-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, TOxGwveXYweZtsfahNpmA3wEEYG6eM+bY01YO5DGvsUtRrTLTvHeYfN+7ZS4LDsZ m8vuUQNgRfLokqQtWCRW1Q== 0000853022-98-000009.txt : 19980312 0000853022-98-000009.hdr.sgml : 19980312 ACCESSION NUMBER: 0000853022-98-000009 CONFORMED SUBMISSION TYPE: 10-Q/A PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19970331 FILED AS OF DATE: 19980311 SROS: AMEX FILER: COMPANY DATA: COMPANY CONFORMED NAME: ROBERTS PHARMACEUTICAL CORP CENTRAL INDEX KEY: 0000853022 STANDARD INDUSTRIAL CLASSIFICATION: PHARMACEUTICAL PREPARATIONS [2834] IRS NUMBER: 222429994 STATE OF INCORPORATION: NJ FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q/A SEC ACT: SEC FILE NUMBER: 001-10432 FILM NUMBER: 98563260 BUSINESS ADDRESS: STREET 1: MERIDIAN CENTER II STREET 2: 4 INDUSTRIAL WAY W CITY: EATONTOWN STATE: NJ ZIP: 07724 BUSINESS PHONE: 7323891182 MAIL ADDRESS: STREET 1: 4 INDUSTRIAL WAY WEST STREET 2: 4 INDUSTRIAL WAY WEST CITY: EATONTOWN STATE: NJ ZIP: 07755 10-Q/A 1 FORM 10-Q/A SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Quarter Ended Commission File Number: 1-10432 March 31, 1997 ROBERTS PHARMACEUTICAL CORPORATION (Exact name of registrant as specified in its charter) NEW JERSEY 22-2429994 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) MERIDIAN CENTER II 4 INDUSTRIAL WAY WEST EATONTOWN, NEW JERSEY 07724 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (908) 389-1182 Indicate by check mark whether the registrant (1) has filed all reports required to be filed by section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No --- --- Class Outstanding Shares at February 28, 1998 Common Stock 30,516,188 ROBERTS PHARMACEUTICAL CORPORATION INDEX Page Part I Item 1 - Financial Statements 2 Item 2 - Management's Discussion and Analysis 8 Signatures 11 ROBERTS PHARMACEUTICAL CORPORATION CONSOLIDATED BALANCE SHEETS (Unaudited)
March 31, 1997 December 31, 1996 -------------- ----------------- ASSETS: Current assets: Cash and cash equivalents $ 86,766 $ 87,125 Marketable securities 7,326 7,793 Accounts receivable, net 24,377 30,791 Inventory 18,931 16,665 Notes receivable, current 245 1,620 Deferred tax assets 9,040 9,040 Net assets held for sale 500 500 Other current assets 1,787 2,124 ------- ------- Total current assets 148,972 155,658 Fixed assets, net 14,873 14,945 Intangible assets 180,227 183,756 Notes receivable 6,652 6,574 Deferred non-current tax asset 11,216 11,217 Other assets 74 74 ------- ------- Total assets $362,014 $372,224 ======= =======
The accompanying notes are an integral part of these financial statements. - 2 - ROBERTS PHARMACEUTICAL CORPORATION CONSOLIDATED BALANCE SHEETS (Unaudited)
March 31, 1997 December 31, 1996 -------------- ----------------- LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Current installments of long-term debt $ 5,496 $ 6,376 Accounts payable 12,494 15,848 Income taxes payable 7,422 7,020 Dividends payable 310 679 Other current liabilities 18,728 21,559 ------- ------- Total current liabilities 44,450 51,482 Long-term debt, excluding current installments 7,077 10,639 Other liabilities 320 345 Shareholders' equity: Class B preferred stock, $.10 par 10,000,000 shares authorized, 1,004,622 and 2,721,030 outstanding 100 272 Common stock, $.01 par, 100,000,000 shares authorized, 27,234,370 and 22,961,707 outstanding 272 223 Additional paid-in capital 365,571 365,160 Cumulative translation adjustments (541) (301) Retained earnings (deficit) (54,998) (55,359) Treasury stock, 387,594 shares of common stock, at cost (237) (237) -------- -------- Total shareholders' equity 310,167 309,758 -------- -------- Total liabilities and shareholders' equity $362,014 $372,224 ======== ========
The accompanying notes are an integral part of these financial statements. - 3 - ROBERTS PHARMACEUTICAL CORPORATION CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands except per share data) (Unaudited)
For the three months ended March 31, 1997 1996 ---- ---- Sales and Revenue: Sales $ 26,330 $ 17,216 Other revenue 0 12 --------- --------- Total sales and revenue 26,330 17,228 --------- --------- Operating costs and expenses: Cost of sales 11,652 8,748 Research & development 1,834 1,149 Marketing & administration 12,421 12,849 --------- --------- Total operating costs & expenses 25,907 22,746 --------- --------- Operating income (loss) 423 (5,518) --------- --------- Other income (expense): Interest income 1,168 438 Interest expense (254) (651) Foreign currency gain (loss) (13) (140) Other income(expense), net --- 25 --------- --------- Total other income (expense) 901 (328) --------- --------- Income (loss) from continuing operations before income taxes 1,324 (5,846) Provision (benefit) from income taxes 414 (1,634) --------- --------- Net income (loss) $ 910 $ (4,212) ========= ========= Net income (loss) per share of common stock, primary and fully diluted $ 0.02 $ (0.22) ========= ========= Weighted average number of common shares outstanding: 27,421,143 18,722,259
The accompanying notes are an integral part of these financial statements. - 4 - ROBERTS PHARMACEUTICAL CORPORATION CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) (Unaudited)
For the three months ended March 31, 1997 1996 ---- ---- Cash flows from operating activities: $ 3,164 $ 11,781 -------- --------- Cash flows from investing activities: Redemption of marketable securities 467 7,527 Purchases of intangible assets --- (40) Purchases of fixed assets (92) (78) Collection of notes receiveable 1,424 --- Impact of discontinued operations 0 2 -------- --------- Net cash provided by (used in) investing activities 1,799 7,411 -------- -------- Cash flows from financing activities: Payments on notes payable and long term debt (4,655) (8,280) Net proceeds from issuance of common stock 288 (217) 5% Preferred stock dividends paid (920) --- Impact of discontinued operations 0 355 ------- ------- Net cash used in financing activities (5,287) (8,142) ------- ------- Exchange rate changes on cash and cash equivalents (35) (8) ------- ------- Change in cash and cash equivalents (359) 11,042 Beginning cash and cash equivalents 87,125 16,357 ------- ------- Ending cash and cash equivalents $86,766 $27,399 ======= ======= Supplemental cash flow information: Interest paid $862 $62 Income taxes paid 7 ---
The accompanying notes are an integral part of these financial statements. - 5 - 1. Summary of Significant Accounting Policies ------------------------------------------ Basis of Presentation - --------------------- In the opinion of management, the accompanying consolidated financial statements include all necessary adjustments, consisting of normal adjustments, necessary for a fair presentation of results for the period reported. All dollar amounts are presented in thousands, except per share data. Foreign Currency Translation - ---------------------------- Effective January 1, 1997, the functional currency of the United Kingdom subsidiary, Monmouth Pharmaceutical, Ltd., was changed from the U.S. Dollar to the British Pound. Monmouths' translation gains and losses will now be accumulated as a separate component of Shareholders' Equity. New Accounting Pronouncements - ----------------------------- In February 1997, the FASB issued SFAS No. 128, "Earnings Per Share." SFAS 128 specifies a new standard designed to improve the earnings per share ("EPS") information provided in financial statements by simplifying the existing computational guidelines, revising the disclosure requirements, and increasing the comparability of EPS data on an international basis. Some of the changes made to simplify the EPS computations include: (a) eliminating the presentation of primary EPS and replacing it with basic EPS, with the principal difference being that common stock equivalents are not considered in computing basic EPS, (b) eliminating the modified treasury stock method and the three percent materiality provision, and (c) revising the contingent share provisions and the supplemental EPS data requirements. SFAS 128 also makes a number of changes to existing disclosure requirements. SFAS 128 is effective for financial statements issued for periods ending after December 15, 1997, including interim periods. The Company has not yet determined the impact of the implementation of SFAS 128 and therefore this calculation has not been reflected in these financial statements. 2. Inventory --------- Inventory at March 31, 1997 consists of: Raw Materials $ 2,709 Finished Goods 16,222 ------- Total $18,931 ======= -6- 3. Net Income Per Common Share --------------------------- Net income per common share was determined by dividing net income, as adjusted below, by applicable shares outstanding.
March 31, ---------------------------- 1997 1996 ---- ---- Net income as reported $ 910 $ (4,212) EPS Adjustment for Preferred dividends (309) --- ---------- --------- Per share net income for EPS calculation $ 601 $ (4,212) ========== ==========
5. Contingency ----------- A shareholder class action suit was instituted March 24, 1995, in the United States District Court for the District of New Jersey against Roberts Pharmaceutical Corporation and certain of its officers and a former officer for alleged violations of certain federal securities laws. The Company is not able to predict the outcome of this proceeding at this time, and management is not able to determine the amount of the potential liability, if any. Roberts Pharmaceutical believes that it has complied with all of its obligations under the federal securities laws. Roberts Pharmaceutical intends to defend vigorously against the plaintiff's allegations and considers such allegations to be without merit. - 7 - Item 2. Management's Discussion and Analysis of Financial Conditions and Results of Operations Results of Operations Three months ended March 31, 1997 and 1996 Corporate Revenues - ------------------ Total revenue for the three months ended March 31, 1997 increased $9.1 million as compared with the first three months of 1996. This increase was due to an increase in revenues from product sales. Product Sales - ------------- For the three months ended March 31, 1997, product sales increased $9.1 million from $17.2 million to $26.3 million primarily as a result of the launch of AGRYLIN and an increase in sales by the United Kingdom subsidiary. U.S. product sales increased $6.3 million from $11.5 million to $17.8 million. AGRYLIN provided $4.0 million of this increase, and COLACE, NITRODISC, and PERI-COLACE also posted significant increases of $0.9 million, $0.9 million, and $0.5 million, respectively. Sales of the Company's United Kingdom subsidiary, Monmouth Pharmaceuticals, Ltd., increased $2.5 million from $2.8 million to $5.3 million, primarily due to sales of LODINE which was launched in fourth quarter 1996. Sales of the Company's Canadian subsidiary increased slightly by $0.3 million from $2.9 million to $3.2 million. Cost of Sales - ------------- For the three months ended March 31, 1997, cost of sales amounted to 44.3% of product sales, a 6.6 percentage point decrease as compared to the prior year's comparable period. This decrease in cost of sales and corresponding increase in gross profit percentage is primarily the result of the addition of AGRYLIN to the product mix. AGRYLIN has higher gross profit percentage as it is a product that was developed through Roberts own research and development. Additionally contributing to the increased gross profit is a $1.0 million decrease in sales of NOROXIN, which has a very high cost of sales. Also included in cost of sales is a $1.8 million charge for minimum royalties due to Ortho Pharmaceutical Corporation for SUPPRELIN sales. Research and Development - ------------------------ Research and Development expenses increased $0.7 million to $1.8 million during the three months ended March 31, 1997 as compared to the comparable prior year period. This increase is due to a reduced level of expenditure required to support the Company's development program for AGRYLIN which was recently approved, offset by an increase due to start-up of the Phase IV midodrine trials and the cost of purchased research and development for Sampatrilat. - 8 - Marketing and Administrative Expenses - ------------------------------------- For the three months ended March 31, 1997, Marketing and Administrative expenses decreased $0.4 million from $12.8 million to $12.4 million. Marketing expenses decreased $0.8 million as a result of a decrease of $0.9 million in consulting costs and a decrease of $0.4 million in salaries and benefits, offset by an increase of $0.5 million of NOROXIN sample costs. Administrative expense increased $0.4 million from $5.1 million to $5.5 million. This increase was due to a number of factors including a $0.2 million increase in insurance expense and an increase of $0.3 million related to salaries and benefits. Interest Income and Expense - --------------------------- Interest income increased $0.7 million as a result of an increase in invested marketable securities arising from the common and preferred stock offerings in the third quarter of 1996. Interest expense decreased by $0.4 million as a result of a decrease in long-term debt related to product acquisitions. Income Taxes - ------------ For the three months ended March 31, 1997 and 1996, income tax expense was calculated using a normal statutory rate for continuing operations, except for certain taxes related to foreign operations. The Company has recorded net deferred tax assets of approximately $20.3 million. Realization is dependent upon generating sufficient taxable income to utilize such items. Although realization is not assured, management believes it is more likely than not that all of the deferred tax assets will be realized; however, these assets could be reduced at any time if estimates of future taxable income are reduced. - 9 - Liquidity and Capital Resources - ------------------------------- Operating activities provided $3.2 million in cash. The primary components of cash provided by operating activities were a $6.4 million decrease in accounts receivable and the net income of $0.9 million, which includes $1.8 million of non-cash charges, and increased working capital requirements of $5.9 million. Investing activities provided $1.8 million, comprised primarily of $0.4 million in marketable securities redemptions and $1.4 million in collections of notes receivable. Financing activities used $5.3 million, including $4.6 million of payments on notes payable and payment of $0.9 million of preferred stock dividends paid partially offset by proceeds from the issuance of Common Stock. The Company will use its existing cash and securities balances and cash generated from operations to fund its operating activities and its near-term and long-term debt obligations from previous product acquisitions as well as future acquisitions of new products and the purchase of a manufacturing facility and for the development of existing pipeline products. Foreign Currency Fluctuations - ----------------------------- Roberts has subsidiary operations outside the United States. As a result, Roberts is subject to fluctuations in revenues and costs reported in United States dollars as a consequence of changing currency exchange rates, especially rates for the British pound and Canadian dollar. Such fluctuations were not material for the first quarter 1997. - 10 - Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this amendment to be signed on its behalf by the undersigned, thereunto duly authorized. Date: 3/5/97 /s/ Peter M. Rogalin ---------------------- --------------------------- Peter M. Rogalin Vice President and Treasurer Date: 3/5/97 /s/ Peter M. Rogalin ---------------------- --------------------------- Peter M. Rogalin Chief Accounting Officer - 16 - EX-27 2
5 1,000 3-MOS DEC-31-1997 MAR-31-1997 86,766 7,326 24,377 0 18,931 148,972 14,873 0 362,014 44,450 0 0 100 272 310,167 362,014 26,330 26,330 11,652 11,652 1,834 0 254 1,324 414 910 0 0 0 910 .02 .02 Includes raw material inventory of $2,709.
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