributable primarily to the noncontrolling interest impact related to the reduction in our deferred tax liabilities for the fiscal year 2008 resulted from change of tax rate from 25% to 15%.
Net Income (Loss) attributable to ChinaEdu
Net income attributable to ChinaEdu was $5.1 million for the fiscal year 2009, compared with a loss of $6.3 million for the fiscal year 2008, primarily because there was not an impairment charge of goodwill and intangible assets in the fiscal year 2009, while such charge was $10.3 million in the fiscal year 2008.
Net income per basic and diluted ADS were $0.313 and $0.291, respectively for the fiscal year of 2009, which improved significantly as compared to losses of $0.330 and $0.330, respectively, for the fiscal year 2008.
Adjusted net income attributable to ChinaEdu (non-GAAP) increased by 11.4% to $6.9 million for the fiscal year 2009, as compared to $6.2 million in the fiscal year 2008. Adjusted net margin remained flat at 13.3% for the fiscal year 2009.
Adjusted net income per basic and diluted ADS were $0.424 and $0.394, respectively for the fiscal year 2009, which increased by 31.7% and 27.9% from $0.322 and $0.308, respectively, for the fiscal year 2008.
Adjusted EBITDA (Non-GAAP)
Adjusted EBITDA (non-GAAP) was $16.0 million for the fiscal year 2009, which increased by 28.2% as compared to $12.5 million for the fiscal year 2008. This increase was attributable primarily to the increased net revenue and decreased general and administrative expenses and selling and marketing expenses as discussed above. Adjusted EBITDA margin was 30.8% for the fiscal year 2009 as compared to 26.8% for the fiscal year 2008.
First Quarter 2010 Total Net Revenue Guidance
For the first quarter of 2010, ChinaEdu expects its total net revenue to be in the range of RMB87 million to RMB90 million or $12.7 million to $13.2 million. This forecast reflects ChinaEdu’s current and preliminary view, which is subject to change.
Conference Call
ChinaEdu senior management will host a conference call on Friday, March 12, 2010 at 8:00 a.m. U.S. Eastern time / 5:00 a.m. U.S. Pacific time / 9:00 p.m. Beijing/Hong Kong time.
The conference call may be accessed by calling (US) 866 396 2384/ (International) +1 617 847 8711/ (HK) +852 3002 1672/ (China) +86 10 800 152 1490, and entering the passcode: 76490238. A telephone replay of the conference call will be available shortly after the call until March 19, 2010 at (US) 888 286 8010/ (International) +1 617 801 6888 and entering passcode: 86606775. A live and archived webcast may be accessed via ChinaEdu’s investor relations website at http://ir.chinaedu.net .
Non-GAAP Financial Measures
To supplement the unaudited condensed consolidated financial information presented in accordance with Accounting Principles Generally Accepted in the United States of America (“GAAP”), the Company uses non-GAAP measures of income from operations and net income attributable to ChinaEdu, which are adjusted from results based on GAAP to exclude certain non-cash items of share-based compensation, exchange loss, amortization of intangible assets and land use rights and goodwill and intangible assets impairment charges, if applicable. The Company also uses adjusted EBITDA, which is also a non-GAAP measure and is adjusted from GAAP results of net income to exclude interest income, taxes, exchange loss, depreciation, amortization of intangible assets and land use rights, share-based compensation and goodwill and intangible assets impairment charges, if applicable. These non-GAAP financial measures are provided to enhance the investors’ overall understanding of the Company’s current and past financial performance in on-going core operations as well as prospects for the future. These measures should be considered in addition to results prepared and presented in accordance with GAAP, but should not be considered a substitute for or superior to GAAP results. Management considers the non-GAAP information as important measures internally and therefore deems it important to provide all of this information to investors.
About ChinaEdu
ChinaEdu Corporation is an educational services provider in China, incorporated as an exempted limited liability company in the Cayman Islands. Established in 1999, the Company’s primary business is to provide comprehensive services to the online degree programs of leading Chinese universities. These services include academic program development, technology services, enrollment marketing, student support services and finance operations. The Company’s other lines of businesses include the operation of private primary and secondary schools, online interactive tutoring services and providing marketing and support for international curriculum programs.
The Company believes it is the largest service provider to online degree programs in China in terms of the number of higher education institutions that are served and the number of student enrollments supported. The Company currently has 15 long-term, exclusive contracts that generally vary from 10 to 50 years in length. ChinaEdu also performs recruiting services for 15 universities through its nationwide learning centers network.
Forward-Looking Statement
This press release contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, including certain plans, expectations, goals, and projections, which are subject to numerous assumptions, risks, and uncertainties. Forward-looking statements involve known and unknown risks, uncertainties and contingencies, many of which are beyond our control which may cause actual results, levels of activity, performance or achievements to differ materially from any future results, levels of activity, performance or achievements expressed or implied by such forward-looking statements. The Company’s actual results could differ materially from those contained in the forward-looking statements due to a number of factors, including those described under the heading “Risk Factors” in the Company’s Annual Report on Form 20-F for the year ended December 31, 2008, and in documents subsequently filed by the Company from time to time with the Securities and Exchange Commission. Unless required by law, the Company undertakes no obligation to (and expressly disclaim any such obligation to) update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
For more information, please contact:
Lily Liu, CFO
ChinaEdu Corporation
Phone: +86-10-8418-6655 x1002
Email: ir@chinaedu.net
S. Jimmy Xia, IR Manager
ChinaEdu Corporation
Phone: +86-10-8418-6655 x1150
Email: ir@chinaedu.net
ChinaEdu Corporation
Unaudited Condensed Consolidated Balance Sheets
December
31, 2008 December December
(in thousands, unaudited) As Adjusted(1) 31, 2009 31, 2009
RMB RMB US$
Current assets:
Cash and cash equivalents 353,933 203,143 29,761
Term deposits 63,500 122,304 17,918
Restricted cash -- 365 53
Accounts receivable, net 14,854 28,334 4,151
Inventory -- 1,852 271
Prepaid expenses and other
current assets 20,251 25,315 3,709
Amounts due from related parties 150,472 176,802 25,902
Deferred tax assets 3,986 3,309 485
Investments -- 17,706 2,594
Total current assets 606,996 579,130 84,844
Cost method investment 1,210 1,210 177
Investment -- 3,000 440
Land use rights, net 28,344 27,874 4,084
Property and equipment, net 161,925 203,995 29,885
Deposits paid for acquisition
of property and equipment 8,619 13,898 2,036
Intangible assets, net 70,377 66,621 9,760
Deferred tax assets 2,096 1,541 226
Rental deposits 958 868 127
Goodwill 38,155 38,155 5,590
Total assets 918,680 936,292 137,169
Liabilities and equity
Current liabilities:
Accounts payable 8,530 6,467 947
Deferred revenues 96,068 97,853 14,336
Accrued expenses and other
current liabilities 51,629 68,917 10,096
Amounts due to related parties 25,769 25,668 3,760
Income taxes payable 27,917 33,389 4,892
Other taxes payable 12,008 15,900 2,329
Total current liabilities 221,921 248,194 36,360
Deferred revenues 6,073 8,075 1,183
Deferred tax liabilities 11,069 10,143 1,486
Unrecognized tax benefit 5,473 7,727 1,132
Total liabilities 244,536 274,139 40,161
ChinaEdu shareholders' equity 589,829 559,973 82,039
Noncontrolling interest 84,315 102,180 14,969
Total equity 674,144 662,153 97,008
Total liabilities and equity 918,680 936,292 137,169
(1) Amount in relation to noncontrolling interest, formerly named minority
interest, as of December 31, 2008 is reclassified in accordance with
ASC 810 (formerly FASB Statement No. 160, Noncontrolling Interest),
which was adopted by the Company on January 1, 2009.
ChinaEdu Corporation
Unaudited Condensed Consolidated Statements of Operations
Three Months Ended
(in thousands, except December 31,
for percentage, share, 2008 As September December December
and per share Adjusted (1) 30, 2009 31, 2009 31, 2009
information) RMB RMB RMB US$
Gross Revenue (2) 89,441 94,303 95,871 14,045
Business Tax and Surcharge 2,901 4,559 354 52
Net Revenue:
Online degree programs 69,945 71,510 76,457 11,201
Online tutoring programs 4,472 5,778 5,510 807
Private primary and
secondary schools 6,823 7,669 9,816 1,438
International curriculum
programs 5,300 4,787 3,734 547
Total net revenue 86,540 89,744 95,517 13,993
Cost of revenue:
Online degree programs 28,195 23,633 26,575 3,893
Online tutoring programs 1,443 1,426 1,222 179
Private primary and
secondary schools 5,828 7,070 7,298 1,069
International curriculum
programs 3,532 2,840 2,531 371
Total cost of revenue 38,998 34,969 37,626 5,512
Gross profit:
Online degree programs 41,750 47,877 49,882 7,308
Online tutoring programs 3,029 4,352 4,288 628
Private primary and
secondary schools 995 599 2,518 369
International curriculum
programs 1,768 1,947 1,203 176
Total gross profit 47,542 54,775 57,891 8,481
Online degree programs 59.7% 67.0% 65.2% 65.2%
Online tutoring programs 67.7% 75.3% 77.8% 77.8%
Private primary and
secondary schools 14.6% 7.8% 25.7% 25.7%
International curriculum
programs 33.4% 40.7% 32.2% 32.2%
Gross margin 54.9% 61.0% 60.6% 60.6%
Operating expenses:
General and administrative 27,410 20,519 23,014 3,372
Selling and marketing 8,202 6,766 6,578 964
Research and development 8,947 7,522 8,410 1,232
Goodwill and intangible
assets impairment 52,236 -- -- --
Total operating expenses 96,795 34,807 38,002 5,568
Income (loss) from
operations (49,253) 19,968 19,889 2,913
Operating margin -56.9% 22.2% 20.8% 20.8%
Other income (expense) 145 (264) 761 111
Interest income 2,973 1,041 1,085 159
Interest expense (1) (1) (1) --
Income (loss) before
income tax provisions (46,136) 20,744 21,734 3,183
Income tax expense 19,621 (4,835) (5,487) (804)
Net income (loss) (26,515) 15,909 16,247 2,379
Net income attributable to
the noncontrolling
interest (12,469) (8,610) (7,191) (1,053)
Net income (loss)
attributable to ChinaEdu (38,984) 7,299 9,056 1,326
Net margin -45.0% 8.1% 9.5% 9.5%
Net income (loss)
attributable to ChinaEdu
per ADS:
Basic (2.10) 0.45 0.56 0.082
Diluted (2.10) 0.41 0.51 0.075
Weighted average aggregate
number of ADSs
outstanding:
Basic 18,650,558 16,227,267 16,148,719 16,148,719
Diluted 18,650,558 17,604,567 17,589,699 17,589,699
(2) Gross revenue are
detailed as follows
Online degree programs 72,411 75,564 76,441 11,199
Online tutoring programs 4,643 6,002 5,658 829
Private primary and
secondary schools 6,853 7,671 9,821 1,439
International curriculum
programs 5,534 5,066 3,951 579
Twelve Months Ended
December
(in thousands, except 31, 2008 December December
for percentage, share, As Adjusted (1) 31, 2009 31, 2009
and per share information) RMB RMB US$
Gross Revenue (2) 327,903 368,447 53,978
Business Tax and Surcharge 10,183 13,741 2,013
Net Revenue:
Online degree programs 255,388 285,178 41,779
Online tutoring programs 15,436 19,584 2,869
Private primary and secondary schools 19,289 30,627 4,487
International curriculum programs 27,607 19,317 2,830
Total net revenue 317,720 354,706 51,965
Cost of revenue:
Online degree programs 76,224 95,428 13,980
Online tutoring programs 4,017 5,713 837
Private primary and secondary schools 17,572 26,109 3,825
International curriculum programs 19,920 11,112 1,628
Total cost of revenue 117,733 138,362 20,270
Gross profit:
Online degree programs 179,164 189,750 27,799
Online tutoring programs 11,419 13,871 2,032
Private primary and secondary schools 1,717 4,518 662
International curriculum programs 7,687 8,205 1,202
Total gross profit 199,987 216,344 31,695
Online degree programs 70.2% 66.5% 66.5%
Online tutoring programs 74.0% 70.8% 70.8%
Private primary and secondary schools 8.9% 14.8% 14.8%
International curriculum programs 27.8% 42.5% 42.5%
Gross margin 62.9% 61.0% 61.0%
Operating expenses:
General and administrative 86,908 82,858 12,139
Selling and marketing 29,851 23,688 3,470
Research and development 26,185 30,385 4,451
Goodwill and intangible assets
impairment 70,093 -- --
Total operating expenses 213,037 136,931 20,060
Income (loss) from operations -13,050 79,413 11,635
Operating margin -4.1% 22.4% 22.4%
Other income (expense) 562 1,748 256
Interest income 10,652 4,980 730
Interest expense (1,298) (2) --
Income (loss) before income tax
provisions (3,134) 86,139 12,621
Income tax expense (3,473) (19,287) (2,826)
Net income (loss) (6,607) 66,852 9,795
Net income attributable to the
noncontrolling interest (36,412) (32,073) (4,699)
Net income (loss) attributable to
ChinaEdu (43,019) 34,779 5,096
Net margin -13.5% 9.8% 9.8%
Net income (loss) attributable to
ChinaEdu per ADS:
Basic (2.25) 2.14 0.313
Diluted (2.25) 1.99 0.291
Weighted average aggregate number of
ADSs outstanding:
Basic 19,226,501 16,281,535 16,281,535
Diluted 19,226,501 17,506,561 17,506,561
(2) Gross revenue are detailed as
follows
Online degree programs 263,727 297,192 43,539
Online tutoring programs 16,058 20,130 2,949
Private primary and secondary schools 19,319 30,684 4,495
International curriculum programs 28,799 20,441 2,995
ChinaEdu Corporation
Unaudited Condensed Consolidated Statements of Cash Flow
Three Months Ended
December September December December
(in thousands) 31, 2008 (1) 30, 2009 31, 2009 31, 2009
RMB RMB RMB US$
Operating activities:
Net income (loss) (26,515) 15,909 16,247 2,379
Share-based compensation 1,683 1,488 1,611 236
Depreciation 3,570 4,119 4,560 668
Amortization of land use
rights 182 152 152 22
Amortization of intangible
assets 2,087 1,114 1,129 165
Goodwill and intangible
assets impairment 52,236 -- -- --
Accounts receivable write-
off 1,215 16 (61) (9)
Loss from disposal of
property and equipment 1,663 110 310 45
Deferred income taxes (16,310) (613) (51) (7)
Accounts receivable (10,341) 11,797 (15,121) (2,215)
Inventory -- (722) (53) (8)
Prepaid expenses and other
current assets (7,287) (6,582) (2,800) (410)
Amounts due from related
parties (22,991) 26,821 11,511 1,686
Rental deposits 107 (67) 62 9
Land use right (160) -- -- --
Accounts payable (1,084) (1,368) (1,373) (201)
Deferred revenues 68,925 (60,114) 64,517 9,452
Accrued expenses and other
current liabilities 16,213 8,437 10,043 1,472
Amounts due to related
parties (29,096) 11,946 (37,523) (5,497)
Unrecognized tax benefit 872 89 184 27
Other taxes payable 5,287 2,122 2,054 301
Income tax payable (4,556) 4,800 5,131 752
Net cash provided by operating
activities 35,700 19,454 60,529 8,867
Investing activities:
Purchase of business -- -- -- --
Purchase of property and
equipment (4,745) (10,270) (6,277) (920)
Deposits paid for
acquisition of property and
equipment (2,616) 2,616 (13,987) (2,049)
Redeem (purchase) of term
deposits 41,000 (8,988) (33,825) (4,955)
Purchase of investments -- (14,083) (6,495) (952)
Purchase of contractual
right -- -- (735) (108)
Change in restricted cash -- -- (365) (53)
Proceeds from disposal of
property and equipment -- -- -- --
Net cash provided by (used in)
investing activities 33,639 (30,725) (61,684) (9,037)
Financing activities:
Repurchase of ordinary
shares (13,714) -- (14,740) (2,159)
Cancellation fee of
repurchased ordinary shares -- (249) -- --
Short term loan -- 2,117 (2,117) (310)
Repayment of long-term loan
interest and principal -- -- -- --
Cash dividends paid to
noncontrolling shareholders (7,269) -- (4,098) (600)
Capital contributions by
noncontrolling shareholders -- -- 735 108
Proceeds from exercise of
options 1,383 2,463 274 40
Net cash provided by (used in)
financing activities (19,600) 4,331 (19,946) (2,921)
Effect of foreign exchange
rate changes 865 48 4 1
CASH AND CASH EQUIVALENTS,
beginning of period 303,329 231,132 224,240 32,851
CASH AND CASH EQUIVALENTS,
end of period 353,933 224,240 203,143 29,761
Net increase (decrease) in cash 50,604 (6,892) (21,097) (3,090)
Twelve Months Ended
December December December
(in thousands) 31, 2008 (1) 31, 2009 31, 2009
RMB RMB US$
Operating activities:
Net income (loss) (6,607) 66,852 9,795
Share-based compensation 5,231 7,416 1,086
Depreciation 12,212 16,603 2,432
Amortization of land use
rights 606 619 91
Amortization of intangible
assets 8,746 5,237 767
Goodwill and intangible
assets impairment 70,093 -- --
Accounts receivable write-
off 1,215 364 53
Loss from disposal of
property and equipment 1,663 513 75
Deferred income taxes (8,387) 306 45
Accounts receivable (14,658) (13,844) (2,028)
Inventory -- (1,852) (271)
Prepaid expenses and other
current assets (2,970) (5,075) (743)
Amounts due from related
parties (44,950) (26,330) (3,857)
Rental deposits 665 90 13
Land use right (160) (1,989) (291)
Accounts payable (950) 115 17
Deferred revenues 15,210 3,792 556
Accrued expenses and other
current liabilities 10,011 19,082 2,796
Amounts due to related
parties (4,368) 268 39
Unrecognized tax benefit 1,141 2,254 330
Other taxes payable 5,342 3,892 570
Income tax payable 5,462 5,472 802
Net cash provided by operating
activities 54,547 83,785 12,277
Investing activities:
Purchase of business (6,700) -- --
Purchase of property and
equipment (36,323) (57,071) (8,361)
Deposits paid for
acquisition of property
and equipment (8,650) (11,371) (1,666)
Redeem (purchase) of term
deposits (57,458) (58,813) (8,616)
Purchase of investments -- (20,578) (3,015)
Purchase of contractual
right (1,225) (1,235) (181)
Change in restricted cash -- (365) (53)
Proceeds from disposal of
property and equipment 31 -- --
Net cash provided by (used in)
investing activities (110,325) (149,433) (21,892)
Financing activities:
Repurchase of ordinary
shares (34,190) (76,387) (11,191)
Cancellation fee of
repurchased ordinary
shares -- (249) (36)
Short term loan -- -- --
Repayment of long-term
loan interest and
principal (25,724) -- --
Cash dividends paid to
noncontrolling
shareholders (11,319) (14,698) (2,153)
Capital contributions by
noncontrolling
shareholders 1,225 1,715 251
Proceeds from exercise of
options 1,787 4,161 610
Net cash provided by (used in)
financing activities (68,221) (85,458) (12,519)
Effect of foreign exchange rate
changes (19,182) 316 44
CASH AND CASH EQUIVALENTS, beginning
of period 497,114 353,933 51,851
CASH AND CASH EQUIVALENTS, end of
period 353,933 203,143 29,761
Net increase (decrease) in cash (143,181) (150,790) (22,090)
ChinaEdu Corporation
Reconciliations from income (loss) from operations to adjusted income from
operations (non-GAAP) and adjusted operating margin (non-GAAP)
Three Months Ended
December September December December
(in thousands, unaudited) 31, 2008 30, 2009 31, 2009 31, 2009
RMB RMB RMB US$
Income (loss) from
operations
GAAP Result (49,253) 19,968 19,889 2,913
Share-based compensation 1,683 1,488 1,611 236
Exchange loss -- -- -- --
Amortization 2,269 1,266 1,281 187
Goodwill and intangible
assets impairment 52,236 -- -- --
Adjusted income from
operations (non-GAAP) 6,935 22,722 22,781 3,336
Adjusted operating margin
(non-GAAP) 8.0% 25.3% 23.9% 23.9%
Twelve Months Ended
December December December
(in thousands, unaudited) 31, 2008 31, 2009 31, 2009
RMB RMB US$
Income (loss) from operations
GAAP Result (13,050) 79,413 11,635
Share-based compensation 5,231 7,416 1,086
Exchange loss 1,433 -- --
Amortization 9,352 5,856 858
Goodwill and intangible assets
impairment 70,093 -- --
Adjusted income from operations
(non-GAAP) 73,059 92,685 13,579
Adjusted operating margin (non-GAAP) 23.0% 26.1% 26.1%
ChinaEdu Corporation
Reconciliation from net income (loss) to adjusted EBITDA (non-GAAP)
and adjusted EBITDA margin (non-GAAP)
Three Months Ended
December September December December
(in thousands, unaudited) 31, 2008 30, 2009 31, 2009 31, 2009
RMB RMB RMB US$
Net income (loss) (26,515) 15,909 16,247 2,379
Income tax expense (19,621) 4,835 5,487 804
Share-based compensation 1,683 1,488 1,611 236
Exchange loss -- -- -- --
Amortization 2,269 1,266 1,281 187
Depreciation 3,570 4,119 4,560 668
Interest income and other, net (3,117) (776) (1,845) (270)
Goodwill and intangible assets
impairment 52,236 -- -- --
Adjusted EBITDA (non-GAAP) 10,505 26,841 27,341 4,004
Adjusted EBITDA margin (non-GAAP) 12.1% 29.9% 28.6% 28.6%
Twelve Months Ended
December December December
(in thousands, unaudited) 31, 2008 31, 2009 31, 2009
RMB RMB US$
Net income (loss) (6,607) 66,852 9,795
Income tax expense 3,473 19,287 2,826
Share-based compensation 5,231 7,416 1,086
Exchange loss 1,433 -- --
Amortization 9,352 5,856 858
Depreciation 12,212 16,603 2,432
Interest income and other, net (9,916) (6,726) (986)
Goodwill and intangible assets
impairment 70,093 -- --
Adjusted EBITDA (non-GAAP) 85,271 109,288 16,011
Adjusted EBITDA margin (non-GAAP) 26.8% 30.8% 30.8%
ChinaEdu Corporation
Reconciliations from net income (loss) attributable to ChinaEdu to
adjusted net income attributable to ChinaEdu (non-GAAP), adjusted net
margin (non-GAAP) and adjusted net income per ADS (non-GAAP)
Three Months Ended
(in thousands, unaudited) December September December December
31, 2008 30, 2009 31, 2009 31, 2009
RMB RMB RMB US$
Net income (loss) attri-
butable to ChinaEdu
GAAP Result (38,984) 7,299 9,056 1,326
Share-based compensation 1,683 1,488 1,611 236
Exchange loss -- -- -- --
Share-based compensation
attributable to the
noncontrolling interest (203) (168) (183) (27)
Amortization 2,269 1,266 1,281 187
Goodwill and intangible
assets impairment 52,236 -- -- --
Adjusted net income
attributable to ChinaEdu
(non-GAAP) 17,001 9,885 11,765 1,722
Adjusted net margin (non-
GAAP) 19.6% 11.0% 12.3% 12.3%
Adjusted net income per
ADS (non-GAAP)
Basic 0.91 0.61 0.73 0.107
Diluted 0.89 0.56 0.67 0.098
Weighted average aggregate
number of ordinary shares
outstanding:
Basic 18,650,558 16,227,267 16,148,719 16,148,719
Diluted 19,187,923 17,604,567 17,589,699 17,589,699
Twelve Months Ended
(in thousands, unaudited) December December December
31, 2008 31, 2009 31, 2009
RMB RMB US$
Net income (loss) attributable to
ChinaEdu
GAAP Result (43,019) 34,779 5,096
Share-based compensation 5,231 7,416 1,086
Exchange loss 1,433 -- --
Share-based compensation attributable
to the noncontrolling interest (786) (925) (136)
Amortization 9,352 5,856 858
Goodwill and intangible assets
impairment 70,093 -- --
Adjusted net income attributable to
ChinaEdu (non-GAAP) 42,304 47,126 6,904
Adjusted net margin (non-GAAP) 13.3% 13.3% 13.3%
Adjusted net income per ADS (non-GAAP)
Basic 2.20 2.89 0.424
Diluted 2.10 2.69 0.394
Weighted average aggregate number of
ordinary shares outstanding:
Basic 19,226,501 16,281,535 16,281,535
Diluted 20,162,529 17,506,561 17,506,561
Adjusted income from operations, which is a non-GAAP measure defined as
income from operations excluding share-based compensation, exchange loss,
amortization of intangible assets and land use rights, and goodwill and
intangible assets impairment charges, if applicable.
Adjusted net income attributable to ChinaEdu, which is a non-GAAP measure
defined as net income attributable to the ChinaEdu excluding share-based
compensation, exchange loss, noncontrolling interest for share-based
compensation, amortization of intangible assets and land use rights, and
goodwill and intangible assets impairment charges, if applicable.
Press Release Source: Frequency Electronics, Inc. On Friday March 12, 2010, 8:30 am EST
MITCHEL FIELD, N.Y., March 12, 2010 (GLOBE NEWSWIRE) — Frequency Electronics, Inc. (Nasdaq:FEIM – News) reported net income for the third quarter of fiscal 2010, which ended January 31, 2010, of $2.0 million, or $0.25 per diluted share, compared to a net loss of $129,000, or ($0.02) per diluted share in the preceding quarter, and net income of $99,000, or $0.01 per diluted share, in the third quarter of fiscal 2009. Net income for the first nine months of fiscal 2010 was $2.6 million, or $0.31 per diluted share, compared to net loss of $1.6 million, or ($0.19) per diluted share, in the same period of fiscal 2009. The fiscal year 2010 periods include a tax benefit of $2.0 million as a result of a change in tax laws regarding the carryback of net operating losses and also include non-cash investment impairment charges to income of $350,000 for the quarter and $550,000 for the nine months ended January 31, 2010.
Revenues for the third quarter were $12.5 million, compared to $11.4 million for the preceding quarter and $13.2 million for the same period of fiscal 2009. Revenues for the first nine months of fiscal 2010 were $36.4 million compared to $40.3 million for the same period of fiscal 2009.
Operating income for the third quarter of fiscal 2010 was $314,000, an increase over the $242,000 operating income in the preceding quarter, and compared to an operating loss of $215,000 in the third quarter of fiscal 2009. For the first nine months of fiscal 2010, operating income was $1.2 million compared to an operating loss of $2.5 million for the same period in the previous fiscal year.
Chairman of the Board General Joseph Franklin made the following comments: “Recent results add further support to our very positive outlook for Frequency Electronics. The Company is generating increased operating profits at current revenue rates, reflecting operating efficiencies that were put in place last year. Our cash position has increased from $14.9 million at year end to $16.9 million at the end of the third quarter. We are making great progress on the design of new standardized space products which will address a larger share of the satellite payload market. Engineering models for these products are on schedule for completion by the end of this fiscal year. The Company has also made large R&D investments to develop and qualify state-of-the-art products which in many cases are sole-source on large, multi-year government programs. We anticipate significant additional bookings for follow-on phases of these programs, which will add to revenues and profitability.”
Reports on the Company’s major business areas:
– Satellite Payloads: Revenues from this business area in the third quarter continued on the same trend, approximately 33% of consolidated revenues. U.S. Government space program revenues continued to grow, while commercial revenues were relatively flat. Significant engineering effort is directed at development of new C and Ku band beacon/telemetry transceivers, and a new family of frequency generators and converters.
– U.S. Government/DOD non-satellite programs: Revenues from this business area exceeded 20% of consolidated revenues in the third quarter. Year-over-year for the first nine months, revenues from this business area have increased 25%.
– Telecommunications infrastructure: Revenues from this business area in the third quarter were approximately 30% of consolidated revenues. Sales of wireless products continued to decline. Sales of the US5G and other wireline synchronization products are gaining significant market share and now represent a major portion of this business area.
Reporting segments:
(Including inter-segment sales of $595,000 in the third quarter of fiscal 2010, $635,000 in the previous quarter, and $786,000 in the third quarter of fiscal 2009.)
– FEI-NY revenues were $7.4 million for this quarter, compared to $6.9 million in the preceding quarter, and $9.5 million in the third quarter of fiscal 2009. The FEI-NY segment includes revenues from all major business areas.
– Gillam-FEI recorded revenues of $3.8 million for this quarter, compared to $2.5 million in the preceding quarter and $2.4 million in the third quarter of fiscal 2009. The Gillam-FEI segment includes revenues primarily from wireline telecommunications infrastructure and from other network management products
– FEI-Zyfer revenues were $1.9 million for this quarter, compared to $2.6 million for the preceding quarter and $2.1 million in the third quarter of fiscal 2009. The majority of FEI-Zyfer’s sales are derived from U.S. Government/DOD programs, and also include US5G sales.
Chief Financial Officer Alan Miller stated: “Our third quarter and nine-month gross margins improved substantially over the same periods of fiscal year 2009. Consequently, we were able to generate operating profits during the fiscal 2010 periods. We recorded $465,000 in positive operating cash flow for this past quarter; $3.1 million year-to-date and we anticipate adding another $2.8 million upon receipt of the tax refund. Frequency is on a very sound financial footing to take advantage of new opportunities.”
Investor Conference Call
As previously announced, the Company will hold a conference call to discuss these results on Friday, March 12, 2010, at 11:30 AM Eastern Time. Investors and analysts may access the call by dialing 1-877-407-9205. International callers may dial 1-201-689-8054. Ask for the Frequency Electronics conference call.
The call will be archived on the Company’s website through April 12, 2010. The archived call may also be retrieved at 1-877-660-6853 (domestic) or 1-201-612-7415 (international) using Passcodes (both are required for playback): Account: 286, Conference ID: 346964.
About Frequency Electronics
Frequency Electronics, Inc. is a world leader in the design, development and manufacture of high precision timing, frequency control and synchronization products for space and terrestrial applications. Frequency’s products are used in commercial, government and military systems, including satellite payloads, missiles, UAVs, aircraft, GPS, secure radios, SCADA, energy exploration and wireline and wireless communication networks. Frequency has received over 60 awards of excellence for achievements in providing high performance electronic assemblies for over 120 space programs. The Company invests significant resources in research and development and strategic acquisitions world-wide to expand its capabilities and markets. Subsidiaries and Affiliates: Gillam-FEI provides expertise in wireline network synchronization and SCADA; FEI-Zyfer provides GPS and secure timing (“SAASM”) capabilities for critical military and commercial applications, and US5G and related wireline synchronization products; FEI-Asia provides cost-effective manufacturing and distribution capabilities in a high growth market. Frequency’s Morion affiliate supplies high-quality, cost-effective quartz oscillators and components. The Elcom Technologies affiliate provides added resources for state-of-the-art RF microwave products. Additional information is available on the Company’s website: http://www.frequencyelectronics.com/.
Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995: The Statements in this press release regarding the future constitute “forward-looking” statements pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements inherently involve risks and uncertainties that could cause actual results to differ materially from the forward-looking statements. Factors that would cause or contribute to such differences include, but are not limited to, inability to integrate operations and personnel, actions by significant customers or competitors, general domestic and international economic conditions, consumer spending trends, reliance on key customers, continued acceptance of the Company’s products in the marketplace, competitive factors, new products and technological changes, product prices and raw material costs, dependence upon third-party vendors, competitive developments, changes in manufacturing and transportation costs, the availability of capital, and other risks detailed in the Company’s periodic report filings with the Securities and Exchange Commission. By making these forward-looking statements, the Company undertakes no obligation to update these statements for revisions or changes after the date of this release.
| Frequency Electronics, Inc. and Subsidiaries |
| Consolidated Condensed Summary of Operations |
|
|
|
|
|
|
Quarter Ended |
Nine Months Ended |
|
January 31, |
January 31, |
|
2010 |
2009 |
2010 |
2009 |
|
(unaudited) |
(unaudited) |
|
(in thousands except per share data) |
|
|
|
|
|
| Revenues |
$12,524 |
$13,208 |
$36,360 |
$40,297 |
| Cost of Revenues |
8,102 |
9,749 |
23,243 |
30,932 |
| Gross Margin |
4,422 |
3,459 |
13,117 |
9,365 |
|
|
|
|
|
| Selling and Administrative |
2,608 |
2,845 |
7,948 |
8,797 |
| Research and Development |
1,500 |
829 |
3,954 |
3,068 |
| Operating Income (Loss) |
314 |
(215) |
1,215 |
(2,500) |
| Interest and Other, Net |
(235) |
295 |
(611) |
237 |
| Income (Loss) before Income Taxes |
79 |
80 |
604 |
(2,263) |
| Income Tax Benefit |
(1,970) |
(19) |
(1,970) |
(696) |
| Net Income (Loss) |
$2,049 |
$99 |
$2,574 |
$(1,567) |
|
|
|
|
|
| Net Income (Loss) per Share: |
|
|
|
|
| Basic |
$0.25 |
$0.01 |
$0.31 |
$(0.19) |
| Diluted |
$0.25 |
$0.01 |
$0.31 |
$(0.19) |
| Average Shares Outstanding |
|
|
|
|
| Basic |
8,184,627 |
8,097,899 |
8,176,638 |
8,381,424 |
| Diluted |
8,222,574 |
8,097,899 |
8,197,367 |
8,381,424 |
|
| Frequency Electronics, Inc. and Subsidiaries |
| Condensed Consolidated Balance Sheets |
|
|
|
|
January 31, |
April 30, |
|
2010 |
2009 |
|
(in thousands) |
|
|
|
| ASSETS |
|
|
| Cash & Marketable Securities |
$16,912 |
$14,909 |
| Accounts Receivable |
9,924 |
10,775 |
| Costs and Estimated Earnings in Excess of Billings |
2,667 |
2,193 |
| Inventories |
28,585 |
26,051 |
| Other Current Assets |
3,307 |
2,143 |
| Property, Plant & Equipment |
7,016 |
7,961 |
| Other Assets |
13,335 |
13,888 |
|
$81,746 |
$77,920 |
|
|
|
| LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
| Current Liabilities |
$7,461 |
$8,040 |
| Long-term Obligations and Other |
10,751 |
10,714 |
| Stockholders’ Equity |
63,534 |
59,166 |
|
$81,746 |
$77,920 |
Press Release Source: ATP Oil & Gas Corporation On Friday March 12, 2010, 8:20 am EST
HOUSTON–(BUSINESS WIRE)–ATP Oil & Gas Corporation (NASDAQ:ATPG – News) today issued its annual 2009 results, a 376% reserve replacement ratio, and announced that its major deepwater Gulf of Mexico development, the Telemark Hub, is on schedule for first production later this month. At ATP’s other deepwater development, the Canyon Express Hub, the MC 217 #3 well was placed on initial production March 11, 2010 at 30 MMcf/d gross.
Telemark Hub Update
ATP’s major deepwater Gulf of Mexico development, the Telemark Hub, is on schedule to commence production during March 2010 from the Atwater Valley 63 # 4 well. This well was tested in February at a gross rate in excess of 10,700 Boe/d from two zones. The ATP Titan, the Telemark Hub’s state-of-the-art floating production and processing facility, is in the final stages of commissioning following the installation of all major production and processing components. The sales pipelines have been hydro-tested and dewatered.
The initial sections of the Nabor’s platform rig 202 began arriving this week. Following erection of the drilling rig on the ATP Titan over the next several weeks, ATP will begin the process of re-entering and completing the Mississippi Canyon (“MC”) 941 #3 well. The MC 941 #3 well, which has been drilled and cased, is expected to commence production in the second quarter 2010. In September 2009, this well encountered 266’ of net pay, triple the amount of net pay found in the original control well.
ATP operates the Telemark Hub with a 100% working interest and owns 100% of the ATP Titan and associated pipelines and infrastructure.
Canyon Express Hub Update
At King’s Peak, the MC 217 #3 well began production through the Canyon Express pipeline on March 11, 2010 at a gross rate of 30 MMcf/d. At Aconcagua, MC 305, two additional wells, the #3 and #4, are scheduled to resume production at a rate of 30 MMcf/d gross, bringing the entire Canyon Express Hub production rate up to 60 MMcf/d gross.
ATP operates the Canyon Express Hub with a greater than 50% working interest in the wells and associated pipelines, which have a throughput capacity of approximately 500 MMcf/d.
Results of Operations
Oil revenues rose to 75% of total oil and gas revenues in 2009 compared with 56% in 2008. Oil and gas production for 2009 was 5.9 MMBoe compared to 9.6 MMBoe for 2008. In the fourth quarter 2009, ATP produced 1.3 MMBoe compared to 0.9 MMBoe in the fourth quarter 2008. With the startup of production at the Telemark Hub, ATP anticipates a further increase in its oil revenues as a percent of total revenues as well as its oil to gas production ratio during 2010.
Lease operating expense was $85.0 million for 2009 and $24.5 million for the fourth quarter 2009, compared to $91.2 million for 2008 and $18.1 million for the fourth quarter 2008. Lease operating expense for 2009 decreased compared to 2008 primarily due to the sale of 80% of the two North Sea properties mentioned above and from reduced fuel and chemical costs in the Gulf of Mexico. These cost decreases were partially offset by increases related to insurance premiums and nonrecurring workover activities at various Gulf of Mexico and North Sea properties.
General and administrative expense was $44.2 million for 2009 and $19.1 million for the fourth quarter of 2009, compared to $41.7 million for 2008 and $14.4 million for the fourth quarter of 2008. The general and administrative expense increased in 2009 compared to 2008 due primarily to the payment of third party fees related to ATP’s debt modification in the fourth quarter 2009.
Interest expense decreased to $40.9 million in 2009 compared to $100.7 million in 2008 primarily due to 2009 capitalized interest of $110.1 million compared to capitalized interest of $44.6 million in 2008. Capitalized interest in 2009 increased due to higher average construction work-in-progress balances.
ATP recorded a net loss attributable to common shareholders of $51.8 million or $1.24 per basic and diluted share for 2009, compared to net income of $121.7 million or $3.43 per basic and $3.39 per diluted share for 2008. For the fourth quarter, ATP recorded a net loss of $40.0 million or $0.80 per basic and diluted share, compared to net income of $50.2 million or $1.41 per basic and diluted share for the fourth quarter 2008. Fourth quarter results were impacted by delays related to a well recompletion at ATP’s Gomez Hub. The recompletion of the MC 711 #4 well was successful in January 2010 and, as a result, the comingled well tested at a net rate in excess of 4,600 Boe/d.
The net loss for the fourth quarter 2009 was impacted by several nonrecurring items research analysts typically exclude from their published estimates including an after-tax impairment at several Gulf of Mexico shelf properties of $24.1 million, an after-tax gain on the sale of properties of $8.5 million, an after-tax expense of $4.0 million relating to debt modification and an unrealized after-tax loss on derivatives of $10.1 million. Accordingly, net loss before these nonrecurring items, a non-GAAP measure, in the fourth quarter 2009 was $10.3 million or $0.20 per basic and diluted share. For the same metric in 2008, ATP recorded net income of $78.4 million or $2.21 per basic and $2.20 per diluted share. A reconciliation of non-GAAP net income is provided below:
|
| Reconciliation of Non-GAAP Net Income (Loss) Attributable to Common Shareholders |
| (In Thousands, Except Per Share Amounts) |
| (Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Year Ended |
|
|
|
December 31, |
|
December 31, |
|
|
|
2009 |
|
2008 |
|
2009 |
|
2008 |
|
|
|
|
|
|
|
|
|
|
| Net income (loss) attributable to common shareholders |
|
|
$ |
(39,966
|
) |
|
$ |
50,157 |
|
|
$ |
(51,817
|
) |
|
$ |
121,705 |
|
| Adjustments to net income, net of tax at statutory rates: |
|
|
|
|
|
|
|
|
|
| Other revenues – insurance recoveries |
|
|
|
– |
|
|
|
(21,001 |
) |
|
|
(8,882 |
) |
|
|
(21,584 |
) |
| Impairment of oil and gas properties |
|
|
|
24,083 |
|
|
|
81,437 |
|
|
|
29,769 |
|
|
|
81,288 |
|
| (Gain) loss on abandonment |
|
|
|
(50 |
) |
|
|
7,138 |
|
|
|
1,867 |
|
|
|
8,639 |
|
| Gain on disposal of properties |
|
|
|
(8,450 |
) |
|
|
(59,536 |
) |
|
|
(8,192 |
) |
|
|
(59,641 |
) |
| Loss on debt extinguishment |
|
|
|
– |
|
|
|
– |
|
|
|
– |
|
|
|
15,743 |
|
| Debt modification costs |
|
|
|
4,046 |
|
|
|
– |
|
|
|
4,046 |
|
|
|
– |
|
| Unrealized derivatives expense |
|
|
|
10,056 |
|
|
|
20,170 |
|
|
|
25,075 |
|
|
|
8,028 |
|
|
Pro forma net income (loss) attributable to common shareholders
|
|
|
$ |
(10,281
|
) |
|
$ |
78,365 |
|
|
$ |
(8,134
|
) |
|
$ |
154,178 |
|
|
|
|
|
|
|
|
|
|
|
|
Pro forma net income (loss) per share attributable to common shareholders:
|
|
|
|
|
|
|
|
|
|
| Basic |
|
|
$ |
(0.20
|
) |
|
$ |
2.21 |
|
|
$ |
(0.16
|
) |
|
$ |
4.35 |
|
| Diluted |
|
|
$ |
(0.20
|
) |
|
$ |
2.20 |
|
|
$ |
(0.16
|
) |
|
$ |
4.30 |
|
|
|
|
|
|
|
|
|
|
|
| Weighted average shares outstanding: |
|
|
|
|
|
|
|
|
|
| Basic |
|
|
|
50,208 |
|
|
|
35,506 |
|
|
|
50,208 |
|
|
|
35,457 |
|
| Diluted |
|
|
|
50,208 |
|
|
|
35,608 |
|
|
|
50,208 |
|
|
|
35,868 |
|
|
|
|
|
|
|
|
|
|
|
ATP’s selected operating statistics and financial information below contain additional information on the company’s activities for the year and fourth quarter of 2009 and the comparable periods in 2008.
| Selected Financial Data |
|
Three Months Ended |
|
|
Year Ended |
| (Unaudited) |
|
December 31, |
|
|
December 31, |
|
|
2009 |
|
2008 |
|
|
2009 |
|
2008 |
|
|
|
|
|
|
|
|
|
|
| Production |
|
|
|
|
|
|
|
|
|
| Natural gas (MMcf) |
|
|
3,006 |
|
|
|
2,782 |
|
|
|
|
15,119 |
|
|
|
31,862 |
|
| Gulf of Mexico |
|
|
2,177 |
|
|
|
1,026 |
|
|
|
|
11,988 |
|
|
|
16,760 |
|
| North Sea |
|
|
829 |
|
|
|
1,756 |
|
|
|
|
3,131 |
|
|
|
15,102 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Oil and condensate (MBbls) |
|
|
748 |
|
|
|
409 |
|
|
|
|
3,353 |
|
|
|
4,266 |
|
| Gulf of Mexico |
|
|
746 |
|
|
|
403 |
|
|
|
|
3,344 |
|
|
|
4,232 |
|
| North Sea |
|
|
2 |
|
|
|
6 |
|
|
|
|
9 |
|
|
|
34 |
|
|
|
|
|
|
|
|
|
|
|
| Natural gas, oil and condensate |
|
|
|
|
|
|
|
|
|
| MMcfe |
|
|
7,497 |
|
|
|
5,249 |
|
|
|
|
35,237 |
|
|
|
57,468 |
|
| MBoe |
|
|
1,250 |
|
|
|
875 |
|
|
|
|
5,873 |
|
|
|
9,578 |
|
|
|
|
|
|
|
|
|
|
|
| Average Prices (1) |
|
|
|
|
|
|
|
|
|
| Natural gas (per Mcf) |
|
$ |
4.70 |
|
|
$ |
6.18 |
|
|
|
$ |
4.40 |
|
|
$ |
8.02 |
|
| Gulf of Mexico |
|
|
4.50 |
|
|
|
11.59 |
|
|
|
|
4.16 |
|
|
|
9.68 |
|
| North Sea |
|
|
5.20 |
|
|
|
3.00 |
|
|
|
|
5.34 |
|
|
|
6.18 |
|
| Oil and condensate (per Bbl) |
|
|
70.47 |
|
|
|
68.80 |
|
|
|
|
57.28 |
|
|
|
71.85 |
|
|
|
|
|
|
|
|
|
|
|
| Natural gas, oil and condensate |
|
|
|
|
|
|
|
|
|
| Per Mcfe |
|
$ |
8.91 |
|
|
$ |
8.63 |
|
|
|
$ |
7.34 |
|
|
$ |
9.78 |
|
| Per Boe |
|
|
53.46 |
|
|
|
51.78 |
|
|
|
|
44.03 |
|
|
|
58.68 |
|
|
|
|
|
|
|
|
|
|
|
| Deferred Revenue Recognized ($000’s) |
|
|
|
|
|
|
|
|
|
| Natural gas |
|
$ |
1,199 |
|
|
$ |
(48 |
) |
|
|
$ |
7,244 |
|
|
$ |
3,795 |
|
| Oil and condensate |
|
|
6,299 |
|
|
|
3,368 |
|
|
|
|
32,649 |
|
|
|
18,976 |
|
| Total |
|
|
7,498 |
|
|
|
3,320 |
|
|
|
|
39,893 |
|
|
|
22,771 |
|
|
|
|
|
|
|
|
|
|
|
|
Gain (Loss) on Oil and Gas Derivatives ($000’s)
|
|
|
|
|
|
|
|
|
|
| Natural gas contracts |
|
|
|
|
|
|
|
|
|
| Realized or settled during the period |
|
$ |
4,080 |
|
|
$ |
(314 |
) |
|
|
$ |
43,707 |
|
|
$ |
(5,632 |
) |
| Unrealized |
|
|
2,047 |
|
|
|
28,531 |
|
|
|
|
(15,162 |
) |
|
|
11,448 |
|
| Oil and condensate contracts |
|
|
|
|
|
|
|
|
|
| Realized or settled during the period |
|
|
(4,402 |
) |
|
|
64,467 |
|
|
|
|
(6,146 |
) |
|
|
83,286 |
|
| Unrealized |
|
|
(17,436 |
) |
|
|
5,537 |
|
|
|
|
(23,111 |
) |
|
|
– |
|
| Total |
|
|
(15,711 |
) |
|
|
98,221 |
|
|
|
|
(712 |
) |
|
|
89,102 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Includes the effect of cash flow hedges in 2008. Effective January 1, 2009, four U.K. contracts are accounted for as hedges and aggregate net income settlements of $0.2 million and $1.7 million are reflected in the average oil and gas prices noted above for the three months and year ended December 31, 2009, respectively.
|
|
Proved Reserves
ATP reported independent third-party proved reserves at year-end 2009 of 135.2 MMBoe. ATP’s proved reserves are located 62% in the deep waters of the Gulf of Mexico, 6% on the Gulf of Mexico shelf and 32% in the North Sea. The December 31, 2009 pre-tax PV-10 was determined using SEC pricing. All of the proved reserves shown below were prepared by independent reservoir engineers whose certification letters are available on ATP’s web site.
| Proved Reserves by Region |
| Prepared by independent reservoir engineers |
| December 31, 2009 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gulf of Mexico |
|
|
North Sea |
|
|
Consolidated |
| Proved |
|
|
MBbls |
|
MMcf |
|
MBoe |
|
|
MBbls |
|
MMcf |
|
MBoe |
|
MBbls |
|
MMcf |
|
MBoe |
| Developed |
|
|
7,826 |
|
44,517 |
|
|
15,246 |
|
|
|
4 |
|
12,745 |
|
|
2,128 |
|
|
|
7,830 |
|
57,262 |
|
|
17,374 |
|
| Undeveloped |
|
|
44,614 |
|
188,522 |
|
|
76,033 |
|
|
|
25,498 |
|
97,497 |
|
|
41,749 |
|
|
|
70,112 |
|
286,019 |
|
|
117,781 |
|
| Total |
|
|
52,440 |
|
233,039 |
|
|
91,279 |
|
|
|
25,502 |
|
110,242 |
|
|
43,877 |
|
|
|
77,942 |
|
343,281 |
|
|
135,155 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Standardized measure |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
($’s in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Developed |
|
$ |
404,218 |
|
|
|
|
|
|
|
$ |
28,963 |
|
|
|
|
|
|
|
$ |
433,181 |
|
| Undeveloped |
|
|
1,217,306 |
|
|
|
|
|
|
|
|
338,649 |
|
|
|
|
|
|
|
|
1,555,955 |
|
| Pre-tax PV-10 |
|
|
1,621,524 |
|
|
|
|
|
|
|
|
367,612 |
|
|
|
|
|
|
|
|
1,989,136 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Future income taxes, discounted at 10% |
|
|
(98,443 |
) |
|
|
|
|
|
|
|
(116,191 |
) |
|
|
|
|
|
|
|
(214,634 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Standardized measure |
|
$ |
1,523,081 |
|
|
|
|
|
|
|
$ |
251,421 |
|
|
|
|
|
|
|
$ |
1,774,502 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ATP achieved a 376% reserve replacement ratio from all sources in 2009, based on net additions of 22.0 MMBoe. A reconciliation of ATP’s reserve replacement ratio and the changes in proved reserves from December 31, 2008 to December 31, 2009 is provided below.
| Changes in 2009 Proved Reserves |
| (MBoe) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Proved Reserves 12/31/08 |
|
|
|
|
|
|
|
|
118,937 |
|
|
|
|
|
|
|
|
|
|
|
|
Revisions, extensions and discoveries
|
|
|
|
|
22,027 |
|
|
|
|
| Acquisitions |
|
|
|
|
63 |
|
|
|
|
| Additions from all sources |
|
|
|
|
|
|
|
|
22,090 |
|
|
|
|
|
|
|
|
|
|
|
| 2009 Production |
|
|
|
|
|
|
|
|
(5,873 |
) |
| Proved Reserves 12/31/09 |
|
|
|
|
|
|
|
|
135,155 |
|
|
|
|
|
|
|
|
|
|
|
| Production Replacement Ratio |
|
|
|
|
|
|
|
|
|
| (MBoe) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Additions from all sources |
|
|
|
|
|
|
|
|
22,090 |
|
| 2009 Production |
|
|
|
|
|
|
|
|
5,873 |
|
| Production Replacement Ratio |
|
|
|
|
|
|
|
|
376 |
% |
|
|
|
|
|
|
|
|
|
|
Transactions
During 2009, ATP closed a series of capital market, asset monetization, and financing transactions, a summary of which is provided below:
First Quarter
- Raised $149 million from the sale of a redeemable noncontrolling interest in ATP-IP. ATP continues to hold a 51% interest in ATP-IP, the entity that owns the ATP Innovator;
Second Quarter
- Completed a $68 million common stock issuance, net of fees and expenses;
- Conveyed limited-term net profits interests (“NPIs”) to three vendors in exchange for their services for a total expected value of approximately $200 million;
Third Quarter
- Executed an agreement with the contractor to defer approximately $99 million of Octabuoy hull construction costs without delaying the construction schedule;
- Realized $75 million, net of fees and expenses, from monetizing both the oil and natural gas pipelines that service ATP’s Gomez Hub;
- Raised $93 million by selling common stock and $136 million by selling convertible perpetual preferred stock, net of fees and expenses;
Fourth Quarter
- Conveyed a limited-term dollar denominated overriding royalty interest for $15 million;
- Sold a 25% working interest in the deep operating rights in one of our properties for $13 million.
ATP has continued this monetization program in 2010. On January 6, 2010, ATP completed a $140 million limited-term overriding royalty interest transaction. ATP intends to monetize other assets, primarily the ATP Titan or other Telemark Hub infrastructure, and potentially other overriding royalty and net profits interests in 2010.
As a result of the above transactions, ATP reduced its Term Loans from $1.4 billion at December 31, 2008 to $1.2 billion at December 31, 2009. Substantially all of this reduction related to the Asset Sale Facility tranche of our Term Loan Facility falling from $326.7 million at year-end 2008 to $160.7 million at year-end 2009. Additional reductions in 2010 have decreased the outstanding balance to $146.0 million as of March 11, 2010. ATP was in compliance with the covenants of its Term Loans and expects to remain in compliance throughout 2010.
Hedging and Derivative Update
Since ATP announced third quarter earnings on November 5, 2009, ATP has been active in the U.S. derivatives market, hedging 3.1 million Bbls of crude oil at prices ranging from $73.15 per Bbl to $81.00 per Bbl and 3.7 Bcf of natural gas at $5.42 per MMBtu. ATP plans to add additional hedges throughout 2010 to coincide with the ramp-up in production at the Telemark Hub.
In addition, ATP unwound 2.1 MMMBtu of natural gas collars in the U.K. and replaced them with 1.8 Bcf of natural gas swaps at an average price of $5.45 per MMBtu. A detailed hedge and derivative schedule is provided near the end of this press release.
4th Quarter and Year-End 2009 Conference Call
ATP management will host a conference call on Friday, March 12th at 10:00 am CT to discuss the company’s year-end 2009 results followed by a Q&A session.
Date: Friday, March 12, 2010
Time: 11:00 am ET; 10:00 am CT; 9:00 am MT and 8:00am PT
ATP invites interested persons to listen to the live webcast on the company’s website at http://cts.businesswire.com/ct/CT?id=smartlink&url=http%3A%2F%2Fwww.atpog.com&esheet=6212266&lan=en_US&anchor=www.atpog.com&index=1&md5=d3e1e773c609b6f1eb76609831058366. Phone participants should dial 877-675-4757. A digital replay of the conference call will be available at 888-203-1112, ID# 9413300, for a period of 24 hours beginning at 1:00 pm CT, and the webcast will be archived for 30 business days at http://cts.businesswire.com/ct/CT?id=smartlink&url=http%3A%2F%2Fwww.atpog.com&esheet=6212266&lan=en_US&anchor=www.atpog.com&index=2&md5=3f4a8af0479da5bbb8e76f8ac4d45394.
About ATP Oil & Gas Corporation
ATP Oil & Gas is focused on development and production of oil and natural gas in the Gulf of Mexico and the North Sea. The company trades publicly as ATPG on the NASDAQ Global Select Market. For more information about ATP Oil & Gas Corporation, visit http://cts.businesswire.com/ct/CT?id=smartlink&url=http%3A%2F%2Fwww.atpog.com&esheet=6212266&lan=en_US&anchor=www.atpog.com&index=3&md5=df37d6b4d560b5ca87fd12bd279cfe25.
Forward-looking Statements
Certain statements included in this news release are “forward-looking statements” under the Private Securities Litigation Reform Act of 1995. ATP cautions that assumptions, expectations, projections, intentions, or beliefs about future events may, and often do, vary from actual results and the differences can be material. Some of the key factors which could cause actual results to vary from those ATP expects include changes in natural gas and oil prices, the timing of planned capital expenditures, availability of acquisitions, uncertainties in estimating proved reserves and forecasting production results, operational factors affecting the commencement or maintenance of producing wells, the condition of the capital markets generally, as well as our ability to access them, and uncertainties regarding environmental regulations or litigation and other legal or regulatory developments affecting our business. During December 2008, the SEC issued the final rule, “Modernization of Oil and Gas Reporting” and we have adopted it as of December 31, 2009. Those new regulations allow, among other things, disclosure of probable and possible reserve quantities in reports filed with the SEC. While we do not include such reserves in our filings with the SEC, our publicly available independent third party reservoir engineering reports set forth probable and possible reserve quantities. We and our independent third party reservoir engineers use the term “probable” to describe volumes of reserves potentially recoverable through additional drilling or recovery techniques that, by their nature, are more speculative than estimates of proved reserves. All estimates of reserves in this news release have been prepared by our independent third party engineers. More information about the risks and uncertainties relating to ATP’s forward-looking statements is found in our SEC filings.
| CONSOLIDATED BALANCE SHEETS |
| (In Thousands) |
| (Unaudited) |
|
|
December 31, |
|
December 31, |
|
|
2009 |
|
2008 |
| Assets |
|
|
|
|
|
|
|
|
|
| Current assets: |
|
|
|
|
| Cash and cash equivalents |
|
$ |
108,961 |
|
|
$ |
214,993 |
|
| Restricted cash |
|
|
10,504 |
|
|
|
– |
|
| Accounts receivable (net of allowance of $291 and $352, respectively) |
|
|
52,551 |
|
|
|
93,915 |
|
| Deferred tax asset |
|
|
101,956
|
|
|
|
39,150 |
|
| Derivative asset |
|
|
1,321 |
|
|
|
15,366 |
|
| Other current assets |
|
|
10,615 |
|
|
|
11,954 |
|
| Total current assets |
|
|
285,908
|
|
|
|
375,378 |
|
|
|
|
|
|
| Oil and gas properties: |
|
|
|
|
| Oil and gas properties (using the successful efforts method of accounting): |
|
|
|
|
| Proved properties |
|
|
3,609,131
|
|
|
|
2,802,315 |
|
| Unproved properties |
|
|
13,910 |
|
|
|
14,705 |
|
|
|
|
3,623,041
|
|
|
|
2,817,020 |
|
| Less accumulated depletion, impairment and amortization |
|
|
(1,137,269 |
) |
|
|
(944,817 |
) |
| Oil and gas properties, net |
|
|
2,485,772
|
|
|
|
1,872,203 |
|
|
|
|
|
|
| Furniture and fixtures (net of accumulated depreciation) |
|
|
342 |
|
|
|
470 |
|
| Deferred financing costs, net |
|
|
16,378 |
|
|
|
13,493 |
|
| Other assets, net |
|
|
14,747
|
|
|
|
14,066 |
|
| Total assets |
|
$ |
2,803,147
|
|
|
$ |
2,275,610 |
|
|
|
|
|
|
| Liabilities and Equity |
|
|
|
|
|
|
|
|
|
| Current liabilities: |
|
|
|
|
| Accounts payable and accruals |
|
$ |
212,736 |
|
|
$ |
277,914 |
|
| Current maturities of term loans |
|
|
16,838 |
|
|
|
10,500 |
|
| Asset retirement obligation |
|
|
43,418 |
|
|
|
32,854 |
|
| Derivative liability |
|
|
16,216 |
|
|
|
8,114 |
|
| Deferred tax liability |
|
|
– |
|
|
|
– |
|
| Other current liabilities |
|
|
23,094
|
|
|
|
9,537 |
|
| Total current liabilities |
|
|
312,302
|
|
|
|
338,919 |
|
|
|
|
|
|
| Term loans |
|
|
1,199,847 |
|
|
|
1,356,130 |
|
| Other long-term obligations |
|
|
274,942 |
|
|
|
2,582 |
|
| Asset retirement obligation |
|
|
106,781 |
|
|
|
99,254 |
|
| Deferred tax liability |
|
|
146,764
|
|
|
|
101,953 |
|
| Derivative liability |
|
|
7,646 |
|
|
|
1,194 |
|
| Deferred revenue |
|
|
19,336 |
|
|
|
59,229 |
|
| Total liabilities |
|
|
2,067,618
|
|
|
|
1,959,261 |
|
|
|
|
|
|
|
|
|
|
|
| Temporary equity-redeemable noncontrolling interest |
|
|
139,598 |
|
|
|
– |
|
|
|
|
|
|
| Shareholders’ equity: |
|
|
|
|
| Convertible preferred stock, $0.001 par value |
|
|
140,000 |
|
|
|
– |
|
| Common stock, $0.001 par value |
|
|
51 |
|
|
|
36 |
|
| Additional paid-in capital |
|
|
574,451 |
|
|
|
400,334 |
|
| Retained earnings |
|
|
(22,173
|
) |
|
|
29,644 |
|
| Accumulated other comprehensive loss |
|
|
(95,487
|
) |
|
|
(112,754 |
) |
| Treasury stock, at cost |
|
|
(911 |
) |
|
|
(911 |
) |
| Total shareholders’ equity |
|
|
595,931
|
|
|
|
316,349 |
|
|
|
|
|
|
| Total equity |
|
|
735,529
|
|
|
|
316,349 |
|
| Total liabilities and equity |
|
$ |
2,803,147
|
|
|
$ |
2,275,610 |
|
|
|
|
|
|
| CONSOLIDATED INCOME STATEMENTS |
| (In Thousands, Except Per Share Amounts) |
| (Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Year Ended |
|
|
December 31, |
|
December 31, |
|
|
2009 |
|
2008 |
|
2009 |
|
2008 |
|
|
|
|
|
|
|
|
|
| Oil and gas revenues |
|
$ |
74,327 |
|
|
$ |
48,630 |
|
|
$ |
298,490 |
|
|
$ |
584,823 |
|
| Other |
|
|
– |
|
|
|
32,309 |
|
|
|
13,664 |
|
|
|
33,206 |
|
|
|
|
74,327 |
|
|
|
80,939 |
|
|
|
312,154 |
|
|
|
618,029 |
|
|
|
|
|
|
|
|
|
|
| Costs and operating expenses: |
|
|
|
|
|
|
|
|
| Lease operating |
|
|
24,493 |
|
|
|
18,085 |
|
|
|
84,956 |
|
|
|
91,196 |
|
| Exploration |
|
|
– |
|
|
|
– |
|
|
|
264 |
|
|
|
48 |
|
| General and administrative |
|
|
19,055 |
|
|
|
14,374 |
|
|
|
44,211 |
|
|
|
41,653 |
|
| Depreciation, depletion and amortization |
|
|
32,347 |
|
|
|
24,337 |
|
|
|
152,780 |
|
|
|
246,434 |
|
| Impairment of oil and gas properties |
|
|
37,051 |
|
|
|
125,059 |
|
|
|
45,799 |
|
|
|
125,059 |
|
| Accretion of asset retirement obligation |
|
|
2,736 |
|
|
|
2,774 |
|
|
|
11,676 |
|
|
|
15,566 |
|
| Loss on abandonment |
|
|
(77 |
) |
|
|
10,980 |
|
|
|
2,872 |
|
|
|
13,289 |
|
| Gain on disposal of properties |
|
|
(13,000 |
) |
|
|
(119,233 |
) |
|
|
(12,433 |
) |
|
|
(119,233 |
) |
| Other, net |
|
|
(871 |
) |
|
|
160 |
|
|
|
(742 |
) |
|
|
(99 |
) |
|
|
|
101,734 |
|
|
|
76,536 |
|
|
|
329,383 |
|
|
|
413,913 |
|
| Income (loss) from operations |
|
|
(27,407 |
) |
|
|
4,403 |
|
|
|
(17,229 |
) |
|
|
204,116 |
|
|
|
|
|
|
|
|
|
|
| Other income (expense): |
|
|
|
|
|
|
|
|
| Interest income |
|
|
155 |
|
|
|
525 |
|
|
|
710 |
|
|
|
3,476 |
|
| Interest expense (net) |
|
|
(9,087
|
) |
|
|
(21,760 |
) |
|
|
(40,884
|
) |
|
|
(100,729 |
) |
| Derivative income (expense) |
|
|
(15,711 |
) |
|
|
98,222 |
|
|
|
(712 |
) |
|
|
89,035 |
|
| Loss on extinguishment of debt |
|
|
– |
|
|
|
– |
|
|
|
– |
|
|
|
(24,220 |
) |
|
|
|
(24,643
|
) |
|
|
76,987 |
|
|
|
(40,886
|
) |
|
|
(32,438 |
) |
|
|
|
|
|
|
|
|
|
| Income (loss) before income taxes |
|
|
(52,050
|
) |
|
|
81,390 |
|
|
|
(58,115
|
) |
|
|
171,678 |
|
| Income tax (expense) benefit: |
|
|
|
|
|
|
|
|
| Current |
|
|
(523 |
) |
|
|
1,679 |
|
|
|
(545 |
) |
|
|
(1,969 |
) |
| Deferred |
|
|
18,963
|
|
|
|
(32,912 |
) |
|
|
23,079
|
|
|
|
(48,004 |
) |
| Total |
|
|
18,440
|
|
|
|
(31,233 |
) |
|
|
22,534
|
|
|
|
(49,973 |
) |
|
|
|
|
|
|
|
|
|
| Net income (loss) |
|
|
(33,610
|
) |
|
|
50,157 |
|
|
|
(35,581
|
) |
|
|
121,705 |
|
| Less income attributable to the redeemable
noncontrolling interest
|
|
|
(3,562 |
) |
|
|
– |
|
|
|
(13,380 |
) |
|
|
– |
|
| Less preferred stock dividends |
|
|
(2,794 |
) |
|
|
– |
|
|
|
(2,856 |
) |
|
|
– |
|
| Net income (loss) attributable to common shareholders |
|
$ |
(39,966
|
) |
|
$ |
50,157 |
|
|
$ |
(51,817
|
) |
|
$ |
121,705 |
|
|
|
|
|
|
|
|
|
|
| Net income (loss) per share attributable
to common shareholders:
|
|
|
|
|
|
|
|
| Basic |
|
$ |
(0.80
|
) |
|
$ |
1.41 |
|
|
$ |
(1.24
|
) |
|
$ |
3.43 |
|
| Diluted |
|
$ |
(0.80
|
) |
|
$ |
1.41 |
|
|
$ |
(1.24
|
) |
|
$ |
3.39 |
|
|
|
|
|
|
|
|
|
|
| Weighted average shares outstanding: |
|
|
|
|
|
|
|
|
| Basic |
|
|
50,208 |
|
|
|
35,506 |
|
|
|
41,853 |
|
|
|
35,457 |
|
| Diluted |
|
|
50,208 |
|
|
|
35,608 |
|
|
|
41,853 |
|
|
|
35,868 |
|
|
|
|
|
|
|
|
|
|
| CONSOLIDATED CASH FLOW DATA |
| (In Thousands) |
| (Unaudited) |
|
|
|
Twelve Months Ended |
|
|
|
December 31, |
|
|
|
2009 |
|
2008 |
|
|
|
|
|
|
| Cash flows from operating activities: |
|
|
|
|
|
Net income (loss) |
|
$ |
(35,581 |
) |
|
$ |
121,705 |
|
|
Adjustments to operating activities |
|
|
198,154 |
|
|
|
345,099 |
|
|
Changes in assets and liabilities |
|
|
(1,431 |
) |
|
|
80,163 |
|
| Net cash provided by operating activities |
|
|
161,142 |
|
|
|
546,967 |
|
|
|
|
|
|
|
| Cash flows from investing activities: |
|
|
|
|
|
Additions to oil and gas properties |
|
|
(636,615 |
) |
|
|
(917,523 |
) |
|
Proceeds from disposition of oil and gas properties |
|
|
13,000 |
|
|
|
471,846 |
|
|
Additions to furniture and fixtures |
|
|
(147 |
) |
|
|
(170 |
) |
|
(Increase) decrease in restricted cash |
|
|
(10,504 |
) |
|
|
13,837 |
|
| Net cash used in investing activities |
|
|
(634,266 |
) |
|
|
(432,010 |
) |
|
|
|
|
|
|
| Cash flows from financing activities: |
|
|
|
|
|
Proceeds from term loans |
|
|
19,000 |
|
|
|
1,639,750 |
|
|
Payments of term loans |
|
|
(176,511 |
) |
|
|
(1,680,190 |
) |
|
Deferred financing costs |
|
|
(6,491 |
) |
|
|
(15,523 |
) |
|
Issuance of common stock, net of costs |
|
|
170,629 |
|
|
|
– |
|
|
Issuance of preferred stock, net of costs |
|
|
135,549 |
|
|
|
– |
|
|
Net profits interest payments |
|
|
(1,929 |
) |
|
|
(13,397 |
) |
|
Sale of redeemable noncontrolling interest, net of costs |
|
|
148,751 |
|
|
|
– |
|
|
Partner distributions |
|
|
(18,970 |
) |
|
|
– |
|
|
Proceeds from pipeline transaction
|
|
|
74,511 |
|
|
|
– |
|
|
Proceeds from dollar – denominated overriding royalty transaction
|
|
|
14,500
|
|
|
|
–
|
|
|
Principal payments – dollar-denominated overriding royalty transaction
|
|
|
(369 |
) |
|
|
– |
|
|
Exercise of stock options |
|
|
3 |
|
|
|
33 |
|
| Net cash provided by financing activities |
|
|
358,673 |
|
|
|
(69,327 |
) |
|
|
|
|
|
|
| Effect of exchange rate changes on cash |
|
|
8,419 |
|
|
|
(30,086 |
) |
|
|
|
|
|
|
| Net decrease in cash and cash equivalents |
|
|
(106,032 |
) |
|
|
15,544 |
|
| Cash and cash equivalents, beginning of period |
|
|
214,993 |
|
|
|
199,449 |
|
|
|
|
|
|
|
| Cash and cash equivalents, end of period |
|
$ |
108,961 |
|
|
$ |
214,993 |
|
|
|
|
|
|
|
|
|
|
|
Hedges, Derivatives and Fixed Price Contracts
|
|
|
|
|
|
|
|
|
2010 |
|
|
2011 |
|
|
1Q |
|
2Q |
|
3Q |
|
4Q |
|
FY |
|
|
1Q |
|
2Q |
|
3Q |
|
4Q |
|
FY |
| Gulf of Mexico |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Fixed Forwards & Swaps |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Natural Gas |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Volumes (MMMBtu) |
|
|
1,800 |
|
|
1,815 |
|
|
1,830 |
|
|
1,830 |
|
|
7,275 |
|
|
|
900 |
|
|
|
|
|
|
|
|
900 |
| Price ($/MMBtu) |
|
$ |
5.37 |
|
$ |
5.57 |
|
$ |
5.57 |
|
$ |
5.57 |
|
$ |
5.52 |
|
|
$ |
5.41 |
|
|
|
|
|
|
|
$ |
5.41 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Crude Oil |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Volumes (MBbls) |
|
|
267 |
|
|
364 |
|
|
414 |
|
|
414 |
|
|
1,459 |
|
|
|
338 |
|
|
341 |
|
|
345 |
|
|
345 |
|
|
1,369 |
| Price ($/Bbl) |
|
$ |
78.83 |
|
$ |
75.13 |
|
$ |
77.83 |
|
$ |
77.83 |
|
$ |
77.34 |
|
|
$ |
78.76 |
|
$ |
78.76 |
|
$ |
78.76 |
|
$ |
78.76 |
|
$ |
78.76 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Crude Oil |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Volumes (MBbls) |
|
|
273 |
|
|
182 |
|
|
184 |
|
|
184 |
|
|
823 |
|
|
|
270 |
|
|
273 |
|
|
184 |
|
|
184 |
|
|
911 |
| Price ($/Bbl) |
|
$ |
68.64 |
|
$ |
70.00 |
|
$ |
70.00 |
|
$ |
70.00 |
|
$ |
69.55 |
|
|
$ |
77.33 |
|
$ |
77.33 |
|
$ |
80.00 |
|
$ |
80.00 |
|
$ |
78.41 |
|
Reparticipation calls ($/Bbl)
|
|
$ |
101.48 |
|
$ |
110.00 |
|
$ |
110.00 |
|
$ |
110.00 |
|
$ |
107.18 |
|
|
$ |
111.67 |
|
$ |
111.67 |
|
$ |
110.00 |
|
$ |
110.00 |
|
$ |
110.99 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Collars |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Natural Gas |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Volumes (MMMBtu) |
|
|
450 |
|
|
1,365 |
|
|
1,380 |
|
|
1,380 |
|
|
4,575 |
|
|
|
1,350 |
|
|
|
|
|
|
|
|
1,350 |
| Floor Price ($/MMBtu) |
|
$ |
4.00 |
|
$ |
4.75 |
|
$ |
4.75 |
|
$ |
4.75 |
|
$ |
4.68 |
|
|
$ |
4.75 |
|
|
|
|
|
|
|
$ |
4.75 |
| Ceiling Price ($/MMBtu) |
|
$ |
7.00 |
|
$ |
7.95 |
|
$ |
7.95 |
|
$ |
7.95 |
|
$ |
7.86 |
|
|
$ |
7.95 |
|
|
|
|
|
|
|
$ |
7.95 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Puts |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Crude Oil |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Volumes (MBbls) |
|
|
90 |
|
|
91 |
|
|
92 |
|
|
92 |
|
|
365 |
|
|
|
|
|
|
|
|
|
|
|
| Floor Price ($/Bbl) |
|
$ |
24.70 |
|
$ |
24.70 |
|
$ |
24.70 |
|
$ |
24.70 |
|
$ |
24.70 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| North Sea |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Fixed Forwards & Swaps |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Natural Gas |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Volumes (MMMBtu) |
|
|
270 |
|
|
728 |
|
|
736 |
|
|
736 |
|
|
2,470 |
|
|
|
450 |
|
|
|
|
|
|
|
|
450 |
| Price ($/MMBtu)(1) |
|
$ |
6.60 |
|
$ |
5.88 |
|
$ |
5.88 |
|
$ |
5.88 |
|
$ |
5.96 |
|
|
$ |
5.45 |
|
|
|
|
|
|
|
$ |
5.45 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| The above are ATP’s outstanding financial and physical commodity contracts. |
| Additional hedges, derivatives and fixed price contracts, if any, will be announced during the year. |
| (1) Assumes USD $1.50 to GBP 1.00 currency translation rate. |
MILPITAS, Calif., March 11, 2010 (GLOBE NEWSWIRE) — Globalstar, Inc. (Nasdaq:GSAT), a leading provider of mobile satellite voice and data services to businesses, governments and consumers, today announced it has received a substantial order for the initial delivery of more than 15,000 SPOT Satellite Communicators from DeLorme, an innovation leader in mapping and GPS technologies. The introductory order will address DeLorme’s retail distribution channel fill requirements. Earlier this year at the Consumer Electronics Show in Las Vegas, the two companies jointly announced the introduction of the world’s first rugged, handheld GPS and satellite communicator product. The DeLorme Earthmate® PN-60w with SPOT Satellite Communicator is the first handheld GPS navigation device capable of sending customized text messages even when the user is operating far beyond the range of cellular communications. The product is expected to be ready for general availability beginning in late spring.
“The DeLorme Earthmate PN-60w with the SPOT Satellite Communicator provides customers with the utility of a sophisticated handheld GPS device combined with SPOT’s global satellite messaging and tracking capability,” said Peter Dalton, Chief Executive Officer of Globalstar Inc. “We were very pleased with the reception this new product received when it was unveiled at CES and today’s announcement further demonstrates the level of market excitement and potential pent up demand there is for a handheld GPS device capable of sending customized text messages and location coordinates from virtually anywhere in the world.”
The revolutionary SPOT Satellite Communicator, designed exclusively for the new PN-60w, merges SPOT satellite message functionality with DeLorme’s state-of-the-art GPS mapping utility. Together, this integrated solution offers broad messaging capabilities enabling users to send freeform text messages using the PN-60w’s keyboard to select individuals or groups, even when the user is far beyond the range of traditional terrestrial-based wireless communications.
Established SPOT technology allows real-time location updates and the ability to summon help in an emergency. Custom messages and waypoints can easily be shared with social networking sites like SPOTadventures.com, Geocaching.com, Twitter, and Facebook. As an emergency back-up, the SPOT Satellite Communicator has stand-alone capability to send location-based SOS notification to an emergency response center.
For more information regarding the SPOT Satellite GPS Messenger please visit www.findmespot.com.
About Globalstar, Inc.
With over 375,000 subscribers, Globalstar is a leading provider of mobile satellite voice and data services. Globalstar offers these services to commercial and recreational users in more than 120 countries around the world. The Company’s products include mobile and fixed satellite telephones, simplex and duplex satellite data modems and flexible service packages. Many land based and maritime industries benefit from Globalstar with increased productivity from remote areas beyond cellular and landline service. Global customer segments include: oil and gas, government, mining, forestry, commercial fishing, utilities, military, transportation, heavy construction, emergency preparedness, and business continuity as well as individual recreational users. Globalstar data solutions are ideal for various asset and personal tracking, data monitoring and SCADA applications.
For more information regarding Globalstar, please visit Globalstar’s web site at www.globalstar.com
About DeLorme
DeLorme is the longtime leader in innovative mapping and GPS solutions serving millions of satisfied consumers and enterprise customers. Based in Yarmouth, ME, DeLorme offers a unique set of core competencies across the complex areas of map data creation and management, software development, and integration with GPS. The ability to develop all the critical components necessary to compete in the fast-changing navigation world provides a distinct competitive advantage. DeLorme is one of a handful of mapmakers that still own and produce their own content, and its Street Atlas USA, Topo USA, XMap, and Earthmate GPS products have introduced countless first-to-market innovations. To learn more, go to www.delorme.com.
Safe Harbor Language for Globalstar Releases
This press release contains certain statements such as, “The product is expected to be ready for general availability beginning in late spring,” that are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are subject to a number of assumptions, risks and uncertainties, many of which are beyond our control, including demand for our products and services, including commercial acceptance of our Simplex products, including SPOT Satellite GPS Messenger, and the ability to retain and migrate our two-way communications services subscribers to our second-generation constellation when it is deployed; problems relating to the construction, launch or in-orbit performance of our existing and future satellites, including the effects of the degrading ability of our first-generation satellite constellation to support two-way communication; problems relating to the ground-based facilities operated by us or by independent gateway operators; competition and its competitiveness vis-a-vis other providers of satellite and ground-based communications products and services; the pace and effects of industry consolidation; the continued availability of launch insurance on commercially reasonable terms, and the effects of any insurance exclusions; changes in technology; our ability to continue to attract and retain qualified personnel; worldwide economic, geopolitical and business conditions and risks associated with doing business on a global basis; and legal, regulatory, and tax developments, including changes in domestic and international government regulation.
Any forward-looking statements made in this press release speak as of the date made and are not guarantees of future performance. Actual results or developments may differ materially from the expectations expressed or implied in the forward-looking statements, and we undertake no obligation to update any such statements. Additional information on factors that could influence our financial results is included in our filings with the Securities and Exchange Commission, including our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K.
