LAUSANNE, Switzerland and IRVINE, California, February 27 /PRNewswire-FirstCall/ -- IsoTis S.A. (“IsoTis”) today reported its financial results for the fourth quarter and full year 2005. Revenues were US$8.6 million for the fourth quarter of 2005, a 34% increase over revenue of US$6.4 million for the fourth quarter of 2004. For the full year 2005, revenues reached US$32.1 million, representing a 26% increase over revenue of US$25.4 million for the full year of 2004.
Revenue Analysis
IsoTis’ chief distribution channels are its US network of independent agents and its network of international distributors. In the fourth quarter of 2005, revenue from the US network grew 21% to US$5.8 million compared to US$4.8 million in the fourth quarter of 2004; international revenue grew 99% to US$2.2 million compared to US$1.1 million in the fourth quarter of 2004. For the full year 2005, revenue from the US network increased 16% to US$22.2 million compared to US$19.2 million for the full year of 2004, and international revenue grew 48% to US$7.4 million compared to US$4.9 million for the full year 2004.
Results Comparison & Cash Position
The loss from operations for the fourth quarter of 2005 was US$2.8 million, down from loss from operations of US$12.9 million for the fourth quarter of 2004. The loss from operations for the full year 2005 was US$9.9 million, compared to loss from operations of US$33.3 million for the full year 2004. The company recognised a foreign exchange gain of US$10.0 million for the full year 2005, which had a significant impact on the company’s full year results. The company recorded net income for the full year 2005, of US$0.9 million, compared to a net loss of US$37.2 million for the full year 2004.
At December 31, 2005 the company had cash and cash equivalents (including restricted cash) of US$20.1 million.
Operational highlights for 2005 - Continued to build management team - Expanded sales management group - Sustained sales training and education effort - Continued development of new products
Pieter Wolters, President and CEO of IsoTis OrthoBiologics commented, “We are pleased with our strong performance in 2005. We have surpassed our 2005 revenue guidance, and for the sixth quarter in succession we are reporting revenue growth compared to the same quarter of the previous year. We also reduced our operating loss for 2005 to less than one third of the prior year. We will focus on maintaining our momentum by continuing to invest in marketing, sales and training, as well as in product development.”
Business Outlook for 2006
- IsoTis anticipates total revenues for full year 2006 to grow in excess of 20%.
- IsoTis plans to intensify product & business development aimed at introducing new products.
Conference Call
The Company will hold a meeting at SWX Convention Point in Zurich and simultaneously conduct a conference call at 3.00 p.m. CET/9.00 a.m. ET/6.00 a.m. PT. Dial: +41-91-610-5609 (Europe); +44-207-107-0613 (UK); +1-866-865-5144 (toll free dial in US/Canada); no password required. Digital playback is available for 24 hours after the conference starting at 6.00 p.m. until February 28, 6.00 p.m. CET, dial: +41-91-612-4330 (Europe); +44-207- 108-6233 (UK); +1-866-416-2558 (US/Canada); playback ID: 238#. The call will also be Webcast live on the IsoTis website at www.isotis.com. The Webcast will remain available on IsoTis’ website at least through April 30, 2006.
IsoTis has a product portfolio with several innovative and proprietary natural and synthetic bone graft substitutes on the market and others in development, an established North American independent distribution network, and an expanding international presence. The company’s main commercial operations are based out of Irvine, California; its international sales headquarters is based in Lausanne, Switzerland.
Certain statements in this Press Release are “forward-looking statements” within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, including those that refer to management’s plans and expectations for future operations, prospects and financial condition. Words such as “strategy,” “expects,” “plans,” “anticipates,” “believes,” “will,” “continues,” “estimates,” “intends,” “projects,” “goals,” “targets” and other words of similar meaning are intended to identify such forward-looking statements. One can also identify them by the fact that they do not relate strictly to historical or current facts. Such statements are based on the current expectations of the management of IsoTis only. Undue reliance should not be placed on these statements because, by their nature, they are subject to known and unknown risks and can be affected by factors that are beyond the control of IsoTis. Actual results could differ materially from current expectations due to a number of factors and uncertainties affecting IsoTis’ business, including but not limited to competitive sales and marketing environment, the timely commencement and success of IsoTis’ clinical trials and research endeavours, delays in receiving US Food and Drug Administration or other regulatory approvals (a.o. EMEA, CE), market acceptance of the IsoTis’ products, effectiveness of our distribution channels, development of competing therapies and/or technologies, the terms of any future strategic alliances, the need for additional capital, the inability to obtain, or meet conditions imposed for the required governmental and regulatory approvals and consents. IsoTis expressly disclaims any intent or obligation to update these forward-looking statements except as required by law. For a more detailed description of the risk factors and uncertainties affecting IsoTis, refer to the Company’s Annual Report on Form 20-F for the fiscal year ended December 31, 2004, filed with the SEC and to IsoTis’ reports filed from time to time with the Swiss Stock Exchange (SWX), Euronext Amsterdam N.V., and SEDAR at www.sedar.com, as well as the Toronto Stock Exchange (TSX).
IsoTis S.A. Consolidated Statements of Operations US Dollars Unaudited Three Months Ended December 31, December 31, 2005 2004 Net revenues Product sales $ 8,613,412 $ 6,297,598 Government grants - - Royalties - 134,720 - - Total net revenues 8,613,412 6,432,318 - - Operating expenses Costs of sales 3,930,321 3,618,765 Research and development 2,159,005 4,248,552 Marketing and selling 3,830,472 4,603,411 General and administrative 1,486,542 4,551,672 Reorganisation costs - 2,334,283 Total operating expenses 11,406,340 19,356,683 Loss from operations (2,792,928) (12,924,365) Interest income and other 191,391 2,093,673 Interest expense and other (249,556) (722,453) Foreign exchange gain/(loss) 1,356,579 (7,431,134) Net income(loss) before taxes (1,494,514) (18,984,279) Provision for income taxes - - Net income(loss) $ (1,494,514) $ (18,984,279) Basic net income(loss) per share $ (0.02) $ (0.27) Diluted net income per share Weighted average common shares outstanding 70,804,821 69,923,295 Diluted common shares outstanding IsoTis S.A. Consolidated Statements of Operations US Dollars Unaudited Year Ended December 31, December 31, 2005 2004 Net revenues Product sales $ 32,063,461 $ 25,268,629 Government grants - 37,141 Royalties 38,825 134,720 Total net revenues 32,102,286 25,440,490 Operating expenses Costs of sales 13,114,233 12,254,210 Research and development 6,330,136 12,159,409 Marketing and selling 13,140,497 13,989,841 General and administrative 9,424,863 15,588,846 Reorganisation costs - 4,743,458 Total operating expenses 42,009,729 58,735,764 Loss from operations (9,907,443) (33,295,274) Interest income and other 1,240,717 2,360,690 Interest expense and other (406,111) (319,489) Foreign exchange gain/(loss) 9,981,769 (5,977,977) Net income(loss) before taxes 908,932 (37,232,050) Provision for income taxes - - Net income(loss) $ 908,932 $ (37,232,050) Basic net income(loss) per share $ 0.01 $ (0.54) Diluted net income per share $ 0.01 Weighted average common shares outstanding 70,464,330 69,548,046 Diluted common shares outstanding 72,447,640 IsoTis S.A. Consolidated Balance Sheets Unaudited Unaudited December 31, December 31, 2005 2004 Assets Current assets: Cash and cash equivalents $ 15,714,442 $ 25,539,603 Restricted cash 2,184,063 3,030,402 Trade receivables, net 6,306,518 4,414,341 Inventories 10,020,906 9,295,435 Unbilled receivables 295,115 435,116 Value added tax receivable 95,505 137,122 Prepaid expenses and other current assets 761,355 2,297,876 Total current assets 35,377,904 45,149,895 Non-current assets: Restricted cash 2,250,000 4,605,623 Property, plant and equipment, net 1,359,280 3,270,707 Goodwill 16,383,069 16,383,069 Intangible assets, net 13,585,250 16,236,065 Total non-current assets 33,577,599 40,495,464 Total assets $ 68,955,503 $ 85,645,359 Liabilities and shareholders’ equity Current liabilities: Trade payables $ 2,910,114 $ 3,571,784 Accrued liabilities 6,680,989 8,468,782 Deferred revenue 344,719 62,042 Current portion of capital lease obligations - 39,877 Current portion of interest-bearing loans and borrowings 1,015,471 6,796,899 Total current liabilities 10,951,293 18,939,384 Non-current liabilities: Capital lease obligations - - Interest-bearing loans and borrowings 2,043,781 3,067,722 Total non-current liabilities 2,043,781 3,067,722 Common Stock 50,644,949 49,955,146 Additional paid in capital 106,212,297 105,598,590 Accumulated other comprehensive income 12,932,003 22,822,269 Accumulated deficit (113,828,820) (114,737,752) Total shareholders’ equity 55,960,429 63,638,253 Total liabilities and shareholders’ equity $ 68,955,503 $ 85,645,359
IsoTis OrthoBiologics
CONTACT: Hans Herklots, Director IR, Tel: +41-21-620-6011, E-mail:hans.herklots@isotis.com. Rob Morocco, CFO, +1-949-855-7155,robert.morocco@isotis.com
