-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, C0jwfczqEAtmxv0EphOLpWZkyWnN0+DvC02KKoliumUduBTNmftSCUemuN9w/jpK xI6Lk8nLKHn5wxxXGsCX9A== 0000950124-04-003307.txt : 20040721 0000950124-04-003307.hdr.sgml : 20040721 20040721130046 ACCESSION NUMBER: 0000950124-04-003307 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20040720 ITEM INFORMATION: ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 20040721 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CARACO PHARMACEUTICAL LABORATORIES LTD CENTRAL INDEX KEY: 0000887708 STANDARD INDUSTRIAL CLASSIFICATION: PHARMACEUTICAL PREPARATIONS [2834] IRS NUMBER: 382505723 STATE OF INCORPORATION: MI FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-31773 FILM NUMBER: 04923918 BUSINESS ADDRESS: STREET 1: 1150 ELIJAH MCCOY DR CITY: DETROIT STATE: MI ZIP: 48202 BUSINESS PHONE: 3138718400 MAIL ADDRESS: STREET 1: 1150 ELIJAH MCCOY DRIVE CITY: DETROIT STATE: MI ZIP: 48202 8-K 1 k86938e8vk.txt CURRENT REPORT DATED JULY 20, 2004 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 July 20, 2004 (Date of report) CARACO PHARMACEUTICAL LABORATORIES, LTD. -------------------------------------------------------- (Exact name of registrant as specified in its charter) Michigan 0-24676 38-2505723 - ------------------------------------- ---------------------------------- ---------------------------------- (State or other jurisdiction of (Commission file number) (I.R.S. employer identification incorporation) no.)
1150 Elijah McCoy Drive, Detroit, Michigan 48202 -------------------------------------------------------- (Address of principal executive offices) (313) 871-8400 -------------------------------------------------------- (Registrant's telephone number, including area code) Not Applicable -------------------------------------------------------- (Former name or former address, if changed since last report) ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS c) Exhibits. Exhibit No. Description 99.1 Press Release of Caraco Pharmaceutical Laboratories, Ltd., dated July 20, 2004 announcing second quarter of 2004 results of operations. ITEM 12. RESULTS OF OPERATIONS AND FINANCIAL CONDITION On July 20, 2004, registrant announced its results of operations for the quarter ended June 30, 2004, as set forth in the press release included as Exhibit 99.1 hereto, which is incorporated herein by reference. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. CARACO PHARMACEUTICAL LABORATORIES, LTD. Date: July 20, 2004 By: /s/ Jitendra N. Doshi ----------------------------- Jitendra N. Doshi Chief Executive Officer EXHIBIT INDEX 99.1 Press Release of Caraco Pharmaceutical Laboratories, Ltd., dated July 20, 2004 announcing second quarter of 2004 results of operations. 2 EX-99.1 2 k86938exv99w1.txt PRESS RELEASE DATED JULY 20, 2004 EXHIBIT 99.1 IMMEDIATE RELEASE CONTACTS CARACO PHARMA - JITENDRA DOSHI OR BOB KURKIEWICZ - P:313 871-8400 Marcotte Financial Relations - Mike Marcotte - P:248 656-3873 CARACO PHARMACEUTICAL POSTS MID-YEAR NET SALES $28.4 MILLION (UP 38%), Q2 NET SALES $14.8 MILLION (UP 24%), SIX-MONTHS NET CASH FROM OPERATIONS $8.8 MILLION, SIX-MONTHS NON-CASH R&D EXPENSE $12.5 MILLION, MID-YEAR NET LOSS $0.7 MILLION. DETROIT, July 20, 2004 -- CARACO PHARMACEUTICAL LABORATORIES, LTD. (AMEX:CPD) posted strong mid-year and second quarter net sales of $28.4 million and $14.8 million, respectively, and generated record net cash from operations of $8.8 million. After mid-year non-cash R&D expense of $12.5 million, the net loss was $0.7 million, Jitendra N. Doshi, Chief Executive Officer, reported today. SIX-MONTH 2004 RESULTS H1-2004 net sales improved 38% to $28.4 million, from H1-2003 net sales of $20.6 million. The H1-2004 gross profit of $17.3 million, up 44%, compared favorably to H1-2003 gross profit of $12.0 million. Gross profit as a percentage of net sales improved marginally, to 61% in H1-2004, from 58% in the corresponding period of 2003. Mr. Doshi said, "We incurred substantially higher total R&D expense for H1-2004 as three products were successfully transferred from Sun Global under the R&D agreement. Total R&D expenses for the period were $15.0 million, of which non-cash R&D expense was $12.5 million. This was considerably higher than $1.5 million and zero, respectively, for the corresponding period in 2003. This resulted in a net loss of $0.7 million or $(0.03) per diluted share for H1-2004, compared to a net income of $6.5 million, or $0.26 per diluted share for H1-2003. "However, net cash generated from operations, which stood at $15.5 million for the full year of 2003 and $8.8 million for H1-2004, helped us to repay long-term loans, fund our expansion activities and augment working capital. During the six months, we utilized the cash accruals to repay the ICICI Bank loan of $4.4 million and the EDC loan of $6.4 million, make a scheduled repayment of $3.1 million to Bank of Nova Scotia and invest $2.5 million in facility upgrades. This was after available cash of $3.5 million and $1.5 million, utilized for increase in inventories and receivables, respectively." Q2 results Q2-2004 net sales rose 24% to $14.8 million, from net sales of $11.9 million in the corresponding period in Q2-2003. Gross profit for Q2-2004 was $9.1 million, up 21% over gross profit of $7.5 million for Q2-2003. Net income during Q2-2004 was $1.5 million, or $0.05 per diluted share, compared to net income of $4.3 million, or $0.17 per diluted share in Q2-2003. The lower income during Q2-2004 was primarily due to substantially higher R&D expenses for Q2-2004 of $6.0 million, of which non-cash R&D expense related to technology transfer was $4.7 million. In Q2-2003, because there were no product transfers, total R&D expense and non-cash R&D expense was $0.6 million and zero, respectively. 3 Mr. Doshi added, "We expect the healthy increase in sales and cash flow during the first half of 2004 to continue through the remainder of the year. However, pricing pressures, due to increased competition, which resulted in lower gross margins in the fourth quarter of 2003, are expected to remain in 2004. Nevertheless we are optimistic about achieving our previously stated guidance of 20-25% revenue growth for 2004." "We continue to work aggressively to build our pipeline of products for our future growth. We have selected a total of 15 products out of 25, including 8 selected during Q2-2004, under the products agreement with Sun Global. These are at various stages of development. Of these 15 products, four have passed bio-equivalency studies. We have filed three ANDAs during H1-2004 and to date, four products are pending approval with the FDA. We hope to file six or seven ANDAs with the FDA in 2004, including the three already filed in H1-2004." Detroit-based Caraco Pharmaceutical Laboratories, Ltd., develops, manufactures and distributes generic and private-label prescription drugs to some of the nation's largest wholesalers, distributors, drugstore chains, healthcare systems and state and federal agencies. Safe Harbor: This news release contains forward-looking statements made pursuant to the safe-harbor provisions of the Private Securities Litigation Reform Act of 1995. Such statements are based on management's current expectations and are subject to risks and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. These risks and uncertainties are contained in the Corporation's filings with the Securities and Exchange Commission and include: that the information is of a preliminary nature and may be subject to further adjustment; not obtaining FDA approval for new products or delays in receiving FDA approvals; governmental restrictions on the sale of certain products; dependence on key personnel; development by competitors of new or superior products or cheaper products or new technology for the production of products or the entry into the market of new competitors; market and customer acceptance and demand for new pharmaceutical products; availability of raw materials in a timely manner, at competitive prices, and in required quantities; timing and success of product development and launch; integrity and reliability of the Company's data; lack of success in attaining full compliance with regard to regulatory and cGMP compliance; experiencing difficulty in managing our recent rapid growth and anticipated future growth; dependence on limited customer base; occasional credits to certain customers reflecting price reductions on products previously sold to them and still available as shelf-stock; possibility of an incorrect estimate of charge-backs and the impact of such an incorrect estimate on net sales, gross profit and net income; dependence on few products generating majority of sales; product liability claims for which the Company may be inadequately insured; subjectivity in judgment of management in applying certain significant accounting policies derived based on historical experience, terms of contracts, our observations of trends of industry, information received from our customers and other sources, to estimate revenues, accounts receivable, allowances including charge backs, rebates, income taxes, values of assets and inventories and other risks identified in this report and identified from time to time in our reports and registration statements filed with the Securities and Exchange Commission. These forward-looking statements represent our judgment as of the date of this report. We disclaim, however, any intent or obligation to update our forward-looking statements. Financial Statements follow 4 CARACO PHARMACEUTICAL LABORATORIES, LTD. UNAUDITED STATEMENTS OF OPERATIONS
SIX MONTHS ENDED THREE MONTHS ENDED JUNE 30 JUNE 30 2004 2003 2004 2003 ---------- ---------- ---------- ---------- Net sales 28,360,953 20,611,537 14,799,865 11,889,937 Cost of Goods Sold 11,111,175 8,653,413 5,720,474 4,427,464 ---------- ---------- ---------- ---------- Gross Profit 17,249,777 11,958,124 9,079,391 7,462,473 Selling, general & administrative expenses 2,693,078 3,089,820 1,410,723 2,140,036 R&D cost to affiliate -- non-cash 12,491,600 0 4,663,440 0 R&D cost other 2,493,830 1,526,719 1,360,500 626,788 Operating (loss) / income (428,731) 7,341,585 1,644,729 4,695,649 Other Income / (expense) Interest expense (317,175) (817,722) (135,633) (375,470) Interest income 16,625 7,043 14,610 5,978 Other income 13,035 -- 2,968 -- ---------- ---------- ---------- ---------- Net other expense (287,515) (810,679) (118,055) (369,492) Net (loss) / income (716,246) 6,530,906 1,526,674 4,326,157 Net income / (loss) per basic common share (0.03) 0.27 0.06 0.18 Net income / (loss) per basic and diluted common share (0.03) 0.26 0.05 0.17 ---------- ---------- ---------- ----------
5 SCHEDULE OF NET CASH PROVIDED BY / (USED) IN OPERATING ACTIVITIES (UNAUDITED)(1)
Six-month period ended 06/30/04 06/30/03 ------------- ------------- Net (loss) / income (716,246) 6,530,906 Adjustments to reconcile net (loss) / income to net cash provided by / (used) in operating activities Depreciation 413,749 316,261 Common shares issued in lieu of cash for compensation 0 32,450 Variable compensation expense for stock options 0 851,800 Preferred shares issued to affiliate for R&D Cost 12,491,600 0 Changes in operating assets and liabilities which provided / (used) cash Accounts receivable (1,490,092) (3,914,949) Inventories (3,494,344) 375,536 Prepaid expenses and deposits 154,372 (441,715) Accounts payable 1,911,514 68,467 Accrued expenses and Interest (499,854) (106,615) Net cash provided by operating activities 8,770,699 3,712,141
(1) This schedule of net cash provided by / (used) in operating activities is deemed by management to be a meaningful measure of financial performance and liquidity, and provides investors with a measure of cash that may be used for debt service and for other purposes. 6 -----END PRIVACY-ENHANCED MESSAGE-----