CLOSURE Medical Provides 2005 Financial Guidance
January 11 2005 - 4:05PM
PR Newswire (US)
CLOSURE Medical Provides 2005 Financial Guidance RALEIGH, N.C.,
Jan. 11 /PRNewswire-FirstCall/ -- CLOSURE Medical Corporation
(NASDAQ:CLSR), a global leader in biomaterial-based medical
devices, today reported its financial guidance for fiscal year
2005. The Company expects 2005 total revenues in the range of $46.0
to $50.0 million, an increase of 19 percent using the midpoint of
$48.0 million compared to the 2004 revenue guidance midpoint of
$40.5 million. The Company expects that the majority of revenue
growth will come from DERMABOND Topical Skin Adhesive products,
including continued penetration of its ProPen products. The Company
estimates that DERMABOND products will represent at least 80
percent of total revenues with the remainder to come primarily from
the BAND-AID(R) Brand Liquid Bandage and OMNEX(TM) Surgical Sealant
products. BAND-AID(R) Brand Liquid Bandage revenue growth in 2005
is forecasted to decline as compared to 2004 as a result of
competition and pricing pressures in the US over-the-counter
adhesive bandage category that began last year. The Company expects
this decline to be partially offset by the new revenue contribution
from OMNEX(TM) Surgical Sealant, the Company's first product to be
used inside the body. The Company expects to receive CE Mark
approval in the first quarter which would allow for distribution of
the product in Europe. Currently, the Company is in discussions
with a multi-national medical device company to distribute
OMNEX(TM) Surgical Sealant and expects a European launch during the
first half of 2005. Net income before non-cash stock option expense
for 2005 is expected to be in the range of $11.2 to $12.2 million,
or 23 to 25 percent of revenue, when using the midpoint of the 2005
revenue guidance range of $48.0 million. Based on 16.0 million
shares outstanding, earnings per share before non-cash stock option
expense for 2005 is estimated to be $0.70 to $0.76 versus the 2004
guidance of $0.59 to $0.62 per share, which represents an increase
of approximately 21 percent using the midpoints of each range. Net
income before non-cash stock option expense and earnings per share
before non-cash stock option expense are non-GAAP financial
measures. Pursuant to recently adopted rule amendments by the
Financial Accounting Standards Board, GAAP now requires that
compensation expense relating to stock options be included in the
Company's results of operations beginning in the third quarter of
2005. Preliminary estimates of the non-cash stock option expense
for 2005, based on the number of stock options currently
outstanding and calculated using assumptions consistent with those
disclosed in the 2004 quarterly filings, approximates $2.7 million
net of tax, or $0.17 per share. While the Company has attempted to
estimate the non-cash stock option expense to be recorded in the
second half of 2005, the actual expense may vary materially
depending on the assumptions and methodologies used in implementing
this new accounting standard as well as the number of stock options
outstanding during the 2005 period. Gross margins are expected to
remain strong, approximately 75 to 77 percent, due to a product mix
of at least 80 percent of the higher-margin DERMABOND products and
increased manufacturing efficiencies in 2005. Operating margins are
expected to remain strong as well, despite considerable planned
investments in research and development, approximately 20 to 25
percent of total revenues, related to the topical wound care and
internal surgical sealant platforms. Increased general and
administrative expenses during 2005 will support business
development efforts of OMNEX(TM) Surgical Sealant, especially the
European launch. Daniel A. Pelak, President & Chief Executive
Officer, commented, "We believe the execution of our operating plan
and potential opportunities offered by our technology will move our
business forward during 2005. We expect DERMABOND adhesive to be a
solid revenue contributor in 2005 as we continue to build our
topical wound care platform of products. Complementing our topical
platform will be OMNEX(TM) Surgical Sealant, one of the more
significant milestones in the Company's history as it is our first
product to be used inside the body. We are encouraged about the
potential long-term value of OMNEX(TM) sealant and other product
opportunities within our surgical sealant platform, given the
feedback from physicians." Pelak added, "Continued focus and
execution will be imperative to our success in 2005 as we build our
biomaterial technology platforms. This organization is poised and
committed to make it happen." The Company expects to generate net
cash flow of approximately $15.0 million in 2005. Operations are
estimated to generate approximately $15.6 million offset by
investments in long-term assets which are expected to be
approximately $2.5 million. Guidance Conference Call CLOSURE
Medical will conduct a live webcast today, January 11, 2005, at
4:30 p.m. EST to discuss the Company's expectations for fiscal year
2005. To access the live webcast go to the Company's website,
http://www.closuremed.com/. About CLOSURE Medical Corporation
CLOSURE Medical Corporation is a global leader in the development
and manufacture of innovative biomaterial-based medical devices
that fulfill the needs of healthcare practitioners, patients and
consumers. For additional information on CLOSURE Medical visit its
website at http://www.closuremed.com/ or visit the "Clients"
section of the Allen & Caron website at
http://www.allencaron.com/. This release contains certain
forward-looking statements which involve known and unknown risks,
delays, uncertainties or other factors not under the Company's
control which may cause actual results, performance or achievements
of the Company to be materially different from the results,
performance, or other expectations implied by these forward-looking
statements. These factors include, but are not limited to the early
stage of commercialization of the Company's products; the ability
of the Company to increase the efficiencies in its manufacturing
processes; the effectiveness of initiatives launched in response to
the Company's competitors' product introductions; the progress and
success of its research and development programs for future
products; the success of its clinical study for OMNEX(TM) Surgical
Sealant and future clinical studies; the successful enrollment of
current and future clinical studies; the need for regulatory
approval and effects of governmental regulation; technological
uncertainties; the inventory management policies adopted by the
Company's marketing partners; end-user growth for the products sold
by the Company's marketing partners; the Company's success in
securing marketing partners for future products; the satisfactory
conclusion of negotiations with, and dependence on marketing
partners, and dependence on patents and trade secrets, as well as
those detailed in the Company's Annual Report on Form 10-K for the
year ended December 31, 2003, filed with the Securities and
Exchange Commission. Although the Company believes that the
expectations in the forward-looking statements are reasonable, the
Company cannot guarantee such results. The Company undertakes no
obligation to publicly revise these forward-looking statements to
reflect events or circumstances that arise after the date hereof.
DATASOURCE: CLOSURE Medical Corporation CONTACT: investors , Joe
Allen, +1-212-691-8087, , or media, Len Hall, +1-949-474-4300, ,
both of Allen & Caron Inc, for CLOSURE Medical Corp; or Benny
Ward, CFO of CLOSURE Medical Corp, +1-919-876-7800 Web site:
http://www.closuremed.com/ http://www.allencaron.com/
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