Discovery Partners International Reports Financial Results For First Quarter 2002
SAN DIEGO, Apr 23, 2002 /PRNewswire-FirstCall via COMTEX/ -- Discovery Partners
International, Inc. (Nasdaq: DPII) today reported financial results for the
first quarter ended March 31, 2002. In the first quarter 2002, revenues were
$10.0 million, compared to $9.5 million in the first quarter 2001. Net loss
was $763,628 or $0.03 per share, in line with analyst consensus earnings expectations,
compared to a net loss of $2.2 million (which includes amortization of goodwill
prior to the adoption of FAS 142), or $0.09 per share, in the first quarter
In the first quarter 2002, gross margin was $4.1 million, or 41% of sales, compared
to $5.1 million, or 53% of sales in the same period of 2001. The reduction in
gross margin for the first quarter 2002 reflects previously anticipated changes
in the product and services mix, which resulted in a redeployment of company
funded research and development efforts to direct revenue generating activities.
As a result, expenditures on research and development were $1.9 million, compared
to $3.9 million in the same period of 2001, a decrease of 50%. In the first
quarter 2002, selling, general and administrative expenses were $3.3 million,
compared to $2.8 million in the first quarter 2001.
As of March 31, 2002, Discovery Partners had approximately $77.4 million in
cash, cash equivalents, and short-term investments. Discovery Partners expects
to remain cash flow neutral for 2002, excluding minor fluctuations in working
capital and the impact, if any, of acquisitions or stock repurchases under the
Company's stock repurchase program.
"During the first quarter 2002, Discovery Partners' gross margin began
to reflect the previously disclosed impact of the Pfizer contract, signed in
the fourth quarter 2001," said Riccardo Pigliucci, Chief Executive Officer
and President of Discovery Partners. "As we progress through the year,
we expect this trend of offsetting impact on cost of revenues and research and
development expenditures to continue. We continue to expect to see the greatest
contribution to revenues from the Pfizer contract in the second half of 2002."
"During the quarter, we signed a significant drug discovery collaboration
agreement with Xenon Genetics, Inc. to provide lead optimization services in
addition to the two separate high throughput screening and computational chemistry
agreements we signed with Xenon last year," added Pigliucci. "Since
the beginning of 2002, Discovery Partners has continued to conclude collaboration
agreements and has added new names to its customers list. However, at this time,
the level of shippable backlog for the second quarter is lower than anticipated.
We are therefore cautious regarding our short term financial outlook. For the
full year, however, we reiterate our 2002 financial guidance of revenue growth
in the 20 to 25 percent range over 2001, with earnings per share in the range
of $0.02 to $0.05 per share."
A conference call discussing first quarter 2002 financial results as well as
financial guidance for the remainder of fiscal 2002 will be publicly available
via the Company's website, www.discoverypartners.com . The live webcast will
begin at 11:00 a.m. Eastern Time, on Tuesday, April 23, 2002. In addition to
the live webcast, replays will be available to the public on Discovery Partners'
website and by calling 800-428-6051 (domestic) and 973-709-2089 (international),
access code: 238602 through Tuesday, April 30, 2002.
About Discovery Partners
Discovery Partners International, Inc. has become a leader in drug discovery
collaborations by offering integrated services and products that span the drug
discovery continuum including target characterization, high throughput screening,
lead generation, lead optimization, high throughput synthesis automation, and
gene expression analysis. Discovery Partners is headquartered in San Diego,
California and has operations in the United States and Europe. For more information
on Discovery Partners International, Inc., please visit the Company's website
at http://www.discoverypartners.com .
Statements in this press release that are not strictly historical are "forward-looking"
statements within the meaning of the Private Securities Litigation Reform Act
of 1995 and involve a high degree of risk and uncertainty. Discovery Partners'
actual results may differ materially from those projected in the forward looking
statements due to risks and uncertainties that exist in Discovery Partners'
operations, development efforts and business environment, including integration
of acquired businesses, the trend toward consolidation of the pharmaceutical
industry, quarterly sales variability, technological advances by competitors,
and other risks and uncertainties more fully described in Discovery Partners'
annual report on Form 10-K for the year ended December 31, 2001 as filed with
the Securities and Exchange Commission and Discovery Partners' other SEC reports.
DISCOVERY PARTNERS INTERNATIONAL, INC.
SELECTED CONSOLIDATED FINANCIAL DATA
(Unaudited, in thousands except per share amounts)
Three months ended March 31,
Summary Statement of Operations: 2002 2001
Revenue $10,020 $9,524
Cost of revenue 5,921 4,464
Gross margin 4,099 5,060
Research and development 1,942 3,893
Selling, general and administrative 3,268 2,797
Amortization of stock-based compensation 198 324
Amortization of goodwill -- 1,500
Total operating expenses 5,408 8,514
Loss from operations (1,309) (3,454)
Interest and other income, net 545 1,253
Net loss $(764) $(2,201)
Net loss per share, basic and diluted $(0.03) $(0.09)
Weighted average shares outstanding,
basic and diluted 24,281 23,775
Summary Balance Sheet: March 31, December 31,
Cash and cash equivalents and
short-term investments $77,410 $77,265
Accounts receivable, net 9,140 10,144
Other current assets, net 9,983 9,577
Total current assets 96,533 96,986
Property and equipment, net 10,687 10,642
Patent, license rights and other
intangible assets, net 6,168 6,400
Goodwill, net 50,918 50,918
Other long term assets, net 2,016 2,076
Total assets $166,322 $167,022
Accounts payable and accrued expenses $3,569 $3,816
Short term debt 1,819 738
Deferred revenue 3,520 3,881
Total current liabilities 8,908 8,435
Other liabilities 764 1,177
Minority interest 296 368
Stockholders' equity 156,354 157,042
Total liabilities and stockholders' equity $166,322 $167,022
SOURCE Discovery Partners International, Inc.
Riccardo Pigliucci, Chief Executive Officer of Discovery Partners International,
Inc., +1-858-552-3639, email@example.com
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