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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
- --- SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2002
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
- --- SECURITIES EXCHANGE ACT OF 1934
For the transition period from ________________________to_______________________
Commission File Number 1-10581
BENTLEY PHARMACEUTICALS, INC.
(Exact name of registrant as specified in its charter)
DELAWARE No. 59-1513162
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
65 Lafayette Road, 3rd Floor, North Hampton, NH 03862
(Current Address of Principal Executive Offices)
Registrant's telephone number, including area code: (603) 964-8006
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
YES X NO
----- -----
The number of shares of the registrant's common stock outstanding as of August
7, 2002 was 17,373,753.
BENTLEY PHARMACEUTICALS, INC. AND SUBSIDIARIES
FORM 10-Q FOR THE QUARTER ENDED JUNE 30, 2002
INDEX
Part I. FINANCIAL INFORMATION PAGE
--------------------- ----
Item 1. Consolidated Financial Statements:
Consolidated Balance Sheets as of June 30, 2002
and December 31, 2001 3
Consolidated Statements of Operations and of
Comprehensive Income (Loss) for the three
months ended June 30, 2002 and 2001, and the
six months ended June 30, 2002 and 2001 4
Consolidated Statement of Changes in Stockholders'
Equity for the six months ended June 30, 2002 5
Consolidated Statements of Cash Flows
for the six months ended June 30, 2002 and 2001 6
Notes to Consolidated Financial Statements 8
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 13
Item 3. Quantitative and Qualitative Disclosures About
Market Risk 20
Part II. OTHER INFORMATION
-----------------
Item 1. Legal Proceedings 22
Item 4. Submission of Matters to a Vote of Security Holders 22
Item 6. Exhibits and Reports on Form 8-K 22
PART I. FINANCIAL INFORMATION
Item 1. Consolidated Financial Statements
BENTLEY PHARMACEUTICALS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands, except per share data) June 30, December 31,
2002 2001
---- ----
ASSETS
- ------
Current assets:
Cash and cash equivalents $16,489 $5,736
Short-term investments 10,194 -
Receivables, net 10,701 6,937
Inventories, net 3,899 2,563
Deferred taxes 157 141
Prepaid expenses and other 842 462
------- ------
Total current assets 42,282 15,839
------- ------
Non-current assets:
Fixed assets, net 7,330 5,595
Drug licenses and related costs, net 10,704 10,276
Other 358 409
------- ------
Total non-current assets 18,392 16,280
------- ------
$60,674 $32,119
======= =======
LIABILITIES AND STOCKHOLDERS' EQUITY
- ------------------------------------
Current liabilities:
Accounts payable $6,177 $4,820
Accrued expenses 4,558 2,490
Short-term borrowings 897 1,757
Current portion of long-term debt 133 -
Deferred income 306 496
------- ------
Total current liabilities 12,071 9,563
------- ------
Non-current liabilities:
Taxes payable 2,016 1,827
Long-term debt 290 142
Other 163 163
------- ------
Total non-current liabilities 2,469 2,132
------- ------
Commitments and contingencies
Stockholders' equity:
Preferred stock, $1.00 par value, authorized 2,000 shares, issued
and outstanding, zero shares - -
Common stock, $.02 par value, authorized 35,000 shares, issued
and outstanding, 17,316 and 14,585 shares 347 292
Stock purchase warrants (to purchase 3,353 and 3,424
shares of common stock) 432 433
Additional paid-in capital 120,657 97,501
Accumulated deficit (73,678) (74,332)
Accumulated other comprehensive loss (1,624) (3,470)
------- ------
Total stockholders' equity 46,134 20,424
------- ------
$60,674 $32,119
======= =======
The accompanying Notes to Consolidated Financial Statements
are an integral part of these financial statements.
3
BENTLEY PHARMACEUTICALS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS AND OF COMPREHENSIVE INCOME (LOSS)
(in thousands, except per share data) For the Three Months For the Six Months
Ended June 30, Ended June 30,
--------------------------- --------------------------
2002 2001 2002 2001
----------- ---------- ----------- ---------
Revenues:
Net product sales $10,075 $6,125 $19,381 $11,939
Research and development collaboration 58 - 175 -
------- ------ ------- -------
Total revenues 10,133 6,125 19,556 11,939
Cost of net product sales 4,515 2,687 8,540 5,136
------- ------ ------- -------
Gross profit 5,618 3,438 11,016 6,803
------- ------ ------- -------
Operating expenses:
Selling and marketing 2,608 2,251 5,218 4,442
General and administrative 1,315 984 2,409 1,863
Research and development 583 463 1,347 884
Depreciation and amortization 237 208 484 447
------- ------ ------- -------
Total operating expenses 4,743 3,906 9,458 7,636
------- ------ ------- -------
Gain on sale of drug licenses 520 - 592 4,977
------- ------ ------- -------
Income (loss) from operations 1,395 (468) 2,150 4,144
------- ------ ------- -------
Other income (expenses):
Interest income 85 33 93 91
Interest expense (67) (52) (110) (123)
Other (8) 12 4 14
------- ------ ------- -------
Income (loss) before income taxes 1,405 (475) 2,137 4,126
Provision for foreign income taxes 886 94 1,483 2,053
------- ------ ------- -------
Net income (loss) $519 ($569) $654 $2,073
======= ====== ======= =======
Net income (loss) per common share:
Basic $0.03 ($0.04) $0.04 $0.15
======= ====== ======= =======
Diluted $0.03 ($0.04) $0.03 $0.13
======= ====== ======= =======
Weighted average common shares outstanding:
Basic 16,823 13,952 15,735 13,941
======= ====== ======= =======
Diluted 20,484 13,952 19,204 15,690
======= ====== ======= =======
Net income (loss) $519 ($569) $654 $2,073
Other comprehensive income (loss):
Foreign currency translation gains (losses) 2,105 (501) 1,846 (1,479)
------- ------ ------- -------
Comprehensive income (loss) $2,624 ($1,070) $2,500 $594
======= ====== ======= =======
The accompanying Notes to Consolidated Financial Statements
are an integral part of these financial statements.
4
BENTLEY PHARMACEUTICALS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
(in thousands, except per share data)
$.02 Par Value Accumulated
Common Stock Stock Additional Other
-------------------- Purchase Paid-In Accumulated Comprehensive
Shares Amount Warrants Capital Deficit Loss Total
------ -------- -------- ------- ------- ---- -----
Balance at December 31, 2001 14,585 $292 $433 $97,501 ($74,332) ($3,470) $20,424
Offering of common stock, net 2,500 50 - 22,056 - - 22,106
Exercise of stock options/warrants 218 5 (1) 966 - - 970
Equity based compensation 13 - - 134 - - 134
Foreign currency translation
adjustments, net - - - - - 1,846 1,846
Net income - - - - 654 - 654
------ ---- ---- -------- -------- ------- -------
Balance at June 30, 2002 17,316 $347 $432 $120,657 ($73,678) ($1,624) $46,134
====== ==== ==== ======== ======== ======= =======
The accompanying Notes to Consolidated Financial Statements are an
integral part of these financial statements.
5
BENTLEY PHARMACEUTICALS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Six Months Ended June 30,
---------------------------------
(in thousands) 2002 2001
---- ----
Cash flows from operating activities:
Net income $654 $2,073
Adjustments to reconcile net income to
net cash used in operating activities:
Gain on sale of drug licenses (592) (4,977)
Depreciation and amortization 484 447
Equity-based compensation expense 134 208
Other non-cash items 758 (261)
(Increase) decrease in assets and
increase (decrease) in liabilities:
Receivables (2,128) (489)
Inventories (937) (675)
Prepaid expenses and other current assets (434) (230)
Other assets 50 (26)
Accounts payable and accrued expenses 1,446 1,824
Deferred income (190) 1,643
Other liabilities - (69)
------- -------
Net cash used in operating activities (755) (532)
------- -------
Cash flows from investing activities:
Proceeds from sale of drug licenses 598 2,582
Proceeds from sale of investments 11,290 19,294
Purchase of investments (21,467) (19,229)
Additions to fixed assets (1,320) (648)
Additions to drug licenses and related costs, net (160) (231)
------- -------
Net cash (used in) provided by investing activities (11,059) 1,768
------- -------
(Continued on following page)
The accompanying Notes to Consolidated Financial Statements are an
integral part of these financial statements.
6
BENTLEY PHARMACEUTICALS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (concluded)
For the Six Months Ended June 30,
---------------------------------
(in thousands) 2002 2001
---- ----
Cash flows from financing activities:
Proceeds from offering of common stock, net $22,106 $ -
Proceeds from exercise of stock options/warrants 970 21
Repayment of borrowings (2,203) (2,366)
Proceeds from borrowings 1,530 44
------- -------
Net cash provided by (used in) financing activities 22,403 (2,301)
------- -------
Effect of exchange rate changes on cash 164 (95)
------- -------
Net increase (decrease) in cash and cash equivalents 10,753 (1,160)
Cash and cash equivalents at beginning of period 5,736 4,816
------- -------
Cash and cash equivalents at end of period $16,489 $3,656
======= =======
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
The Company paid cash during the period for (in thousands):
Interest $107 $124
======= =======
Income taxes $420 $88
======= =======
SUPPLEMENTAL DISCLOSURES OF NON-CASH FINANCING ACTIVITIES
The Company has issued Common Stock in exchange for services as follows
(in thousands):
Shares 13 36
======= =======
Amount $134 $208
======= =======
Fixed asset and drug license purchases included in accounts payable $320 $145
======= =======
The accompanying Notes to Consolidated Financial Statements are
an integral part of these financial statements.
7
BENTLEY PHARMACEUTICALS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
HISTORY AND OPERATIONS:
Bentley Pharmaceuticals, Inc. and its Subsidiaries is a U.S.-based
international specialty pharmaceutical company focused on advanced drug delivery
technologies and pharmaceutical products. We own U.S. and international patent
and other proprietary rights to technologies that enhance or facilitate the
absorption of drugs across biological membranes. We are developing products
incorporating these technologies and seek to form strategic alliances with major
pharmaceutical and biotechnology companies to facilitate the development and
commercialization of our products. We currently have strategic alliances with
Pfizer Inc and Auxilium Pharmaceuticals, Inc. and are in preliminary discussions
with a number of large pharmaceutical companies to form additional alliances.
Bentley Pharmaceuticals is incorporated in the State of Delaware.
We also have a commercial presence in Spain, where we manufacture and
market branded and generic pharmaceutical products primarily within four
therapeutic areas: cardiovascular, gastrointestinal, neurological and infectious
diseases.
We anticipated the opportunities that the emerging generic drug market in
Spain presented and began taking measures over three years ago to enter the
Spanish generic drug market. We created Laboratorios Davur, a wholly-owned
subsidiary of our Spanish entity, Laboratorios Belmac, to register, market and
distribute generic pharmaceutical products in Spain and began aligning our
business model to be competitive in this arena, including hiring and training a
new generic sales force, submission of generic-equivalent products to the
Spanish Ministry of Health for approval and a marketing campaign designed to
position our Spanish generic subsidiary as a leader in the Spanish generic drug
market. In July 2000, we entered into a strategic alliance with Teva
Pharmaceutical Industries, Ltd. ("Teva"), whereby we have received the right to
register and market in Spain more than 75 of Teva's products. Teva also entered
into a supply agreement with us pursuant to which Teva will manufacture the
products and supply them to us for marketing and sale in Spain. Teva was also
granted a right of first refusal to acquire Laboratorios Davur in the event that
we decide to sell that subsidiary or its direct parent, Laboratorios Belmac. We
also granted Teva the right to bid for Laboratorios Belmac in the event we
decide to sell that subsidiary.
BASIS OF CONSOLIDATED FINANCIAL STATEMENTS:
The consolidated financial statements of Bentley Pharmaceuticals, at June
30, 2002 and 2001 included herein, have been prepared by us, without audit,
pursuant to the rules and regulations of the Securities and Exchange Commission.
Certain information and footnote disclosures normally included in financial
statements prepared in accordance with Accounting Principles Generally Accepted
in the United States of America have been condensed or omitted in so far as such
information was disclosed in our consolidated financial statements for the year
ended December 31, 2001. These consolidated financial statements should be read
in conjunction with the summary of significant accounting policies and the
audited consolidated financial statements and notes thereto included in our
Annual Report on Form 10-K for the year ended December 31, 2001.
8
In the opinion of management, the accompanying unaudited consolidated
financial statements for the period ended June 30, 2002 and 2001 are presented
on a basis consistent with the audited consolidated financial statements for the
year ended December 31, 2001 and contain all adjustments, consisting only of
normal recurring adjustments, necessary to present fairly Bentley's financial
position as of June 30, 2002 and the results of our operations and our cash
flows for the six months ended June 30, 2002 and 2001. The results of operations
for the six months ended June 30, 2002 should not necessarily be considered
indicative of the results to be expected for the year.
CASH AND CASH EQUIVALENTS:
Included in cash and cash equivalents at June 30, 2002 and December 31,
2001 are approximately $15,802,000 and $4,560,000, respectively, of short-term
investments considered to be cash equivalents, as the original maturity dates of
such investments were three months or less when purchased.
INVENTORIES:
Inventories are stated at the lower of cost or market, cost being
determined on the first in, first out ("FIFO") method, and are comprised of the
following (in thousands):
June 30, 2002 December 31, 2001
------------- -----------------
Raw materials $2,498 $1,387
Finished goods 1,459 1,230
------ ------
3,957 2,617
Less allowance for slow moving inventory (58) (54)
$3,899 $2,563
====== ======
STOCKHOLDERS' EQUITY:
On April 17, 2002, we completed an equity offering of 2,500,000 shares of
our Common Stock at $9.80 per share, and received net proceeds of approximately
$22,106,000, after deducting offering costs.
During the six months ended June 30, 2002, stock options to purchase
approximately 147,000 shares of our Common Stock were exercised, generating net
proceeds to us of approximately $617,000. Also, during this six-month period,
approximately 141,400 Class B Warrants were exercised to acquire approximately
70,700 shares of our Common Stock, generating net proceeds to us of
approximately $353,000. Subsequent to June 30, 2002, stock options to purchase
10,000 shares of our Common Stock were exercised and approximately 95,400 Class
B Warrants were exercised to acquire approximately 47,700 shares of our Common
Stock, generating aggregate net proceeds to us of approximately $262,250.
A substantial amount of our business is conducted in Europe and is
therefore influenced by the extent to which there are fluctuations in the
dollar's value against other currencies, specifically the Euro. The exchange
rate at June 30, 2002 and December 31, 2001 was 1.01 euros and 1.12 Euros per
9
U.S. dollar, respectively. The weighted average exchange rate for the three
months ended June 30, 2002 and 2001 was 1.09 Euros and 1.15 Euros per U.S.
dollar, respectively. Coincidentally, the weighted average exchange rate for
both of the six-month periods ended June 30, 2002 and 2001 was 1.11 Euros per
U.S. dollar. The effect of foreign currency fluctuations on net assets for the
six months ended June 30, 2002 was an increase of $1,846,000. The cumulative
historical effect of foreign currency fluctuations on net assets as of June 30,
2002 is a decrease of $1,624,000, as reflected in our Consolidated Balance
Sheets as accumulated other comprehensive loss.
SALE OF BIOLID(R):
In February 2002, we agreed to sell the trademark, registration rights and
dossier for our pharmaceutical product, Biolid(R), to a third party for 601,000
Euros (approximately $526,000). We received a deposit of 303,000 Euros
(approximately $265,000) from the purchaser in February 2002, which was
reflected as deferred income in the Consolidated Balance Sheet as of March 31,
2002. We received the balance of 298,000 Euros (approximately $261,000) upon
approval of the transfer of the rights to the purchaser by the Spanish Ministry
of Health during the quarter ended June 30, 2002, which resulted in a pre-tax
gain of approximately $520,000.
SALE OF LACTOLIOFIL(R):
In November 2001, we agreed to sell the trademark, registration rights and
dossier for our pharmaceutical product, Lactoliofil(R), to a third party for
162,000 Euros (approximately $145,000). We received a deposit of 81,000 Euros
(approximately $72,500) from the purchaser in November 2001, which was reflected
as deferred income in the Consolidated Balance Sheet as of December 31, 2001. We
received a second payment of 81,000 Euros (approximately $72,500) upon approval
of the transfer of the rights to the purchaser by the Spanish Ministry of
Health, which occurred during the quarter ended March 31, 2002. As a result, we
recognized a pre-tax gain of approximately $72,000 during the first quarter of
2002 on this sale.
PROVISION FOR INCOME TAXES:
We recorded a provision for foreign income taxes totaling $886,000 and
$1,483,000 for the three and six months ended June 30, 2002, respectively, as a
result of reporting taxable income for tax purposes in Spain, including the
capital gains tax arising from the sale of Lactoliofil(R) and Biolid(R) drug
licenses. These amounts represent 43% and 41%, respectively, of pre-tax income
reported in Spain. No benefit has been recorded for U.S. losses, which totaled
$1,184,000 and $2,203,000 for the three and six months ended June 30, 2002,
respectively. The provision for income taxes differs from the amount computed by
applying the U.S. federal income tax rate of 34% to pretax income primarily as a
result of the increase in the valuation allowance to offset domestic deferred
tax assets and certain nondeductible expenses in Spain.
10
BASIC AND DILUTED INCOME (LOSS) PER COMMON SHARE:
Basic and diluted net income (loss) per common share is based on the
weighted average number of shares of common stock outstanding during each
period. The effect of our outstanding stock options and stock purchase warrants
were considered in the diluted income per share calculations for the three and
six months ended June 30, 2002 and 2001.
The following is a reconciliation between basic and diluted net income per
common share for the three months ended June 30, 2002 and the six months ended
June 30, 2002 and 2001. Dilutive securities issuable for the three and six
months ended June 30, 2002 include approximately 1,499,000 and 1,421,000 shares
issuable as a result of exercisable Class B Warrants, respectively and
approximately 2,162,000 and 2,048,000 shares issuable as a result of various
stock options and other warrants that are outstanding and exercisable,
respectively. Dilutive securities issuable for the six months ended June 30,
2001 include approximately 382,000 shares issuable as a result of exercisable
Class B Warrants and approximately 1,367,000 shares issuable as a result of
various stock options and other warrants that are outstanding and exercisable.
(in thousands, except per share data)
For the Three Months Ended June 30, 2002:
Effect of
Basic Dilutive Diluted
EPS Securities EPS
---------- ---------- ---------
Net Income $ 519 --- $ 519
Number of Common Shares 16,823 3,661 20,484
Net Income Per Common Share $ .03 ($ .00) $ .03
For the Six Months Ended June 30, 2002:
Effect of
Basic Dilutive Diluted
EPS Securities EPS
---------- ---------- ---------
Net Income $ 654 --- $ 654
Number of Common Shares 15,735 3,469 19,204
Net Income Per Common Share $ .04 ($ .01) $ .03
For the Six Months Ended June 30, 2001:
Effect of
Basic Dilutive Diluted
EPS Securities EPS
---------- ---------- ---------
Net Income $ 2,073 --- $2,073
Number of Common Shares 13,941 1,749 15,690
Net Income Per Common Share $ .15 ($.02) $ .13
11
RECLASSIFICATIONS:
Certain prior period amounts have been reclassified to conform with the
current period's presentation. Such reclassifications are not material to the
consolidated financial statements.
NEW ACCOUNTING PRONOUNCEMENTS:
In June 2001, the Financial Accounting Standards Board issued SFAS No. 141,
Business Combinations, and SFAS No. 142, Goodwill and Other Intangible Assets.
SFAS No. 141 supersedes APB No. 16, Business Combinations, and SFAS No. 38,
Accounting for Preacquisition Contingencies of Purchased Enterprises and
requires that all business combinations be accounted for by a single method -
the purchase method. SFAS No. 141 also provides guidance on the recognition of
intangible assets identified in a business combination and requires enhanced
financial statement disclosures. SFAS No. 142 adopts a more aggregate view of
goodwill and bases the accounting for goodwill on the units of the combined
entity into which an acquired entity is integrated. In addition, SFAS No. 142
concludes that goodwill and intangible assets that have indefinite useful lives
will not be amortized but rather will be tested at least annually for
impairment. Intangible assets that have finite lives will continue to be
amortized over their useful lives. SFAS No. 141 is effective for all business
combinations initiated after June 30, 2001. The adoption of SFAS No. 142 is
required for fiscal years beginning after December 15, 2001 (the year 2002 for
Bentley), except for the non-amortization and amortization provisions which are
required for goodwill and intangible assets acquired after June 30, 2001. The
adoption of SFAS No. 141 and SFAS No. 142 did not have a material impact on our
financial position, results of operations or cash flows.
In October 2001, the Financial Accounting Standards Board issued SFAS No.
144 Accounting for the Impairment or Disposal of Long-Lived Assets. SFAS No. 144
supersedes previous guidelines for financial accounting and reporting for the
impairment or disposal of long-lived assets and for segments of a business to be
disposed of. The adoption of SFAS No. 144, on January 1, 2002, did not have a
material impact on our financial position, results of operations or cash flows.
12
Item 2. BENTLEY PHARMACEUTICALS, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
CRITICAL ACCOUNTING POLICIES
Our significant accounting policies are more fully described in Note 2 to
our consolidated financial statements in our Annual Report of Form 10-K for the
year ended December 31, 2001. However, certain of our accounting policies are
particularly important to the portrayal of our financial position and results of
operations and require the application of significant judgment by our
management; as a result they are subject to an inherent degree of uncertainty.
In applying those policies, our management uses its judgment to determine the
appropriate assumptions to be used in the determination of certain estimates.
Those estimates are based on our historical experience, terms of existing
contracts, our observance of trends in the industry, information provided by our
customers and information available from other outside sources, as appropriate.
Our significant accounting policies include:
o Inventories. Inventories are stated at the lower of cost or market, cost
being determined on the first-in, first-out method. Reserves for slow
moving and obsolete inventories are provided based on historical experience
and current product demand. We evaluate the adequacy of these reserves
quarterly.
o Revenue recognition and accounts receivable. Revenue on product sales is
recognized when persuasive evidence of an arrangement exists, the price is
fixed and final delivery has occurred and there is a reasonable assurance
of collection of the sales proceeds. We generally obtain oral or written
purchase authorizations from our customers for a specified amount of
product at a specified price and consider delivery to have occurred at the
time of shipment. We provide our customers with a limited right of return.
Revenue is recognized at shipment and a reserve for sales returns is
recorded. We have demonstrated the ability to make reasonable and reliable
estimates of product returns in accordance with SFAS No. 48 and of
allowances for doubtful accounts based on significant historical
experience. Revenue from service sales is recognized when the service
procedures have been completed or applicable milestones have been achieved.
Revenue from research and development contracts is recognized over
applicable contractual periods or as defined milestones are attained, as
specified by each contract and as costs related to the contracts are
incurred.
o Foreign currency translation. The financial position and results of
operations of our foreign subsidiaries are measured using local currency as
the functional currency. Assets and liabilities of each foreign subsidiary
are translated at the rate of exchange in effect at the end of the period.
Revenues and expenses are translated at the average exchange rate for the
period. Foreign currency translation gains and losses not impacting cash
flows are credited to or charged against other comprehensive income (loss).
Foreign currency translation gains and losses arising from cash
transactions are credited to or charged against current earnings.
13
o Drug licenses and related costs. Drug licenses and related costs incurred
in connection with acquiring licenses, patents and other proprietary rights
related to our commercially developed products are capitalized. Capitalized
drug licenses and related costs are being amortized on a straight-line
basis over fifteen years from the dates of acquisition. Carrying values of
such assets are reviewed quarterly and are adjusted for any diminution in
value.
RESULTS OF OPERATIONS:
Three Months Ended June 30, 2002 versus Three Months Ended June 30, 2001
- ------------------------------------------------------------------------
Net Product Sales. Net product sales increased by 64% from $6,125,000 in
the three months ended June 30, 2001 to $10,075,000 in the three months ended
June 30, 2002. The $3,950,000 increase was primarily the result of our
continuing efforts to increase sales in the generic drug market in Spain. We
anticipated the opportunities in the emerging generic drug market in Spain and
began taking measures over three years ago to enter the Spanish generic drug
market. We began to register, manufacture and market generic pharmaceutical
products in Spain and began aligning our business model to be competitive in
this arena, including hiring and training a new generic products sales force,
submission of generic-equivalent products to the Spanish Ministry of Health for
approval and a marketing campaign designed to position ourselves as a leader in
the Spanish generic drug market. We experienced an increase in net sales of 55%
in local currency in Spain in the second quarter of 2002 compared to the same
quarter of the prior year. A 5% increase in the weighted average value of the
Euro, in relation to the U.S. Dollar, over the past 12 months, had the effect of
increasing revenues by approximately $492,000 during the quarter ended June 30,
2002.
Research and Development Collaboration Revenues. Research and development
collaboration revenues totaled $58,000 in the three months ended June 30, 2002.
We entered into a research collaboration, whereby our collaborator agreed to
fund a research and development program to combine Bentley's patented CPE-215
drug delivery technologies with certain proprietary compounds. Our collaborator
advanced to us $250,000 during the fourth quarter of 2001, which we recorded as
deferred income as of December 31, 2001, and we are recognizing it as revenue
when the related costs are incurred. We have recognized $175,000 of this revenue
through June 30, 2002. The remaining $75,000 is reflected on the Consolidated
Balance Sheet as deferred income as of June 30, 2002.
Gross Profit. Gross profit increased by 63% from $3,438,000 in the three
months ended June 30, 2001 to $5,618,000 in the three months ended June 30,
2002. The $2,180,000 increase was the direct result of the growth in our net
product sales during the period. Our gross margins on net product sales for the
first quarter of 2002 decreased slightly to 55% compared to 56% in the same
quarter of the prior year. We experienced an increase in gross profit of 51% in
local currency in Spain in the second quarter of 2002 compared to the same
quarter of the prior year. An increase in the weighted average value of the
Euro, in relation to the U.S. Dollar over the past 12 months, had the effect of
increasing gross profit by approximately $275,000 during the quarter ended June
30, 2002. Sales of generic products accounted for approximately 41% of
14
our net product sales during the quarter ended June 30, 2002, compared to 28% in
the second quarter of the prior year. Although we expect to continue to benefit
from economies of scale in the future as we grow, gross margins may decrease as
sales of generic products, with lower margins, become more significant in the
future. Additionally, the Ministry of Health in Spain levies a tax on
pharmaceutical companies for the purposes of funding rising healthcare costs in
Spain. In the second quarter of 2002, this tax had the effect of reducing gross
profit by approximately $133,000, or 1%.
Selling and Marketing Expenses. Selling and marketing expenses increased by
16% from $2,251,000 in the second quarter of 2001 to $2,608,000 in the second
quarter of 2002. The $357,000 increase was instrumental in achieving a 64%
increase in net product sales during the quarter, as a result of our successful
sales and marketing programs. More than one-third of this $357,000 increase was
the result of the increase in the weighted average value of the Euro, in
relation to the U.S. Dollar, over the past 12 months, which had the effect of
increasing selling and marketing expenses by $123,000 in the second quarter of
2002. Selling and marketing expenses as a percentage of net product sales
decreased to only 26% in the second quarter of 2002, compared to 37% of sales in
the second quarter of 2001.
General and Administrative Expenses. General and administrative expenses
increased by 34% from $984,000 in the second quarter of 2001 to $1,315,000 in
the second quarter of 2002. The $331,000 increase was the result of increased
general and administrative activities required to support our 65% revenue growth
in the second quarter of 2002. General and administrative expenses as a percent
of total revenues decreased to only 13% in the second quarter of 2002 compared
to 16% of revenues in the second quarter of 2001. General and administrative
expenses would have been approximately $39,000 lower in the second quarter of
2002, absent the increase in the weighted average value of the Euro, in relation
to the U.S. Dollar, over the past 12 months.
Research and Development Expenses. Research and development expenses
increased by 26% from $463,000 in the second quarter of 2001 to $583,000 in the
second quarter of 2002. The $120,000 increase was the result of an increase in
our costs associated with our research and development collaboration as well as
our Phase I/II Clinical Studies (treatment of nail fungal infections),
pre-clinical programs underway in collaboration with universities and with
product formulation and testing efforts being performed in the laboratory in our
U.S. headquarters and at our facility in Zaragoza, Spain. We are using our U.S.
laboratory to develop potential product applications using our drug delivery
technologies. The expenditures in research and development reflect our focus on
projects that are necessary for expansion of our portfolio of marketed products
and clinical trials involving our drug delivery technologies. We expect that our
future expenditures for research and development activities will continue to
increase as a result of programs that are necessary to advance new applications
of our technologies.
Provision for Income Taxes. We generated additional U.S. federal net
operating loss carry-forwards in the second quarter of 2002. However, since we
are not assured of future profitable domestic operations, we have recorded a
valuation allowance for any future tax benefit of such losses in the U.S.
Therefore, no benefit has been recognized with respect to U.S. losses reported
in the second quarter of 2002. We recorded a provision for foreign income taxes
totaling $886,000 (43% of Spanish pre-tax income) for the second quarter of 2002
compared to a provision
15
for foreign income taxes of $94,000 in the second quarter of the prior year. The
provision for income taxes for the second quarter of 2002 included approximately
$704,000 as a result of reporting taxable income from operations in Spain and
approximately $182,000 as a result of capital gains taxes arising from the sale
of the Biolid(R) drug license, whereas the provision for income taxes in the
second quarter of the prior year included approximately $94,000 as a result of
reporting taxable income from operations in Spain. The provision for foreign
income taxes would have been approximately $54,000 lower than reported, absent
the increase in the weighted average value of the Euro, in relation to the U.S.
Dollar, over the past 12 months.
Net Income. Including the $520,000 pre-tax gain on sale of the Biolid(R)
drug license, we reported income from operations of $1,395,000 for the second
quarter of 2002 compared to a loss from operations of $468,000 in the second
quarter of the prior year. Excluding the $520,000 pre-tax gain from the sale of
the Biolid(R) drug license, the income from operations for the quarter ended
June 30, 2002 totaled $875,000. The combination of income from operations of
$1,395,000 and the non-operating items, primarily the provision for foreign
income taxes of $886,000, resulted in net income of $519,000, or $.03 per basic
and diluted common share on 16,823,000 weighted average basic common shares
outstanding (20,484,000 weighted average diluted common shares outstanding) for
the second quarter of 2002, compared to a net loss in the second quarter of the
prior year of $569,000, or $.04 per basic and diluted common share on 13,952,000
weighted average basic and diluted common shares outstanding.
Six Months Ended June 30, 2002 versus Six Months Ended June 30, 2001
- --------------------------------------------------------------------
Net Product Sales. Net product sales increased by 62% from $11,939,000 in
the six months ended June 30, 2001 to $19,381,000 in the six months ended June
30, 2002. The $7,442,000 increase was primarily the result of our continuing
efforts to increase sales in the generic drug market in Spain. We anticipated
the opportunities in the emerging generic drug market in Spain and began taking
measures over three years ago to enter the Spanish generic drug market. We began
to register, manufacture and market generic pharmaceutical products in Spain and
began aligning our business model to be competitive in this arena, including
hiring and training a new generic products sales force, submission of
generic-equivalent products to the Spanish Ministry of Health for approval and a
marketing campaign designed to position ourselves as a leader in the Spanish
generic drug market.
Research and Development Collaboration Revenues. Research and development
collaboration revenues totaled $175,000 in the six months ended June 30, 2002.
We entered into a research collaboration, whereby our collaborator agreed to
fund a research and development program to combine Bentley's patented CPE-215
drug delivery technologies with certain proprietary compounds. Our collaborator
advanced to us $250,000 during the fourth quarter of 2001, which we recorded as
deferred income as of December 31, 2001, and we are recognizing it as revenue
when the related costs are incurred.
Gross Profit. Gross profit increased by 62% from $6,803,000 in the six
months ended June 30, 2001 to $11,016,000 in the six months ended June 30, 2002.
The $4,213,000 increase was the direct result of the growth in our net product
sales during the period. Our gross margins on net product sales for the first
six months of 2002 decreased slightly to 56% compared to 57% in the
16
same period of the prior year. Sales of generic products accounted for
approximately 42% of our net product sales during the six months ended June 30,
2002, compared to 24% in the same period of the prior year. Although we expect
to continue to benefit from economies of scale in the future as we grow, gross
margins may decrease as sales of generic products, with lower margins, become
more significant in the future. Additionally, the Ministry of Health in Spain
levies a tax on pharmaceutical companies for the purposes of funding rising
healthcare costs in Spain. In the first six months of 2002, this tax had the
effect of reducing gross profit by approximately $270,000, or 1%.
Selling and Marketing Expenses. Selling and marketing expenses increased by
17% from $4,442,000 in the first six months of 2001 to $5,218,000 in the first
six months of 2002. The $776,000 increase was instrumental in achieving a 62%
increase in net product sales during the period, as a result of our successful
sales and marketing programs. Selling and marketing expenses as a percentage of
net product sales decreased to 27% in the first half of 2002 compared to 37% of
sales in the first half of 2001.
General and Administrative Expenses. General and administrative expenses
increased by 29% from $1,863,000 in the first half of 2001 to $2,409,000 in the
first half of 2002. The $546,000 increase was the result of increased general
and administrative activities required to support our 64% revenue growth in the
first half of 2002. General and administrative expenses as a percent of total
revenues decreased to only 12% in the first half of 2002, compared to 16% of
revenues in the first half of 2001.
Research and Development Expenses. Research and development expenses
increased by 52% from $884,000 in the first half of 2001 to $1,347,000 in the
first half of 2002. The $463,000 increase was the result of an increase in our
costs associated with our research and development collaboration as well as our
Phase I/II Clinical Studies (treatment of nail fungal infections), pre-clinical
programs underway in collaboration with universities and with product
formulation and testing efforts being performed in the laboratory in our U.S.
headquarters and at our facility in Zaragoza, Spain. We are using our U.S.
laboratory to develop potential product applications using our drug delivery
technologies. The expenditures in research and development reflect our focus on
projects that are necessary for expansion of our portfolio of marketed products
and clinical trials involving our drug delivery technologies. We expect that our
future expenditures for research and development activities will continue to
increase as a result of programs that are necessary to advance new applications
of our technologies.
Provision for Income Taxes. We generated additional U.S. federal net
operating loss carry-forwards in the first half of 2002. However, since we are
not assured of future profitable domestic operations, we have recorded a
valuation allowance for any future tax benefit of such losses in the U.S.
Therefore, no benefit has been recognized with respect to U.S. losses reported
in the first half of 2002. We recorded a provision for foreign income taxes
totaling $1,483,000 (41% of Spanish pre-tax income) for the first half of 2002
compared to a provision for foreign income taxes of $2,053,000 in the prior
year. The provision for income taxes for the six months ended June 30, 2002
included approximately $1,273,000 as a result of reporting taxable income from
operations in Spain and approximately $210,000 as a result of capital gains
taxes arising from the sale of Biolid(R) and Lactoliofil(R) drug licenses,
whereas the provision for income taxes in the first
17
half of the prior year included approximately $232,000 as a result of reporting
taxable income from operations in Spain and approximately $1,821,000 as a result
of capital gains taxes arising from the sale of drug licenses.
Net Income. Including the $592,000 pre-tax gain on sale of the Biolid(R)
and Lactoliofil(R) drug licenses, we reported income from operations of
$2,150,000 for the first six months of 2002 compared to income from operations
of $4,144,000 (including $4,977,000 of pre-tax gain on sale of the Controlvas(R)
drug license) in the first six months of the prior year. Excluding the $592,000
pre-tax gain from the sale of the Biolid(R) and Lactoliofil(R) drug licenses,
the income from operations for the six months ended June 30, 2002 totaled
$1,558,000. The combination of income from operations of $2,150,000 and the
non-operating items, primarily the provision for foreign income taxes of
$1,483,000, resulted in net income of $654,000, or $.04 per basic common share
($.03 per diluted common share) on 15,735,000 weighted average basic common
shares outstanding (19,204,000 weighted average diluted common shares
outstanding) for the first six months of 2002, compared to net income in the
first six months of the prior year of $2,073,000, or $.15 per basic common share
($.13 per diluted common share) on 13,941,000 weighted average basic common
shares outstanding (15,690,000 weighted average diluted common shares
outstanding).
LIQUIDITY AND CAPITAL RESOURCES:
Total assets increased from $32,119,000 at December 31, 2001 to $60,674,000
at June 30, 2002, while Stockholders' Equity increased from $20,424,000 at
December 31, 2001 to $46,134,000 at June 30, 2002. The increase in Stockholders'
Equity primarily reflects the net proceeds of $22,106,000 from the April 2002
common stock offering, the exercise of stock options and warrants totaling
$970,000, the positive impact of the fluctuation of the Euro/US dollar exchange
rate which totaled $1,846,000 and year to date net income of $654,000.
Working capital increased from $6,276,000 at December 31, 2001 to
$30,211,000 at June 30, 2002, primarily as a result of proceeds from the April
2002 common stock offering and exercises of stock options and warrants,
partially offset by additions to fixed assets.
Cash, cash equivalents and short-term investments increased from $5,736,000
at December 31, 2001 to $26,683,000 at June 30, 2002, primarily as a result of
net proceeds received from the April 2002 common stock offering totaling
$22,106,000 and proceeds received from exercises of stock options and warrants
totaling $970,000, partially offset by net repayment of borrowings of $673,000,
additions to fixed assets totaling $1,320,000, and use of cash for operating
activities totaling $755,000. Included in cash and cash equivalents at June 30,
2002 are approximately $15,802,000 of short-term investments considered to be
cash equivalents.
Receivables increased from $6,937,000 at December 31, 2001 to $10,701,000
at June 30, 2002 as a direct result of the increase in net product sales.
Receivables increased by approximately $2,677,000 in local currency, but
fluctuations in foreign currency exchange rates increased receivables reported
in U.S. dollars by approximately $1,095,000. We have not experienced any
delinquent accounts on our receivables that have had a material effect on our
financial position, results of operations or cash flows. Inventories increased
from $2,563,000 at December 31, 2001 to $3,899,000 at June 30, 2002 as a result
of raw materials purchases and strategic increases in
18
finished goods inventories in anticipation of continuing demand for our generic
products. Inventories increased by approximately $937,000 in local currency, but
fluctuations in foreign currency exchange rates increased inventories reported
in U.S. dollars by approximately $399,000.
The combined total of accounts payable and accrued expenses increased from
$7,310,000 at December 31, 2001 to $10,735,000 at June 30, 2002, primarily due
to accruals for taxes payable (approximately $1,345,000), as well as for
inventory purchases (approximately $324,000), additions to fixed assets
(approximately $39,000) and reserves for potential sales returns (approximately
$218,000), as well as by the effect of fluctuations in foreign currency exchange
rates (approximately $1,117,000).
Short-term borrowings and current portion of long-term debt decreased from
$1,757,000 at December 31, 2001 to $897,000 at June 30, 2002, as a result of net
repayment of short-term borrowings partially offset by the effect of
fluctuations in foreign currency exchange rates. The weighted average interest
rate on our short-term borrowings is 4.9%.
Long-term debt, which totaled $142,000 at December 31, 2001, increased to
$290,000 during the six months ended June 30, 2002 as a result of long-term
equipment financing. The weighted average interest rate (including imputed
interest) on our long-term debt is 5.0%.
Operating activities for the six months ended June 30, 2002 used net cash
of $755,000. Investing activities, primarily the purchase of short-term
investments using the proceeds received from the April 2002 offering of common
stock, as well as additions to machinery and equipment and capital improvements
made to the manufacturing facility in Spain used net cash of $11,059,000 during
the six months ended June 30, 2002. Financing activities, consisting primarily
of net proceeds received from the April 2002 offering of common stock and the
proceeds received from the exercise of stock options and warrants, partially
offset by net repayment of borrowings, provided net cash of $22,403,000 during
the six months ended June 30, 2002.
Seasonality. In the past, we have experienced lower sales in the third
calendar quarter and higher sales in the fourth calendar quarter due to
seasonality. As we market more pharmaceutical products whose sales are seasonal,
seasonality of sales may become more significant.
Effect of Inflation and Changing Prices. Neither inflation nor changing
prices has materially impacted our net product sales or income from operations
for the periods presented.
Liquidity. Given our current liquidity and cash balances, and considering
our future strategic plans (including our budgeted capital improvements and
planned equipment purchases), we should have sufficient liquidity to fund
operations for at least the next twenty-four months, which should be a
sufficient time frame for us to advance our strategic objectives and generate
sufficient net product sales and cash flow to support our operating cash flow
needs. As mentioned above, we have cash and cash equivalents of approximately
$16,489,000 as of June 30, 2002 and short-term investments of approximately
$10,194,000. These resources, combined with available lines of credit, should be
adequate to satisfy our capital and operating requirements during at least the
next twenty-four months. We also have outstanding at June 30, 2002 warrants,
including our publicly traded Class B Warrants, to purchase approximately
3,353,000 shares of Common Stock. There can be no assurance that any of the
warrants will be exercised prior to expiration; however, if all
19
warrants that are currently outstanding are exercised, we would receive
aggregate cash proceeds of approximately $15,664,000. The Class B Warrants are
scheduled to expire on December 31, 2002. Two Class B Redeemable Warrants,
together, entitle a holder, until December 31, 2002, to purchase one share of
Common Stock at a price of $5.00 per share. There can be no assurance, however,
that changes in our research and development plans, capital expenditures or
other events affecting our net product sales or operating expenses will not
result in the earlier depletion of our funds. We continue to explore alternative
sources for financing our business activities. In appropriate situations, that
will be strategically determined, we may seek financial assistance from other
sources, including contribution by others to joint ventures and other
collaborative or licensing arrangements for the development, testing,
manufacturing and marketing of products under development.
NEW ACCOUNTING PRONOUNCEMENTS
In June 2001, the Financial Accounting Standards Board issued SFAS No. 141,
Business Combinations, and SFAS No. 142, Goodwill and Other Intangible Assets.
SFAS No. 141 supersedes APB No. 16, Business Combinations, and SFAS No. 38,
Accounting for Preacquisition Contingencies of Purchased Enterprises and
requires that all business combinations be accounted for by a single method -
the purchase method. SFAS No. 141 also provides guidance on the recognition of
intangible assets identified in a business combination and requires enhanced
financial statement disclosures. SFAS No. 142 adopts a more aggregate view of
goodwill and bases the accounting for goodwill on the units of the combined
entity into which an acquired entity is integrated. In addition, SFAS No. 142
concludes that goodwill and intangible assets that have indefinite useful lives
will not be amortized but rather will be tested at least annually for
impairment. Intangible assets that have finite lives will continue to be
amortized over their useful lives. SFAS No. 141 is effective for all business
combinations initiated after June 30, 2001. The adoption of SFAS No. 142 is
required for fiscal years beginning after December 15, 2001 (the year 2002 for
Bentley), except for the non-amortization and amortization provisions which are
required for goodwill and intangible assets acquired after June 30, 2001. The
adoption of SFAS No. 141 and SFAS No. 142 did not have a material impact on our
financial position, results of operations or cash flows.
In October 2001, the Financial Accounting Standards Board issued SFAS No.
144 Accounting for the Impairment or Disposal of Long-Lived Assets. SFAS No. 144
supersedes previous guidelines for financial accounting and reporting for the
impairment or disposal of long-lived assets and for segments of a business to be
disposed of. The adoption of SFAS No. 144, on January 1, 2002, did not have a
material impact on our financial position, results of operations or cash flows.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Foreign Currency. A substantial amount of our business is conducted in
Europe and is therefore influenced by the extent to which there are fluctuations
in the dollar's value against other currencies, specifically the Euro. The
exchange rate at June 30, 2002 and December 31, 2001 was 1.01 euros and 1.12
Euros per U.S. dollar, respectively. The weighted average exchange rate for the
three months ended June 30, 2002 and 2001 was 1.09 Euros and 1.15 Euros per U.S.
dollar, respectively. Coincidentally, the weighted average exchange rate for
both of the six-month periods
20
ended June 30, 2002 and 2001 was 1.11 Euros per U.S. dollar. The effect of
foreign currency fluctuations on net assets for the six months ended June 30,
2002 was an increase of $1,846,000. The cumulative historical effect of foreign
currency fluctuations on net assets was a decrease of $1,624,000, as reflected
in our Consolidated Balance Sheets as accumulated other comprehensive loss.
Although exchange rates fluctuated significantly in recent years, we do not
believe that the effect of foreign currency fluctuation is material to our
results of operations as the expenses related to much of our foreign currency
revenues are in the same currency as such revenues. However, the carrying value
of assets and reported values can be materially impacted by foreign currency
translation, as can the translated amounts of net product sales and expenses.
Nonetheless, we do not plan to modify our business practices.
We have relied primarily upon financing activities to fund our operations
in the United States. In the event that we are required to fund United States
operations or cash needs with funds generated in Spain, currency rate
fluctuations in the future could have a significant impact on us. However, at
the present time, we do not anticipate altering our business plans and practices
to compensate for future currency fluctuations.
Interest Rates. The weighted average interest rate on our short-term
borrowings and current portion of long-term debt is 4.9% and the balance
outstanding is $1,030,000 as of June 30, 2002. A portion of our long-term
borrowings is non-interest bearing and the balance outstanding on these
borrowings at June 30, 2002 is $238,000 including imputed interest (at 6.0%) of
$72,000. The balance of our long-term borrowings of $120,000 bears interest at
the rate of 2.9%. Consequently, the weighted average interest rate on our
long-term borrowings is 5.0%. The effect of an increase in the interest rate of
one hundred basis points (to 5.9% on short-term borrowings and to 6.0% on
long-term borrowings) would have the effect of increasing interest expense by
approximately $14,000 annually.
CAUTIONARY STATEMENTS FOR PURPOSES OF THE "SAFE HARBOR" PROVISIONS OF THE
- --------------------------------------------------------------------------
PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995
- -------------------------------------------------
The statements contained in this Quarterly Report on Form 10-Q, which are
not historical facts contain forward looking information with respect to plans,
projections or future performance of Bentley Pharmaceuticals, Inc. ("Bentley"),
the occurrence of which involve certain risks and uncertainties that could cause
our actual results to differ materially from those expected by Bentley,
including but not limited to risks associated with identifying suitable drugs
for combination with our drug delivery technologies, expanding generic and
branded drug operations, development and commercialization of our products,
relationships with our strategic partners, uncertainty of clinical trials
results, regulatory approval process, product sales concentration,
unpredictability of patent protection, technological changes, the effect of
economic conditions, and other uncertainties detailed in Bentley's Annual Report
on Form 10-K (SEC File No. 1-10581) for the year ended December 31, 2001.
21
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
See Item 1. Legal Proceedings in our Quarterly Report on Form 10-Q for the
quarterly period ended March 31, 2002.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Our Annual Meeting of Stockholders was held on May 22, 2002 for the purpose
of electing three directors. Proxies for the meeting were solicited pursuant to
Regulation 14A of the Securities Exchange Act of 1934, as amended, and there was
no solicitation in opposition. The following members were elected to our Board
of Directors.
Nominee Term Expiring Shares Voted For Shares Voted Against
- ------- ------------- ---------------- --------------------
Miguel Fernandez 2005 15,175,138 16,257
James R. Murphy 2005 14,364,059 827,336
Robert M. Stote 2005 14,364,059 827,336
Directors whose terms of office continued after the meeting are as follows:
NAME Term Expiring
- ---- -------------
Michael McGovern 2003
Michael D. Price 2003
Charles L. Bolling 2004
Robert J. Gyurik 2004
William A. Packer 2004
John W. Spiegel was appointed as one of our Directors on June 21, 2002, to
serve until our next Annual Meeting of Stockholders.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits:
99.1 Certification of the Chief Executive Officer
99.2 Certification of the Chief Financial Officer
(b) Reports on Form 8-K filed during the quarter ended June 30, 2002:
None.
All other items required in Part II have been previously filed or are not
applicable for the quarter ended June 30, 2002.
22
SIGNATURES
----------
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
BENTLEY PHARMACEUTICALS, INC.
------------------------------------------------
Registrant
August 8, 2002 By: /s/ James R. Murphy
------------------------------------------------
James R. Murphy
Chairman, President and Chief Executive Officer
(principal executive officer)
August 8, 2002 By: /s/ Michael D. Price
------------------------------------------------
Michael D. Price
Vice President, Chief Financial Officer,
Treasurer and Secretary (principal financial
and accounting officer)
23