Attached files
| file | filename |
|---|---|
| 10-Q - LSR 3Q FORM 10-Q - LIFE SCIENCES RESEARCH INC | form10q3q09.htm |
| EX-32.1 - SOX CERTIFICATIONS - LIFE SCIENCES RESEARCH INC | exhibit32.htm |
| EX-31.1 - CEO CERTIFICATION - LIFE SCIENCES RESEARCH INC | exhibit31-1.htm |
| EX-31.2 - CFO CERTIFICATION - LIFE SCIENCES RESEARCH INC | exhibit31-2.htm |
Exhibit 99.1
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Press
Release
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LIFE
SCIENCES RESEARCH, INC.
|
|
(NYSE
Arca: LSR)
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PO
Box 2360
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Mettlers
Road
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East
Millstone, NJ 08875-2360
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For
Further Information:
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Richard
Michaelson
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Phone:
US (732) 649-9961
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E-mail:
LifeSciencesResearch@LSRinc.net
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November
5, 2009
LSR
ANNOUNCES THIRD QUARTER RESULTS
Highlights:
|
·
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Revenues
of $49.4 million
|
|
·
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Operating
income of $5.5 million, or 11.1% of revenues, excluding $1.0 million of
transaction costs
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·
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Net
income of $1.1 million
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|
·
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Diluted
EPS of $0.08
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EAST MILLSTONE, N.J. (November 5, 2009) – Life Sciences Research, Inc.
(NYSE Arca: LSR) announced today financial results for the three and nine months
ended September 30, 2009.
Revenues
for the third quarter of 2009 were $49.4 million, 22.3% below third quarter 2008
revenues of $63.6 million. Excluding the effect of exchange rate
movements, revenues decreased 13.3%. Operating income for the quarter
ended September 30, 2009 was $4.4 million, which included $1.0 million of
expenses associated with the previously announced pending transaction for the
Company to be acquired by Lion Holdings, an entity controlled by LSR’s Chairman
and CEO, Andrew Baker. Excluding those costs, operating income was
$5.5 million, or 11.1% of revenues, compared with $9.5 million, or 15.0% of
revenues for the same period in the prior year. The 2009 quarter
included stock-based compensation expenses of $0.3 million or $0.02 per fully
diluted share, compared with $0.5 million or $0.03 per fully diluted share in
the 2008 quarter. The 2009 quarter included Other Expense of $0.9
million or $0.06 per fully diluted share associated with non-cash foreign
exchange gains principally related to the Company’s dollar-based debt, compared
with Other Expense of $4.6 million in the 2008 quarter. The Company reported net
income for the quarter ended September 30, 2009 of $1.1 million or $0.08 per
fully diluted share, compared with $2.1 million or $0.13 per fully diluted share
for the quarter ended September 30, 2008.
Revenues
for the nine months ended September 30, 2009 were $142.7 million, 25.4% below
revenues of $191.1 million for the same period in the prior
year. Excluding the effect of exchange rate movements, revenues
decreased by 10.5%. Operating Income for the nine months ended
September 30, 2009 was $14.3 million, which included $2.5 million of expenses
associated with the previously announced pending transaction for the Company to
be acquired by Lion Holdings. Excluding those costs, operating income
was $16.8 million, or 11.8% of revenues, compared with $29.2 million, or 15.3%
of revenues for the same period in the prior year. The 2009
nine-month period included stock-based compensation expenses of $0.8 million or
$0.06 per fully diluted share, compared with $1.6 million or $0.10 per fully
diluted share in the same period last year. Other Income in the
current period was $3.4 million or $0.24 per fully diluted share, compared with
Other Expense of $4.7 million in the prior year. The Company reported net income
of $11.0 million or $0.79 per fully diluted share for the nine months ended
September 30, 2009, compared with $16.1 million or $1.04 per fully diluted share
for the nine months ended September 30, 2008.
Cash and
cash equivalents as of September 30, 2009 were $39.4 million, down from $39.5
million as of June 30, 2009 and up from $36.5 million as of December 31,
2008. Net days sales outstanding at September 30, 2009 were 31 days,
compared with 26 days at June 30, 2009 and 30 days at December 31,
2008. Capital expenditures totaled $4.3 million in the third quarter
of 2009, compared with $4.1 million in the third quarter of
2008. Capital expenditures for the nine months ended September 30,
2009 totaled $8.6 million, compared with $13.9 million for the nine months ended
September 30, 2008.
Net new
orders totaled $42.5 million for the third quarter of 2009. This
represented a book-to- bill ratio of 0.86 for the quarter. Net new
orders totaled $128.0 million for the nine months ended September 30,
2009. This represented a book-to-bill ratio of 0.90 for the nine
months ended September 30, 2009. At September 30, 2009 backlog
(booked on work) amounted to approximately $139 million.
On July
9, 2009, LSR announced that it had entered into a definitive merger agreement to
be acquired by Lion Holdings, Inc, an entity controlled by LSR’s Chairman and
CEO, Andrew Baker, for $8.50 per share in cash. On October 28, 2009,
LSR filed with the SEC a definitive proxy statement with respect to the merger.
The transaction will be voted on by stockholders at a special meeting of
stockholders on November 23, 2009 and, if approved, is expected to close
promptly thereafter. The merger remains, subject to certain closing conditions,
including stockholder approval.
About
Life Sciences Research
Life
Sciences Research, Inc. is a global contract research organization providing
product development services to the pharmaceutical, agrochemical and
biotechnology industries. LSR brings leading technology and
capability to support its clients in non-clinical safety testing of new
compounds in early stage development and assessment. The purpose of
this work is to identify risks to humans, animals or the environment resulting
from the use or manufacture of a wide range of chemicals which are essential
components of LSR's clients' products. The Company's services are
designed to meet the regulatory requirements of governments around the
world. LSR operates research facilities in the United States (the
Princeton Research Center, New Jersey) and the United Kingdom (Huntingdon and
Eye, England).
Important
Additional Information for Investors and Stockholders
In
connection with the proposed Merger of the Company with a wholly owned
subsidiary of Lion Holdings, the Company has filed with the SEC a definitive
proxy statement for the meeting of stockholders of the Company to be convened on
November 23, 2009 to approve the Merger. That definitive proxy statement and a
form of proxy has been mailed to the stockholders of the Company. The Company,
Parent, Merger Sub, Andrew Baker, LAB Holdings LLC and Focused Healthcare
Partners, LLC have also filed a Schedule 13E-3, as amended, with the SEC
regarding the proposed Merger. BEFORE MAKING ANY VOTING OR INVESTMENT
DECISION, THE COMPANY’S STOCKHOLDERS AND INVESTORS ARE URGED TO READ THE PROXY
STATEMENT AND OTHER DOCUMENTS FILED WITH THE SEC CAREFULLY AND IN THEIR ENTIRETY
BECAUSE THEY CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED
MERGER. Company stockholders and other investors can obtain copies of
these materials without charge from the SEC through the SEC’s website at www.sec.gov. These
documents can also be obtained free of charge by accessing them on the Company’s
corporate website at www.lsrinc.net.
The
Company and its directors, executive officers and certain other members of its
management and employees may, under SEC rules, be deemed to be participants in
the solicitation of proxies from the Company’s stockholders in connection with
the transaction. Information regarding the interests of such
directors and executive officers (which may be different from those of the
Company’s stockholders generally) is set forth in the Company’s proxy statement
referred to above and additional information regarding the Company’s directors
and executive officers is included in the Company’s 2009 proxy statement and
2008 Annual Report on Form 10-K, previously filed with
SEC. Stockholders may obtain additional information regarding the
interests of the Company and its directors and executive officers in the Merger
and the solicitation of proxies, which may be different than those of the
Company’s stockholders generally, by reading the proxy statement and other
relevant documents regarding the Merger, filed with the SEC.
Forward
Looking Statements
This
announcement contains statements that may be forward-looking as defined by the
Private Securities Litigation Reform Act of 1995. These statements
are based largely on LSR’s expectations and are subject to a number of risks and
uncertainties, certain of which are beyond LSR’s control, as more fully
described in the Company’s SEC filings, including its Form 10-K for the fiscal
year ended December 31, 2008, as filed with the US Securities and Exchange
Commission.
- tables
to follow -
Life
Sciences Research Inc. and Subsidiaries
Condensed
Consolidated Statements of Operations
Unaudited
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(Dollars
in thousands, except per share data)
|
3
months ended
September
30
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9
months ended
September
30
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||||||||||||||
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2009
|
2008
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2009
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2008
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|||||||||||||
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Net
revenues
|
$ | 49,361 | $ | 63,560 | $ | 142,656 | $ | 191,117 | ||||||||
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Cost
of sales
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(36,408 | ) | (44,643 | ) | (104,017 | ) | (131,514 | ) | ||||||||
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Gross
profit
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12,953 | 18,917 | 38,639 | 59,603 | ||||||||||||
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Selling,
general and administrative expenses
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(7,494 | ) | (9,374 | ) | (21,788 | ) | (30,369 | ) | ||||||||
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Acquisition-related
expenses
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(1,038 | ) | - | (2,538 | ) | - | ||||||||||
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Operating
income
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4,421 | 9,543 | 14,313 | 29,234 | ||||||||||||
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Interest
income
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23 | 141 | 73 | 469 | ||||||||||||
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Interest
income, related parties
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79 | 98 | 294 | 349 | ||||||||||||
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Interest
expense
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(2,377 | ) | (2,192 | ) | (6,371 | ) | (6,857 | ) | ||||||||
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Interest
expense, related parties
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(745 | ) | (775 | ) | (2,193 | ) | (2,371 | ) | ||||||||
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Other
income/(expense)
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(887 | ) | (4,627 | ) | 3,412 | (4,664 | ) | |||||||||
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Income
before income taxes
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514 | 2,188 | 9,528 | 16,160 | ||||||||||||
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Income
tax benefit/(expense)
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544 | (120 | ) | 1,494 | (73 | ) | ||||||||||
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Net
income
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$ | 1,058 | $ | 2,068 | $ | 11,022 | $ | 16,087 | ||||||||
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Income
per share
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||||||||||||||||
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-Basic
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$ | 0.08 | $ | 0.16 | $ | 0.83 | $ | 1.27 | ||||||||
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-Diluted
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$ | 0.08 | $ | 0.13 | $ | 0.79 | $ | 1.04 | ||||||||
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Weighted
average number of common stock
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||||||||||||||||
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-
Basic (000’s)
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13,355 | 12,679 | 13,350 | 12,656 | ||||||||||||
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-
Diluted (000’s)
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14,048 | 15,625 | 14,027 | 15,489 | ||||||||||||
Life
Sciences Research Inc. and Subsidiaries
Condensed
Consolidated Balance Sheets
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(Dollars
in thousands, except per share data)
|
September
30,
2009
(Unaudited)
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December
31, 2008
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||||||
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ASSETS
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||||||||
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Current
assets:
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||||||||
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Cash
and cash equivalents
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$ | 39,361 | $ | 36,493 | ||||
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Accounts
receivable, net
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24,716 | 19,607 | ||||||
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Unbilled
receivables, net
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21,068 | 21,683 | ||||||
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Inventories
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2,259 | 2,854 | ||||||
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Prepaid
expenses and other current assets (includes related parties of $1,969 and $985 in 2009 and
2008)
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7,498 | 5,031 | ||||||
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Total
current assets
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$ | 94,902 | $ | 85,668 | ||||
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Property,
plant and equipment, net
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69,956 | 63,610 | ||||||
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Goodwill
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3,033 | 2,684 | ||||||
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Intangible
assets, net
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5,315 | 6,449 | ||||||
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Other
assets, related parties
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2,530 | 3,074 | ||||||
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Deferred
income taxes
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11,247 | 9,713 | ||||||
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Total
assets
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$ | 186,983 | $ | 171,198 | ||||
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LIABILITIES
AND STOCKHOLDERS' DEFICIT
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||||||||
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Current
liabilities:
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||||||||
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Accounts
payable
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$ | 12,732 | $ | 12,061 | ||||
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Accrued
payroll and other benefits
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4,150 | 4,643 | ||||||
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Accrued
expenses and other liabilities
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26,544 | 25,160 | ||||||
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Short-term
debt
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2,400 | 2,596 | ||||||
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Fees
invoiced in advance
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29,302 | 27,681 | ||||||
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Total
current liabilities
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$ | 75,128 | $ | 72,141 | ||||
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Long-term
debt, net (includes related parties of $21,702 and $21,025 in
2009 and
2008)
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71,729 | 71,943 | ||||||
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Deferred
gain on disposal of US property
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8,227 | 8,467 | ||||||
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Pension
liabilities
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36,809 | 33,859 | ||||||
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Total
liabilities
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$ | 191,893 | $ | 186,410 | ||||
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Commitments
and contingencies
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||||||||
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Stockholders'
deficit
|
||||||||
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Preferred
Stock, $0.01 par value. Authorized: 5,000,000
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||||||||
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Issued
and outstanding: None
|
- | - | ||||||
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Non-Voting
Common Stock, $0.01 par value. Authorized:
5,000,000
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||||||||
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Issued
and outstanding: None
|
- | - | ||||||
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Voting
Common Stock, $0.01 par value. Authorized:
50,000,000
|
||||||||
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Issued
and outstanding at September 30, 2009:
13,899,095
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||||||||
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(December
31, 2008: 13,345,495)
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139 | 133 | ||||||
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Paid
in capital
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91,454 | 89,717 | ||||||
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Accumulated
other comprehensive loss
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(48,149 | ) | (45,686 | ) | ||||
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Accumulated
deficit
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(48,354 | ) | (59,376 | ) | ||||
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Total
stockholders' deficit
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$ | (4,910 | ) | $ | (15,212 | ) | ||
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Total
liabilities and stockholders' deficit
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$ | 186,983 | $ | 171,198 | ||||
Life
Sciences Research Inc. and Subsidiaries
Condensed
Consolidated Statements of Cash Flows
Unaudited
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(Dollars
in thousands)
|
September
30, 2009
|
September
30, 2008
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||||||
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Cash
flows from operating activities:
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||||||||
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Net
income
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$ | 11,022 | $ | 16,087 | ||||
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Adjustments
to reconcile net income to net cash provided by/(used in) operating
activities
|
||||||||
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Depreciation
and amortization
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6,733 | 7,410 | ||||||
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Amortization
of gain on disposal of US property
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(240 | ) | (241 | ) | ||||
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Non-cash
compensation expense associated with employee stock compensation
plans
|
920 | 1,579 | ||||||
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Foreign
exchange (gain)/loss on March 2006 Financing
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(4,047 | ) | 4,041 | |||||
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Foreign
exchange loss on intercompany balances
|
635 | 16 | ||||||
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Deferred
income tax (benefit)/expense
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(1,494 | ) | 73 | |||||
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Provision
for losses on accounts receivable
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412 | 272 | ||||||
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Amortization
of debt issue and financing costs included in interest
expense
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2,619 | 2,917 | ||||||
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Changes
in operating assets and liabilities:
|
||||||||
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Accounts
receivable, unbilled receivables and prepaid expenses
|
(2,944 | ) | (7,915 | ) | ||||
|
Inventories
|
760 | (928 | ) | |||||
|
Accounts
payable, accrued expenses and other liabilities
|
(1,282 | ) | (1,050 | ) | ||||
|
Fees
invoiced in advance
|
(885 | ) | (5,647 | ) | ||||
|
Defined
benefit pension plan liabilities
|
(823 | ) | (3,330 | ) | ||||
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Net
cash provided by operating activities
|
$ | 11,386 | $ | 13,284 | ||||
|
Cash
flows used in investing activities:
|
||||||||
|
Purchase
of property, plant and equipment
|
(8,603 | ) | (13,947 | ) | ||||
|
Payment
for acquisition
|
- | (1,779 | ) | |||||
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Net
cash used in investing activities
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$ | (8,603 | ) | $ | (15,726 | ) | ||
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Cash
flows used in financing activities:
|
||||||||
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Proceeds
from issue of Voting Common Stock
|
5 | 571 | ||||||
|
Repurchase
of warrants
|
- | (1,000 | ) | |||||
|
Repayments
of long-term borrowings
|
(1,800 | ) | (1,542 | ) | ||||
|
Repayments
of short-term borrowings
|
(81 | ) | (496 | ) | ||||
|
Net
cash used in financing activities
|
$ | (1,876 | ) | $ | (2,467 | ) | ||
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Effect
of exchange rate changes on cash and cash equivalents
|
1,961 | (1,156 | ) | |||||
|
Increase/(decrease)
in cash and cash equivalents
|
2,868 | (6,065 | ) | |||||
|
Cash
and cash equivalents at beginning of period
|
36,493 | 36,223 | ||||||
|
Cash
and cash equivalents at end of period
|
$ | 39,361 | $ | 30,158 | ||||
|
Supplementary
Disclosures:
|
||||||||
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Interest
paid
|
$ | 5,849 | $ | 6,055 | ||||
|
Income
taxes paid
|
$ | 148 | $ | 149 | ||||
|
Supplementary
Disclosures of non-cash financing activity:
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||||||||
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Exercise
of warrants by independent third parties
|
$ | 825 | $ | - | ||||