SAN DIEGO, July 26, 2001 (PRIMEZONE) -- Women First HealthCare, Inc. (Nasdaq:WFHC) today announced significant improvement in its operating results for the second quarter ended June 30, 2001. The Company reported a net loss of $1.5 million or $0.08 per share. In last year's second quarter the Company lost $10.7 million or $0.61 per share. For the six months through June 30, 2001 the Company lost $2.4 million, or $0.14 per share, compared to a net loss of $18.7 million, or $1.07 per share, in the prior period, an improvement of $16.3 million or 87.1%.
The Company reported second quarter 2001 total net revenue of $5.6 million as compared to $5.8 million for second quarter 2000, a 4.6% decrease. Net revenue for the Company's core pharmaceutical products -- ORTHO-EST(r) Tablets and Esclim(tm) -- grew 85.5% over the comparable quarter last year. For the six-month 2001 period, total net revenue was $12.7 million, 5.1% below the prior year's $13.3 million. However, excluding nonrecurring related party service revenue in 2000, year-over-year total net revenue actually increased by 39.2%. Core pharmaceutical product net revenue was up 117% for the six-month period ended June 30, 2001.
Gross margins improved dramatically in 2001, to 76.5% and 70.3%, in the three-month and six-month periods, respectively. The comparable gross margins from the prior year were 29.8% and 51.9%, reflecting the minimum payment requirement that existed prior to the Company acquiring ORTHO-EST(r) Tablets.
Total expenses in the 2001 periods were less than half of what they were in the 2000 periods. For the three-month and six-month periods 2001, operating expenses totaled $5.8 million and $11.8 million, respectively. The comparable prior period amounts were $12.7 million and $26.3 million, respectively. The improvement in operating expenses is the result of the Company's ongoing efforts to more closely align expenses with revenues following its restructuring in July 2000.
Commenting on the results, Edward F. Calesa, chairman, president and CEO, said, "We remain on track to achieve the best year of our existence in 2001. Sales remain strong, margins have been strengthened and expenses continue to decline as our efforts to reach profitability continue to dominate our focus. Of particular note this quarter were our acquisition of Midrin(r), the profitability of both of our operating divisions and an increase in our cash position from March 31, 2001. Our short-term goal remains reaching breakeven in the fourth quarter of this year and achieving profitability in 2002."
Business Segments
The Company reports results in three segments as follows:
The Pharmaceutical Division recorded net revenue of $3.5 million in the second quarter 2001 from sales of its core products, ORTHO-EST(r) Tablets and Esclim(tm) transdermal system, an increase of 85.5% over net revenue from sales in the prior year period. For the six-month period, these products achieved a 117% sales growth over the prior year period. In 2001, the pharmaceutical segment earned $532,000 in the second quarter and $884,000 in the six-month period compared to a net loss of $8.7 million and $14.1 million in the prior periods. Effective June 29, 2001, the Company acquired Midrin(r), a prescription headache management product from Elan Corporation, plc. The Company's statements of operations for the three and six months ended June 30, 2001 were not significantly impacted by the acquisition.
The Consumer Business Division recorded net revenue in 2001 of $2.1 million and $4.1 million for the three and six-month periods respectively, down from $2.4 million and $4.7 million in the prior year periods. The Consumer Business focus for 2001 is to reduce expenses and limit the loss significantly while supporting the Company's pharmaceutical products. The segment produced a small profit for the second quarter 2001 versus a $327,000 loss in the second quarter 2000. For the six-month periods, the segment had a net loss of $245,000 in the current year compared to a net loss of $543,000 in 2000.
The Trialogue(tm) Division's focus shifted in 2001 to provide strategic marketing programs for sale to major pharmaceutical companies. Trialogue(tm) recorded no revenue in the second quarter or first six months of 2001 as it continues the rollout of a unique new marketing program called Integrated Marketing Platform. Trialogue(tm) revenue in 2000, $1.6 million for the quarter and $3.2 million for the six months, was primarily related party service revenue and is nonrecurring.
Financial Position
The Company's cash position at June 30, 2001 was $9.2 million, up slightly from the March 31, 2001 level and $300,000 below the year-end level. During last year's first six months, cash declined $14.5 million or $2.4 million per month. Working capital at June 30, 2001 was $9.3 million, $300,000 below the year-end level, and stockholders' equity increased to $17.1 million from $15.0 million at year-end. The Company has long-term debt of $11 million in the form of convertible secured debt issued to acquire Midrin(r).
About Women First HealthCare, Inc.
Founded in 1996, Women First HealthCare, Inc. is a San Diego-based specialty pharmaceutical company. Its mission is to help midlife women make informed choices regarding their health care needs and to provide pharmaceutical and lifestyle products to meet those needs. Women First is specifically targeted to women age 40+ and their clinicians. The Company's Pharmaceutical Division, which includes a nationwide team of experienced sales specialists, contacts primarily OB/GYNs and Nurse Practitioners with estrogen replenishment options -- ORTHO-EST(r) Tablets (estropipate) and Esclim(tm) (estradiol transdermal system) -- and the prescription headache management product, Midrin(r) (isometheptene mucate, USP, dichloralphenazone, USP and acetaminophen, USP). The Consumer Business is responsible for Daily Difference(tm) dietary supplements, developed in consultation with Tufts University School of Nutrition Science and Policy, and the Company's line of self-care products available through its As We Change(r) national mail order catalog and Internet retailer, www.aswechange.com. Trialogue(tm), the Corporate Marketing Division, is responsible for providing access to Women First's network of opinion leaders and clinicians through strategic marketing programs for sale to major pharmaceutical companies. The Company's business strategy includes the acquisition and licensing of additional prescription products that support its mission. Further information about Women First can be found online at www.womenfirst.com.
ORTHO-EST(r) Tablets and Esclim(tm) are indicated for the relief of moderate to severe vasomotor symptoms associated with menopause. ORTHO-EST(r) Tablets are also indicated for the prevention of osteoporosis. The most commonly reported side effects of ORTHO-EST(r) Tablets and Esclim(tm) are those typical of estrogen replenishment therapy: breast tenderness, headache, nausea, and abdominal pain. Estrogens have been reported to increase the risk of endometrial carcinoma in postmenopausal women. Estrogens are contraindicated in patients with known or suspected pregnancy, undiagnosed abnormal genital bleeding, known or suspected breast cancer, known or suspected estrogen-dependent neoplasia, or active thrombophlebitis or thromboembolic disorders. Midrin(r) is indicated for relief of tension and vascular headaches. Midrin(r) is contraindicated in glaucoma and/or severe cases of renal disease, hypertension, organic heart disease, hepatic disease and in those patients who are on monoamine-oxidase (MAO) inhibitor therapy. Caution should be observed in hypertension, peripheral vascular disease and after recent cardiovascular attacks. Adverse reactions can include transient dizziness and skin rash in hypersensitive patients, which can usually be eliminated by reducing dosage. For more information about these products or to see the package insert, please visit www.womenfirst.com, Rx Products area.
Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995: This press release may contain certain "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are subject to various risks, and Women First HealthCare, Inc. cautions you that any forward-looking information is not a guarantee of future performance. Women First HealthCare, Inc. disclaims any intent or obligation to update these forward-looking statements. Actual results could differ materially due to a number of factors, including (i) we have incurred significant losses since we were founded in November 1996, and if midlife women do not use, and their clinicians do not recommend, the products we offer, we will continue to experience significant losses; (ii) there is a limited market awareness of our Company and the products and services we offer; (iii) we may need additional financing in 2001 to fund our operations, acquire new products, and make planned capital expenditures, which financing may not be available on acceptable terms, if at all; (iv) we may not be able to identify appropriate licensing, co-promotion or acquisition candidates in the future or to take advantage of the opportunities we identify; (v) we and our products face significant competition; (vi) if we do not successfully manage any growth we experience, we may experience increased expenses without corresponding revenue increases; (vii) we are dependent on single sources of supply for all of the products we offer; and (viii) additional factors set forth in the Company's Securities and Exchange Commission filings including its Annual Report on Form 10-K for the period ended December 31, 2000 and its Form 10-Q for the period ending March 31, 2001.
Women First HealthCare, Inc.
Consolidated Statements of Operations
(Unaudited)
Three months ended Six months ended
June 30, June 30,
-------------------------- --------------------------
2001 2000 2001 2000
------------ ------------ ------------ ------------
Net product
revenue $ 5,556,771 $ 4,248,069 $ 12,621,194 $ 8,607,228
Net service
revenue -- 262,000 -- 462,000
Net service
revenue from
related
party -- 1,316,330 43,843 4,276,339
------------ ------------ ------------ ------------
Total service
revenues -- 1,578,330 43,843 4,738,339
------------ ------------ ------------ ------------
Total net
revenues 5,556,771 5,826,399 12,665,037 13,345,567
Costs and
expenses:
Cost of
sales 1,306,219 4,092,202 3,763,910 6,417,913
Marketing
and sales 3,330,094 9,878,055 7,566,163 20,793,878
General and
admini-
strative 2,360,592 1,993,142 3,963,062 4,383,684
Research and
development 101,649 119,075 225,836 388,357
Restructuring
charges -- 734,665 -- 734,665
------------ ------------ ------------ ------------
Total costs
and expenses 7,098,554 16,817,139 15,518,971 32,718,497
------------ ------------ ------------ ------------
Loss from
operations (1,541,783) (10,990,740) (2,853,934) (19,372,930)
Interest and
other
income, net 87,908 326,680 443,325 710,456
------------ ------------ ------------ ------------
Net loss $ (1,453,875) $(10,664,060) $ (2,410,609) $(18,662,474)
============ ============ ============ ============
Net loss per
share
(basic and
diluted) $ (0.08) $ (0.61) $ (0.14) $ (1.07)
============ ============ ============ ============
Weighted
average
shares used
in computing
net loss per
share (basic
and diluted) 17,760,365 17,479,867 17,685,816 17,425,666
============ ============ ============ ============
Women First HealthCare, Inc.
Consolidated Balance Sheets
June 30, December 31,
2001 2000
------------ ------------
(Unaudited)
Assets
Current assets:
Cash and cash equivalents $ 9,208,013 $ 9,507,865
Accounts receivable, net 1,448,076 421,435
Inventory 1,913,795 1,387,872
Receivable from related party -- 2,682,468
Prepaid expenses and
other current assets 599,139 544,283
------------ ------------
Total current assets 13,169,023 14,543,923
Property and equipment, net 968,176 1,081,214
Product rights 13,902,915 --
Intangible assets, net 3,024,665 3,266,840
Other assets 973,315 1,152,398
------------ ------------
Total assets $ 32,038,094 $ 20,044,375
============ ============
Liabilities and
stockholders' equity
Current liabilities:
Accounts payable $ 881,868 $ 1,052,322
Payable to related party 166,263 992,745
Accrued salaries and
employee benefits 1,372,891 750,902
Other accrued liabilities 1,497,362 2,213,245
------------ ------------
Total current liabilities 3,918,384 5,009,214
Note payable 11,000,000 --
Commitments -- --
Stockholders' equity:
Preferred stock -- --
Common stock 18,592 17,593
Treasury stock (99,660) (99,660)
Additional paid-in capital 85,230,779 80,794,541
Deferred compensation (173,761) (231,682)
Accumulated deficit (67,856,240) (65,445,631)
------------ ------------
Total stockholders' equity 17,119,710 15,035,161
------------ ------------
Total liabilities and
stockholders' equity $ 32,038,094 $ 20,044,375
============ ============