Three Months
Ended Year Ended
December 31, Change December 31, Change
--------------- ----------- ----------------- ------------
2010 2009 $ % 2010 2009 $ %
------- ------- ------ ---- -------- -------- ------- ----
Net Product
Sales
Curosurf $ 9,854 $ 8,310 $1,544 19% $ 33,621 $ 10,463 $23,158 221%
Zyflo(R)
product
family 8,764 4,122 4,642 113 30,619 17,959 12,660 70
Factive(R) 963 1,087 (124) (11) 5,126 1,178 3,948 335
Spectracef(R)
product
family 1,849 2,494 (645) (26) 5,327 9,390 (4,063) (43)
AlleRx Dose
Pack
products 5,200 8,722 (3,522) (40) 27,305 31,707 (4,402) (14)
HyoMax
product
family 2,270 3,131 (861) (27) 10,071 28,148 (18,077) (64)
Other
Products(1) 3,582 2,883 699 24 11,675 10,443 1,232 12
------- ------- ------ ---- -------- -------- ------- ----
Total net
product
sales 32,482 30,749 1,733 6 123,744 109,288 14,456 13
License and
royalty
agreement
revenues 32 39 (7) (18) 1,573 276 1,297 470
------- ------- ------ ---- -------- -------- ------- ----
Net Revenues $32,514 $30,788 $1,726 6% $125,317 $109,564 $15,753 14%
======= ======= ====== ==== ======== ======== ======= ====
(1) Primarily propoxyphene/acetaminophen products.
Gross margin percentage for the full year of 2010 was 74% compared to 82%
for the full year of 2009. The lower gross margin percentage compared to
the prior period was due to a relatively higher portion of our net product
sales in 2010 derived from products that have lower gross margins,
specifically Curosurf. Gross margin percentage for the fourth quarter was
70%, similar to the fourth quarter of 2009.
Selling, general and administrative expenses increased $7.5 million, or
16%, for the full year of 2010 compared to 2009. The increase was
primarily related to our incurring a full year of expenses in 2010 for our
hospital sales force that we created in September 2009, co-promotion
expenses relating to Zyflo CR and increased sample usage for both Zyflo CR
and Factive, partially offset by lower stock compensation and reduced legal
and consulting costs during 2010 as compared to 2009 when we incurred
significant expenses related to the Chiesi transaction. Selling, general
and administrative expenses during the fourth quarter increased $4.0
million, or 36%, compared to the fourth quarter of 2009. The increase was
primarily related to co-promotion expenses relating to Zyflo CR and AlleRx
and increased sample usage for both Zyflo CR and Factive.
Royalty expenses decreased $6.1 million, or 32%, during 2010 compared to
2009. The reduction in royalty expense was primarily due to lower net
revenues from our HyoMax products, partially offset by increased royalties
for Zyflo CR and Factive. Royalty expenses increased $0.6 million, or 28%
during the fourth quarter of 2010 compared to the fourth quarter of 2009
primarily due to product mix.
As of December 31, 2010, the Company had $50.9 million in cash and cash
equivalents, an increase of 170%, compared to $18.9 million as of December
31, 2009.
Conference Call Information
Cornerstone Therapeutics will host a conference call today at 8:30 AM ET to
discuss its financial results for the quarter and twelve months ended
December 31, 2010. To participate in the live conference call, please
dial 866-730-5770 (U.S. callers) or 857-350-1594 (international callers),
and provide passcode 99190634. A live webcast of the call will also be
available through the "Investors -- Webcasts & Presentations" section of
the Company's website at http://www.crtx.com. Please allow extra time
prior to the webcast to register for the webcast and to download and
install any necessary audio software.
The conference call and the webcast will be archived for 30 days. The
telephone replay of the call will be available today at 11:30 AM ET, by
dialing 888-286-8010 (U.S. callers) or 617-801-6888 (international
callers), and providing passcode 56948345.
About Cornerstone Therapeutics
Cornerstone Therapeutics Inc. (
CORNERSTONE THERAPEUTICS INC.
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except share and per share data)
Three Months Ended Year Ended
December 31, December 31,
---------------------- ----------------------
2010 2009 2010 2009
---------- ---------- ---------- ----------
(Unaudited)
Net revenues $ 32,514 $ 30,788 $ 125,317 $ 109,564
Costs and expenses:
Cost of product sales
(exclusive of
amortization of product
rights) 9,599 9,212 32,313 19,457
Selling, general and
administrative 15,109 11,112 53,198 45,731
Royalties 2,856 2,240 12,702 18,775
Research and development 740 1,163 4,488 3,608
Amortization of product
rights 3,943 3,587 14,728 6,115
---------- ---------- ---------- ----------
Total costs and expenses 32,247 27,314 117,429 93,686
---------- ---------- ---------- ----------
Income from operations 267 3,474 7,888 15,878
---------- ---------- ---------- ----------
Other expenses:
Interest expense, net (38) (15) (85) (128)
Other expense, net -- -- (25) --
---------- ---------- ---------- ----------
Total other expenses (38) (15) (110) (128)
---------- ---------- ---------- ----------
Income before income taxes 229 3,459 7,778 15,750
Benefit from (provision
for) income taxes 563 (771) (1,609) (5,547)
---------- ---------- ---------- ----------
Net income $ 792 $ 2,688 $ 6,169 $ 10,203
========== ========== ========== ==========
Net income per share, basic $ 0.03 $ 0.11 $ 0.24 $ 0.58
========== ========== ========== ==========
Net income per share,
diluted $ 0.03 $ 0.10 $ 0.24 $ 0.54
========== ========== ========== ==========
Weighted-average common
shares, basic 25,463,467 24,972,954 25,412,636 17,651,668
========== ========== ========== ==========
Weighted-average common
shares, diluted 26,093,755 25,751,756 26,036,544 18,776,588
========== ========== ========== ==========
CORNERSTONE THERAPEUTICS INC.
CONSOLIDATED BALANCE SHEETS
(In thousands, except share and per share data)
December 31, December 31,
2010 2009
------------ ------------
Assets
Current assets:
Cash and cash equivalents $ 50,945 $ 18,853
Accounts receivable, net 76,476 16,548
Inventories, net 15,174 18,106
Prepaid and other current assets 5,111 4,808
Income tax receivable 197 --
Deferred income tax asset 6,599 3,507
------------ ------------
Total current assets 154,502 61,822
------------ ------------
Property and equipment, net 1,486 1,312
Product rights, net 112,328 126,806
Goodwill 13,231 13,231
Amounts due from related parties 38 38
Long-term accounts receivable and other assets 8,553 113
------------ ------------
Total assets $ 290,138 $ 203,322
============ ============
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $ 7,671 $ 7,172
Accrued expenses 46,599 23,703
Current portion of license agreement
liability 1,368 1,019
Current portion of capital lease 83 10
Current portion of deferred revenue 37,616 --
Income taxes payable -- 1,606
------------ ------------
Total current liabilities 93,337 33,510
------------ ------------
License agreement liability, less current
portion -- 1,341
Capital lease, less current portion 146 39
Deferred revenue, less current portion 19,578 --
Deferred income tax liability 4,679 4,564
------------ ------------
Total liabilities 117,740 39,454
------------ ------------
Stockholders' equity
Preferred stock -- $0.001 par value,
5,000,000 shares authorized; no shares
issued and outstanding -- --
Common stock -- $0.001 par value, 90,000,000
shares authorized; 25,472,963 and 25,022,644
shares issued and outstanding as of December
31, 2010 and December 31, 2009, respectively 25 25
Additional paid-in capital 160,106 157,745
Retained earnings 12,267 6,098
------------ ------------
Total stockholders' equity 172,398 163,868
------------ ------------
Total liabilities and stockholders' equity $ 290,138 $ 203,322
============ ============
CORNERSTONE THERAPEUTICS INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
Year Ended December 31,
-------------------------
2010 2009
----------- -----------
Cash flows from operating activities
Net income $ 6,169 $ 10,203
Adjustments to reconcile net income to net cash
provided by operating activities:
Amortization and depreciation 14,778 6,392
Provision for prompt payment discounts 3,903 3,157
Provision for inventory allowances 1,340 1,474
Loss on sale of property and equipment 25 --
Impairment of product rights 350 --
Stock-based compensation 1,339 3,291
Benefit from deferred income taxes (2,977) (3,632)
Changes in operating assets and liabilities:
Accounts receivable (63,831) (6,718)
Inventories 1,592 (8,202)
Prepaid expenses, long-term accounts receivable
and other assets (8,743) (3,121)
Accounts payable 499 (3,116)
Accrued expenses 23,154 2,053
Income taxes payable/receivable (1,803) (1,331)
Deferred revenue 57,194 --
----------- -----------
Net cash provided by operating activities 32,989 450
----------- -----------
Cash flows from investing activities
Proceeds from sale of marketable securities -- 300
Proceeds from sale of property and equipment 2 --
Purchase of property and equipment (375) (635)
Purchase of product rights (250) (5,169)
----------- -----------
Net cash used in investing activities (623) (5,504)
----------- -----------
Cash flows from financing activities
Proceeds from exercise of common stock options
and warrants 544 437
Proceeds from issuance of shares of common stock -- 15,465
Payments for cancellation of warrants -- (41)
Excess tax benefit from stock-based compensation 478 1,269
Principal payments on license agreement liability (1,250) (2,500)
Principal payments on capital lease obligation (46) (9)
----------- -----------
Net cash (used in) provided by financing
activities (274) 14,621
----------- -----------
Net increase in cash and cash equivalents 32,092 9,567
Cash and cash equivalents as of beginning of year 18,853 9,286
----------- -----------
Cash and cash equivalents as of end of year $ 50,945 $ 18,853
=========== ===========
Supplemental disclosure of cash flow information
Cash paid during the year for interest $ 318 $ 531
=========== ===========
Cash paid during the year for income taxes $ 6,780 $ 9,260
=========== ===========
Supplemental schedule of non-cash investing and
financing activities
Purchase of property and equipment with capital
leases $ 226 $ -
=========== ===========
Acquisition of product rights through equity
issued and liabilities assumed $ -- $ 110,050
=========== ===========
CORNERSTONE THERAPEUTICS INC.
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
(In thousands, except share and per share data - unaudited)
The following table shows the non-GAAP financial measures used in this
press release reconciled to the most directly comparable GAAP financial
measures.
Three Months Ended Year Ended
December 31, December 31,
2010 2009 2010 2009
---------- ---------- ---------- ----------
GAAP income from Operations $ 267 $ 3,474 $ 7,888 $ 15,878
Add: stock-based
compensation(1) 369 321 1,339 1,478
Add: amortization of
product rights 3,943 3,587 14,728 6,115
Add: acquisition-related
expenses(2) -- -- -- 3,563
---------- ---------- ---------- ----------
Non-GAAP income from
operations $ 4,579 $ 7,382 $ 23,955 $ 27,034
========== ========== ========== ==========
GAAP net income $ 792 $ 2,688 $ 6,169 $ 10,203
Add: stock-based
compensation(1) 369 321 1,339 1,478
Add: amortization of
product rights 3,943 3,587 14,728 6,115
Add: acquisition-related
expenses(2) -- -- -- 3,563
Less: tax effects related
to above items(3) 58 (1,108) (3,324) (3,927)
---------- ---------- ---------- ----------
Non-GAAP net income $ 5,162 $ 5,488 $ 18,912 $ 17,432
========== ========== ========== ==========
GAAP net income per share,
diluted $ 0.03 $ 0.10 $ 0.24 $ 0.54
========== ========== ========== ==========
Non-GAAP net income per
share, diluted $ 0.20 $ 0.21 $ 0.73 $ 0.93
========== ========== ========== ==========
Shares used in diluted net
income per share
calculation:
GAAP net income 26,093,755 25,751,756 26,036,544 18,776,588
========== ========== ========== ==========
Non-GAAP net income 26,093,755 25,751,756 26,036,544 18,776,588
========== ========== ========== ==========
(1) Stock-based compensation excludes stock-based compensation charges
incurred in connection with the Chiesi transaction, which are included
in acquisition-related expenses.
(2) Acquisition-related expenses include stock-based compensation charges
and legal, accounting and related costs that resulted from or were
incurred in connection with the Chiesi transaction. During 2009,
acquisition-related stock-based compensation charges include $1.8
million of charges that were included in selling, general and
administrative expenses.
(3) Tax effects for the three months ended December 31, 2010 and 2009 are
calculated using effective tax rates of (1.3)% and 28.4%, respectively.
Tax effects for 2010 and 2009 are calculated using effective tax rates
of 20.7% and 35.2%, respectively.
Contact Information: Contacts Investor Relations Contacts: Westwicke Partners John Woolford +1-443-213-0506 or Westwicke Partners Stefan Loren, Ph.D. +1-443-213-0507 Media Relations Contact: Fleishman-Hillard Andrea Moody +1-919-457-0743