EX-99.1 2 v059612_ex99-1.htm Unassociated Document
PRESS RELESE - FOR IMMEIDATE RELEASE
 
INYX REPORTS THIRD-QUARTER OPERATING RESULTS
 
NEW YORK - December 4, 2006 - Inyx, Inc. (OTC BB: IYXIE), a specialty pharmaceutical company focused on niche drug delivery technologies and products, reported today operating results for the third quarter and nine months ended September 30, 2006.

For the third quarter of 2006, Inyx’s revenues reached $18.0 million, up 39.5% from the $12.9 million reported for the comparable quarter in 2005. The company incurred an increased net loss in the 2006 quarter of $9.7 million, or $0.19 per share, compared with a net loss of $4.9 million, or $0.12 a share, in the year-earlier period. The 2006 net loss includes approximately $2.0 million in non-cash depreciation and amortization charges as well as $2.3 million in one-time cash expenses related to pending acquisitions.

For the first nine months of 2006, revenues totaled $59.6 million, more than double the $24 million reported for the year-ago period. The net loss in the 2006 nine months totaled $22.2 million, or $0.45 per share, compared to a net loss of $16 million, or $0.41 a share, in the corresponding period last year. The 2006 net loss includes approximately $6.0 million in non-cash depreciation and amortization charges as well as $5.3 million in one-time expenses related to pending acquisitions.

Detailed financials are presented in the company’s Form 10-Q filed with the SEC, which can be downloaded from Inyx’s website.

Inyx’s increase in year-over-year revenues and solid gross margin are the result of the larger scope of its businesses this year with the addition of Ashton Pharmaceuticals in the United Kingdom and the company’s new Exaeris marketing subsidiary. The increase in net operating losses incurred this year is due largely to higher fixed operating expenses from the Exaeris and Inyx USA operations and a lack of sufficient growth in revenues at those units to adequately absorb their overheads.
 
The growth in revenues during the first nine months was not as strong as the company had expected because certain business has been delayed due to additional regulatory documentation and testing procedures that several of its clients have to complete before commercialization or transfer of their products to Inyx’s sites can commence; this business is now expected to start up in the fourth quarter and early 2007. Moreover, two pending acquisitions, which the company originally expected to complete in the 2006 second half, have been delayed, Inyx said.
 
Revised Financial Guidance
 
On November 24, 2006, Inyx reported revised guidance for 2006. The company said it expects revenues for the year to total approximately $85 million, up from $49.6 million in 2005, with net losses for 2006, based on two pending acquisitions now not being completed this year.
 
Inyx has a definitive agreement to acquire Pharmapac UK Ltd., one of the leading contract pharmaceutical production and packaging providers in the United Kingdom. This acquisition is now expected to be completed on January 4, 2007. Pharmapac expects revenues to be in
 
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INYX - Page 2
 
excess of £7.3 million ($13.9 million) with EBITDA exceeding £1.5 million ($2.9 million) for 2006.
 
Inyx also has a pending acquisition of a German pharmaceutical production business. Inyx is reviewing this acquisition because of a recent disclosure that significantly reduces the mid-term operating results for the German site and, consequently, Inyx is uncertain now if this transaction will be consummated.
 
Going-Private Consideration
 
As previously reported, on November 20, 2006, a group comprised of Inyx senior management and strategic outside investors approached the company’s board of directors about taking the company private. The Inyx board has formed a special committee comprised of three independent directors, which will evaluate any specific proposal. The committee will retain an independent investment-banking firm to review the fairness of any proposed offer made by the group. The group, which includes Jack Kachkar, M.D., Chairman & CEO of Inyx, and Steve Handley, President of Inyx, said that it intends to make an offer that “it believes will be in the best interests of all Inyx shareholders.” Dr. Kachkar informed the special committee that he will work to secure new debt financing for Inyx before the group tries to finalize financing for any going-private offer.
 
As previously reported, on November 21, 2006, Inyx informed Westernbank Puerto Rico it intended to pay off the loan amounts owed to Westernbank by December 31, 2006; this debt now totals approximately $120 million and Dr. Kachkar has pledged a personal guarantee against a portion of that amount.
 
About Inyx
 
Inyx, Inc. is a specialty pharmaceutical company with niche drug delivery technologies and products for the treatment of respiratory, allergy, dermatological, topical and cardiovascular conditions. Inyx focuses its expertise on both prescription and over-the-counter pharmaceutical products and provides specialty pharmaceutical development and production consulting services. In addition, Inyx is developing its own proprietary products. The company’s operations are conducted through several wholly owned subsidiaries: Inyx USA, Ltd., based in Manati, Puerto Rico; Inyx Pharma Ltd. and Inyx Europe Limited, which owns and operates Ashton Pharmaceuticals Ltd., all near Manchester, England; Inyx Canada, Inc. in Toronto; and Exaeris, Inc., based in Exton, Pennsylvania. Inyx, Inc.’s corporate offices are in New York City. For more information, please visit: www.inyxgroup.com.
 
Safe Harbor
 
Statements about Inyx’s future expectations, including future revenues and earnings, and all other statements in this press release other than historical facts, are "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, Section 21E of the Securities Exchange Act of 1934, and as that term is defined in the Private Securities Litigation Reform Act of 1995. The Company intends that such forward-looking statements be subject to the safe harbors created by these regulations. Since these statements involve risks and uncertainties and are subject to change at any time, the Company's actual results could differ materially from expected results.
 
 
For more information, please contact:
 
Jay M. Green, Executive VP, 212-838-1111 jgreen@inyxgroup.com
Bill Kelly, VP, Investor Relations, 212-838-1111 bill.kelly@inyxgroup.com


(financial tables on next two pages)

 
 
 




INYX - PAGE 3

 
INYX, INC.
Consolidated Statements of Operations
(in thousands, except per share data)
 

   
For the Three Months Ended September 30,
  
For the Nine Months
Ended September 30,
  
   
2006
  
2005
  
2006
  
2005
  
   
(Unaudited)
  
(Unaudited)
  
                   
Net revenues
  
$
18,006
  
$
12,908
  
$
59,560
  
$
24,086
  
Cost of sales
    
10,593
    
7,837
    
36,231
    
16,236
  
Gross profit
    
7,413
    
5,071
    
23,329
    
7,850
  
                           
Operating expenses:
                          
Research and development
    
667
    
929
    
1,834
    
1,876
  
General and administrative
    
10,420
    
5,813
    
25,681
    
12,239
  
Selling
    
1,310
    
181
    
4,584
    
355
  
Depreciation
   
1,603
    
903
    
4,655
    
1,619
  
Amortization of intangible assets
    
448
    
436
    
1,327
    
845
  
Total operating expenses
    
14,448
    
8,262
    
38,081
    
16,934
  
                           
Loss from operations before interest and financing costs, provision for income taxes and extraordinary gain
   
(7,035
)
  
(3,191
)
  
(14,752
)
  
(9,084
)
                           
Interest and financing costs
    
2,708
    
1,750
    
7,428
    
7,896
  
                           
Net loss before provision for income taxes and extraordinary gain
    
(9,743
)
  
(4,941
)
  
(22,180
)
  
(16,980
)
                           
Provision for income taxes
    
-
    
-
    
-
    
-
  
                           
Net loss before extraordinary gain
    
(9,743
)
  
(4,941
)
  
(22,180
)
  
(16,980
)
                           
Extraordinary gain, net of taxes
    
-
    
-
    
-
    
917
  
                           
Net loss
  
$
(9,743
)
$
(4,941
)
$
(22,180
)
$
(16,063
)
                           
Basic and fully diluted loss per share before extraordinary gain
  
$
(0.19
)
$
(0.12
)
$
(0.45
)
$
(0.43
)
Basic and fully diluted income from extraordinary gain
    
-
    
-
    
-
    
0.02
  
Basic and fully diluted loss per share
  
$
(0.19
)
$
(0.12
)
$
(0.45
)
$
(0.41
)
                           
Weighted-average number of shares used in computing basic and fully diluted loss per share
    
51,985,114
    
39,985,613
    
49,127,327
    
39,428,431
  



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INYX - Page 4

 
INYX, INC.
Consolidated Balance Sheets
(in thousands, except per share data)
 

   
September 30, 2006
  
December 31, 2005
  
   
(Unaudited)
      
Assets
  
           
Current assets:
          
Cash and cash equivalents
  
$
1,518
  
$
1,023
  
Accounts receivable, net
    
22,790
    
19,782
  
Inventories, net
    
12,117
    
11,331
 
Prepaid expenses and other current assets
    
3,262
    
2,589
 
Total current assets
    
39,687
    
34,725
 
               
Property, plant and equipment, net
    
41,528
    
40,781
 
Deferred financing costs, net
    
1,363
    
1,434
 
Deferred costs and deposits
    
5,318
   
431
 
Advances for investment
    
5,603
    
-
  
Deposits for acquisition of office building
    
2,226
    
-
  
Intangible assets, net
    
18,769
    
14,782
 
     
74,807
    
57,428
  
               
Total assets
  
$
114,494
  
$
92,153
  
               
Liabilities and Stockholders’ Deficiency
Current liabilities:
              
Borrowings under lines of credit
  
$
58,778
  
$
30,011
  
Term loans - current portion
    
49,366
    
9,288
  
Accounts payable
    
13,966
    
11,691
  
Accrued expenses
   
12,218
    
9,557
 
Deferred tax liability
    
1,948
    
1,858
 
Deferred revenues
    
5,865
    
-
  
Seller financing
    
11,216
    
14,014
 
Total current liabilities
    
153,357
    
76,419
 
Term loans, net of current portion
    
-
    
46,134
  
Total liabilities
    
153,357
    
122,553
 
               
Commitments and contingencies
              
               
Stockholders’ deficiency:
              
Preferred stock - $0.001 par value, 10,000,000 shares authorized - none issued and outstanding
    
-
    
-
  
Common stock - $0.001 par value, 150,000,000 shares authorized - 52,496,189 shares issued and outstanding at September 30, 2006, net of 610,461 shares of treasury stock; 43,389,922 shares issued and outstanding at December 31, 2005, net of 209,732 shares of treasury stock
    
52
    
43
  
Additional paid-in capital
    
43,479
    
33,315
  
Accumulated deficit
    
(83,523
)
  
(61,343
)
Subscriptions receivable
    
(293
)
  
(293
)
Accumulated other comprehensive income (loss) - foreign currency translation adjustment
    
1,422
    
(2,122
)
Total stockholders’ deficiency
    
(38,863
)
  
(30,400
)
Total liabilities and stockholders’ deficiency
  
$
114,494
  
$
92,153
  

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