COLUMBIA, Md., Sept. 1 /PRNewswire-FirstCall/ -- Martek
Biosciences Corporation (Nasdaq: MATK) today announced its
financial results for the third quarter of fiscal 2010. Revenues
for the third quarter were $117.2
million, up 51% from $77.8
million in the third quarter of fiscal 2009. GAAP net income
was $11.9 million, or $0.35 per diluted share, for the third quarter of
fiscal 2010, an increase of 33% compared to $8.9 million, or $0.27 per diluted share, for the third quarter of
fiscal 2009. The revenues and earnings for the third quarter
of fiscal 2010 include the results of Amerifit Brands ("Amerifit"
or "branded consumer health products"), the acquisition of which
was completed by Martek on February 12,
2010.
The third quarter of fiscal 2010 included charges related to the
acquisition of Amerifit of $700,000
and charges related to the Winchester restructuring (see discussion
below) of $600,000. Excluding
these amounts, net of tax, the fiscal 2010 third quarter earnings
on a non-GAAP basis would have been $12.7
million, or $0.38 per diluted
share, an increase of 42% over the third quarter of fiscal 2009
(see Table II "Reconciliation of GAAP to Non-GAAP Net Income
Measure" below).
Commenting on the quarter, Chief Executive Officer Steve Dubin said, "Martek's strong third quarter
results reflect another good quarter for DHA and ARA sales to our
infant formula customers, another record quarter of DHA sales in
non-infant formula markets, strong sales of Amerifit's consumer
branded products and improved gross margins. I believe that
Martek's strong run rate coming out of fiscal 2010 will provide an
excellent platform from which to grow as we continue to expand our
DHA ingredients business beyond infant formula, begin to
commercialize new products currently in development as consumer
branded products sold through Amerifit's marketing and distribution
channels and continue our efforts to reduce production costs.
Accordingly, I expect growth in revenues, margin and earnings in
2011. It is also worth noting that, as a result of our strong
earnings and robust cash flow generation, our Amerifit acquisition
debt has been repaid earlier than expected and Martek is once again
essentially debt-free. Martek's solid balance sheet and strong
financial performance provides us with great flexibility which,
among other things, should allow us to launch new Martek products,
as noted above, during our next fiscal year, continue to prudently
invest in our promising R&D pipeline and explore new
complementary business opportunities."
Revenue Summary
Product sales in the third quarter of fiscal 2010 were
$114 million, an increase of
$38.9 million from the third quarter
of fiscal 2009. This increase was partially attributable to the
branded consumer health product sales of Amerifit which totaled
$20.3 million in the third quarter.
The remainder of the increase, or $18.6 million, was the result of sales of our
nutritional ingredients in both the infant formula and non-infant
formula markets. Demand increases outside the United States, particularly in
Asia, were a key driver of the
growth in both markets.
A breakdown of product sales for the third quarter and fiscal
year to date periods (in thousands) follows:
|
|
|
Three months ended July
31,
|
|
Nine months ended July
31,
|
|
|
2010
|
|
2009
|
%
incr (decr)
|
2010
|
|
2009
|
%
incr (decr)
|
|
|
|
|
|
|
|
|
|
|
|
Nutritional
ingredients:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Infant
formula
|
$
|
79,169
|
|
$
|
63,320
|
25%
|
$
|
237,028
|
|
$
|
215,294
|
10%
|
|
Food and
beverage
|
|
4,553
|
|
|
2,681
|
70%
|
|
13,265
|
|
|
8,278
|
60%
|
|
Pregnancy and
nursing, nutritional
supplements
and animal nutrition
|
|
9,015
|
|
|
7,931
|
14%
|
|
25,216
|
|
|
20,396
|
24%
|
|
Shipping
charges
|
|
624
|
|
|
470
|
33%
|
|
1,883
|
|
|
1,498
|
26%
|
|
Total
nutritional ingredients
|
|
93,361
|
|
|
74,402
|
25%
|
|
277,392
|
|
|
245,466
|
13%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Branded consumer
health
|
|
20,301
|
|
|
—
|
n/a
|
|
38,310
|
|
|
—
|
n/a
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-nutritional
products
|
|
309
|
|
|
642
|
(52%)
|
|
1,437
|
|
|
1,752
|
(18%)
|
|
Total product
sales
|
$
|
113,971
|
|
$
|
75,044
|
52%
|
$
|
317,139
|
|
$
|
247,218
|
28%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract manufacturing and collaborations revenues in the third
quarter totaled $3.2 million, of
which approximately $900,000 relates
to revenues associated with Martek's joint development agreement
with a subsidiary of BP p.l.c. ("BP") for work on microbial oils
for use as biofuels and the remaining $2.3
million relates to contract manufacturing activities.
Consistent with previous disclosures, as of July 31, 2010, we have ceased nearly all contract
manufacturing activities.
Gross Margin and Operating Expenses
Overall gross margin for the third quarter of fiscal 2010 was
nearly 50%, an increase over the 44% gross margin realized in the
third quarter of fiscal 2009. This improvement was largely
due to both ARA and DHA cost reductions in the 2010 period and the
positive impact of higher gross margins on branded consumer health
product sales. Included in the third quarter's gross margin is the
negative effect of approximately $200,000 (gross margin impact of 0.2%) related to
one-time inventory step-up costs resulting from the Amerifit
acquisition.
Research and development expenses in the third quarter of fiscal
2010 were $8.5 million, consistent
with previously stated guidance and up from $6.6 million in last year's third quarter. As
anticipated, the increase was due to the volume of the Company's
pre-clinical research activities during the current quarter,
primarily associated with the development of Martek's next
generation DHA product for infant formula, as well as higher
personnel costs. Martek's research and development focuses on both
broadening the market applications for life'sDHA™ as
well as leveraging the Company's microbial technology platform to
develop new high-value product offerings. The Company continues to
expect quarter-to-quarter fluctuations in research and development
expenses mainly due to the timing of outside services, including
third-party clinical trial services.
During the third quarter of fiscal 2010, selling, general and
administrative expenses were $18.9
million, or 16% of revenue, consistent with prior guidance
and an increase from $11.0 million,
or 14% of revenue, in last year's third quarter due partially to
the incremental expenses attributable to Amerifit.
Advertising and promotion costs during the third quarter totaled
$5.6 million, or 5% of revenue. As a
percentage of revenue, we anticipate similar advertising and
promotion expenses for our current products each quarter, with such
costs fluctuating from quarter to quarter due to the timing of
particular advertising and promotional campaigns and the launch of
new branded consumer health products.
Financial Position
As previously noted, Martek financed its February 2010 acquisition of Amerifit through
available cash, a new term debt facility totaling $75 million, and $11
million drawn from a new revolving credit facility. Strong
cash generation since the acquisition, including over $36 million in the third quarter of fiscal 2010,
enabled a full repayment of all acquisition financing within five
months of the acquisition date. As such, as of July 31, 2010, the Company returned to being
essentially debt-free and now has its entire $100 million credit line available.
Restructuring of Winchester Manufacturing Site
In June 2010, Martek announced
plans to restructure its Winchester,
Kentucky manufacturing facilities in an effort to streamline
operations, improve capacity utilization, and reduce manufacturing
costs and operating expenses. As a result of this restructuring
plan, a charge of approximately $600,000 was recorded in the third quarter of
fiscal 2010 related to employee separation costs. The Company
anticipates incurring approximately $1.0
million of additional restructuring costs in the fourth
quarter of fiscal 2010 related to employee separation costs. Also,
as previously announced, Martek is evaluating the potential sale or
lease of a portion of its Winchester operations. Any such sale or lease
would be contingent upon Martek's ability to maintain necessary
production redundancies through continuing access to certain key
processes at the Winchester
facility and/or arrangements with contract manufacturers. We expect
that the plant restructuring will result in a non-cash asset
impairment charge or loss upon sale of $30
million to $40 million in the fourth quarter of fiscal
2010.
Significant Recent Events
- Extended Global Sole-Source Supply Agreement with Mead
Johnson – In June 2010, Martek
extended its sole-source supply agreement with Mead Johnson &
Company, LLC, for DHA and ARA for infant formula products. Under
the terms of the amendment, Martek will remain Mead Johnson's
global sole-source supplier of DHA and ARA for all of its infant
formula products through at least December
31, 2015, an extension of four years beyond the earliest
possible termination date of the current agreement. The amendment
also provides graduated price reductions to Mead Johnson over the
term of the extension, beginning in 2010.
- Supply Agreements with Chinese Dairies – Martek entered
into nutritional ingredient supply agreements with two leading
Chinese dairies. A five-year agreement with Chinese dairy Mengniu
Dairy Company Limited was executed for the use of Martek's
life'sDHA™ in Mengniu-brand UHT milk and potentially other
categories. In addition, the Company entered into a multi-year DHA
and ARA agreement with Feihe Dairy, a wholly-owned subsidiary of
American Dairy, Inc. Under the terms of the agreement, Feihe Dairy
will purchase its total requirements of DHA and ARA for its new
premium infant formula and growing-up milk products sold in
China.
- Non-Infant Formula Product Launches with life'sDHA™ –
- Foods and Beverages – O' Sole Mio™ Vivi Bene® medaglioni with
basil and O' Sole Mio™ Vivi Bene® medaglioni with sundried tomato
(Les aliments O'Sole Mio – Canada); Dairyland™ Cool Ones yogurt (Saputo
Inc. – Canada); Little Bear® Kid
Growing Milk (Uni-President – China); Babyliqi – Professor Qiqi Drink (Hong Kong Babyliqi Biotechnology
Co., Ltd.™ – China); Yubao
Goat-Goat Dairy Drink (Xi'an Yubao Goat Dairy Industry Co., Ltd –
China).
- Pregnancy and nursing and nutritional supplements –
CitraNatal®Harmony™ with 250 mg life'sDHA™ (Mission
Pharmacal® – U.S.); Prenexa® with 300 mg life'sDHA™
(Upsher-Smith Laboratories – U.S.); Organic Nutritional Mommy Bars
(Earth's Best Organic® – U.S.); Opti3 (Chrysalis – UK);
Supradyn® Junior Gummies with 60 mg life'sDHA™ per daily
dose (Bayer – Spain); Stop
Aging Now with 100 mg life'sDHA™ per day (Avema Pharma
Solutions – U.S.); Neurofen (Laboratoria Natury – Poland); Z.K. 200 Cereboost (Guarana, DHA,
Vitamins + Zinc) with 15 mg life'sDHA™ (Artisan Gida – EU);
Meydunig Mama and Maydunig Baby with 200 mg and 100 mg
life'sDHA™ respectively (Shanghai Baojialijia – China).
- New Scientific Data Published on DHA and ARA – The
journal Acta Paediatrica (online, July 2010) published the results of the
continuation of a study previously reported from the University of Oslo, Norway. The study was a
randomized, double-blinded, placebo-controlled intervention in
which additional DHA and ARA or placebo oil were added to the human
milk given to very low birth weight infants (< 1500 g). The
intervention and control group included 44 and 48 children,
respectively. Supplementation began one week after birth until
discharge from hospital (9 weeks on average). The infants were
tested at 2 years of age using various measures. The authors
concluded that "a positive effect of early supplementation with DHA
and ARA on 20 months attention capacity was indicated". Martek
supplied oils used in this study.
Financial Guidance
The projected results are shown below for Martek (not including
Amerifit), Amerifit (stand-alone, post-acquisition) and on a
consolidated basis for the three months ending October 31, 2010. The consolidated net income and
earnings per share information is shown inclusive of any charges
resulting from the Winchester
restructuring described above as well as exclusive of such charges
through the pro forma non-GAAP disclosures shown below.
|
|
|
Three months ending October 31,
2010
|
|
(in millions, except per
share data)
|
Martek
|
Amerifit
|
|
Consolidated
|
|
|
|
|
|
|
|
Revenue
|
$
|
87.0 – 91.0
|
$
|
21.0 – 22.0
|
$
|
108.0 – 113.0
|
|
Income (loss) from operations
before restructuring charge
|
$
|
16.1 – 18.3
|
$
|
3.0 – 3.5
|
$
|
19.6 – 21.8
|
|
Restructuring charge
|
$
|
41.0 – 31.0
|
$
|
-
|
$
|
41.0 – 31.0
|
|
Income (loss) from operations
after restructuring charge
|
$
|
(24.9) – (12.7)
|
$
|
3.0 – 3.5
|
$
|
(21.4) – (9.2)
|
|
Net income
|
|
|
|
|
$
|
(13.4) – (5.9)
|
|
Pro forma non-GAAP net income
(a)
|
|
|
|
|
$
|
11.8 – 13.1
|
|
Diluted EPS
|
|
|
|
|
$
|
(0.40) – (0.18)
|
|
Pro forma non-GAAP diluted EPS
(a)
|
|
|
|
|
$
|
0.35 – 0.39
|
|
|
|
|
|
|
|
|
(a) Excludes estimated
charges of between $25.2 million and $19.0 million, net of tax ($41
million to $31 million, gross) related to the Winchester plant
restructuring. See Table II "Reconciliation of GAAP to Non-GAAP Net
Income Measure" below.
|
|
|
|
|
For the fourth quarter of fiscal 2010, Martek expects infant
formula revenue to be between $71 million
and $75 million, non-infant formula nutritional revenue to
be between $13 million and $14
million, and contract manufacturing and collaborations
revenue to be between $1.0 million and $1.3
million. Such projected fourth quarter revenues would equate
to year-over-year growth of more than 23%.
Consolidated gross margin in the fourth quarter of fiscal 2010
is expected to be between 51% and 52%. Furthermore, due to
the Company's early repayment of its term loan and related debt
issuance cost amortization acceleration in the third quarter, we
expect interest expense to decline significantly in the fourth
quarter of fiscal 2010 as compared to the third quarter of 2010.
Based on this fourth quarter guidance, Martek expects full
fiscal year 2010 revenue to be between $439
million and $444 million, including infant formula revenues
of between $308 million and $312
million. The projected 2010 annual revenues would represent
year-over-year growth in total revenues of 27% to 29% (10% to 11%
excluding Amerifit-related revenues) and reflects meaningful gains
in nearly all markets for our nutritional ingredients, including
growth in infant formula revenues of 8% to 9% and growth in
non-infant formula nutritional revenues of 31% to 34%.
With the recently-extended infant formula supply agreements
along with the pending Winchester
restructuring, the Company has greater visibility into its expected
results for fiscal 2011. As such, we are projecting revenue and net
income growth over fiscal 2010. Contributing to this anticipated
earnings increase is projected gross margin growth of at least 400
basis points over the expected full year fiscal 2010 level. Gross
margin for fiscal 2011 will be favorably impacted by a full year of
Amerifit operations, the discontinuation of the Company's low
margin contract manufacturing business, production cost
efficiencies and lower ARA pricing.
Investor Conference Call Webcast
Martek will host a conference call and webcast for investors to
review its third quarter results and fourth quarter of fiscal 2010
outlook at 4:45 p.m. Eastern Time on
September 1, 2010. Access to the live
audio webcast is available through Martek's website at
http://investors.martek.com. The webcast will be available
for replay for 30 days.
Cautionary Note Regarding Forward-Looking Statements
Sections of this release contain forward-looking statements
concerning, among other things: (1) Martek's expectations regarding
future revenue growth in and customer demand from the infant
formula, pregnancy and nursing, nutritional supplements, animal
feeds and food and beverage markets as well as markets for Amerifit
products; (2) its expectations regarding revenue, gross margin,
operating expenses and income for the fourth quarter of and full
year fiscal 2010 for both Martek and Amerifit; (3) its expectations
regarding revenue, gross margin and income for fiscal 2011; (4) its
expectations regarding launches by customers of products containing
Martek's life'sDHA™ and future revenues associated with
Martek's contract manufacturing; (5) its expectations regarding
future capabilities of and benefits from the Amerifit acquisition;
and (6) its expectations regarding charges to be recorded in the
fourth quarter of fiscal 2010 related to the restructuring of the
Winchester plant.
Furthermore, Martek's operating results are subject to
quarter-to-quarter fluctuations, some of which may be significant,
and are also subject to future changes in the Company's preliminary
purchase price allocation for its Amerifit acquisition. The
forward-looking statements noted above are based upon numerous
assumptions which Martek cannot control and involve risks and
uncertainties that could cause actual results to differ. These
statements should be understood in light of the risk factors and
cautionary statements set forth herein and in the Company's filings
with the Securities and Exchange Commission, including, but not
limited to, Part I, Item 1A of the Company's Form 10-K for the
fiscal year ended October 31, 2009
and other filed reports on Form 10-K, Form 10-Q and Form 8-K.
About Martek
Martek Biosciences Corporation (Nasdaq: MATK) is a leader in the
innovation, development, production and sale of high-value products
from microbial sources that promote health and wellness through
nutrition. The Company's technology platform consists of its core
expertise, broad experience and proprietary technology in areas
such as microbial biology, algal genomics, fermentation and
downstream processing. This technology platform has resulted in
Martek's development of a number of products, including the
company's flagship product, life'sDHA™, a sustainable and
vegetarian source of algal DHA (docosahexaenoic acid) important for
brain, heart and eye health throughout life for use in infant
formula, pregnancy and nursing products, foods and beverages,
dietary supplements and animal feeds. The Company also produces
life'sARA™ (arachidonic acid), an omega-6 fatty acid, for
use in infant formula and growing-up milks. Martek's subsidiary,
Amerifit Brands, develops, markets and distributes branded consumer
health and wellness products and holds leading brand positions in
all of its key product categories. Amerifit products are sold in
most major mass, club, drug, grocery and specialty stores and
include: Culturelle®, a leading probiotic supplement; AZO, the
leading OTC brand addressing symptom relief and detection of
urinary tract infections; and ESTROVEN®, the leading all-natural
nutritional supplement brand addressing the symptoms of menopause.
Martek currently has a number of nutritional health and wellness
products under development that it plans to commercialize and
distribute through Amerifit's distribution channels.
Martek's technology platform has also made it a sought-after
partner on a range of groundbreaking projects in process, including
the development of microbially-derived biofuels and the development
of DHA-containing oilseeds. For more information on Martek
Biosciences, visit http://www.martek.com/. For a complete list of
life'sDHA™ and life'sARA™ products, visit
http://www.lifesdha.com/. For more information about Amerifit
Brands, visit www.amerifit.com.
MARTEK BIOSCIENCES
CORPORATION
Summary Consolidated Financial
Information
(Unaudited - $ in thousands,
except per share data)
Unaudited Condensed Consolidated
Statements of Income Data
|
|
|
Three months ended July
31,
|
|
Nine months ended July
31,
|
|
|
2010
|
|
2009
|
|
2010
|
|
2009
|
|
|
|
|
|
|
|
|
|
|
Revenues:
|
|
|
|
|
|
|
|
|
|
Product sales
|
$
|
113,971
|
|
$
|
75,044
|
|
$
|
317,139
|
|
$
|
247,218
|
|
|
|
Contract manufacturing and
collaborations
|
|
3,192
|
|
|
2,790
|
|
|
13,748
|
|
|
10,390
|
|
|
|
Total revenues
|
|
117,163
|
|
|
77,834
|
|
|
330,887
|
|
|
257,608
|
|
|
Cost of revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of product sales
|
|
56,011
|
|
|
41,129
|
|
|
164,310
|
|
|
137,337
|
|
|
|
Cost of contract manufacturing
and collaborations
|
|
2,647
|
|
|
2,675
|
|
|
11,977
|
|
|
10,101
|
|
|
|
Total cost of
revenues
|
|
58,658
|
|
|
43,804
|
|
|
176,287
|
|
|
147,438
|
|
|
|
|
Gross margin
|
|
58,505
|
|
|
34,030
|
|
|
154,600
|
|
|
110,170
|
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Research and
development
|
|
8,499
|
|
|
6,604
|
|
|
24,386
|
|
|
20,510
|
|
|
|
Selling, general and
administrative
|
|
18,892
|
|
|
11,027
|
|
|
49,598
|
|
|
36,058
|
|
|
|
Advertising and
promotion
|
|
5,598
|
|
|
412
|
|
|
10,072
|
|
|
1,353
|
|
|
|
Amortization of intangible
assets
|
|
2,983
|
|
|
1,534
|
|
|
7,022
|
|
|
4,910
|
|
|
|
Acquisition costs
|
|
484
|
|
|
—
|
|
|
3,472
|
|
|
—
|
|
|
|
Restructuring charge
|
|
607
|
|
|
—
|
|
|
607
|
|
|
—
|
|
|
|
Other operating
expenses
|
|
300
|
|
|
234
|
|
|
505
|
|
|
956
|
|
|
|
Total operating
expenses
|
|
37,363
|
|
|
19,811
|
|
|
95,662
|
|
|
63,787
|
|
|
Income from
operations
|
|
21,142
|
|
|
14,219
|
|
|
58,938
|
|
|
46,383
|
|
|
Interest income (expense) and
other, net
|
|
(1,777)
|
|
|
81
|
|
|
(3,292)
|
|
|
427
|
|
|
Income before income tax
provision
|
|
19,365
|
|
|
14,300
|
|
|
55,646
|
|
|
46,810
|
|
|
Income tax provision
|
|
7,479
|
|
|
5,372
|
|
|
21,600
|
|
|
17,259
|
|
|
Net income
|
$
|
11,886
|
|
$
|
8,928
|
|
$
|
34,046
|
|
$
|
29,551
|
|
|
Basic earnings per
share
|
$
|
0.36
|
|
$
|
0.27
|
|
$
|
1.02
|
|
$
|
0.89
|
|
|
Diluted earnings per
share
|
$
|
0.35
|
|
$
|
0.27
|
|
$
|
1.02
|
|
$
|
0.89
|
|
|
Shares used in computing basic
earnings per share
|
|
33,468
|
|
|
33,234
|
|
|
33,376
|
|
|
33,191
|
|
|
Shares used in computing diluted
earnings per share
|
|
33,610
|
|
|
33,346
|
|
|
33,542
|
|
|
33,346
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unaudited Condensed Consolidated
Balance Sheets Data
|
|
|
July 31,
|
|
October 31,
|
|
|
2010
|
2009
|
|
Assets:
|
|
|
|
|
|
Cash and cash
equivalents
|
$
|
26,522
|
|
$
|
141,063
|
|
|
Short-term
investments
|
|
—
|
|
|
7,301
|
|
|
Accounts receivable,
net
|
|
66,415
|
|
|
44,304
|
|
|
Inventories, net
|
|
110,751
|
|
|
116,179
|
|
|
Other current assets
|
|
5,776
|
|
|
5,240
|
|
|
Property, plant and equipment,
net
|
|
249,825
|
|
|
252,279
|
|
|
Deferred tax asset
|
|
25,761
|
|
|
24,303
|
|
|
Long-term investments
|
|
4,633
|
|
|
4,495
|
|
|
Goodwill, intangibles and other
long-term assets, net
|
|
328,404
|
|
|
94,653
|
|
Total assets
|
$
|
818,087
|
|
$
|
689,817
|
|
|
|
|
|
|
|
|
Liabilities and stockholders'
equity:
|
|
|
|
|
|
|
|
Accounts payable and accrued
expenses
|
$
|
53,804
|
|
$
|
31,365
|
|
|
Notes payable and other
long-term obligations
|
|
4,265
|
|
|
810
|
|
|
Deferred tax
liability
|
|
76,200
|
|
|
10,091
|
|
|
Deferred revenue
|
|
8,849
|
|
|
11,407
|
|
|
Stockholders' equity
|
|
674,969
|
|
|
636,144
|
|
Total liabilities and
stockholders' equity
|
$
|
818,087
|
|
$
|
689,817
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unaudited Condensed Consolidated
Cash Flow Data
|
|
|
Nine months ended July
30,
|
|
|
|
2010
|
|
|
2009
|
|
|
|
|
|
|
|
|
|
Operating activities:
|
|
|
|
|
|
|
|
Net income
|
$
|
34,046
|
|
|
$
|
29,551
|
|
|
|
Non-cash items
|
|
53,446
|
|
|
|
40,945
|
|
|
|
Changes in operating assets and
liabilities, net
|
|
12,201
|
|
|
|
(30,494)
|
|
|
|
Net cash provided by operating
activities
|
|
99,693
|
|
|
|
40,002
|
|
|
|
|
|
|
|
|
|
|
|
Investing activities:
|
|
|
|
|
|
|
|
|
|
Cash paid for acquisition of
Amerifit, net of cash acquired
|
|
(200,743)
|
|
|
|
—
|
|
|
|
Sale of investments and
marketable securities, net
|
|
7,350
|
|
|
|
100
|
|
|
|
Expenditures for property, plant
and equipment
|
|
(13,171)
|
|
|
|
(6,733)
|
|
|
|
Capitalization of intangible
assets
|
|
(4,077)
|
|
|
|
(6,129)
|
|
|
|
Net cash used in investing
activities
|
|
(210,641)
|
|
|
|
(12,762)
|
|
|
|
|
|
|
|
|
|
|
|
Financing activities:
|
|
|
|
|
|
|
|
|
|
Repayments of notes payable,
term loan and other long-term obligations
|
|
(75,162)
|
|
|
|
(88)
|
|
|
|
Proceeds of term loan
|
|
75,000
|
|
|
|
—
|
|
|
|
Borrowings from revolving line
of credit
|
|
11,000
|
|
|
|
—
|
|
|
|
Repayments of borrowings from
revolving line of credit
|
|
(11,000)
|
|
|
|
—
|
|
|
|
Payment of debt issuance
costs
|
|
(3,944)
|
|
|
|
—
|
|
|
|
Proceeds (payments) from equity
transactions, net
|
|
512
|
|
|
|
(302)
|
|
|
|
Net cash used in financing
activities
|
|
(3,594)
|
|
|
|
(390)
|
|
|
|
|
|
|
|
|
|
|
|
Foreign currency translation
adjustment
|
|
1
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
Net change in cash and cash
equivalents
|
|
(114,541)
|
|
|
|
26,850
|
|
|
|
Cash and cash equivalents,
beginning of period
|
|
141,063
|
|
|
|
102,495
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents, end
of period
|
$
|
26,522
|
|
|
$
|
129,345
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Table I
MARTEK BIOSCIENCES
CORPORATION
SEGMENT
INFORMATION
(Unaudited - $ in
thousands)
|
|
|
Three months ended July
31,
|
|
Nine months ended July
31,
|
|
|
|
2010
|
|
2009
|
|
2010
|
|
2009
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Branded consumer health
products
|
$
|
20,301
|
|
$
|
—
|
|
$
|
38,310
|
|
$
|
—
|
|
|
Nutritional
ingredients
|
|
93,361
|
|
|
74,402
|
|
|
277,392
|
|
|
245,466
|
|
|
Other
|
|
3,501
|
|
|
3,432
|
|
|
15,185
|
|
|
12,142
|
|
|
Total
|
$
|
117,163
|
|
$
|
77,834
|
|
$
|
330,887
|
|
$
|
257,608
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment Income From
Operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Branded consumer health
products
|
$
|
1,900
|
|
$
|
—
|
|
$
|
3,793
|
|
$
|
—
|
|
|
Nutritional
ingredients
|
|
18,921
|
|
|
13,949
|
|
|
54,123
|
|
|
46,042
|
|
|
Other
|
|
321
|
|
|
270
|
|
|
1,022
|
|
|
341
|
|
|
Total
|
$
|
21,142
|
|
$
|
14,219
|
|
$
|
58,938
|
|
$
|
46,383
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Table II
MARTEK BIOSCIENCES
CORPORATION
RECONCILIATION OF GAAP TO
NON-GAAP NET INCOME MEASURE
(Unaudited)
The Company makes reference in
this release to non-GAAP presentations of fiscal 2010 net income
and diluted earnings per share that exclude expenses associated
with the acquisition of Amerifit and the restructuring of the
Winchester manufacturing site. We are providing this information to
assist investors in comparing the results of the current periods to
those in the prior year periods when these items were not present.
We caution investors, however, that these non-GAAP results should
only be considered in addition to results that are reported under
current GAAP and should not be considered as a substitute for
results that are presented under GAAP. Following is a schedule
showing the reconciliation of net income and diluted earnings per
share reported under GAAP to the non-GAAP financial measure
included herein:
|
|
|
|
Three months ended July
31,
|
|
Nine months ended July
31,
|
|
|
Historical Results, $ in
thousands
|
2010
|
|
2009
|
|
2010
|
|
2009
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income, as reported under
GAAP
|
$
|
11,886
|
|
$
|
8,928
|
|
$
|
34,046
|
|
$
|
29,551
|
|
|
Add: acquisition costs,
net of tax
|
|
302
|
|
|
—
|
|
|
2,504
|
|
|
—
|
|
|
Add: restructuring charge,
net of tax
|
|
374
|
|
|
—
|
|
|
374
|
|
|
—
|
|
|
Add: inventory step-up,
net of tax
|
|
149
|
|
|
—
|
|
|
1,219
|
|
|
—
|
|
|
Non-GAAP net income measure
|
$
|
12,711
|
|
$
|
8,928
|
|
$
|
38,143
|
|
$
|
29,551
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended July
31,
|
|
Nine months ended July
31,
|
|
|
Historical Results, $ per
share
|
2010
|
|
2009
|
|
2010
|
|
2009
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per share, as
reported under GAAP
|
$
|
0.35
|
|
$
|
0.27
|
|
$
|
1.02
|
|
$
|
0.89
|
|
|
Add: acquisition costs,
net of tax
|
|
.01
|
|
|
—
|
|
|
.07
|
|
|
—
|
|
|
Add: restructuring charge,
net of tax
|
|
.01
|
|
|
—
|
|
|
.01
|
|
|
—
|
|
|
Add: inventory step-up,
net of tax
|
|
.01
|
|
|
—
|
|
|
.04
|
|
|
—
|
|
|
Non-GAAP diluted earnings per
share measure
|
$
|
0.38
|
|
$
|
0.27
|
|
$
|
1.14
|
|
$
|
0.89
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Forecasted Results, $ in
millions
|
Three months
ended
October 31,
2010
|
|
|
|
|
Net income, projected to be
reported under GAAP
|
$
|
(13.4) – (5.9)
|
|
Add: projected restructuring
charge, net of tax
|
|
25.2 – 19.0
|
|
Non-GAAP net income measure
|
$
|
11.8 – 13.1
|
|
|
|
|
|
|
|
|
|
Forecasted Results, $ per
share
|
Three months
ended
October 31,
2010
|
|
|
|
|
Diluted earnings per share,
projected to be reported under GAAP
|
$
|
(0.40) – (0.18)
|
|
Add: projected restructuring
charge, net of tax
|
|
0.75 – 0.57
|
|
Non-GAAP diluted earnings per
share measure
|
$
|
0.35 – 0.39
|
|
|
|
|
|
|
|
|
CONTACT
|
|
Kyle Stults
|
|
Investor Relations
|
|
(410) 740-0081
|
|
kstults@martek.com
|
|
|
|
|
SOURCE Martek Biosciences Corporation
Copyright t. 1 PR Newswire