AT THE COMPANY

Robert V. Toni, President & CEO
J. Blount Swain, CFO
CLOSURE Medical Corporation
(919) 876-7800

AT THE FINANCIAL RELATIONS BOARD

For General Info: Paul G. Henning (212) 661-8030
For Analyst Info: Brian Gill (212) 661-8030
or Media Info: Deanne Eagle (212) 661-8030

 

FOR IMMEDIATE RELEASE:

 

CLOSURE MEDICAL CORPORATION THIRD QUARTER RESULTS

 

Raleigh, NC, October 21, 1998 — CLOSURE Medical Corporation (Nasdaq: CLSR), a medical tissue cohesive products company, today announced that total revenues for the third quarter ended September 30, 1998 were $4,210,000, consisting of product sales of $2,710,000 and license and product development revenues of $1,500,000, compared to product sales of $591,000 for the quarter ended September 30, 1997. Net income for the 1998 quarter was $494,000, or $.04 per basic and diluted share, compared to a net loss of $1.6 million, or ($.12) per basic and diluted share in the corresponding 1997 period.

Revenues for the nine months ended September 30, 1998 were $6,322,000, including license and product development revenues of $1,500,000, compared to $939,000 in the corresponding 1997 period. For the nine months ended September 30, 1998, the Company reported a net loss of $3.8 million, or ($.29) per basic and diluted share, compared to a net loss of $4.8 million, or ($.37) per basic and diluted share for the same period of 1997.

"The FDA approval and launch of DERMABOND* Topical Skin Adhesive in the United States during the third quarter signals the beginning of a revolution in topical wound closure," stated Robert V. Toni, President and Chief Executive Officer.

Cash and cash equivalents and total investments were $19.3 million at September 30, 1998 compared to $24.5 million at December 31, 1997.

CLOSURE also announced the commencement of a clinical study of 150 patients designed to demonstrate the effectiveness of Soothe-n-SealÔ Protective Sealant for the treatment of oral ulcers (canker sores). The Company chose investigators at Brigham & Women’s Hospital in Boston, MA, The University of North Carolina-Chapel Hill, located in Chapel Hill, NC and Forsyth Dental Center, also in Boston, MA to conduct the study.

CLOSURE Medical Corporation, headquartered in Raleigh, North Carolina, develops, manufactures and commercializes medical tissue cohesive products based on its proprietary cyanoacrylate technology. CLOSURE's nonabsorbable tissue cohesive products may be used to replace sutures and staples for certain topical wound closure applications, while its absorbable tissue cohesive products can potentially be used as tissue cohesives for internal wound closure and management. Currently marketed nonabsorbable tissue cohesive products include DERMABOND* topical skin cohesive, which is used to replace sutures and staples for closure of certain lacerations and incisions, OCTYLDENT* cohesive, which is used as an adjunct in the treatment of adult periodontal disease; and the NEXABAND* line of topical cohesives, which are used in veterinary wound closure and management.

* DERMABOND is a trademark of Ethicon, Inc.; OCTYLDENT and NEXABAND are registered Trademarks of CLOSURE Medical Corporation.

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This release contains certain forward-looking statements which involve known and unknown risks, delays, uncertainties or other factors not under the Company’s control which may cause actual results, performance or achievements of the Company to be materially different from the results, performance, or other expectations implied by these forward-looking statements. These factors include, but are not limited to the early stage of commercialization of the Company products; the need for regulatory approval and effects of governmental regulation; technological uncertainties; dependence on market acceptance and marketing partners; and dependence on patents and trade secrets, as well as those detailed in the Company’s Annual Report on Form 10-K for the year ended December 31, 1997 filed with the Securities and Exchange Commission.

 

CLOSURE Medical Corporation
Statement of Operations
(Unaudited)
(In thousands, except per share data)

 

 

Three Months Ended
September 30,

 

Nine Months Ended
September 30,

 

1998

 

1997

 

1998

 

1997

 

 

 

 

 

 

 

 

Product sales

$ 2,710

 

$ 591

 

$ 4,822

 

$ 939

License and product development revenues

1,500

 

-

 

1,500

 

-

Total revenues

4,210

 

591

 

6,322

 

939

Cost of products sold

1,063

 

461

 

2,448

 

883

Gross profit and license and product development revenues

3,147

 

130

 

3,874

 

56

 

 

 

 

 

 

 

 

Research, development and regulatory affairs expenses

1,502

 

870

 

4,410

 

2,366

Selling and administrative expenses

1,339

 

1,266

 

3,889

 

3,548

Total operating expenses

2,841

 

2,136

 

8,299

 

5,914

 

 

 

 

 

 

 

 

Income (loss) from operations

306

 

(2,006)

 

(4,425)

 

(5,858)

 

 

 

 

 

 

 

 

Interest expense

(100)

 

(18)

 

(291)

 

(26)

Investment and interest income

288

 

397

 

934

 

1,062

 

 

 

 

 

 

 

 

Net income (loss)

$ 494

 

$ (1,627)

 

$ (3,782)

 

$ (4,822)

 

 

 

 

 

 

 

 

Shares used in computation of net income (loss) per share:

Basic

13,278

 

13,212

 

13,264

 

12,873

Diluted

13,656

 

13,212

 

13,264

 

12,873

 

 

 

 

 

 

 

 

Net income (loss) per share:

Basic

$ 0.04

 

$ (0.12)

 

$ (0.29)

 

$ (0.37)

Diluted

$ 0.04

 

$ (0.12)

 

$ (0.29)

 

$ (0.37)



CLOSURE Medical Corporation
Balance Sheet
(In thousands, except for share data)

 

 

September 30,

 

December 31,

 

 

1998

 

1997

Assets

 

(Unaudited)

 

 

Current assets:

 

 

 

 

Cash and cash equivalents

 

$ 3,682

 

$ 7,277

Short-term investments

 

12,715

 

14,417

Accounts receivable

 

742

 

1,226

Inventories

 

626

 

347

Prepaid expenses

 

210

 

367

 

 

 

 

 

 

 

Total current assets

 

17,975

 

23,634

 

 

 

 

 

Furniture, fixtures and equipment, net

 

6,722

 

3,694

Restricted investments

 

1,582

 

1,517

Long-term investments

 

1,362

 

1,298

Intangible assets, net

 

385

 

276

 

 

 

 

 

Total assets

 

$ 28,026

 

$ 30,419

 

 

 

 

 

 

 

 

 

 

Liabilities and Stockholders’ Equity

 

 

 

 

Current liabilities:

 

 

 

 

Accounts payable

 

$ 955

 

$ 478

Accrued expenses

 

1,597

 

2,598

Deferred revenue

 

2,340

 

2,019

Capital lease obligations

 

240

 

155

Current portion of long-term debt

 

350

 

350

 

 

 

 

 

Total current liabilities

 

5,482

 

5,600

 

 

 

 

 

Capital lease obligations

 

998

 

1,250

Long-term debt less current portion

 

2,450

 

1,150

 

 

 

 

 

Total liabilities

 

8,930

 

8,000

 

 

 

 

 

Stockholders’ Equity:

 

 

 

 

Preferred Stock, $.01 par value. Authorized 2,000 shares; none issued or outstanding.

 

-

 

-

Common Stock, $.01 par value. Authorized 35,000 shares; issued and outstanding 13,280 and 13,242 shares, respectively

 

133

 

132

Additional paid-in capital

 

46,289

 

46,058

Accumulated deficit

 

(26,857)

 

(23,075)

Deferred compensation on stock options

 

(469)

 

(696)

 

 

 

 

 

Total stockholders’ equity

 

19,096

 

22,419

 

 

 

 

 

Total liabilities and stockholders’ equity

 

$ 28,026

 

$ 30,419