BUFFALO, N.Y., Feb. 23 /PRNewswire-FirstCall/ -- MINRAD International, Inc. today announced its financial results for the quarter ended December 31, 2005. The Company generated revenue of $2,466,000 for the quarter and $8,345,000 for calendar 2005. This compared to revenue of $460,000 in the same period 2004 and $3,528,000 on a proforma basis for the calendar year. (In 2004 the company changed from a September 30 to December 31 year.)
Revenue in both North America and the International markets were up sharply in the two periods: 4th Quarter Calendar Year $ Thousands 2004 2005 % 2004 2005 % North America 246 526 113 1210 2467 104 International 214 1940 806 2312 5878 154 Total 460 2466 436 3528 8345 137
In reviewing revenue growth between periods, it should be noted that fourth quarter 2004 revenue was constrained by the company’s sevoflurane validation production.
For the quarter, the company experienced a loss of $(1,115,000), $(0.04) per common share. This compares with a loss of $(1,380,000), $(0.05) per share in the fourth quarter of 2004. On an operating basis, the loss for the quarter of ($817,000) represented a $365,000 improvement, 30.8% reduction, from the fourth quarter of 2004. For the year ended December 31, 2005 the Company experienced a loss of $(12,052,000), $(0.42) per common share. The proforma loss for the same time period in 2004 was $(4,776,000), $(0.21) per common share. The 2005 loss included $370,000 in cash dividends from the Company’s preferred share offering in the second quarter and $6,598,549 in non-cash dividends. There were no dividends in 2004. FY 2005 also included $1,904,000 in non-cash imputed interest related to warrant value with the bridge loans made to the Company by shareholders.
Manufacturing performance variances in the fourth quarter of $(398,000) depressed gross margins from 57.4% at standard to 41.2%. This compares with (33.8%) in the same period a year ago when the company was producing its sevoflurane validation batches. The variances reflect start-up of Buffalo image-guided manufacturing, $(82,000) and $(300,000) from volume, inventory and efficiency variances in the Bethlehem inhalation anesthetic facility.
The company’s fourth quarter operating expenses were up $808,000 to $1,834,000, a 79% increase when comparing the same period in 2004. Research and Development expense increased $191,000, 62% to $500,000. Primary drivers in the year-over-year increase were increased product registration and intellectual property costs. Sales and Marketing expense increased $409,000, 178% reflecting compensation associated with the higher volumes between periods and the recruitment, development and training of a US sales organization. Finance and Administrative expense of $695,000 was $208,000, higher than the same period a year ago, 43%, reflecting additions to the company’s financial staff, and higher insurance costs. In each year, the company had high costs related to public operation. In December 2004 we completed our reverse merger and became a public organization. In November 2005 we listed on the American Stock Exchange, incurring $75,000 in registration fees.
Balance Sheet
At December 31, 2005 the company had total current assets of $9.0 million with $0.7 million cash on hand. At the same time, MINRAD had current liabilities of approximately $5.8 million. $1.5 million in demand notes from shareholders were repaid in October 2005.
About the Company
MINRAD International, Inc. is an interventional pain management company with real-time image guidance and anesthesia and analgesia product lines. The real-time image guidance products facilitate minimally invasive surgery especially for pain management and have broad applications in orthopedics, neurosurgery, and interventional radiology. These devices enable medical professionals to improve the accuracy of interventional procedures and reduce radiation exposure. MINRAD International also manufactures and markets generic inhalation anesthetics for use in connection with human and veterinary surgical procedures. The company is developing a drug/drug delivery system for conscious sedation, which, similar to nitrous oxide in dental surgery, provides a patient with pain relief without loss of consciousness.
This news release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. In some cases, you can identify forward-looking statements by terms such as “may,” “intend,” “might,” “will,” “should,” “could,” “would,” “expect,” “believe,” “estimate,” “anticipate,” “predict,” “project,” “potential,” or the negative of these terms, and similar expressions intended to identify forward-looking statement. Investors should not place undue reliance on the forward-looking statements contained in this news release. Each forward-looking statement speaks only as of the date on which it is made, and except as required by law, MINRAD International undertakes no obligation to update any forward-looking statement to reflect events or circumstances after the date on which it is made or to reflect the occurrence of anticipated or unanticipated events or circumstances. Forward-looking statements are based on assumptions and estimates and are subject to risks and uncertainties. Important factors that could cause actual results to differ materially from those identified in the forward-looking statements in this news release include changes in general economic and political conditions and currency exchange rates; market factors, including competitive pressures and changes in pricing policies; changes in interpretations of existing legislation or the adoption of new legislation; loss of major customers; the occurrence of litigation or claims; natural and manmade disasters, including acts of terrorism or war; and other factors described in the “Risk Factors” and “Cautionary Factors That May Affect Future Results” sections of Minrad International’s Form 10-KSB, filed with the Securities and Exchange Commission on March 31, 2005.
Contact: William Bednarski President & CFO 716-855-1068 MINRAD INTERNATIONAL, INC. CONSOLIDATED STATEMENTS OF OPERATIONS
4th Quarter Ended December 31,2005 COMPARED TO UNAUDITED PROFORMA 4th Quarter
Ended December 31, 2004 IN THOUSANDS UNAUDITED FAVORABLE FAVORABLE FY 2005 2004 (UNFAVORABLE) (UNFAVORABLE) Revenue $2,466 $460 $2,006 436% Cost of goods sold Standard Cost of Sales 1,051 210 (841) (401%) Manufacturing Variances 398 406 8 2% 1,449 616 (833) (135%) Gross profit 1,017 (156) 1,173 752% GP % 41.2% (33.8)% 75.0 pts Operating expenses: Sales and marketing 639 230 (409) (178%) Research and development 500 309 (191) (62%) Finance and administrative 695 487 (208) (43%) Total operating expenses 1,834 1,026 (808) (79%) Operating loss (817) (1,182) 365 31% Interest expense: cash (27) (81) 54 67% Interest expense: imputed (100) (117) 17 15% Net Loss $(944) $(1,380) $436 (32%) Less Preferred Stock Dividends Cash dividends (171) -- (171) NA Non cash dividends -- -- -- -- Net loss available for common stockholders $(1,115) $(1,380) $265 19% Net Loss per share $(0.04) (0.05) 0.01 20% Weighted average common shares outstanding 28,998 27,831 1,167 4% MINRAD INTERNATIONAL, INC. CONSOLIDATED STATEMENTS OF OPERATIONS
FY2005 ENDED 12/31/2005 COMPARED TO UNAUDITED PROFORMA 2004 ENDED 12/31/2004
IN THOUSANDS UNAUDITED FAVORABLE FAVORABLE FY 2005 2004 (UNFAVORABLE) (UNFAVORABLE) Revenue $8,345 $3,528 $4,817 137% Cost of goods sold Standard Cost of Sales 3,360 1,616 (1,744) (108%) Manufacturing Variances 1,469 1,245 (224) (18%) 4,829 2,861 (1,968) (69%) Gross profit 3,516 667 2,849 427% GP % 42.1% 18.9% 23.2 pts Operating expenses: Sales and marketing 1,760 773 (987) (128%) Research and development 1,804 1,117 (687) (62%) Finance and administrative 2,754 2,129 (625) (29%) Total operating expenses 6,318 4,019 (2,299) (57%) Operating loss (2,802) (3,352) 550 16% Interest expense: cash (377) (546) 169 31% Interest expense: imputed (1,904) (878) (1,026) (117%) Net Loss $(5,083) $(4,776) $(307) (6%) Less Preferred Stock Dividends Cash dividends (370) -- (370) NA Non cash dividends (6,599) -- (6,599) NA Net loss available for common stockholders $(12,052) $(4,776) $(7,276) (152%) Net Loss per share $(0.42) (0.21) (0.22) (105%) Weighted average common shares outstanding 28,519 23,741 4,778 20% MINRAD INTERNATIONAL, INC. CONSOLIDATED BALANCE SHEETS IN THOUSANDS December 31, December 31, ASSETS 2005 2004 Current Assets Cash, and cash equivalents $670 $3 Accounts receivable, net 3,459 606 Inventories, net 3,861 1,070 Prepaid expenses 961 472 Total current assets 8,951 2,151 Net property and equipment 1,069 499 Other Assets 163 113 Total Assets 10,183 2,763 LIABILITIES AND STOCKHOLDER’S EQUITY (DEFICIT) Current Liabilities: Demand notes payable $2,720 $1,471 Accounts payable 2,542 2,434 Dividends Payable 170 Accrued expenses 405 825 Due to affiliates -- 375 Current portion of long-term including default reclassifications -- 1,022 Total current liabilities 5,837 6,127 Stockholder’s Equity (Deficit) 4,346 (3,364) Total Liabilities & Equity $10,183 $2,763 MINRAD INTERNATIONAL, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) IN THOUSANDS FY2005 Unaudited Ended December 31, Proforma 2005 2004 Cash flows from operating activities: Net loss $(5,084) $(4,776) Adjustments to reconcile net loss to net Cash used by operating activities: (4,439) 1,154 Net cash used by operating activities (9,523) (3,622) Net cash used by investing activities (483) (266) Net cash provided by financing activities 10,673 3,465 Net increase (decrease) in cash and cash equivalents 667 (423) Cash and cash equivalents - beginning of period 3 426 Cash and cash equivalents - end of period $670 $3
MINRAD International, Inc.
CONTACT: William Bednarski, President & CFO of MINRAD International, Inc.,+1-716-855-1068
Web site: http://www.minrad.com/
