ANDRX Reports 136% Increase in Net Income.Business Editors FORT LAUDERDALE Fort Lauderdale (lô`dərdāl), residential, commercial, and resort city (1990 pop. 149,377), seat of Broward co., SE Fla., on the Atlantic coast; settled around a fort built (c.1837) in the Seminole War, inc. 1911. , Fla.--(BUSINESS WIRE)--April 25, 2000 ANDRX CORPORATION (Nasdaq:ADRX ADRX Andrx Corporation (stock symbol) ) today announced its results for the three months ended March 31, 2000. Andrx reported net income of $16.4 million or $0.25 per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share for the 2000 first quarter, as compared to net income of $6.9 million or $0.11 per diluted share for the 1999 first quarter. All share and related per share calculations included herein give effect to the Company's two-for-one stock splits in May 1999 and April 2000, effected in the form of 100% stock dividends. Excluding the net losses of Cybear, Inc. (Nasdaq:CYBA CYBA Charter Yacht Broker Association CYBA Conejo Youth Basketball Association (Conejo Valley, California) CYBA California Yacht Brokers Association CYBA Cybertron Army CYBA Columbia Yacht Brokers Association ), Andrx reported net income of $21.1 million or $0.32 per diluted share for the 2000 first quarter, as compared to net income of $9.1 million or $0.14 per diluted share for the 1999 first quarter. Cybear is Andrx' majority owned e-healthcare connectivity, applications and portal provider subsidiary. In March 2000, Andrx entered into a corporate reorganization plan A scheme authorized by federal law and promulgated by the president whereby he or she alters the structure of federal agencies to promote government efficiency and economy through a transfer, consolidation, coordination, authorization, or abolition of functions. with Cybear, which will be submitted for approval to the shareholders of Andrx and Cybear in the third quarter of this year. The reorganization plan was recommended to the Cybear board of directors by a special committee and was then approved by the boards of both Cybear and Andrx. The plan will, among other things, create a new class of Andrx common stock, Cybear Group Common, that will enable Andrx shareholders to separately track their investments in Andrx and Cybear. Andrx' 136% increase in net income, from $6.9 million in the 1999 first quarter to $16.4 million in the 2000 first quarter, is in large part attributable attributable emanating from or pertaining to attribute. attributable proportion see attributable risk (below). attributable risk to sales of Cartia Cartia® Diltiazem HCl Cardiology A generic Cardizem® used for angina and HTN. See Angina, Hypertension. XT(TM), Andrx' bioequivalent bi·o·e·quiv·a·lent n. A value indicating the rate at which a substance enters the bloodstream and becomes available to the body. version of Cardizem Car·di·zem A trademark for the drug diltiazem hydrochloride. diltiazem hydrochloride Adizem (UK), Angitil (UK), Apo-Diltiaz (CA), Apo-Diltiazem (CA), Calcicard (UK), Cardizem, Cardizem CD, Cardizem LA, Cartia XT, (R) CD. In comparison, the 1999 first quarter included interim Stipulation An agreement between attorneys that concerns business before a court and is designed to simplify or shorten litigation and save costs. During the course of a civil lawsuit, criminal proceeding, or any other type of litigation, the opposing attorneys may come to an agreement fees pursuant to the Company's Stipulation and Agreement related to the then pending patent infringement patent infringement n. the manufacture and/or use of an invention or improvement for which someone else owns a patent issued by the government, without obtaining permission of the owner of the patent by contract, license or waiver. litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. involving Cartia XT(TM). The increase in net income occurred while the Company continued to increase its investment spending in research and development. The Company's total revenues increased by 48.2% to $115.5 million for the 2000 first quarter, as compared to $77.9 million for the 1999 first quarter. Sales from distributed products increased by 7.6% to $67.8 million for the 2000 first quarter, as compared to $63.0 million for the 1999 first quarter. Sales from manufactured products increased to $44.1 million for the 2000 first quarter, as compared to $4.4 million for the 1999 first quarter. Sales from manufactured products include Diltia XT(R), the Company's bioequivalent version of Dilacor Di·la·cor A trademark for the drug diltiazem hydrochloride. XR(R) for the 2000 and 1999 first quarters and Cartia XT(TM) in the 2000 first quarter. In comparison, the 1999 first quarter includes interim Stipulation fees of $10.0 million pursuant to the Stipulation and Agreement. The Company generated $3.5 million of licensing and other revenues in the 2000 first quarter, as compared to $526,000 in the 1999 first quarter. Gross profit from sales of distributed and manufactured products were $48.7 million, with a gross margin of 43.5% in the 2000 first quarter, as compared to $14.6 million, with a gross margin of 21.6% in the 1999 first quarter. The increase in gross profit and gross margin percentage is primarily the result of the increase in sales of manufactured products within the product mix. Selling, general and administrative expenses were $11.5 million or 10.0% of total revenues for the 2000 first quarter, as compared to $9.6 million or 12.3% of total revenues for the 1999 first quarter. The increase in selling, general and administrative expenses is primarily due to an increase in the activities necessary to support the increased sales from distributed and manufactured products, including a royalty paid to the Company's Co-Chairman and Chief Scientific Officer related to sales of Cartia XT(TM) in the 2000 first quarter and interim Stipulation fees in the 1999 first quarter. Research and development expenses were $8.2 million in the 2000 first quarter, as compared to $4.3 million in the 1999 first quarter. The increase in research and development expenses of $3.9 million or 90.3% reflects the continuing progress in and expansion of both the Company's bioequivalent (ANDA ANDA abbr. abbreviated new drug application ) and brand name (NDA (Non Disclosure Agreement) An agreement signed between two parties that have to disclose confidential information to each other in order to do business. In general, the NDA states why the information is being divulged and stipulates that it cannot be used for any ) drug development programs. Through Cybear, the Company incurred $6.3 million of Internet Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. in the 2000 first quarter, as compared to $2.8 million in the 1999 first quarter. The increase in costs primarily relates to the continuing development of Internet applications and the establishment and expansion of the operational and administrative infrastructure of Cybear and also includes $1.2 million of non-recurring charges. Merger costs of $832,000, incurred by Cybear in the 2000 first quarter, relate to the previously announced pending merger with Andrx under a tracking stock transaction. The diluted weighted average shares of common stock outstanding were 65.8 million in the 2000 first quarter, as compared to 64.6 million in the 1999 first quarter. Alan A`lan´ n. 1. A wolfhound. P. Cohen cohen or kohen (Hebrew: “priest”) Jewish priest descended from Zadok (a descendant of Aaron), priest at the First Temple of Jerusalem. The biblical priesthood was hereditary and male. , Andrx' Co-Chairman and Chief Executive Officer, stated, "I am once again pleased to report that Andrx is continuing to execute its business plan. Our steadfast objective remains the aggressive commercialization of our leading oral controlled-release technologies through increased investment in R&D. The funding of R&D quarters ago have led to this quarter's acceptance of our ANDA filings for bioequivalent versions of Depakote Dep·a·kote A trademark for the drug divalproex sodium. divalproex sodium Depakote, Depakote ER, Depakote Sprinkle Pharmacologic class: Carboxylic acid derivative Therapeutic class: (R) and Claritin Clar·i·tin A trademark for the drug loratadine. loratadine Alavert, Claritin, Claritin RediTabs, Clarityn (UK) Pharmacologic class: Histamine1-receptor antagonist (second-generation) D-24(R) as well as the tentative tentative, adj not final or definite, such as an experimental or clinical finding that has not been validated. approvals of our ANDAs for Prilosec Pri·lo·sec A trademark for the drug omeprazole. omeprazole Losec (CA) (UK), Heartburn Relief (UK), Prilosec, Prilosec OTC, Zegerid, Zanprol (UK) Pharmacologic class: Proton pump inhibitor (R) and Naprelan(R). We are confident that our continued and increasing investment in R&D will reward our shareholders with future product approvals and growth. While we are obviously pleased with the strength of our sales, I am most proud of our scientists' ability to continue to turn R&D dollars into product filings that can be approved by the FDA FDA abbr. Food and Drug Administration FDA, n.pr See Food and Drug Administration. FDA, n.pr the abbreviation for the Food and Drug Administration. ." Andrx is engaged in the formulation formulation /for·mu·la·tion/ (for?mu-la´shun) the act or product of formulating. American Law Institute Formulation and commercialization of oral controlled-release pharmaceuticals utilizing its proprietary drug delivery technologies. In its ANDA program, the Company is developing generic versions of selected high sales volume controlled-release brand name pharmaceuticals. In its NDA program, the Company is developing its own brand name formulations of certain existing drugs that it believes may be improved by the application of the Company's drug delivery technologies. The Company also markets and distributes pharmaceutical products manufactured by third parties and, through its Cybear, Inc. subsidiary (Nasdaq: CYBA), is developing internet-based software and applications for the healthcare industry. Forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. (statements which are not historical facts) in this release are made pursuant to the safe harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. provisions of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995. For this purpose, any statements contained in this report that are not statements of historical fact may be deemed to be forward-looking statements. Without limiting the generality gen·er·al·i·ty n. pl. gen·er·al·i·ties 1. The state or quality of being general. 2. An observation or principle having general application; a generalization. 3. of the foregoing, words such as "may," "will," "expect," "believe," "anticipate," "intend," "could," "would," "estimate," or "continue" or the negative other variations thereof or comparable terminology are intended to identify forward-looking statements. Investors are cautioned that all forward-looking statements involve risk and uncertainties, including those risks and uncertainties detailed in the Company's filings with the Securities and Exchange Commission.
ANDRX CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
(in thousands, except for share and per share amounts)
Three Months Ended
March 31,
-------------------------------
2000 1999
------------- -------------
Revenues
Distributed products $ 67,826 $ 63,025
Manufactured products 44,114 4,373
Stipulation fees - 10,000
Licensing and other 3,538 526
------------- -------------
Total revenues 115,478 77,924
------------- -------------
Operating expenses
Cost of goods sold 63,204 52,826
Selling, general and administrative 11,542 9,591
Research and development 8,211 4,315
Cybear, Inc. Internet operating expenses 6,339 2,795
Cybear, Inc. merger costs 832 -
------------- -------------
Total operating expenses 90,128 69,527
------------- -------------
Income from operations 25,350 8,397
Other income
Minority interest 1,820 51
Gain on sale of Cybear, Inc. shares - 300
Interest income, net 1,057 212
------------- -------------
Income before income taxes 28,227 8,960
Income taxes 11,855 2,016
------------- -------------
Net income $ 16,372 $ 6,944
============= =============
Basic net income per share $ 0.26 $ 0.11
============= =============
Diluted net income per share $ 0.25 $ 0.11
============= =============
Basic weighted average shares
of common stock outstanding 63,212,600 60,871,900
============= =============
Diluted weighted average shares
of common stock outstanding 65,832,200 64,625,200
============= =============
Exclusive of Cybear, Inc.'s Net Losses:
Net income $ 21,141 $ 9,072
============= =============
Basic net income per share $ 0.33 $ 0.15
============= =============
Diluted net income per share $ 0.32 $ 0.14
============= =============
Certain prior year amounts have been reclassified to conform with
the current year presentation and have been restated for the Company's
May 1999 and April 2000 two-for-one stock splits effected in the form
of 100% stock dividends.
ANDRX CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
(in thousands)
--------------------------------------
March 31, December 31,
2000 1999
----------------- -----------------
Assets
Cash, cash equivalents and
investments available-for-sale $ 114,771 $ 123,418
Accounts receivable-net,
inventories and other
current assets 175,530 180,903
----------------- -----------------
Total current assets 290,301 304,321
Property, plant and equipment -
net and other assets 72,825 53,633
----------------- -----------------
Total assets $ 363,126 $ 357,954
================= =================
Liabilities and Shareholders'
Equity
Total liabilities and
minority interest $ 122,772 $ 136,982
Total shareholders' equity 240,354 220,972
----------------- -----------------
Total liabilities and
shareholders' equity $ 363,126 $ 357,954
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