February 14, 2011

Unilife Corporation Announces Financial Results For Fiscal Year 2011 Second Quarter

YORK, Pa., Feb. 14, 2011 /PRNewswire/ -- Unilife Corporation ("Unilife" or "Company") (Nasdaq: UNIS; ASX: UNS) today announced financial results for the three and six months ended December 31, 2010 (Fiscal Year 2011 Second Quarter).

Recent Company Highlights:

  • Completed, on-schedule, the construction of a new global headquarters and production facility in York, PA; U.S. based staff now working out of the new facility
  • Transferred Unitract® automated assembly line to York facility; on schedule to commission new clean rooms and resume production this quarter
  • On schedule to commence initial production of the Unifill® ready-to-fill (pre-filled) syringe this quarter
  • Completed private placement of A$23.1 million (US$22.3 million); received shareholder approval on February 7, 2011
  • Secured A$12.8 million (US$13.0 million) in additional capital through 2010 Share Purchase Plan ("SPP")
  • Appointed Dr. Ramin Mojdeh, former Vice President and General Manager of Becton Dickinson (BD) Pharmaceutical Systems, as Unilife's new Chief Operating Officer (COO)

Mr. Alan Shortall, Chief Executive Officer of Unilife, stated, "The past calendar year was a period of significant business expansion for Unilife. Key milestones completed during this time include our redomiciliation to the U.S., the listing of our common stock on NASDAQ, and the construction of our new state-of-the-art facility. We now have the operational capabilities and other support resources required to begin meeting projected market demand for our proprietary products from pharmaceutical and healthcare customers. The next step in our strategy is to increase the sales and marketing efforts surrounding our products, highlighting their unique value proposition.  Part of this effort is focused on finalizing discussions with many of the world's leading pharmaceutical companies for our Unifill ready-to-fill syringe, as well as some of our pipeline products.  

"In an effort to support the growth of Unilife into a commercial manufacturing business, we recently appointed Dr. Ramin Mojdeh as Unilife's Chief Operating Officer. Dr. Mojdeh has tremendous executive leadership qualities and strong product development expertise with global medical device industry leaders such as BD and Guidant Corporation.

"During the second quarter of fiscal 2011, we also strengthened our balance sheet by raising a total of A$35.9 million (US$35.3 million) through a private placement and our 2010 Share Purchase Plan. The proceeds raised will be used to support general operations as we continue to focus on commencing the initial production and sale of the Unifill® syringe, expanding our network of pharmaceutical customers, and bringing to market exciting new products from our pipeline," concluded Mr. Shortall.

Financial Results for Three and Six Months Ended December 31, 2010

Revenues for the three months ended December 31, 2010 were $1.8 million compared to $3.2 million for the same period in 2009.

The Company's net loss for the three months ended December 31, 2010 was $(10.4) million, or $(0.19) per diluted share, compared to a net loss of $(5.9) million, or $(0.13) per diluted share, for the same period in 2009. The increase in net loss was attributable to a decrease in industrialization fee revenue as well as increased research and development expenses to finalize the product specifications of our Unifill syringe. In addition selling, general and administrative expenses increased due to higher share-based compensation expenses and higher payroll and related expenses due to increases in our workforce offset by a decrease in legal and consulting fees due to significant costs incurred in the prior year quarter in connection with our redomiciliation to the U.S.  

Adjusted net loss for the three months ended December 31, 2010, which excludes approximately $2.7 million in share-based compensation expense, depreciation and amortization and interest expense was $(7.6) million, or $(0.14) per diluted share, compared to adjusted net loss of $(3.0) million, or $(0.07) per diluted share, for the same period in 2009.  

Revenues for the six months ended December 31, 2010 were $5.3 million, compared to $6.4 million for the same period in 2009.

The Company's net loss for the six months ended December 31, 2010 was $(17.6) million, or $(0.32) per diluted share, as compared to a net loss of $(8.0) million, or $(0.19) per diluted share, for the same period in 2009. The increase in net loss was attributable to a decrease in industrialization fee revenue, which was partially offset by an increase in contract manufacturing revenue as well as increased research and development expenses to finalize the product specifications of our Unifill syringe.  In addition selling, general and administrative expenses increased due to higher share-based compensation expenses and higher payroll and related expenses due to increases in our workforce offset by a decrease in legal and consulting fees due to significant costs incurred in the prior year period in connection with our redomiciliation to the U.S.    

Adjusted net loss for the six months ended December 31, 2010, which excludes approximately $6.1 million in share-based compensation expense, depreciation and amortization and interest expense was $(11.5) million, or $(0.21) per diluted share, compared to adjusted net loss of $(3.7) million, or $(0.09) per diluted share, for the same period in 2009.

As of December 31, 2010, the Company's cash, cash equivalents and restricted cash were $41.5 million.  

Conference Call Information

Management has scheduled a conference call for 4:30 p.m. U.S. Eastern Standard Time on February 14, 2011, 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 Annual Report on Form 10-K 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 (US):


Investor Contacts (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)


Assets

December 31,
2010


June 30,
2010

Current Assets:




Cash and cash equivalents

$39,133


$20,750

Restricted cash

2,400


Accounts receivable

451


1,556

Inventories

1,028


797

Prepaid expenses and other current assets

745


637

Total current assets

43,757


23,740

Property, plant and equipment, net

49,810


29,972

Goodwill

12,736


10,792

Intangible assets, net

44


40

Other assets

502


273

Total assets

$106,849


$64,817

Liabilities and Stockholders' Equity




Current Liabilities:




Accounts payable

$3,671


$6,044

Accrued expenses

3,571


2,911

Current portion of long-term debt

2,201


1,648

Deferred revenue

2,595


2,188

Total current liabilities

12,038


12,791

Long-term debt, less current portion

16,377


1,093

Deferred revenue

6,488


6,563

Total liabilities

34,903


20,447

Stockholders' Equity:




Preferred stock, $0.01 par value, 50,000,000 shares authorized as of December 31, 2010; none issued or outstanding as of December 31, 2010 and June 30, 2010


Common stock, $0.01 par value, 250,000,000 shares authorized as of December 31, 2010; 63,397,161 and 54,761,848 shares issued and outstanding as of December 31, 2010 and June 30, 2010, respectively

634


548

Additional paid-in-capital

164,597


122,397

Accumulated deficit

(97,254)


(79,650)

Accumulated other comprehensive income

3,969


1,075

Total stockholders' equity

71,946


44,370

Total liabilities and stockholders' equity

$106,849


$64,817



UNILIFE CORPORATION AND SUBSIDIARIES

Consolidated Statements of Operations

(in thousands, except per share data)

(unaudited)










Three Months Ended


Six Months Ended


December 31,


December 31,


2010


2009


2010


2009

Revenues:








Industrialization fees

$    —


$2,088


$1,350


$3,833

Licensing fees

630


746


1,207


1,429

Product sales and other

1,132


411


2,748


1,091

Total revenues

1,762


3,245


5,305


6,353

Cost of product sales

824


474


1,999


1,303

Gross profit

938


2,771


3,306


5,050

Operating expenses:








Research and development

1,416


287


2,421


686

Selling, general and administrative

9,054


7,517


17,066


11,259

Depreciation and amortization

878


1,009


1,665


1,300

Total operating expenses

11,348


8,813


21,152


13,245

Operating loss

(10,410)


(6,042)


(17,846)


(8,195)

Interest expense

32


14


64


61

Interest income

(82)


(252)


(204)


(257)

Other (income) expense, net

(2)


111


(102)


(20)

Net loss

($10,358)


($5,915)


($17,604)


($7,979)

Loss per share:








Basic loss per share

($0.19)


($0.13)


($0.32)


($0.19)

Diluted loss per share

($0.19)


($0.13)


($0.32)


($0.19)












UNILIFE CORPORATION AND SUBSIDIARIES

Reconciliation of Non-GAAP Measure

(in thousands, except per share data)

(unaudited)










Three Months Ended


Six Months Ended

December 31,


December 31,


2010


2009


2010


2009

Net loss

($10,358)


($5,915)


($17,604)


($7,979)

Share-based compensation expense

1,836


201


4,386


771

Depreciation and amortization

878


1,009


1,665


1,300

Interest expense

32


14


64


61

Non-recurring costs associated with redomiciliation





2,135

    & US listing*


1,710



Adjusted net loss

($7,612)


($2,981)


($11,489)


($3,712)

Adjusted net loss per share —diluted

($0.14)


($0.07)


($0.21)


($0.09)









* 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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