RNS Number:5552O
Huntingdon Life Sciences Group PLC
12 December 2001
Huntingdon, England, December 12, 2001 - Huntingdon Life Sciences Group plc
("Huntingdon" or the "Company") announced today that net revenues for the
three months ended September 30, 2001 were #17.9 million ($25.9 million) an
increase of 11.4% on revenues for the equivalent period last year of #16.1
million ($24.7 million). Under US GAAP the Company reported an operating
profit for the three months ended September 30, 2001 of #0.2 million ($0.3
million) compared to an operating profit of #0.1 million ($0.1 million) for
the equivalent period last year. Net profit after taxation for the quarter was
#0.8 million ($1.2 million) compared to a net loss after taxation of #1.8
million ($2.8 million) for the equivalent period last year. These profits
included non-cash exchange gains on the conversion of dollar denominated
assets and liabilities into sterling of #1.6 million ($2.3 million) compared
to exchange losses in the same period last year of #0.6 million ($0.9
million). Net earnings per ordinary share were 0.3 pence compared to a loss
per ordinary share of 0.6 pence last year. Net earnings per ADR were 10.4
cents compared to a loss per ADR of 24.4 cents last year.
Net revenues for the nine months ended September 30, 2001 were #50.3 million
($73.0 million) an increase of 6% on revenues for the equivalent period last
year of #47.5 million ($73.1 million). The Company also reported an operating
loss under US GAAP for the nine months ended September 30, 2001 of #1.8
million ($2.6 million) compared to an operating profit of #0.2 million ($0.4
million) for the equivalent period last year. Net loss after taxation for the
nine months was #3.4 million ($5.0 million) compared to #5.1 million ($7.8
million) last year. Net loss per ordinary share was 1.2 pence compared to 1.7
pence last year. Net loss per ADR was 42.3 cents compared to 66.9 cents last
year.
Under UK GAAP the Company reported an operating loss for the three months
ended September 30, 2001 of #0.1 million ($0.1 million), a reduction from the
#0.2 million ($0.4 million) last year. Net profit after interest and taxation
was #0.1 million ($0.2 million) compared to a loss of #1.9 million ($2.9
million) for the equivalent period last year. Net earnings per ordinary share
were 0.04 pence compared to a loss of 0.6 pence last year. Net earnings per
ADR were 1.3 cents compared to a loss of 25.1 cents last year.
The Company also reported an operating loss for the nine months ended
September 30, 2001 under UK GAAP of #2.5 million ($3.6 million), up from #0.7
million ($1.1 million) last year. Net loss after interest and taxation was #
6.2 million ($9.0 million) compared to #5.8 million ($9.0 million) for the
equivalent period last year. Net loss per ordinary share was 2.1 pence
compared to 2.0 pence last year. Net loss per ADR was 76.6 cents compared to
76.9 cents last year.
The principal differences between the UK and US reported results are non-cash
charges associated with pension accounting, deferred taxation and foreign
currency translation.
Brian Cass, Huntingdon's Managing Director, said "The continued strong growth
in revenues and improvement in our margins is a reflection of the excellent
support we are enjoying from our client community, and the record orders we
reported in the first half of the year. Third quarter revenues were our
highest in five years and the meaningful growth we have shown in each quarter
of this year has helped us return to positive operating profits. Both of these
were amongst our important interim milestones."
Andrew Baker, Huntingdon's Executive Chairman added "We are most encouraged by
the improvement in our operating results which continues the trend we reported
for the first half of this year. This announcement, featuring more of an
American style of reporting, is an exciting precursor to our pending
transaction with Life Sciences Research and our plan to have our equity trade
as an American public company. As previously announced, approximately 80% of
our shareholders have tendered their shares into the LSR offer, which we
believe clearly displays their enthusiasm for the strategic value of this
transaction. We certainly share that view, and strongly recommend the
minority balance of shareholders who have not yet done so to be part of LSR by
promptly tendering their shares." Instructions for the tendering of shares
have been mailed to shareholders, or can be obtained by contacting the
Company.
On October 16, 2001, a recommended offer was made by Life Sciences Research,
Inc. ("LSR") for the entire issued share capital of Huntingdon (the "Offer"),
as set out in the offer document of that date. On November 13, 2001 LSR
announced an extension of the initial offer period to November 28, 2001 and on
November 29, 2001 LSR announced a further extension of the initial offer
period to December 14, 2001.
SECURITYHOLDERS SHOULD READ THE FOLLOWING DOCUMENTS AND ANY OTHER RELEVANT
DOCUMENTS REGARDING THE OFFER (DESCRIBED ABOVE) WHEN THEY ARE FILED WITH THE
UNITED STATES SECURITIES AND EXCHANGE COMMISSION ("SEC"), BECAUSE THEY WILL
CONTAIN IMPORTANT INFORMATION:
* LSR's preliminary offer document, any supplement thereto, the final
offer document and exchange offer materials.
* LSR's Registration Statement on Form S-4 and Schedule TO containing or
incorporating by reference such documents and other information.
* Huntingdon's Solicitation/Recommendation on Schedule 14D-9.
When these and other documents are filed with the SEC, they may be obtained
free of charge through the SEC's website at http//www.sec.gov. Interested
parties may read and copy any reports, statements and other information filed
by Huntingdon and LSR at the US SEC public reference rooms at 450 Fifth
Street, N.W., Washington, D.C. 20549 or at the Commission's other public
reference rooms in New York, New York and Chicago, Illinois. Please call the
SEC at +1 (800)-732-0330 for further information on public reference rooms.
If you are a holder of Huntingdon ordinary shares and ADSs you may also obtain
free of charge each of these documents (when available) from Huntingdon by
directing your request in writing to PO Box 353, Alconbury, Huntingdon,
Cambridgeshire, PE28 4BR, England.
Huntingdon Life Sciences Group plc is one of the world's leading Contract
Research Organizations providing product development services to the
pharmaceutical, agrochemical and biotechnology industries. Huntingdon brings
leading technology and capability to support its clients in non-clinical
safety testing of new compounds in early stage development and assessment.
Huntingdon operates research facilities in the United Kingdom (Huntingdon and
Eye, England) and the United States (The Princeton Research Centre, New
Jersey).
This announcement contains statements that may be forward-looking as defined
by the USA's Private Litigation Reform Act of 1995. These statements are
based largely on Huntingdon's expectations and are subject to a number of
risks and uncertainties, certain of which are beyond Huntingdon's control, as
more fully described in Huntingdon's Form 10-K for the year ended December 31,
2000, as filed with the US Securities and Exchange Commission.
CONDENSED CONSOLIDATED BALANCE SHEETS
Sept 30, Dec
2001 31, 2000
#'000 #'000
(Unaudited)
ASSETS
Current assets
Cash and cash equivalents 2,064 2,199
Accounts receivable net of allowance for
uncollectables of 11,015
10,894
#102,000 (2000: #57,000)
Unbilled receivables 8,749 5,935
Inventories 1,077 907
Prepaid expenses and other 1,905 1,340
Deferred income taxes 123 330
Total current assets 24,812 21,726
Property and equipment: net 62,848 65,377
Investments 156 154
Unamortised costs of raising long term debt 503 584
Deferred income taxes 5,817 5,150
Total assets 94,136 92,991
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Accounts payable 4,618 3,977
Accrued payroll and other benefits 1,163 927
Accrued expenses and other liabilities 6,597 4,557
Fees invoiced in advance 11,526 10,859
Short term debt - 23,640
Total current liabilities 23,904 43,960
Long term debt 60,628 33,612
Other long term liabilities 346 1,216
Deferred income taxes 10,022 11,480
Shareholders' Equity:
Ordinary Shares, 5p par value
Authorised - at September 30, 2001; 400,000,000
(2000; 400,000,000)
Issued and outstanding - at September 30, 2001;
293,510,294 (2000; 292,184,962) 14,675 14,609
Paid in capital 25,816 25,782
Accumulated deficit (41,538) (38,112)
Accumulated other comprehensive income
- cumulative translation adjustment 283 444
Total shareholders' equity (764) 2,723
Total liabilities and shareholders' equity 94,136 92,991
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS
OF INCOME AND COMPREHENSIVE INCOME
Three months ended Nine months ended
September 30 September 30
2001 2000 2001 2000
#'000 #'000 #'000 #'000
(except per (except per (except per (except per
share data) share data) share data) share data)
Revenues 17,883 16,054 50,326 47,467
Cost of sales (15,059) (13,498) (43,782) (40,083)
Gross profit 2,824 2,556 6,544 7,384
Selling and
administrative (2,634) (2,475) (8,319) (7,136)
expenses
Operating profit/ 190 81 (1,775) 248
(loss)
Interest income 9 17 61 102
Interest expense (1,127) (1,216) (3,407) (3,419)
Other income/(loss) 1,563 (576) (223) (2,156)
Profit/(loss) before 635 (1,694) (5,344) (5,225)
income taxes
Income taxes 209 (145) 1,918 169
Net profit/(loss) 844 (1,839) (3,426) (5,056)
Other comprehensive
income/(loss), net of
tax
Foreign currency
translation
adjustments (295) 124 (161) 382
Comprehensive income/ 549 (1,715) (3,587) (4,674)
(loss)
Earnings/(loss) per
share (pence)
- basic 0.3 (0.6) (1.2) (1.7)
- diluted 0.3 (0.6) (1.2) (1.7)
Earnings/(loss) per
ADR (cents)
- basic 10.4 (24.4) (42.3) (66.9)
- diluted 10.4 (24.4) (42.3) (66.9)
'000 '000 '000 '000
Weighted average
shares outstanding
- basic 293,510 291,010 293,282 291,010
- diluted 293,510 291,010 293,282 291,010
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Nine months ended September 30
2001 2000
#'000 #'000
Cash flows from operating activities:
Net loss (3,426) (5,056)
Adjustments to reconcile net loss to net cash
provided by operating activities
Depreciation and amortisation 4,383 4,489
Amortisation of loan costs 81 216
Deferred income taxes (1,918) (169)
Changes in operating assets and liabilities:
Accounts receivable and prepaid expenses (3,258) (3,734)
Inventories (170) 79
Accounts payable and other accrued expenses 2,917 (1,745)
Fees invoiced in advance 667 822
Other liabilities (870) (1,114)
(1,594)
Net cash used in operating activities
(6,212)
Cash flows from investing activities:
Purchase of property, plant and equipment (1,766) (1,480)
Net cash used in investing activities (1,766) (1,480)
Cash flows from financing activities:
Issue of ordinary shares 100 -
Receipt of loan 2,964 1,000
Net cash received by financing activities 3,064 1,000
Effect of exchange rates on cash and
cash equivalents: 161 2,361
Decrease in cash and cash equivalents (135) (4,331)
Cash and cash equivalents at beginning of year 2,199 5,258
Cash and cash equivalents at end of period 2,064 927
Notes:
(1) Bank loans totaling #22,586,000 were refinanced on January 20,
2001 by means of a loan from HLSF LLC, a subsidiary company of the Stephens
Group Inc., a related party, and two other banks who were part of the original
syndicate. The loans are repayable on June 30, 2006.
As part of the refinancing additional working capital was made available to
the Group to meet its immediate trading requirements. This together with other
financing options still available to the Group, are expected to provide adequate
finance for the foreseeable future.
In the light of the above the directors have formed a judgement that it is
appropriate to adopt the going concern basis in preparing the accounts.
(2) These results have been prepared in accordance with US GAAP, but
have not been audited.
(3) Loss per ADR is calculated using an exchange rate of $1.45 = #1.00 (2000,
$1.54 = #1.00). On July 10, 2000 the Company changed its ADR ratio to one ADR
representing twenty-five Ordinary Shares and the loss per ADR for each period
has been calculated using this ratio; previously each ADR represented five
Ordinary Shares. The ratio change was implemented to assure compliance with the
New York Stock Exchange's listing requirement that ADR's trade at a minimum
price of $1.00 per share.
(4) The Directors do not recommend payment of an interim dividend.
(5) For the purposes of consolidation an average exchange rate of $1.45 =
#1.00 has been used in the nine month period ended September 30, 2001
(2000, $1.54 = #1.00) and $1.44 = #1.00 in the three month period ended
September 30, 2001 (2000, $1.48 = #1.00).
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