Andrx Corporation Reports 2001 Fourth Quarter and Full Year Results for Andrx Group and Cybear Group.Business Editors/Health & Medical Writers 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)--Feb. 21, 2002 Andrx Corporation today announced financial results for the fourth quarter and year ended December December: see month. 31, 2001 for Andrx Group ("Andrx Group") (Nasdaq:ADRX ADRX Andrx Corporation (stock symbol) ), representing the businesses of Andrx Corporation and its subsidiaries other than Cybear Group ("Cybear Group") (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 ), and for Cybear Group representing the businesses of Andrx Corporation's wholly-owned subsidiaries, Cybear Inc. and Mediconsult.com, Inc. ("Mediconsult") and their respective subsidiaries. On September September: see month. 7, 2000, Andrx Corporation completed a reorganization The process of carrying out, through agreements and legal proceedings, a business plan for winding up the affairs of, or foreclosing a mortgage upon, the property of a corporation that has become insolvent. whereby Andrx Corporation acquired the outstanding shares of common stock of Cybear Inc. that it did not already own, Andrx Corporation was reincorporated in Delaware Delaware, state, United States Delaware (dĕl`əwâr, –wər), one of the Middle Atlantic states of the United States, the country's second smallest state (after Rhode Island). , and two new classes of Andrx Corporation common stock were created: Cybear common stock to track the performance of Cybear Group and Andrx common stock to track the performance of Andrx Corporation and its subsidiaries other than Cybear Group. In connection with the reorganization, Andrx Corporation shareholders exchanged each share of Andrx common stock held (pre-reorganization) for one share of Andrx Group common stock and .0372 shares of Cybear Group common stock. Andrx common stock is a class of common stock of Andrx Corporation designated to reflect Andrx Group's performance. Cybear common stock is a class of common stock of Andrx Corporation designated to reflect Cybear Group's performance. Holders of Andrx common stock or Cybear common stock have no specific rights to the assets of Andrx Group or Cybear Group, respectively. Andrx Corporation continues to hold title to all its assets and is responsible for all of its assets, liabilities, operating results and cash flows, regardless of how it allocates assets and liabilities among the classes of stock for financial statement presentation purposes. Holders of Andrx common stock or Cybear common stock are therefore subject to the risks of investing in the businesses, assets, and liabilities of Andrx Corporation as a whole. ANDRX CORPORATION For the fourth quarter of 2001, Andrx Corporation and subsidiaries reported a net loss of $3.4 million with $4.2 million of net income, or $0.06 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, allocated to Andrx Group and a net loss of $7.7 million, or $1.14 per diluted share, allocated to Cybear Group. For the fourth quarter of 2000, Andrx Corporation and subsidiaries reported net income of $14.6 million with $17.7 million of net income, or $0.25 per diluted share, allocated to Andrx Group and a net loss of $3.0 million, or $0.80 per diluted share, allocated to Cybear Group. For the year ended 2001, Andrx Corporation and subsidiaries reported net income of $37.5 million with $72.9 million of net income, or $1.01 per diluted share, allocated to Andrx Group and a net loss of $35.3 million, or $6.09 per diluted share, allocated to Cybear Group. For the year ended December 31, 2000, Andrx Corporation and subsidiaries reported net income of $58.5 million with $66.9 million of net income, or $0.95 per diluted share, allocated to Andrx Group and a net loss of $8.3 million, or $2.19 per diluted share, allocated to Cybear Group. ANDRX GROUP For the fourth quarter of 2001, Andrx Group reported total revenues of $194.7 million, compared to $142.5 million for the same quarter of 2000, an increase of 36.6%. Andrx Group also reported net income of $4.2 million, or $0.06 per diluted share, compared to net income of $17.7 million, or $0.25 per diluted share, for the same period of 2000. For the year ended December 31, 2001, Andrx Group reported total revenues of $740.1 million, a 43.7% increase over total revenues of $515.0 million for 2000. Andrx Group reported net income of $72.9 million, or $1.01 per diluted share for 2001, compared to pro forma As a matter of form or for the sake of form. Used to describe accounting, financial, and other statements or conclusions based upon assumed or anticipated facts. The phrase pro forma net income of $77.7 million, or $1.10 per pro forma diluted share for 2000. Such results of operations for the full year ended 2000 for Andrx Group are pro forma, as they exclude the net losses of Cybear Group, although the reorganization that enabled Cybear Group's results to be excluded from Andrx Group's results did not become effective until September Until September is a 1984 romantic drama set in France. It stars Karen Allen as an American tourist in Paris who falls in love with a married Frenchman (Thierry Lhermitte). External links 7, 2000. This pro forma presentation provides results prior to the reorganization on a basis that is comparable to the current capital structure of Andrx Corporation. For the year ended 2000, without excluding Cybear Group's results prior to the reorganization, Andrx Group's net income was $66.9 million, or $0.95 per diluted share. Commenting on these financial results, Angelo Angelo externally austere but inwardly violent. [Br. Lit.: Measure for Measure] See : Hypocrisy Angelo asked by Isabella to cancel her brother’s death sentence, Angelo agrees if she will yield herself to him. [Br. C. Malahias, Andrx's Vice President and Chief Financial Officer, stated: "As we have previously indicated, Andrx Group experienced a challenging fourth quarter. Product launches were delayed and sales of our 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 Ventolin Ven·to·lin A trademark for the drug albuterol. albuterol (salbutamol) Proventil, Ventolin Pharmacologic class: Sympathomimetic (beta2-adrenergic agonist) (R) significantly declined, but as we announced, to position Andrx for the future, we also increased research and development spending in the 2001 fourth quarter, compared to the third quarter of 2001. We built our brand product sales force, which is currently at 320 representatives, in anticipation The performance of an act or obligation before it is legally due. In patent law, the publication of the existence of an invention that has already been patented or has a patent pending, of the 2002 launch of our first internally developed brand product, Altocor Al·to·cor A trademark for the drug lovastatin. (TM). When these challenges inherent to the generic Generic Describes the characteristics and/or experience of the total universe of a coupon of MBS sector type; that is, in contrast to a specific pool or collateral group, as in a specific CMO issue. industry were combined with lower than expected net sales Net Sales The amount a seller receives from the buyer after costs associated with the sale are deducted. Notes: This amount is calculated by subtracting the following items from gross sales: merchandise returned for credit, allowances for damaged or missing goods, freight of our brand products, we could not offset the cost of our brand product sales force during the 2001 fourth quarter." Andrx Chief Executive Officer and President, Elliot Elliot is a common last name, and may refer to any one of the various people bearing that name. See . It is also a first name, once rare, now becoming more common. As a first or last name, it can be spelled Elliot, Eliott, Eliot, or Elliott. F. Hahn Hahn , Otto 1879-1968. German chemist. He won a 1944 Nobel Prize for his work on atomic fission. Noun 1. Hahn - German chemist who was co-discoverer with Lise Meitner of nuclear fission (1879-1968) Otto Hahn , Ph.D., continued, "Despite the disappointing fourth quarter, overall 2001 was a tremendous success. Some of the factors that contributed to our success in 2001 directly contributed to our disappointing earnings in the fourth quarter. The Armstrong Pharmaceuticals operation, which we acquired on March 30, 2001 for $18 million, generated nearly $51 million in high margin net sales of albuterol albuterol /al·bu·ter·ol/ (al-bu´ter-ol) a ß agonist used as the base or sulfate salt as a bronchodilator. al·bu·ter·ol n. over nine months. While we did not achieve the $22 million in net sales of albuterol in the fourth quarter as we did in both the second and third quarters of 2001, the $7 million in net sales we generated in the fourth quarter, following a marked increase in competition, further reaffirms the success of our acquisition." Dr. Hahn added, "During the fourth quarter of 2001, our pharmaceutical research and development team filed eight ANDAs, bringing our total number of ANDAs pending at 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. to 24. On November November: see month. 16, 2001, the FDA granted final approval to our bioequivalent version of 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 our long-awaited 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. trial for that product began in December. That trial, and all of our patent 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. battles, may be gut-wrenching, slow, and expensive, but they are the expected hurdles we must overcome before launching what we believe are non-infringing, cost-effective cost-effective, n the minimal expenditure of dollars, time, and other elements necessary to achieve the health care result deemed necessary and appropriate. bioequivalent alternatives to some of the largest selling products in the world, which include Prilosec, Tiazac Tiazac® Diltiazem, see there (R), K-Dur K-Dur A trademark for an oral preparation of sustained-release potassium chloride. potassium chloride Warning - High-alert drug! (R), Wellbutrin Well·bu·trin A trademark for the drug bupropion hydrochloride, used to treat depression. bupropion hydrochloride Budeprion SR, Budeprion XL, Wellbutrin, Wellbutrin SR, Wellbutrin XL, Zyban (R), Zyban Zy·ban A trademark for the drug bupropion dipropionate, used to treat nicotine dependence. bupropion hydrochloride Budeprion SR, Budeprion XL, Wellbutrin, Wellbutrin SR, Wellbutrin XL, Zyban (R) and various products in the Claritin Clar·i·tin A trademark for the drug loratadine. loratadine Alavert, Claritin, Claritin RediTabs, Clarityn (UK) Pharmacologic class: Histamine1-receptor antagonist (second-generation) (R) line. With our recently announced letter agreement related to litigation settlements with Biovail Biovail TSX: BVF NYSE: BVF is Canada's largest pharmaceutical company, operating internationally in all aspects of pharmaceutical products. Its major production facility is located in Steinbach, Manitoba. , we are hopeful that FDA will permit the launch of our bioequivalent version of Tiazac by the third quarter of 2002. On the brand side, we have received the FDA's approvable letter for Altocor. Additionally, our clinical development team is working toward the submission Submission Elliott, Anne reluctantly gives up her fiancé on her family’s advice. [Br. Lit.: Jane Austen Persuasion in Magill I, 734] of the 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 for our second internally developed brand product, Metformin metformin /met·for·min/ (met-for´min) an antihyperglycemic agent that potentiates the action of insulin, used in the treatment of type 2 diabetes mellitus. met·for·min n. XT, and our brand product sales force is looking forward to the launch of Altocor. Our plan to develop a brand business is becoming a reality, but it has adversely impacted our bottom line in the fourth quarter. We remain confident that the value created by this sales team will contribute positively to the bottom line in the future." Revenues - Distributed Products For the fourth quarter of 2001, sales from distributed products increased by 49.8% to $144.7 million, compared to $96.6 million for the same quarter in 2000. The increase in sales from distributed products reflects the continued overall strength of our distribution business, including participation in the distribution of additional generic products introduced in the fourth quarter. During the fourth quarter of 2001, Andrx Group generated approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. $21 million of net sales on the distribution of generic Prozac Prozac, trade name for fluoxetine hydrochloride. See antidepressant. Prozac First of the class of antidepressant drugs called selective serotonin reuptake inhibitors (SSRIs), generic name fluoxetine hydrochloride. (R), which enjoyed marketing exclusivity from August 2001 through January January: see month. 2002. For the year ended December 31, 2001, sales from distributed products increased 51.3% to $491.1 million, compared to $324.6 million for the year ended December 31, 2000. Revenues - Andrx Products For the fourth quarter of 2001, net sales of Andrx products were $46.0 million, compared to $42.2 million for the fourth quarter of 2000, an increase of 9.0%. Fourth quarter 2001 net sales of Andrx products consisted of $42.3 million of Andrx bioequivalent products and $3.7 million of Andrx brand products. Andrx Group did not generate any brand product sales in the 2000 fourth quarter, as it commenced its brand sales operations in January 2001 with the acquisition of CTEX Pharmaceuticals ("CTEX"). For the fourth quarter of 2001, net sales of Andrx bioequivalent products of $42.3 million included Cartia Cartia® Diltiazem HCl Cardiology A generic Cardizem® used for angina and HTN. See Angina, Hypertension. (TM) XT, Diltia(TM) XT and albuterol, as compared to $42.2 million in net sales of Andrx bioequivalent products in the 2000 fourth quarter. In the 2001 fourth quarter, sales of Andrx's bioequivalent version of Ventolin were $6.8 million. For the fourth quarter of 2001, net sales of Andrx brand products were $3.7 million. When recognizing net sales, Andrx Group takes into consideration the levels of inventory in the distribution channel. Andrx Group periodically evaluates the inventory position of its customers to determine whether high inventory levels of product exist. During the fourth quarter of 2001, Andrx Group determined that the levels of inventory in the distribution channel for certain brand products increased to high levels. These high levels in the fourth quarter were primarily due to a significantly lighter than expected cough cough, sudden, forceful expiration of air from the lungs caused by an involuntary contraction of the muscles controlling the process of breathing. The cough is a response to some irritating condition such as inflammation or the presence of mucus (sputum) in the and cold season and competition from generic introductions which in combination contributed to a lower than anticipated sell-through sell-through Adjective of the sale of prerecorded video cassettes, without their first being for hire only of brand products in the distribution channel during the fourth quarter. As a result, as of December 31, 2001, Andrx Group recorded an allowance against this high level of brand product in the distribution channel, resulting in recognized net sales of Andrx brand products of $3.7 million for the 2001 fourth quarter. For the year ended December 31, 2001, net sales of Andrx products of $229.0 million include $197.9 million of sales of Andrx's bioequivalent products and $31.1 million in sales of Andrx's brand products. For the year ended December 31, 2000, net sales of Andrx products of $175.4 million were exclusively Andrx bioequivalent products. Revenues - Other In the fourth quarter of 2001, Andrx Group generated $4.0 million in other revenues, compared to $3.7 million for the same period last year. Other revenues for the 2001 fourth quarter primarily included revenues from Armstrong Pharmaceuticals' ("Armstrong") contract manufacturing business and the recognition of $1.8 million in previously deferred license fees, as a result of the October October: see month. 2001 termination The point where a line, channel or circuit ends. See SCSI termination and hybrid. of Andrx Group's 1999 product distribution, development and licensing agreement with Geneva Geneva, canton and city, Switzerland Geneva (jənē`və), Fr. Genève, canton (1990 pop. 373,019), 109 sq mi (282 sq km), SW Switzerland, surrounding the southwest tip of the Lake of Geneva. Pharmaceuticals, Inc. ("Geneva"). Other revenues for the 2000 fourth quarter primarily represented $3.0 million per quarter of the then recurring re·cur intr.v. re·curred, re·cur·ring, re·curs 1. To happen, come up, or show up again or repeatedly. 2. To return to one's attention or memory. 3. To return in thought or discourse. license fees from Geneva. For the year ended December 31, 2001, other revenues were $19.9 million, compared to $15.0 million for the year ended December 31, 2000. Gross Profit/Gross Margin In the fourth quarter of 2001, total gross profit generated from total revenues was $46.8 million, with a total gross margin of 24.0%, compared to total gross profit of $56.2 million, with a total gross margin of 39.4% in the fourth quarter of 2000. During the fourth quarter of 2001, net sales of distributed products generated $22.3 million of gross profit with a gross margin of 15.4%. For the same quarter in 2000, net sales of distributed products generated $16.4 million of gross profit with a gross margin of 17.0%. During the fourth quarter of 2001, net sales of Andrx products generated $22.0 million of gross profit with a gross margin of 47.8%. For the same quarter in 2000, net sales of Andrx products generated $36.0 million of gross profit with a gross margin of 85.3%. During the fourth quarter of 2001, within Andrx products, Andrx's bioequivalent products generated $24.2 million of gross profit with a gross margin of 57.2%, as compared to $36.0 million of gross profit with a gross margin of 85.3% in the 2000 fourth quarter. As a result of the expansion of manufacturing facilities in anticipation of new product launches and delays in such launches, including bioequivalent versions of Prilosec, Tiazac, Metformin, and Naprelan, in the 2001 fourth quarter, Andrx Group incurred costs of approximately $3.4 million, included in cost of goods sold Cost of goods sold The total cost of buying raw materials, and paying for all the factors that go into producing finished goods. cost of goods sold , relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc unabsorbed manufacturing costs at its Florida Florida, state, United States Florida (flôr`ĭdə, flŏr`–), state in the extreme SE United States. A long, low peninsula between the Atlantic Ocean (E) and the Gulf of Mexico (W), Florida is bordered by Georgia and manufacturing facilities. Such manufacturing costs will be absorbed Absorbed 1. In a general business sense, when a cost is treated as an expense instead of being passed on to the customer in the form of higher prices. 2. In underwriting, when an issue has been completely sold to the public. 3. in the future as Andrx Group increases production levels related to launches of Andrx products into the marketplace. Similarly, in connection with the previously announced marked increase in competition for Andrx's bioequivalent version of Ventolin, during the fourth quarter, Andrx Group experienced a decrease in net sales and lower gross margins as well as a related decrease in production levels. Andrx Group incurred costs of approximately $1.7 million, included in cost of goods sold, relating to unabsorbed manufacturing costs at its Armstrong manufacturing facility in Massachusetts Massachusetts (măsəch  `sĭts), most populous of the New England states of the NE United States. . Andrx Group is taking measures to reduce certain levels
of these unabsorbed manufacturing costs. If there is an increase in
market demand for Ventolin and Andrx Group increases production levels
to manufacture additional quantities of its bioequivalent product to
match that increase in market demand, some current excess capacity may
be utilized. Additionally, in the future, Andrx Group may be able to
increase efficiency at its Massachusetts facility by manufacturing other
inhalation inhalation /in·ha·la·tion/ (in?hah-la´shun)1. the drawing of air or other substances into the lungs.inhala´tional 2. the drawing of an aerosolized drug into the lungs with the breath. 3. products, which are currently under development. During the fourth quarter of 2001, within Andrx products, Andrx's brand products experienced a negative gross profit of $2.2 million with a negative gross margin of 59.5%. Due to the high levels of inventory in the brand distribution channel, Andrx Group evaluated its levels of its brand product inventories based on the latest estimated levels of demand for these brand products, primarily cough and cold products, but also including the Anexsia pain product line. Based on such evaluation and the obsolescence ob·so·les·cent adj. 1. Being in the process of passing out of use or usefulness; becoming obsolete. 2. Biology Gradually disappearing; imperfectly or only slightly developed. of certain products due to reformulations caused by generic introductions, Andrx Group provided an inventory allowance of approximately $4.1 million through cost of goods sold in the fourth quarter of 2001. For the year ended December 31, 2001, total gross profit generated from total revenues was $264.3 million, with a total gross margin of 35.7%, as compared to a total gross profit of $217.8 million, with a total gross margin of 42.3%, for the year ended December 31, 2000. For the year ended December 31, 2001, net sales of distributed products generated $84.7 million of gross profit, with a gross margin of 17.2%, compared to $55.9 million of gross profit, with a gross margin of 17.2%, for the year ended December 31, 2000. For the year ended December 31, 2001, sales of Andrx products generated $164.6 million in gross profit with a gross margin of 71.9%, as compared to $146.9 million in gross profit with a gross margin of 83.7%, for the year ended December 31, 2000. For the year ended December 31, 2001, within Andrx products, net sales of Andrx's bioequivalent products generated $145.7 million in gross profit, with a gross margin of 73.6%, compared to $146.9 million in gross profit, with a gross margin of 83.7%, for the year ended December 31, 2000. For the year ended December 31, 2001, within Andrx products, net sales of Andrx's brand products generated $18.9 million in gross profit, with a 60.8% gross margin. Selling, General and Administrative ("SG&A") Expenses SG&A expenses were $32.4 million, or 16.6% of total revenues, for the fourth quarter of 2001, compared to $19.9 million, or 14.0% of total revenues, for the fourth quarter of 2000. SG&A expenses include expenses related to the administration, marketing, selling and warehousing of distributed and Andrx products, the establishment of brand sales and marketing efforts, royalties Not to be confused with Royal family. Royalties (sometimes, running royalties) are usage-based payments made by one party (the "licensee") to another (the "licensor") for ongoing use of an asset, most typically an intellectual property (IP) right. to Andrx Corporation's Co-Chairman and former Chief Scientific Officer related to the sales of Andrx Group's bioequivalent versions 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, as well as corporate overhead and legal costs primarily incurred with respect to patent infringement matters related to Andrx Group's ANDA ANDA abbr. abbreviated new drug application filings and antitrust Antitrust The antitrust laws apply to virtually all industries and to every level of business, including manufacturing, transportation, distribution, and marketing. They prohibit a variety of practices that restrain trade. matters. The increase in SG&A expenses in the fourth quarter of 2001, compared to the fourth quarter of 2000, was primarily due to the increase in total revenues and the building of the brand sales and marketing infrastructure during 2001. As of December 31, 2001, Andrx Group had approximately 320 sales representatives. The Andrx Group sales Group sales Block sale (of large amounts) of securities to institutional investors. group sales The distribution of a new security issue to institutional clients. force will market the current Andrx Group brand products, including the Entex(R) and Anexsia(R) product lines, as Andrx Group continues to prepare its sales force for the anticipated launch of its first internally developed NDA product, Altocor, a high-potency, extended-release extended-release /ex·tend·ed-re·lease/ (ek-stend´ed-re-les´) allowing a twofold or greater reduction in frequency of administration of a drug in comparison with the frequency required by a conventional dosage form. lovastatin lovastatin /lo·va·stat·in/ (lo´vah-stat?in) an antihyperlipidemic agent that acts by inhibiting cholesterol synthesis, used in the treatment of hypercholesterolemia and other forms of dyslipidemia and to lower the risks associated with , for which Andrx Group received an approvable letter from the FDA on January 25, 2002. Andrx Group is evaluating increasing the sales force to up to 500 and entering into a co-marketing Co-marketing is a marketing practice where two companies cooperate with separate distribution channels, sometimes including profit sharing. It is frequently confused with Co-promotion See also Marketing co-operation arrangement. For the year ended December 31, 2001, SG&A expenses were $119.2 million, or 16.1% of total revenues, as compared to $61.9 million, or 12.0% of total revenues, for the year ended December 31, 2000. The increase in SG&A expenses for the year ended December 31, 2001, compared to the year ended December 31, 2000, was primarily due to the result of the increase in total revenues and the building of the brand sales and marketing infrastructure during 2001. Research and Development ("R&D") Expenses R&D expenses were $12.7 million, or 27.5% of Andrx product sales, in the fourth quarter of 2001, compared to $13.1 million, or 31.1% of Andrx product sales, in the fourth quarter of 2000. R&D expenses reflect Andrx Group's continued commercialization efforts in its ANDA (bioequivalent) and NDA (brand) development programs. Fourth quarter 2001 R&D expenses include a $2.0 million milestone “Milemarker” redirects here. For the American indie rock band, see Milemarker (band). A milestone or kilometre sign is one of a series of numbered markers placed along a road at regular intervals, typically at the side of the road or in a median. payment to Geneva in connection with the agreement whereby Andrx Group reacquired from Geneva the marketing rights for certain Andrx brand products under development. During the fourth quarter of 2001, Andrx Group submitted eight ANDAs with the FDA, bringing the total ANDAs at the FDA to 24. R&D expenses were $52.8 million, or 23.1% of Andrx product sales, for the year ended December 31, 2001, as compared to $45.5 million, or 25.9% of Andrx product sales, for the year ended December 31, 2000. Income Taxes In the fourth quarter of 2001, Andrx Group reported income taxes of $255,000, or 6% of income before income taxes, compared to income taxes of $9.1 million, or 34% of income before income taxes, for the fourth quarter of last year. For the year ended December 31, 2001, Andrx Group reported income taxes of $31.4 million, or 30% of income before income taxes, compared to $39.9 million, or 34% of income before income taxes, for the year ended December 31, 2000. Andrx Group provided income taxes at less than the federal statutory tax rate of 35% primarily due to its ability to utilize Cybear Group's losses in accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with the tax sharing agreement entered into in connection with the September 7, 2000 reorganization, partially offset by Cybear Group's amortization and write-off Write-Off A reduction in the value of an asset or earnings by the amount of an expense or loss. Companies are able to write off certain expenses that are required to run the business, or have been incurred in the operation of the business and detract from retained revenues. of non-deductible intangible assets Intangible Asset An asset that is not physical in nature. Notes: Examples are things like copyrights, patents, intellectual property, and goodwill. These are the opposite of tangible assets. . Diluted Weighted Average Shares Outstanding The diluted weighted average number of shares of Andrx common stock outstanding was 72.6 million and 71.8 million for the fourth quarter of 2001 and 2000, respectively. The diluted weighted average number of shares of Andrx common stock outstanding was 72.2 million and 70.5 million for the year ended December 31, 2001 and 2000, respectively. The increases in the diluted weighted average number of shares of common stock outstanding in the fourth quarter and year ended December 31, 2001, as compared to the prior year periods were attributable attributable emanating from or pertaining to attribute. attributable proportion see attributable risk (below). attributable risk to stock option exercises and the issuance of approximately 291,000 shares in January 2001 in connection with the acquisition of CTEX. The year ended December 31, 2001 also includes the full effect of the May 2000 Andrx Group public equity offering of 5.2 million shares. CYBEAR GROUP For the fourth quarter of 2001, Cybear Group reported a net loss of $7.7 million, or $1.14 per diluted share, compared to a net loss of $3.0 million, or $0.80 per diluted share, for the comparable quarter in 2000. For the year ended December 31, 2001, Cybear Group reported a net loss of $35.3 million, or $6.09 per diluted share, compared to a net loss of $23.3 million, or $6.13 per pro forma diluted share, for the year ended December 31, 2000. Such Cybear Group per share amounts for the year ended December 31, 2000, are pro forma, as the weighted average number of shares outstanding of Cybear Group common stock used in the computation Computation is a general term for any type of information processing that can be represented mathematically. This includes phenomena ranging from simple calculations to human thinking. for such period is based on the shares outstanding as of the September 7, 2000 reorganization. This pro forma presentation provides results prior to the reorganization on a basis which is comparable to the current capital structure of Andrx Corporation. For the period subsequent to September 6, 2000 (date of reorganization) through December 31, 2000, Cybear Group reported a net loss of $8.3 million or $2.19 per diluted share. In July July: see month. 2001, Andrx Corporation implemented a one-for-four reverse stock split on its Cybear common stock. All share and per share amounts of Cybear common stock included herein reflect the reverse stock split. The increase in the basic and diluted weighted average shares of common stock outstanding for the fourth quarter and year ended December 31, 2001, was primarily the result of the April 2, 2001, stock-for-stock merger with Mediconsult. The fourth quarter of 2001 included other charges of $2.4 million, which consisted of a write-off of $1.7 million for certain computer software licenses In computing, software that is copyrighted and licensed under a software license is done under a variety of licensing schemes. For end-users there are proprietary licenses and there are free software licenses, and there are proprietary Within these schemes are further classifications. that Cybear Group no longer intends to market or otherwise attempt to commercialize, as well as an allowance of approximately $700,000 associated with an estimated loss for subleasing the remaining term of its leases in Fort Washington Fort Washington, military post during the American Revolution, situated on the highest point of Manhattan island, New York City, overlooking the Hudson River opposite Fort Lee, N.J. , PA, Tarrytown Tarrytown (târ`ētoun), village (1990 pop. 10,739), Westchester co., SE N.Y., a residential suburb of New York City, on the E bank of the Hudson opposite Nyack; settled in the 17th cent. by the Dutch, inc. 1870. , NY, and a portion of its Boca Raton Boca Raton (bō`kə rətōn`), city (1990 pop. 61,492), Palm Beach co., SE Fla., on the Atlantic; inc. 1925. Boca Raton is a popular resort and retirement community that experienced significant industrial development in the 1970s and 80s. , FL location. This allowance for the Boca Raton lease is in addition to an allowance previously recorded in the third quarter of 2001. In the third quarter of 2000, due to the uncertainty of collection resulting from the AHT AHT Animal Health Trust (Suffolk, England) AHT American Hairless Terrier (dog breed) AHT After Hours Trading AHT Animal Health Technician AHT Anchor Handling Tug Corporation ("AHT") bankruptcy bankruptcy, in law, settlement of the liabilities of a person or organization wholly or partially unable to meet financial obligations. The purposes are to distribute, through a court-appointed receiver, the bankrupt's assets equitably among creditors and, in most filing in September 2000, Cybear Group recorded an allowance of $4.0 million against a $4.0 million secured convertible note. During the fourth quarter of 2000, Cybear Group recognized a $2.0 million credit in connection with the acquisition of substantially all of the operating assets Operating Assets Another term for working capital. of AHT with an estimated value of $2.0 million, in exchange for a portion of the $4.0 million note pursuant to an agreement approved by the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. Bankruptcy Court bankruptcy court n. the specialized Federal court in which bankruptcy matters under the Federal Bankruptcy Act are conducted. There are several bankruptcy courts in each state, and each one's territory covers several counties. . For the year ended December 31, 2001, other charges were $14.8 million as compared to $4.0 million for the year ended December 31, 2000. Other charges for 2001 include $11.3 million associated with the write-off of the remaining net goodwill that was created in the September 7, 2000 reorganization and the acquisition of Telegraph telegraph, term originally applied to any device or system for distant communication by means of visible or audible signals, now commonly restricted to electrically operated devices. Attempts at long-distance communication date back thousands of years (see signaling). Consulting Corporation in 1999. Also included in other charges in 2001 were $1.8 million associated with an estimated loss that Cybear Group expects to incur To become subject to and liable for; to have liabilities imposed by act or operation of law. Expenses are incurred, for example, when the legal obligation to pay them arises. An individual incurs a liability when a money judgment is rendered against him or her by a court. for subleasing the remaining term of its leases in Fort Washington, PA, Tarrytown, NY and a portion of its Boca Raton, FL location, and a write-off of $1.7 million for certain computer software licenses. Other charges for 2000 include a $4.0 million allowance against the note receivable note receivable A debt due from borrowers and evidenced by a written promise of payment. Note receivable, an entry on the asset side of many corporate balance sheets, indicates the dollar amount of loans due to be repaid by borrowers. from AHT and $2.0 million of severance The act of dividing, or the state of being divided. The term severance has unique meanings in different branches of the law. Courts use the term in both civil and criminal litigation in two ways: first, when dividing a lawsuit into two or more parts, and second, when costs, impairment Impairment 1. A reduction in a company's stated capital. 2. The total capital that is less than the par value of the company's capital stock. Notes: 1. This is usually reduced because of poorly estimated losses or gains. 2. charges for certain assets and costs incurred to terminate Terminate (terminat.exe) was a shareware modem terminal and host program for MS-DOS and compatible operating systems developed from the early to the late 1990s by the Dane Bo Bendtsen. The last release (5. an agreement offset by a $2.0 million credit in connection with the acquisition of substantially all of the operating assets of AHT. "During the fourth quarter of 2001, Cybear Group completed a review of its current cost structure which resulted in the decision to consolidate Consolidate To combine the assets, liabilities, and other financial items of two or more entities into one. Notes: This term is generally used in the context of consolidated financial statements. operations from Fort Washington, PA and Tarrytown, NY to our headquarters in Boca Raton, FL," said Dr. Eric ERIC Educational Research Information Clearinghouse ERIC Educational Resources Information Center ERIC ERISA Industry Committee ERIC Epidemiologic Research and Information Center (Durham, NC) Moskow, Cybear's President. "The decision to consolidate the operations in Boca Raton should result in meaningful cash savings to the organization beginning with the second quarter of 2002. We continue to evaluate our business for future cost efficiencies while strengthening our web portal See portal. -- Physician's Online(TM)." Revenues Cybear Group recorded total revenues of $1.9 million for the fourth quarter of 2001, an increase of $737,000, or 62.3%, compared to $1.2 million for the fourth quarter of 2000. Revenues in the fourth quarter of 2001 included total Cybearclub LC ("Cybearclub") revenues of $1.1 million, an increase of $203,000, or 22.4%, compared to total Cybearclub revenues of $906,000 for the fourth quarter of 2000. Cybearclub is Cybear Group's joint venture with Andrx Group intended to distribute healthcare products to physicians through the 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 . Under this joint venture, Cybearclub utilized Andrx Group telemarketers to transition Andrx Group customers, as well as new physician customers, to place orders with Cybearclub over the Internet. As a result of an amendment to the Joint Venture Agreement, beginning October 9, 2000, Cybearclub revenues consist of physician Internet sales entered by physician offices on the Internet. For the first quarter of 2000, as originally reported by Cybear Group, all Cybearclub product sales were presented as E-commerce e-commerce, commerce conducted over the Internet, most often via the World Wide Web. E-commerce can apply to purchases made through the Web or to business-to-business activities such as inventory transfers. sales. In the second quarter of 2000, Cybear Group changed its presentation from E-commerce sales to Cybearclub LC sales, and in the third quarter of 2000, Cybear further changed its presentation to "Cybearclub LC Internet product sales" (i.e., physician office Internet orders) and "Cybearclub LC telemarketing telemarketing, the practice of selling goods or services to customers by means of the telephone or of surveying consumer preferences in telephone conversations. product sales" (i.e., telemarketing orders procured by Andrx Group telemarketers and entered over the Internet on behalf of physician customers by Cybear Group employees). For the fourth quarter of 2000, total Cybearclub revenues were $906,000, consisting of $772,000 of Cybearclub LC Internet product sales and $134,000 Cybearclub LC telemarketing product sales. The increase in total Cybearclub revenues in the fourth quarter of 2001, as compared to the fourth quarter of 2000, was primarily the result of increased product availability on the Cybearclub market place. Revenues from application services See ASP and Web services. were $347,000 for the fourth quarter of 2001, an increase of $317,000, compared to $30,000 for the fourth quarter of 2000. Application services represent services provided primarily from Cybear Group's Dr. Chart(R) laboratory product and @Rx(TM) electronic prescription prescription In property law, the effect of the lapse of time in creating and destroying rights. Acquisitive prescription allows an individual, after unequivocal possession for a specific period, to acquire an interest in real property, such as an easement, but not the management product and license fees related to Cybear Group's electronic prescription process patents. Application services revenue was attributable to the acquisition of the AHT assets in November 2000. Revenues from portal services were $243,000 for the fourth quarter of 2001, which represent banner Same as banner ad. 1. banner - The title page added to printouts by most print spoolers. Typically includes user or account ID information in very large character-graphics capitals. and tile tile, one of the ceramic products used in building, to which group brick and terra-cotta also belong. The term designates the finished baked clay—the material of a wide variety of units used in architecture and engineering, such as wall slabs or blocks, floor advertising, surveys and newsletter advertising primarily on Physicians' Online. Portal services revenue was attributable to the acquisition of Mediconsult in April 2001. Cybear Group generated $88,000 in Website development, hosting and maintenance services for the fourth quarter of 2001, a decrease of $41,000, or 31.8%, compared to $129,000 for the fourth quarter of 2000. The decrease in Website development, hosting and maintenance services for the fourth quarter of 2001 was primarily due to Cybear Group's decision not to renew or seek additional hosting customers. Revenues from the online meeting development services were $86,000 for the fourth quarter of 2001, resulting from the receipt of the final payment on the early termination of a contract by a customer. Due to the early termination of this contract by our customer, Cybear Group does not anticipate that significant revenues will be generated for these development services in future periods. Revenues from subscription services were $47,000 for the fourth quarter of 2001, a decrease of $71,000, or 60.2%, compared to $118,000 for the fourth quarter of 2000. Subscription services represent subscriptions to the Dr. Cybear website that included Internet Service Provider Internet service provider (ISP) Company that provides Internet connections and services to individuals and organizations. For a monthly fee, ISPs provide computer users with a connection to their site (see data transmission), as well as a log-in name and password. ("ISP (1) See in-system programmable. (2) (Internet Service Provider) An organization that provides access to the Internet. Connection to the user is provided via dial-up, ISDN, cable, DSL and T1/T3 lines. ") services. The decrease in subscription services was primarily due to Cybear Group discontinuing these ISP offerings and transitioning physicians to the Physicians' Online portal after the April 2001 acquisition of Mediconsult. Gross Profit/Gross Margin Gross profit from Cybearclub LC Internet product sales was $86,000, with a gross margin of 7.8%, for the fourth quarter of 2001, compared to gross profit from Cybearclub LC Internet product sales and Cybearclub LC telemarketing product sales of $74,000, with a gross margin of 8.2%, for the fourth quarter of 2000. 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. Network operations and support costs, product development and selling, general and administrative expenses were $4.7 million for the fourth quarter of 2001, an increase of $421,000, or 10.0%, compared to the $4.2 million in the fourth quarter of 2000. The increase in network operations and support costs, product development and selling, general and administrative expenses was primarily the result of the acquisitions of Mediconsult and the AHT assets offset by reductions in overall personnel and other costs. Depreciation and amortization expense was $1.5 million for the fourth quarters of both 2001 and 2000. Investment Income Cybear Group earned investment income of $15,000 for the fourth quarter of 2001, compared to $310,000 for the fourth quarter of 2000. The investment income in 2000 was generated primarily from the investment of the net proceeds Net Proceeds The amount received after all costs are deducted from the sale of a piece of property or security. Notes: In the case of an investor selling a security, net proceeds represent the proceeds from the sale minus any trading costs (i.e. commissions). raised in Cybear Inc.'s June June: see month. 1999 public offering and from its convertible notes receivable. The decrease in interest income is primarily due to lower average invested cash balances maintained by the Cybear Group. As of December 31, 2001, Cybear Group had approximately $1.2 million in cash and cash equivalents and a working capital deficiency A shortage or insufficiency. The amount by which federal Income Tax due exceeds the amount reported by the taxpayer on his or her return; also, the amount owed by a taxpayer who has not filed a return. of $3.0 million. As previously announced, Andrx Corporation and Cybear Inc. have entered into a $12.0 million committed line of credit. As of December 31, 2001, $2.0 million has been drawn against this line of credit. About Andrx Corporation Andrx Group 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, Andrx Group is developing generic versions of selected high sales volume controlled-release brand name pharmaceuticals. In its NDA program, Andrx Group is developing its own brand name formulations of certain existing drugs that it believes may be improved by the application of Andrx Group's drug delivery technologies. Andrx Group also markets and distributes pharmaceutical products manufactured by third parties. Cybear Group intends to use the Internet to improve the efficiency of administrative and communications tasks of managing patient care - while addressing the healthcare industry's critical need for secure and reliable transmission of information. Cybear Group also distributes healthcare products to physicians through the Internet, primarily through the Cybearclub joint venture with Andrx Group. 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," "to," "expect," "believe," "anticipate," "intend," "could," "would," "estimate," or "continue" or the negative or other variations thereof or comparable terminology The terminology used in the computer and telecommunications field adds tremendous confusion not only for the lay person, but for the technicians themselves. What many do not realize is that terms are made up by anybody and everybody in a nonchalant, casual manner without any regard or are intended to identify forward-looking statements. Investors are cautioned that all forward-looking statements involve risk and uncertainties. Andrx common stock and Cybear common stock are classes of common stock of Andrx Corporation, therefore Andrx and Cybear stockholders are subject to the risks and uncertainties described in Andrx Corporation's filings with the U.S. Securities and Exchange Commission, including Andrx Corporation's Annual Report on Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. for the year ended December 31, 2000 and its Quarterly Reports on Form 10-Q Form 10-Q See 10-Q. for the quarters ended March 31, 2001, June 30, 2001 and September 30, 2001. This release and additional information about Andrx Group and Andrx Corporation are also available on the Internet at: http://www.andrx.com. Additional information about Cybear Group is also available on the Internet at: http://www.cybear.com.
ANDRX CORPORATION AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except for share and per share amounts)
Three Months Ended Years Ended
December 31, December 31,
2001 2000(1) 2001(1) 2000(1)(2)
-------- -------- -------- --------
Revenues
Distributed products $ 145,790 $ 97,458 $ 495,241 $ 329,110
Andrx products 46,037 42,219 229,003 175,428
Other 4,775 4,016 24,797 15,422
-------- -------- -------- --------
Total revenues 196,602 143,693 749,041 519,960
-------- -------- -------- --------
Operating expenses
Cost of goods sold 148,917 87,177 479,595 301,475
Selling, general and
administrative 32,377 19,933 119,221 61,901
Research and development 12,664 13,109 52,846 45,467
Cybear Internet
operating expenses 6,192 5,703 26,100 20,609
Cybear other charges
(credit) 2,404 (2,000) 14,759 5,224
Reorganization costs -- -- -- 2,098
-------- -------- -------- --------
Total operating expenses 202,554 123,922 692,521 436,774
-------- -------- -------- --------
Income (loss) from
operations (5,952) 19,771 56,520 83,186
Other income
Investment income, net 2,764 3,974 12,411 15,216
-------- -------- -------- --------
Income (loss) before
income taxes (3,188) 23,745 68,931 98,402
Income taxes 255 9,108 31,385 39,870
-------- -------- -------- --------
Net income (loss) $ (3,443) $ 14,637 $ 37,546 $ 58,532
======== ========= ========= =========
EARNINGS (LOSS) PER SHARE
ANDRX COMMON STOCK:
Net income allocated
to Andrx Group
(including Cybear
through September
6, 2000) $ 4,241 $ 17,679 $ 72,862 $ 66,873
======== ========= ========= =========
Net income per share
of Andrx common stock:
Basic $ 0.06 $ 0.26 $ 1.04 $ 0.99
======== ========= ========= =========
Diluted $ 0.06 $ 0.25 $ 1.01 $ 0.95
======== ========= ========= =========
Weighted average shares
of Andrx common stock
outstanding:
Basic 70,360,000 69,261,000 69,998,000 67,756,000
========== ========== ========== ==========
Diluted 72,557,000 71,840,000 72,243,000 70,456,000
========== ========== ========== ==========
CYBEAR COMMON STOCK:
Net loss allocated to
Cybear Group (subsequent
to September 6, 2000) $ (7,684) $ (3,042) $ (35,316) $ (8,341)
========== ========== ========== ==========
Basic and diluted net
loss per share of
Cybear common stock (3) $ (1.14) $ (0.80) $ (6.09) $ (2.19)
========== ========== ========== ==========
Basic and diluted
weighted average
shares of Cybear
common stock
outstanding (3) 6,743,000 3,801,000 5,802,000 3,801,000
========== ========== ========== ==========
(1) Certain prior period amounts have been reclassified to conform
with current period presentation.
(2) Cybear Group results prior to the September 7, 2000 reorganization
were included in amounts allocated to the Andrx Group.
(3) The basic and diluted weighted average shares of Cybear common
stock outstanding and the basic and diluted net loss per share of
Cybear common stock included herein for the three months and year
ended December 31, 2001 and 2000 reflect the July 31, 2001
one-for-four reverse stock split.
ANDRX CORPORATION AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
December 31,
2001 /2000
-------- --------
Assets
Cash, cash equivalents and
investments available-for-sale $245,424 $336,809
Accounts receivable, net, inventories
and other current assets 331,476 224,390
-------- --------
Total current assets 576,900 561,199
Property, plant and equipment,
net and other assets 205,914 106,757
-------- --------
Total assets $782,814 $667,956
======== ========
Liabilities and Stockholders' Equity
Total liabilities $134,670 $108,159
Commitments and contingencies
Total stockholders' equity 648,144 559,797
-------- --------
Total liabilities and
stockholders' equity $782,814 $667,956
======== ========
ANDRX GROUP
(Representing Andrx Corporation and its subsidiaries
other than Cybear Group)
Unaudited Condensed Consolidated Statements of Income
(in thousands, except for share and per share amounts)
Three Months Ended Years Ended
December 31, December 31,
------------------ -------------
2001 2000(1) 2001(1) 2000(1)(2)
----------- ----------- ----------- -----------
Revenues
Distributed products $ 144,681 $ 96,552 $ 491,132 $ 324,591
Andrx products 46,037 42,219 229,003 175,428
Other 3,964 3,739 19,949 14,966
----------- ----------- ----------- -----------
Total revenues 194,682 142,510 740,084 514,985
----------- ----------- ----------- -----------
Operating expenses
Cost of goods sold 147,894 86,345 475,760 297,218
Selling, general and
administrative 32,377 19,933 119,221 61,901
Research and
development 12,664 13,109 52,846 45,467
Reorganization costs -- -- -- 2,098
----------- ----------- ----------- -----------
Total operating
expenses 192,935 119,387 647,827 406,684
----------- ----------- ----------- -----------
Income from operations 1,747 23,123 92,257 108,301
Other income
Investment income,
net 2,749 3,664 11,990 9,241
----------- ----------- ----------- -----------
Income before income
taxes 4,496 26,787 104,247 117,542
Income taxes 255 9,108 31,385 39,870
----------- ----------- ----------- -----------
Net income $ 4,241 $ 17,679 $ 72,862 77,672
=========== =========== =========== ===========
Basic net income per
share $ 0.06 $ 0.26 $ 1.04 $ 1.15
=========== =========== =========== ===========
Diluted net income per
share $ 0.06 $ 0.25 $ 1.01 $ 1.10
=========== =========== =========== ===========
Basic weighted average
shares of Common
stock outstanding 70,360,000 69,261,000 69,998,000 67,756,000
=========== =========== =========== ===========
Diluted weighted
average shares of
Common stock
outstanding 72,557,000 71,840,000 72,243,000 70,456,000
=========== =========== =========== ===========
(1) Certain prior period amounts have been reclassified to conform
with current period presentation.
(2) The unaudited condensed consolidated statement of income for
the year ended December 31, 2000 is pro forma as it excludes
the net losses of Cybear Group, although the reorganization
that enabled Cybear Group's results to be excluded from Andrx
Group's results did not become effective until September 7,
2000. This pro forma presentation provides results prior to
the reorganization on a basis which is comparable to the
current capital structure of Andrx Corporation.
ANDRX GROUP
(Representing Andrx Corporation and its subsidiaries
other than the Cybear Group)
Unaudited Condensed Consolidated Balance Sheets
(in thousands)
December 31,
-------------------
2001 2000
-------- --------
Assets
Cash, cash equivalents and
investments available-for-sale $244,190 $320,108
Accounts receivable, net,
inventories and other current assets 329,735 223,551
-------- --------
Total current assets 573,925 543,659
Property, plant and equipment, net
and other assets, including $2,001
note receivable from Cybear Group
as of December 31, 2001 193,982 85,394
-------- --------
Total assets $767,907 $629,053
======== ========
Liabilities and Andrx Group Equity
Total liabilities $127,013 $106,807
Commitments and contingencies
Total Andrx Group equity 640,894 522,246
-------- --------
Total liabilities and Andrx
Group equity $767,907 $629,053
======== ========
CYBEAR GROUP
(Representing Cybear Inc. and Mediconsult.com Inc.
and their respective subsidiaries)
Unaudited Condensed Consolidated Statements of Operations
(in thousands, except for share and per share amounts)
Three Months Ended Years Ended
December 31, December 31,
---------------------- --------------------
2001 2000 (1) 2001(1) 2000 (1)
---------- ---------- ---------- ---------
Revenues
Cybearclub LC Internet
product sales (2) $ 1,109 $ 772 $ 4,109 $ 1,483
Cybearclub LC
telemarketing
product sales (2) - 134 - 2,715
Other product sales - - - 321
Application services 347 30 1,387 30
Portal services 243 - 1,448 -
Website development,
hosting and
maintenance services 88 129 479 336
Online meeting development
services 86 - 1,070 -
Subscription services 47 118 464 161
---------- ----------- --------- ---------
Total revenues 1,920 1,183 8,957 5,046
---------- ----------- --------- ---------
Operating expenses
Cost of sales 1,023 832 3,835 4,257
Network operations
and support 1,243 1,225 5,603 4,501
Product development 1,385 1,259 5,416 3,774
Selling, general and
administrative 2,024 1,747 7,435 8,399
Depreciation and
amortization 1,540 1,472 7,646 4,035
Other charges (credit) 2,404 (2,000) 14,759 4,022
Merger costs - - - 1,202
---------- ----------- --------- ---------
Total operating expenses 9,619 4,535 44,694 30,190
---------- ----------- --------- ---------
Loss from operations (7,699) (3,352) (35,737) (25,144)
Other income
Investment income, net 15 310 421 1,829
---------- ----------- --------- ---------
Loss before income taxes (7,684) (3,042) (35,316) (23,315)
Income taxes - - - -
---------- ----------- --------- ---------
Net loss $ (7,684) $ (3,042) $ (35,316) $(23,315)
========== =========== ========= =========
Basic and diluted net loss
per share (3)(4) $ (1.14) $ (0.80) $ (6.09) $ (6.13)
========== =========== ========= =========
Basic and diluted weighted
average shares of common
stock outstanding (3)(4) 6,743,000 3,801,000 5,802,000 3,801,000
========== =========== ========= =========
(1) Certain prior period amounts have been reclassified to conform to
the current period presentation.
(2) Through the first quarter of 2000, Cybearclub product sales were
reported as E-commerce sales. In the second quarter of 2000,
Cybear Group changed its presentation from E-commerce sales to
Cybearclub LC sales and in the third quarter of 2000, to
Cybearclub LC Internet product sales (i.e., physician Internet
orders) and Cybearclub LC telemarketing product sales (i.e.,
telemarketing orders entered over the Internet on behalf of
customers by Cybear Group employees).
(3) The basic and diluted net loss per share included herein for the
year ended December 31, 2000 is pro forma and is calculated
assuming the basic and diluted weighted average shares of common
stock outstanding as of September 7, 2000 (the effective date of
issuance of the Cybear Group common stock) were outstanding for
such period. This pro forma presentation provides results prior
to the reorganization on a basis which is comparable to the
current capital structure of Andrx Corporation.
(4) The basic and diluted weighted average shares of common stock
outstanding and the basic and diluted net loss per share included
herein for the three months and year ended December 31, 2001 and
2000 reflect the July 31, 2001 one-for-four reverse stock split.
CYBEAR GROUP
(Representing Cybear Inc. and Mediconsult.com Inc.
and their respective subsidiaries)
Unaudited Condensed Consolidated Balance Sheets
(in thousands)
December 31,
---------------------------
2001 2000
------------- -------------
Assets
Cash, cash equivalents and
Investments available-for-sale $ 1,234 $ 16,701
Other assets, net
1,920 1,441
------------- -------------
Total current assets 3,154 18,142
Total long-term assets 13,933 21,363
------------- -------------
Total assets $ 17,087 $ 39,505
============= =============
Liabilities and Cybear Group Equity
Total liabilities, including
$2,001 note payable To Andrx
Corporation as of December 31, 2001 $ 9,837 $ 1,954
Commitments and contingencies
Total Cybear Group equity 7,250 37,551
------------- -------------
Total liabilities and Cybear
Group equity $ 17,087 $ 39,505
============= =============
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