RE: year end is outGenSci Announces Year-End Financial Results,
Accrues Reserve for Jury Verdict in 2001
Irvine, California and Toronto, Ontario, June 18, 2002 – GenSci Regeneration Sciences Inc. (TSE: GNS), The Orthobiologics Technology Company™, today announced that revenues for the fiscal year ended December 31, 2001 were $40.4 million (US $26.1 million) compared to $45.8 million (US $30.8 million) for fiscal year 2000.
In February 2001, the Company transitioned from DePuy AcroMed, Inc., as a sales representative for two of its products, to a newly formed independent sales representative network, which assumed responsibilities for the sale of these products. In spite of the changeover and an increasingly competitive market environment, GenSci’s independent sales network was able to limit the decrease in total revenue to 12%.
GenSci announced a loss of $37.0 million (US $23.5 million), or $0.70 per share, for the year ended December 31, 2001 compared to a loss of $7.0 million (US $4.8 million), or $0.15 per share, for the year ended December 31, 2000. Results are reported in Canadian dollars with an average annual exchange rate for the year 2001 of $1.00 Canadian equaling approximately U.S. $0.645.
The loss includes a $23 million (US $14.5 million) accrual for the previously announced adverse patent litigation jury verdict that the Company will be appealing. Adding to the loss was the cost of patent litigation defense, plus investments required to accelerate market development for GenSci’s new products including ongoing research and development required for its next generation products and technologies.
GenSci reported a loss of $30.3 million, or $0.58 per share, on revenues of $10.1 million for the fourth quarter ended December 31, 2001 compared to a loss of $4.0 million, or $0.08 per share, on revenues of $12.6 million for the comparable period in 2000.
GenSci also announced that its annual report for 2001 has been sent to its shareholders. As previously announced, the commencement of the year end audit was delayed pending receipt of the required approval by the United States Bankruptcy Court for the Company’s engagement of its auditors, which approval was not granted until May 9, 2002. Further to its announcement on June 12, 2002, GenSci continues to expect that its interim financial statements for the period ended March 31, 2002, and its Annual Information Form, will be filed on or before June 28, 2002.