August 30, 2010

Unilife Corporation Announces Preliminary Financial Results for Fourth Quarter and Fiscal Year 2010

LEWISBERRY, Pa., Aug 30, 2010 /PRNewswire via COMTEX News Network/ -- Unilife Corporation ("Unilife" or "Company") (Nasdaq: UNIS; ASX: UNS) today announced preliminary financial results for the fourth quarter and fiscal year ended June 30, 2010.

Mr. Alan Shortall, Chief Executive Officer of Unilife said: "Fiscal 2010 has been a pivotal year for Unilife, as we completed several major milestones including the redomiciliation of the Company to the U.S. and our listing on NASDAQ."

"We have also expanded our executive team and board of directors to reflect our U.S. expansion. Each person brings to the company specific skills and experience that will help guide us through what we expect to be an extremely busy and exciting next couple of years."

"We are now working to finalize the industrialization of the Unifill(TM) syringe and expand relationships with interested pharmaceutical companies, accelerate the global rollout of our Unitract 1mL syringes; and complete the construction of our new state-of-the-art facility in York, Pennsylvania. We remain committed to the continued implementation of our business strategy, and the execution of a number of significant business milestones during fiscal 2011."

Annual Company Highlights:

  • Redomiciled the Company to the U.S. (January 2010).
  • Unilife Corporation common stock listed on the NASDAQ stock exchange (February 2010).
  • Signed an industrialization agreement with sanofi-aventis (July 2009), followed by an agreement between both parties to a list of therapeutic classes including vaccines and anti-thrombotic agents where sanofi-aventis has exclusive rights to negotiate the purchase of the Unifill syringe until June 2014 (March 2010).
  • Appointed the Mikron Group as the contracted supply partner for the development and supply of automated assembly systems to support the commercial production of the Unifill(TM) syringe (November 2009).
  • Initiated U.S. production of the Unitract 1mL Insulin Syringe in Lewisberry, Pennsylvania (PA) (August 2009), and the subsequent first shipment of the product to Doctors Without Borders to support relief efforts in Haiti.
  • Received U.S. FDA market clearance for the Unitract 1mL Insulin Syringes assembled in Lewisberry, PA (April 2010), and the provision of EC certification for the European Union and Australia (June 2010).
  • Signed distribution agreements for the Unitract 1mL syringes, including an agreement with Stason Pharmaceuticals Inc for Japan, China and Taiwan (March 2010); and an agreement with Clinicare for India (April 2010).
  • Started construction on new global headquarters and commercial production facility in York, PA (December 2009). The new 165,000 square foot state-of-the-art facility is on schedule for operations by late-2010.
  • Following the signing of the Industrialization Agreement, Unilife was able to commence discussions with other pharmaceutical companies interested in the use of the Unifill(TM) syringe within therapeutic drug classes outside of those retained by sanofi-aventis. A number of these discussions have accelerated during the past year.
  • Appointed additional U.S. based Board members, including Mary Kate Wold, Marc Firestone and John Lund, as well as the appointment of senior executives including CFO and Executive Vice President Richard Wieland and General Counsel, Corporate Secretary and Chief Compliance Officer Chris Naftzger.

Preliminary Financial Results for Fourth Quarter and Fiscal Year Ended June 30, 2010

Revenues for the fourth quarter ended June 30, 2010 were $2.7 million compared to $7.7 million for the same period in 2009. Revenues for the fiscal year ended June 30, 2010 were $11.4 million compared to $20.0 million for the same period in 2009. The decrease was primarily attributable to a relative decline in revenues from the Company's industrialization agreement with sanofi-aventis in 2010, due to the accelerated receipt of milestone payments during 2009 because the industrialization program was running ahead of its original schedule. The Company has elected to prioritize its activities on the development and supply of its proprietary range of safety syringes. It has consequently reduced its business activities within the medical device contract manufacturing sector during this period.

The Company's net loss for the fourth quarter ended June 30, 2010 was $9.7 million or $0.18 per diluted share, compared to net income of $2.2 million, or $0.06 per diluted share for the same period in 2009. The Company's net loss for the fiscal year ended June 30, 2010 was $29.7 million or $0.64 per diluted share, compared to a net loss of $0.5 million, or $0.02 per diluted share for the same period in 2009. The increase in the net loss was attributable to both the decline in revenues as well as higher payroll and related expenses due to an increase in the workforce at the Lewisberry, PA facility. The Company also incurred an increase in legal and consulting fees in connection with its redomiciliation to the United States.

Adjusted net loss for the fourth quarter ended June 30, 2010, which excludes approximately $4.0 million in share-based compensation expense, depreciation and amortization, interest expense and certain non-recurring costs associated with the redomiciliation and Nasdaq listing was $5.7 million, or $0.11 per diluted share compared to adjusted net income of $3.0 million or $0.08 per diluted share for the same period in 2009. Adjusted net loss for the fiscal year ended June 30, 2010, which excludes approximately $15.2 million in share-based compensation expense, depreciation and amortization, interest expense and certain non-recurring costs associated with the redomiciliation and Nasdaq listing was $14.5 million, or $0.31 per diluted share compared to adjusted net income of $3.9 million or $0.11 per share for the same period in 2009.

As of June 30, 2010, the Company's cash and cash equivalents were $20.8 million.

The financial data included in this press release is based on preliminary unaudited information and may be subject to change. The Company expects to file its audited results for the fiscal year ended June 30, 2010 on Form 10-K with the Securities and Exchange Commission on September 28, 2010.

Conference Call Information

Management has scheduled a conference call for 4:30 p.m. U.S. Eastern Daylight Time on August 30, 2010, to review the Company's financial results, market trends and future outlook. The conference call and accompanying slide presentation will be broadcast over the Internet as a "live" listen only Webcast. An archive of the presentation and webcast will be available for 30 days after the call. To listen, please go to: http://ir.unilife.com/events.cfm

About Unilife Corporation

Unilife Corporation is a U.S.-based medical device company focused on the design, development, manufacture and supply of a proprietary range of retractable syringes. Primary target customers for Unilife products include pharmaceutical manufacturers, suppliers of medical equipment to healthcare facilities and patients who self-administer prescription medication. These patent-protected syringes incorporate automatic, operator-controlled needle retraction features which are fully integrated within the barrel, and are designed to protect those at risk of needlestick injuries and unsafe injection practices. Unilife is ISO 13485-certified and has FDA-registered medical device manufacturing facilities in Pennsylvania.

This press release contains forward-looking statements. All statements that address operating performance, events or developments that we expect or anticipate will occur in the future are forward-looking statements. These forward-looking statements are based on management's beliefs and assumptions and on information currently available to our management. Our management believes that these forward-looking statements are reasonable as and when made. However, you should not place undue reliance on any such forward-looking statements because such statements speak only as of the date when made. We do not undertake any obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law. In addition, forward-looking statements are subject to certain risks and uncertainties that could cause actual results, events and developments to differ materially from our historical experience and our present expectations or projections. These risks and uncertainties include, but are not limited to, those described in "Item 1A. Risk Factors" and elsewhere in our registration statement on Form 10 and those described from time to time in other reports which we file with the Securities and Exchange Commission.

Non-GAAP Financial Measures

U.S. securities laws require that when we publish any non-GAAP financial measure, we disclose the reason for using the non-GAAP measure and provide a reconciliation to the most directly comparable GAAP measure. The presentation of adjusted net income (loss) and adjusted net income (loss) per share are non-GAAP measures. Adjusted net income (loss) represents net income (loss) calculated in accordance with U.S. GAAP as adjusted for the impact of share-based compensation expense, depreciation and amortization, interest expense and certain non-recurring costs associated with our redomiciliation and Nasdaq listing.

Management believes the presentation of adjusted net income (loss) and adjusted net income (loss) per share provides useful information because these measures enhance its own evaluation, as well as investor's understanding, of the Company's core operating and financial results. Non-GAAP financial measures should be considered in addition to results prepared in accordance with GAAP, but should not be considered a substitute for, or superior to, GAAP results. A reconciliation of net income (loss) to adjusted net income (loss) is included in the attached table.

General: UNIS-G


                                                     Investor Contacts
    Investor Contacts (US):                          (Australia)
    Todd Fromer / Garth Russell Stuart Fine         Jeff Carter
    KCSA Strategic
     Communications             Carpe DM Inc        Unilife Corporation
    P: + 1 212-682-6300         P: + 1 908 469 1788 P: + 61 2 8346 6500


(Tables Below)

         UNILIFE CORPORATION AND SUBSIDIARIES
             Consolidated Balance Sheets
    (in thousands, except share data)(unaudited)


                                            June 30,
                                            --------
                                           2010       2009
                                           ----       ----
                 Assets
    Current Assets:
      Cash and cash equivalents         $20,750     $3,627
      Accounts receivable                 1,556      7,333
      Inventories                           797      1,097
      Prepaid expenses and other
       current assets                       637        223
                                            ---        ---
        Total current assets             23,740     12,280
    Property, plant and equipment,
     net                                 29,972      9,137
    Goodwill                             10,792     10,235
    Intangible assets, net                   40         43
    Other assets                            273        517
                                            ---        ---
        Total assets                    $64,817    $32,212
                                        =======    =======
     Liabilities and Stockholders'
                  Equity
    Current Liabilities:
      Accounts payable                   $6,044     $1,103
      Accrued expenses                    2,911      6,097
      Current portion of long-term
       debt                               1,648        405
      Deferred revenue                    2,188      2,642
                                          -----      -----
        Total current liabilities        12,791     10,247
    Long-term debt, less current
     portion                              1,093      2,728
    Deferred revenue                      6,563      7,926
                                          -----      -----
        Total liabilities                20,447     20,901
                                         ------     ------
    Commitments and contingencies
    Stockholders' Equity:
      Preferred stock, $0.01 par
       value, 50,000,000 shares
       authorized as                          -          -
    of June 30, 2010; none issued
     or outstanding as of June 30,
     2010
    and 2009
      Common stock, $0.01 par value,
       250,000,000 shares authorized        548        366
    as of June 30, 2010;
     54,761,848 and 36,625,802
     shares issued
    and outstanding as of June 30,
     2010 and 2009, respectively
      Additional paid-in-capital        123,217     57,987
      Accumulated deficit               (79,650)   (49,902)
      Accumulated other
       comprehensive income                 255      2,860
                                            ---      -----
        Total stockholders' equity       44,370     11,311
                                         ------     ------
          Total liabilities and
           stockholders' equity         $64,817    $32,212
                                        =======    =======



       UNILIFE CORPORATION AND SUBSIDIARIES
      Consolidated Statements of Operations
      (in thousands, except per share data)
                   (unaudited)


                                  Three
                                  Months
                                  Ended           Year Ended
                                June 30,           June 30,
                                --------           --------
                                2010     2009       2010     2009
                                ----     ----       ----     ----
    Revenues                  $2,652   $7,703    $11,422  $19,976
    Cost of sales                636      652      2,471    3,426
                                 ---      ---      -----    -----
       Gross profit            2,016    7,051      8,951   16,550
                               -----    -----      -----   ------
    Operating
     expenses:
       Research and
        development            1,540      427      8,495    1,048
       Selling, general
        and
        administrative         9,799    4,134     28,696   14,941
       Depreciation and
        amortization             587      260      2,314      915
                                 ---      ---      -----      ---
       Total operating
        expenses              11,926    4,821     39,505   16,904
                              ------    -----     ------   ------
         Operating income
          (loss)              (9,910)   2,230    (30,554)    (354)
    Interest expense              34      (30)       125      249
    Interest income             (359)     (29)    (1,066)    (361)
    Other expense                120       58        135      275
                                 ---      ---        ---      ---
         Net income (loss)   $(9,705)  $2,231   $(29,748)   $(517)
                             =======   ======   ========    =====
    Income (loss) per
     share:
    Basic income
     (loss) per share         $(0.18)   $0.06     $(0.64)  $(0.02)
                              ======    =====     ======   ======
    Diluted income
     (loss) per share         $(0.18)   $0.06     $(0.64)  $(0.02)
                              ======    =====     ======   ======



                            UNILIFE CORPORATION AND SUBSIDIARIES
                             Reconciliation of Non-GAAP Measure
                           (in thousands, except per share data)
                                        (unaudited)


                                   Three Months Ended          Year Ended
                                        June 30,                June 30,
                                        --------                --------
                                      2010        2009      2010        2009
                                      ----        ----      ----        ----
    Net income (loss)              $(9,705)     $2,231  $(29,748)      $(517)
    Share-based compensation
     expense                         3,291         384    10,056       3,059
    Depreciation and amortization      587         260     2,314         915
    Interest expense                    34         (30)      125         249
    Non-recurring costs
     associated with
     redomiciliation & US listing*      46         165     2,731         165
                                       ---         ---     -----         ---
    Adjusted net income (loss)     $(5,747)     $3,010  $(14,522)     $3,871
                                   =======      ======  ========      ======
    Adjusted net income (loss) per
     share -diluted                 $(0.11)      $0.08   $( 0.31)      $0.11
                                    ======       =====   =======       =====



    * Includes legal, consulting and other professional fees incurred in
    connection with the Company's redomiciliation to the United States
    and Nasdaq listing.

SOURCE Unilife Corporation

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