CLOSURE Medical Corporation
5250 Greens Dairy RoadRaleigh, NC 27616
Nasdaq: CLSR
 
AT THE COMPANY AT THE FINANCIAL RELATIONS BOARD
Robert V. Toni, President & CEO
J. Blount Swain, CFO
CLOSURE Medical Corporation (919) 876-7800
For General Info: Paul G. Henning (212) 661-8030
For Analyst Info: Nicole Salas (212) 661-8030
For Media Info: Deanne Eagle (212) 661-8030

FOR IMMEDIATE RELEASE: February 10, 1999

CLOSURE MEDICAL CORPORATION REPORTS FOURTH QUARTER RESULTS

Raleigh, NC, February 10, 1999 — CLOSURE Medical Corporation (Nasdaq: CLSR), a medical tissue cohesive products company, today announced that total revenues for the three months ended December 31, 1998 were $3,257,000 compared to $612,000 in the 1997 corresponding period. The net loss for the 1998 quarter was $991,000, or ($.07) per basic and diluted share, compared to a net loss of $2.0 million, or ($.15) per basic and diluted share in the corresponding 1997 period.

Revenues for the year ended December 31, 1998, were $9,579,000, including license and product development revenues of $1,500,000, compared to $1,551,000 in the corresponding 1997 period. For the year ended December 31, 1998, the Company reported a net loss of $4.8 million, or ($.36) per basic and diluted share, compared to a net loss of $6.8 million or ($.53) per basic and diluted share, for the same period of 1997.

Cash and cash equivalents and total investments were $16.7 million at December 31, 1998 compared to $24.5 million at December 31, 1997.

"Looking back, 1998 was a landmark period for CLOSURE Medical," commented Robert V. Toni, CLOSURE's President and Chief Executive Officer. "In a relatively short period of time, we achieved significant milestones toward our goal to be the leader of tissue cohesives, including the FDA approval of DERMABOND and the U.S. and international launch by Ethicon of DERMABOND. We were pleased by the attention given to DERMABOND in industry, consumer and professional publications and in the media. Further, we made steady progress with our proprietary technology toward the development of future consumer products for the treatment of oral ulcers and for minor cuts and abrasions."

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 adhesive, 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.

To receive CLOSURE's latest news release and other corporate documents via fax, at no cost,call 1-800-PRO-INFO. Use the Company's ticker, CLSR. Or visit The Financial RelationsBoard's website at www.frbinc.com.

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 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.

Financial Tables Follow:

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

 
Fourth Quarter
Year Ended
 
December 31,1998
December 31,1997
December 31,1998
December 31,1997
Product sales
$ 3,257
$ 612
$ 8,079
$ 1,551
License and product development revenues
-
-
1,500
-
Total revenues
3,257
612
9,579
1,551
Cost of products sold
1,032
515
3,480
1,398
Gross profit and license and productdevelopment revenues
2,225
97
6,099
153
 
Research, development and regulatory affairs expenses
1,887
1,228
6,297
3,594
Selling and administrative expenses
1,518
1,204
5,407
4,752
Total operating expenses
3,405
2,432
11,704
8,346
 
Income (loss) from operations
(1,180)
(2,335)
(5,605)
(8,193)
 
Interest expense
(92)
(46)
(383)
(72)
Investment and interest income
281
374
1,215
1,436
 
Net income (loss)
$ (991)
$ (2,007)
$ (4,773)
$ (6,829)
 
Shares used in computation of net income (loss) per share:  
Basic
13,286
13,242
13,270
12,966
Diluted
13,286
13,242
13,270
12,966
 
Net income (loss) per share:
Basic
$ (0.07)
$ (0.15)
$ (0.36)
$ (0.53)
Diluted
$ (0.07)
$ (0.15)
$ (0.36)
$ (0.53)

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

 
December 31,1998
December 31,1997
Assets
Current assets:
Cash and cash equivalents
$ 824
$ 7,277
Short-term investments
14,275
14,417
Restricted investments
1,603
-
Accounts receivable
1,191
1,226
Inventories
1,008
347
Prepaid expenses
286
367
 
Total current assets
19,187
23,634
 
Furniture, fixtures and equipment, net
7,707
3,694
Restricted investments
-
1,517
Long-term investments
-
1,298
Intangible assets, net
526
276
 
Total assets
$ 27,420
$ 30,419
 
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable
$ 1,721
$ 478
Accrued expenses
1,705
2,598
Deferred revenue
1,245
349
Capital lease obligations
245
155
Current portion of long-term debt
2,650
350
 
Total current liabilities
7,566
3,930
 
Deferred revenue
670
1,670
Capital lease obligations
934
1,250
Long-term debt less current portion
-
1,150
 
Total liabilities
9,170
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 13,290 and 13,242 shares, respectively.
133
132
Additional paid-in capital
46,358
46,058
Accumulated deficit
(27,848)
(23,075)
Deferred compensation on stock options
(393)
(696)
 
Total stockholders’ equity
18,250
22,419
 
Total liabilities and stockholders’ equity
$ 27,420
$ 30,419