BNT Brookfield Wealth Solutions Ltd

Bentley Pharmaceuticals, Inc. (NYSE: BNT), a specialty pharmaceutical company, today reported financial results for the three months ended March 31, 2007. First quarter 2007 consolidated revenues increased 11% (2% in constant currency) to $31.4 million from $28.3 million in the first quarter of 2006 despite reduced selling prices on the Company�s Spanish pharmaceutical products. As previously reported, the Company was required by recently enacted legislation in Spain to lower prices on a majority of its generic portfolio effective March 1, 2007. The Company chose to accelerate the implementation of these price reductions to February 1, 2007 on select products as a tactic to improve market share in Spain. This measure resulted in an increase in volume sufficient to offset the effect on revenues of lower pricing for the quarter. Licensing and collaboration revenues increased $0.6 million to $2.3 million, primarily from increased royalties from Testim� sales. Gross margins on net product sales were 45.4% in the first quarter of 2007 compared to 51.3% in the first quarter of 2006. The reduction in gross margin resulted from lower pricing and a $0.3 million inventory write-down on U.S. generic inventories. Consolidated gross profit for the quarter increased slightly to $15.5 million from $15.3 million reported in the first quarter of the prior year. Operating income increased 26% to $4.2 million from $3.4 million reported in the same quarter of the prior year. The increase primarily resulted from a $1.4 million increase in the operating income reported by the Company�s Drug Delivery business partially offset by a $0.5 million reduction in the operating income reported by its Specialty Generics business. The higher operating income for Drug Delivery was attributed to increased royalty revenues along with lower general and administrative expenses, namely consulting and compensation expenses. Also contributing to the improvement in Drug Delivery operating income were lower research and development expenses resulting from the timing of clinical trials and reduced compensation expenses. The reduction in operating income for the Specialty Generics business was primarily related to increases in sales and marketing expenses, research and development expenses, and reduced gross profit, partially offset by the absence of the litigation expenses reported in the first quarter of 2006. Pre-tax income for the first quarter of 2007 increased 25% to $4.4 million from $3.5 million reported in the comparable period of 2006. The provision for income taxes declined 13% to $2.1 million from $2.4 million reported in the first quarter of 2006 as the result of lower pre-tax income in the Specialty Generics business and reduced statutory tax rate for that business segment. Pre-tax income of the Specialty Generics business segment for the first quarter was $5.9 million compared to $6.3 million in the prior year period. The effective tax rate for the Specialty Generics business in the first quarter was 35% compared to 38% in the same period of the prior year. For the purposes of determining the provision for income taxes pre-tax losses generated by the Drug Delivery business segment do not offset pre-tax income generated by the Specialty Generics business segment. Accordingly, pre-tax losses in the Drug Delivery business, which reduce consolidated net income, have the effect of increasing the consolidated effective tax rate for GAAP reporting purposes. The Company�s consolidated effective tax rate for the first quarter was 47% compared to 67% in the same period of the prior year, primarily due to the reduction in losses generated by the Drug Delivery business. Net income for the first quarter of 2007 was $2.4 million, or $0.10 per diluted share, compared with $1.2 million, or $0.05 per diluted share reported in the first quarter of 2006. Fluctuations in foreign currency provided a benefit of $0.01 per share compared with the first quarter of 2007. Bentley�s results by operating segment for the first quarter of 2007 and 2006 were as follows: (in thousands) � 2007� 2006� Specialty Generics Drug Delivery Consolidated Specialty Generics Drug Delivery Consolidated Revenues $ 29,228� $ 2,163� $ 31,391� $ 26,643� $ 1,635� $ 28,278� Cost of net product sales 15,897� -� 15,897� 12,933� -� 12,933� Gross profit 13,331� 2,163� 15,494� 13,710� 1,635� 15,345� Operating expenses 7,514� 3,760� 11,274� 7,362� 4,629� 11,991� Income (loss) from operations 5,817� (1,597) 4,220� 6,348� (2,994) 3,354� Other income (expenses), net 112� 109� 221� (14) 207� 193� Income (loss) before income taxes 5,929� (1,488) 4,441� 6,334� (2,787) 3,547� Provision for income taxes 2,081� -� 2,081� 2,393� -� 2,393� Net income (loss) $ 3,848� $ (1,488) $ 2,360� $ 3,941� $ (2,787) $ 1,154� � EBITDA $ 7,262� $ (1,405) $ 5,857� $ 7,467� $ (2,833) $ 4,634� The Company uses both GAAP and certain non-GAAP measures to assess performance. The Company�s management believes these non-GAAP measures may also provide useful supplemental information to investors in order that they may evaluate Bentley�s financial performance using the same measures as management. The Company�s management believes that, as a result, the investor is afforded greater transparency in assessing the Company�s financial performance. These non-GAAP financial measures should not be considered as a substitute for, nor superior to, measures of financial performance prepared in accordance with GAAP. Set forth below is a reconciliation of �EBITDA� to net income, the most directly comparable financial measure calculated and presented in accordance with GAAP. (in thousands) For the three months ended March 31, 2007� 2006� Specialty Generics � Drug Delivery � Consolidated Specialty Generics � Drug Delivery � Consolidated Net income (loss) $ 3,848� $ (1,488) $ 2,360� $ 3,941� $ (2,787) $ 1,154� Provision for income taxes 2,081� -� 2,081� 2,393� -� 2,393� Interest expense (income) (20) (112) (132) 14� (207) (193) Depreciation & amortization 1,353� 195� 1,548� 1,119� 161� 1,280� EBITDA $ 7,262� $ (1,405) $ 5,857� $ 7,467� $ (2,833) $ 4,634� EBITDA is calculated as earnings before interest, income taxes, depreciation and amortization. The Company uses EBITDA as a supplemental financial measure of its operational performance. Management believes EBITDA to be an important measure as it excludes the effects of items which primarily reflect the impact of long-term investment decisions, rather than the performance of the company�s day-to-day operations. The Company believes that this measurement is useful to measure a company�s ability to service debt and to meet other payment obligations or as a valuation measurement. As compared to net income according to GAAP, this measure is more limited in scope because it does not reflect the periodic costs of certain capitalized tangible and intangible assets used in generating revenues in the company�s business. Management evaluates those items through other financial measures such as capital expenditures and cash flow provided by operating activities. Significant components of Bentley�s revenues for the first quarters of 2007 and 2006 are summarized below: For the three months ended March 31, 2007: Revenues Within Spain � � Branded Revenues Outside of % of Total Product Line Generics � Generics � Other � Spain � Total Revenues Omeprazole $551� $3,870� $ �� $ �� $4,421� 14% Simvastatin 366� 1,339� �� �� 1,705� 6% Enalapril 1,314� 391� �� �� 1,705� 6% Paroxetine 449� 897� �� �� 1,346� 4% Codeisan 1,270� �� �� �� 1,270� 4% All other products 3,046� 4,182� 275� 957� 8,460� 27% Sales to licensees and others �� �� 3,670� 6,537� 10,207� 32% Licensing and collaborations �� � �� � 114� � 2,163� � 2,277� � 7% Total Revenues $6,996� � $10,679� � $4,059� � $9,657� � $31,391� � 100% % of Q1 2007 Revenues 22% 34% 13% 31% 100% For the three months ended March 31, 2006: Revenues Within Spain � Revenues Branded Outside of % of Total Product Line Generics � Generics � Other � Spain � Total Revenues Omeprazole $629� $4,383� $ �� $ �� $5,012� 18% Simvastatin 444� 1,471� �� �� 1,915� 7% Enalapril 918� 723� �� �� 1,641� 6% Paroxetine 377� 816� �� �� 1,193� 4% Codeisan 852� �� �� �� 852� 3% All other products 2,615� 3,224� 310� 357� 6,506� 23% Sales to licensees and others �� �� 2,626� 6,825� 9,451� 33% Licensing and collaborations �� � �� � 73� � 1,635� � 1,708� � 6% Total Revenues $5,835� � $10,617� � $3,009� � $8,817� � $28,278� � 100% % of Q1 2006 Revenues 21% 37% 11% 31% 100% Cash, cash equivalents and marketable securities totaled $20.6 million at March 31, 2007, and $15.6 million at December 31, 2006. The Company invested $2.0 million in capital additions in the first quarter of 2007 compared to $3.3 million in the first quarter of 2006. The Company reaffirms its previous guidance that capital expenditures would be between $13.0 million and $16.0 million and research and development costs would be between $15.0 million and $16.0 million during 2007. John Sedor, president of Bentley, commented �I am very pleased with our performance for the quarter. We are meeting the challenge of price reduction mandates in Spain by implementing competitive marketing tactics to increase market share, introducing new products, and exploring cost reduction strategies. Our record revenues for the quarter were the result of increasing sales volume despite the price reductions that went into effect during the quarter. While we may experience further pricing pressures during the year, the Spanish market is a significant generic market in Europe with a higher than average projected growth rate. Bentley�s sales force and vertical integration make it a highly competitive player in this attractive marketplace.� Sedor added, �At the same time, our Drug Delivery business has produced exciting results. Testim royalties increased as we continue to see that product gain market share. Our Nasulin� Phase II trials are progressing with initiation of trials in India. I was pleased to see our Nasulin� abstracts were selected for presentation at the American Diabetes Association on June 22, 2007 in Chicago, Illinois. These are substantial accomplishments for the Company and will drive future value to our shareholders.� Management will host a conference call to discuss the first quarter 2007 results and provide a business update at 10:00 A.M. EDT on May 1, 2007. To participate on the live call, please dial (888) 332-7254 from the U.S. and Canada or, for international callers, please dial (973) 582-2856 (access code 8259328), approximately 10 minutes prior to the scheduled start time. A telephone replay will be available for 30 days by dialing (877) 519-4471 from the U.S. and Canada or (973) 341-3080 for international callers (please reference reservation number 8259328). The conference call will also be broadcast live on the Internet and may be accessed via Bentley�s web site, www.bentleypharm.com. Please go to the Company�s web site approximately 10 minutes prior to the scheduled start time to register. A replay of the conference will also be available on Bentley�s web site for 30 days. Bentley Pharmaceuticals, Inc. is a specialty pharmaceutical company focused on advanced drug delivery technologies and generic pharmaceutical products. Bentley�s proprietary drug delivery technologies enhance the absorption of pharmaceutical compounds across various membranes. Bentley manufactures and markets a growing portfolio of generic and branded generic pharmaceuticals in Europe for the treatment of cardiovascular, gastrointestinal, infectious and central nervous system diseases through its subsidiaries -- Laboratorios Belmac, Laboratorios Davur, Laboratorios Rimafar and Bentley Pharmaceuticals Ireland. Bentley also manufactures and markets active pharmaceutical ingredients through its subsidiary, Bentley API. Additional information regarding Bentley Pharmaceuticals may be obtained through Bentley�s web site at www.bentleypharm.com. Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995: This press release contains forward looking statements, including without limitation statements regarding Bentley�s plans to mitigate recently enacted pharmaceutical price reductions in Spain, the prospects for growth of the specialty generics business in and outside of Spain and for cost reduction measures, Bentley�s plans to continue increased spending on research and development and capital investments in 2007, and the prospects for further clinical development of Bentley�s intranasal insulin program. These forward-looking statements are subject to a number of risks and uncertainties that could cause actual results to differ materially from future results expressed or implied by such statements. Factors that may cause such differences include, but are not limited to, risks associated with the following: clinical trials, the timing and nature of regulatory approvals, changes in third-party reimbursement and government mandates that impact pharmaceutical pricing, development and commercialization of Bentley�s proprietary products and formulations, competition from other manufacturers of generic and proprietary pharmaceuticals, intellectual property litigation, the efficacy and safety of Bentley�s products, the unpredictability of patent protection, international operations, and other uncertainties detailed under �Risk Factors� in Bentley�s most recent Annual Report on Form 10-K and its other subsequent periodic reports filed with the Securities and Exchange Commission. Bentley cautions investors not to place undue reliance on the forward-looking statements contained in this release. These statements speak only as of the date of this document, and Bentley undertakes no obligation to update or revise the statements, except as may be required by law. (tables to follow) Bentley Pharmaceuticals, Inc. and Subsidiaries Consolidated Income Statements � � � (in thousands, except per share data) For the Three Months Ended March 31, 2007� 2006� � Revenues: Net product sales $ 29,114� $ 26,570� Licensing and collaboration revenues 2,277� 1,708� � Total revenues 31,391� 28,278� � Cost of net product sales 15,897� 12,933� � Gross profit 15,494� 15,345� � Operating expenses: Selling and marketing 4,445� 4,139� General and administrative 3,646� 3,904� Research and development 2,675� 2,908� Litigation settlement �� 604� Depreciation and amortization 508� 436� � Total operating expenses 11,274� 11,991� � Income from operations 4,220� 3,354� � Other income (expenses): Interest income 182� 253� Interest expense (50) � (60) � Other, net 89� �� � Income before income taxes 4,441� 3,547� � Provision for income taxes 2,081� 2,393� � Net income $ 2,360� $ 1,154� � Net income per common share: Basic $ 0.11� $ 0.05� Diluted $ 0.10� $ 0.05� � Weighted average common shares outstanding: Basic 22,293� 21,954� Diluted 22,534� 23,807� Bentley Pharmaceuticals, Inc. and Subsidiaries Consolidated Balance Sheets � (in thousands, except per share data) March 31, 2007 December 31, 2006 Assets � Current assets: Cash and cash equivalents $ 20,081� $ 12,424� Marketable securities 524� 3,177� Receivables, net 33,496� 32,963� Inventories 16,650� 16,279� Deferred taxes 1,095� 1,049� Prepaid expenses and other 2,101� 1,798� � Total current assets 73,947� 67,690� � Non-current assets: Fixed assets, net 49,916� 48,556� Drug licenses and related costs, net 16,260� 16,026� Restricted cash 1,000� 1,000� Deferred taxes 167� 240� Other 922� 844� � Total non-current assets 68,265� 66,666� $ 142,212� $ 134,356� � Liabilities and Stockholders� Equity � Current liabilities: Accounts payable $ 15,724� $ 14,566� Accrued expenses 12,201� 9,704� Short-term borrowings �� 247� Current portion of long-term debt �� 307� Deferred income 1,014� 1,045� Other current liabilities 1,987� 1,518� � Total current liabilities 30,926� 27,387� � Non-current liabilities: Deferred taxes �� �� Deferred income 4,100� 3,899� Other 2,720� 2,739� � Total non-current liabilities 6,820� 6,638� � Commitments and contingencies � Stockholders� equity: Preferred stock, $1.00 par value, authorized 2,000 shares, issued and outstanding, none �� �� Common stock, $0.02 par value, authorized 100,000 shares, issued and outstanding, 22,271 and 22,262 shares 445� 445� Additional paid-in capital 140,589� 140,030� Accumulated deficit (46,656) � (49,016) � Accumulated other comprehensive income 10,088� 8,872� � Total stockholders� equity 104,466� 100,331� $ 142,212� $ 134,356�