Andrx Corporation Reports Results for the Three Months Ended March 31, 2002.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)--April 26, 2002 Andrx Corporation today announced its financial results for the first quarter of 2002 including financial results 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 and for 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 ), representing the businesses of Andrx Corporation's wholly-owned subsidiaries, Cybear Inc. and Mediconsult.com, Inc. ("Mediconsult"), and their respective subsidiaries. Webcast Investors will have the opportunity to listen to management's discussion of this release in a conference call to be held on April 26, 2002 at 8:00 AM Eastern Time. This call is being webcast and can be accessed at Andrx's website http://www.andrx.com. The webcast will be available for replay. Reorganization On September September: see month. 7, 2000, Andrx Corporation completed a reorganization 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 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 (as adjusted for the July July: see month. 31, 2001 Cybear common stock one-for-four reverse stock split). 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. Conversion On March 28, 2002, Andrx Corporation announced its intention to convert all of the outstanding shares of Cybear common stock into shares of Andrx common stock effective May 17, 2002. Each outstanding share of Cybear common stock will be converted into 0.00964 of a share of Andrx common stock. The conversion ratio includes a 25% premium on the value of the Cybear common stock, as provided by the terms of Andrx Corporation's Certificate of Incorporation certificate of incorporation n. some states issue a certificate to prove a corporation's existence upon the filing of Articles of Incorporation. In most states the Articles are sufficient proof. , which was approved by the Andrx and Cybear stockholders in the reorganization. Andrx Corporation For the first quarter of 2002, Andrx Corporation and subsidiaries reported net income of $4.5 million with $8.4 million of net income, or $0.12 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 $3.9 million, or $0.58 per diluted share, allocated to Cybear Group. For the first quarter of 2001, Andrx Corporation and subsidiaries reported net income of $14.6 million of which $19.2 million of net income, or $0.27 per diluted share, is allocated to Andrx Group, and a net loss of $4.6 million, or $1.20 per diluted share, is allocated to Cybear Group. Andrx's 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., commented: "While we recognize that one of the key challenges facing Andrx is being able to produce predictable, consistent earnings growth, Andrx's earnings growth can be held hostage hostage, person held by another as a guarantee that certain actions or promises will or will not be carried out. During periods of internal turmoil, insurgents often seize hostages; recent examples include seizures of Americans and other foreigners by militants in to the timing of generic launches, and can be affected by the advent of additional generic competition. The roadmap A roadmap may refer to:
abbr. Food and Drug Administration FDA, n.pr See Food and Drug Administration. FDA, n.pr the abbreviation for the Food and Drug Administration. and the courts. This is particularly evident in the approval of Andrx's controlled-release product candidates, as these products offer the greatest potential opportunity, as evidenced by the more than $430 million of sales generated by 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 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 over the past three years. Unfortunately, while we are constantly seeking ways to make our product available as soon as we can, brand companies are seeking to delay that launch for as long as they can. Thus, when reviewing Andrx's quarterly performance, we believe that our investors should not only carefully consider our earnings, but our business accomplishments as well, as those achievements are steps in the road to create the consistent earnings growth in the future." 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, said: "From an earnings standpoint The Standpoint is a newspaper published in the British Virgin Islands. It was originally published under the name Pennysaver, largely as a shopping-coupon promotional newspaper, but since emerged as one of the most influential sources of journalism in the , during the first quarter of 2002, Andrx improved its earnings as compared to the fourth quarter of 2001 in what continued to be a difficult operating environment In computing, an operating environment is the environment in which users run programs, whether in a command line interface, such as in MS-DOS or the Unix shell, or in a graphical user interface, such as in the Macintosh operating system. . Contributing to those earnings was the launch of our generic version of Glucophage Glu·co·phage A trademark for the drug metformin. metformin hydrochloride Warning - High-alert drug! (R) into a very competitive market place, garnering the leading market share." Dr. Hahn added: "Yet, our less tangible but potentially more valuable accomplishments were the fact that, in the past four months, we obtained favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. district court decisions in our 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 to launch our generic versions of 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) SR/Zyban(R) and Naprelan(R), we received final FDA marketing approval and launched our generic K-Dur K-Dur A trademark for an oral preparation of sustained-release potassium chloride. potassium chloride Warning - High-alert drug! (R), and FDA tentatively ten·ta·tive adj. 1. Not fully worked out, concluded, or agreed on; provisional: tentative plans. 2. Uncertain; hesitant. approved our generic version of Glucophage(R) XR. We also continued to prove our case in the 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) litigation, the patent obstacle which at one time blocked the approval of our generic Tiazac Tiazac® Diltiazem, see there (R) has been lifted, and we are continuing to work towards FDA final approval of Altocor Al·to·cor A trademark for the drug lovastatin. (TM) and generic equivalents to Tiazac, Wellbutrin SR/Zyban and Naprelan. Moreover, to mitigate mit·i·gate v. To moderate in force or intensity. mit  i·ga tion n. the
challenges of generic earnings volatility and consistently grow our
earnings, we are working to better balance our Company with brand
products, which traditionally offer a more consistent and reliable
earnings stream. With Altocor, our first 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 product, having received an
FDA approvable letter, and in anticipation of filing an NDA for
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 during the second half of this year, we are well on our way to having set the foundation for a future brand earnings stream. Though this realignment re·a·lign tr.v. re·a·ligned, re·a·lign·ing, re·a·ligns 1. To put back into proper order or alignment. 2. To make new groupings of or working arrangements between. adds further earnings volatility in the short term, we continue to believe that it is in the longer term best interests of our Company and our shareholders," he concluded. ANDRX GROUP For the first quarter of 2002, Andrx Group reported total revenues of $182.7 million, compared to $155.8 million for the same quarter of 2001, an increase of 17.3%. Andrx Group reported net income of $8.4 million, or $0.12 per diluted share, compared to net income of $19.2 million, or $0.27 per diluted share, for the same period of 2001. Revenues - Distributed Products For the first quarter of 2002, sales from distributed products increased by 18.9% to $127.3 million, compared to $107.0 million for the same quarter in 2001. The increase in sales of distributed products reflects an increase in sales to existing and new customers, generally offset by overall price declines. Revenues - Andrx Products For the first quarter of 2002, 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 Andrx products increased by 21.9% to $54.5 million, compared to $44.8 million for the first quarter of 2001. First quarter 2002 net sales of Andrx products consisted of $49.0 million of Andrx bioequivalent products and $5.5 million of Andrx brand products, as compared to $39.7 million of Andrx bioequivalent products and $5.1 million of Andrx brand products for the first quarter of 2001. For the first quarter of 2002, net sales of Andrx bioequivalent products of $49.0 million included Cardizem(R) CD, Dilacor Di·la·cor A trademark for the drug diltiazem hydrochloride. (R) XR, and Ventolin Ven·to·lin A trademark for the drug albuterol. albuterol (salbutamol) Proventil, Ventolin Pharmacologic class: Sympathomimetic (beta2-adrenergic agonist) (R) metered dose inhalers and commencing January January: see month. 26, 2002, Andrx's bioequivalent version of Glucophage(R), as compared to $39.7 million in net sales of Andrx bioequivalent products in the 2001 first quarter. In the 2002 first quarter, net sales of Andrx's bioequivalent products included $11.3 million in net sales of Glucophage which was launched into a very competitive environment. For the first quarter of 2002, net sales of Andrx brand products were $5.5 million, as compared to $5.1 million in the first quarter of 2001. Net sales of Andrx brand products commenced on January 23, 2001 with the acquisition of CTEX Pharmaceuticals ("CTEX"). Sales in the first quarter of 2002 include sales generated from the CTEX and Entex 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 lines and Anexsia pain product line. Revenues - Other In the first quarter of 2002, Andrx Group generated $843,000 in other revenues, compared to $4.0 million for the same period last year. Other revenues for the 2002 first quarter primarily represented revenues from contract manufacturing at Andrx's Massachusetts Massachusetts (măsəch  `sĭts), most populous of the New England states of the NE United States. facility.
Other revenues for the 2001 first quarter consisted primarily of $3.0
million per quarter of 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 an 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"), a member of the Novartis Novartis International AG (NYSE: NVS) is a multinational pharmaceutical company based in Basel, Switzerland that manufactures drugs such as diclofenac (Voltaren), carbamazepine (Tegretol), valsartan (Diovan), imatinib mesylate (Gleevec / Glivec), cyclosporin A (Neoral / Pharmaceutical Group. The arrangement with Geneva was terminated in October October: see month. 2001. Gross Profit/Gross Margin During the first quarter of 2002, total gross profit generated from total revenues was $55.8 million, with a total gross margin of 30.6%, compared to total gross profit of $62.0 million, with a total gross margin of 39.8% in the first quarter of 2001. During the first quarter of 2002, net sales of distributed products generated $23.2 million of gross profit with a gross margin of 18.2%. For the same quarter in 2001, net sales of distributed products generated $22.4 million of gross profit with a gross margin of 20.9%. During the first quarter of 2002, net sales of Andrx products generated $32.4 million of gross profit with a gross margin of 59.4%. For the same quarter in 2001, net sales of Andrx products generated $35.6 million of gross profit with a gross margin of 79.7%. During the first quarter of 2002, within Andrx products, Andrx's bioequivalent products generated $29.4 million of gross profit with a gross margin of 60.0%, as compared to $31.6 million of gross profit with a gross margin of 79.8% in the 2001 first quarter. The 2002 quarter includes Andrx's bioequivalent version of Glucophage, which was launched into a highly competitive market with relatively low selling prices and low gross margins. In the first quarter of 2002, Andrx Group incurred costs of approximately $2.0 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 in the future as Andrx Group increases production levels in connection with future launches of Andrx products into the marketplace. Andrx Group also incurred costs of approximately $1.9 million, included in cost of goods sold, relating to unabsorbed manufacturing costs at its Armstrong manufacturing facility in Massachusetts. Andrx Group is taking measures to reduce certain levels of these unabsorbed manufacturing costs. During the first quarter of 2002, within Andrx products, Andrx's brand products generated $3.0 million of gross profit with a gross margin of 54.5%, as compared to $4.0 million of gross profit with a gross margin of 78.6% in the 2001 first quarter. Selling, General and Administrative ("SG&A") Expenses SG&A expenses were $36.4 million, or 20.0% of total revenues, for the first quarter of 2002, compared to $23.0 million, or 14.7% of total revenues, for the first quarter of 2001. The increase in SG&A expenses in the first quarter of 2002, compared to the first quarter of 2001, was primarily due to the increase in total revenues, the product mix within revenues, the building of the brand product sales and marketing infrastructure, and the increase in legal costs with respect to 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. 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. As of April 26, 2002, Andrx Group had approximately 280 sales representatives. Andrx Group continues to prepare its sales force for the anticipated launch of Altocor in the second or third quarter of 2002. Research and Development ("R&D") Expenses R&D expenses were $9.9 million, or 18.2% of Andrx product sales, in the first quarter of 2002, compared to $14.3 million, or 32.0% of Andrx product sales, in the first quarter of 2001. R&D expenses reflect Andrx Group's continued commercialization efforts in its ANDA ANDA abbr. abbreviated new drug application (bioequivalent) and NDA (brand) development programs. The Company anticipates filing at least ten ANDAs during the balance of 2002. Income Taxes In the first quarter of 2002, Andrx Group reported income taxes of $3.3 million, or 28% of income before income taxes, compared to income taxes of $8.9 million, or 32% of income before income taxes, for the first quarter of 2001. 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. Diluted Weighted Average Shares Outstanding The diluted weighted average number of shares of Andrx common stock outstanding was 72.3 million and 71.9 million for the first quarter of 2002 and 2001, respectively. The increase in the diluted weighted average number of shares of common stock outstanding in the first quarter of 2002, as compared to the first quarter of 2001, was attributable primarily to stock option exercises. CYBEAR GROUP For the first quarter of 2002, Cybear Group reported a net loss of $3.9 million, or $0.58 per diluted share, compared to a net loss of $4.6 million, or $1.20 per diluted share for the comparable quarter in 2001. In July 2001, Andrx Corporation implemented a one-for-four reverse stock split of its Cybear common stock. All share and per share amounts of Cybear common stock included herein reflect the July 31, 2001 Cybear common stock one-for-four reverse stock split. Revenues Cybear Group recorded total revenues of $2.1 million for the first quarter of 2002, an increase of 34.7%, compared to $1.6 million for the first quarter of 2001. Revenues included Cybearclub LC ("Cybearclub") 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 product sales of $1.2 million in the first quarter of 2002, compared to $925,000 for the first quarter of 2001. Cybearclub is Cybear Group's joint venture with Andrx Group intended to distribute healthcare products to physicians through the Internet. Revenues from portal services were $737,000 for the first quarter of 2002, which represent banner 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 the Physicians' Online portal. Portal services revenue was attributable to the acquisition of Mediconsult in April 2001. Revenues from application services See ASP and Web services. were $147,000 for the first quarter of 2002, compared to $376,000 for the first quarter of 2001. Application services represent services provided primarily from Cybear Group's Dr. Chart(R) laboratory product and @Rx(TM) electronic prescription management product and license fees related to Cybear Group's electronic prescription process patents. The decrease in application services was attributable to the termination of a long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. contract in January 2002. Revenues from Website development, hosting and other services were $11,000 for the first quarter of 2002, compared to $148,000 for the first quarter of 2001. The decrease in Website development, hosting and other services for the first quarter of 2002 was primarily due to Cybear Group's decision not to renew or seek additional hosting customers. Revenues from subscription services were $134,000 for the first quarter of 2001. Subscription services represented 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. services. In 2002, there were no revenues from subscription services as management decided to discontinue dis·con·tin·ue v. dis·con·tin·ued, dis·con·tin·u·ing, dis·con·tin·ues v.tr. 1. To stop doing or providing (something); end or abandon: these 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. offerings and to transition the remaining customers to its Physicians' Online portal. Gross Profit/Gross Margin Gross profit from Cybearclub sales was $96,000, with a gross margin of 7.8%, for the first quarter of 2002, compared to gross profit from Cybearclub sales of $54,000, with a gross margin of 5.8%, for the first quarter of 2001. 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 operations support, product development and selling, general and administrative expenses were $3.8 million for the first quarter of 2002, compared to $4.0 million in the first quarter of 2001. The decrease in these costs was primarily the result of reductions in personnel and other expenses associated with the consolidation and closing of the 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 and 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 locations. Depreciation and amortization expense was $1.1 million for the first quarter of 2002, compared to $1.5 million for the first quarter of 2001. The decrease in depreciation and amortization expense was primarily the result of 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 in 2001 associated with goodwill relating to the September 2000 reorganization and purchase 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, as well as the 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 certain computer software. Other Income (Expense) Cybear Group incurred interest expense of $27,000 for the first quarter of 2002, compared to interest income of $212,000 for the first quarter of 2001. The interest expense in 2002 was primarily the result of Cybear Group borrowing on the line of credit entered into with Andrx Corporation. The interest income in 2001 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. Diluted Weighted Average Shares Outstanding The diluted weighted average number of shares of Cybear common stock outstanding was 6.7 million and 3.8 million for the first quarter 2002 and 2001, respectively. The increase in the diluted weighted average number of shares of common stock outstanding in the first quarter 2002, as compared to the first quarter of 2001, was attributable primarily to the shares issued in conjunction with Cybear's acquisition of Mediconsult. Line of Credit As of March 31, 2002, Cybear had drawn $2.0 million against its line of credit with Andrx Corporation and as of April 25, 2002, $3.6 million had been drawn against this line. The increase in the amount outstanding of $1.6 million was used by Cybear to fund operations and extinguish Extinguish Retire or pay off debt. other liabilities other liabilities Small and relatively insignificant liabilities. For financial reporting purposes, firms often combine small liabilities into this single category rather than listing each liability separately. . Outlook In the second quarter of 2002, Andrx was the fourth entrant en·trant n. One that enters, especially one that enters a competition. [French, from present participle of entrer, to enter, from Old French; see enter. into the generic K-Dur market and accordingly sales of Andrx's product did not include a pipeline fill and are not anticipated to be a significant contributor to Andrx's earnings. Andrx anticipates that it will continue to face a number of issues in the second quarter. In its generic business, the 2002 first quarter pipeline fill for generic Glucophage sales will be absent in the second quarter, and sales of Andrx's generic Ventolin product are not expected to increase. In its brand business, while a second quarter 2002 launch of Altocor is possible, a third quarter 2002 launch appears more probable. In either case, Altocor promotional expenses Noun 1. promotional expense - the cost of promoting a product business expense, trade expense - ordinary and necessary expenses incurred in a taxpayer's business or trade will be incurred in the second quarter of 2002. Additionally, consistent with our 2002 plan, R&D expenses will be higher and Cybear's losses will be included in Andrx earnings per share after the May 17th conversion. Accordingly, Andrx's second quarter earnings will continue to be highly dependent on sales of Cartia Cartia® Diltiazem HCl Cardiology A generic Cardizem® used for angina and HTN. See Angina, Hypertension. (TM) XT and whether Andrx Group launches a significant additional generic product. Absent such launch, second quarter 2002 results may be lower than the first quarter 2002 results. Though the timing remains uncertain, the Company continues to be optimistic op·ti·mist n. 1. One who usually expects a favorable outcome. 2. A believer in philosophical optimism. op that it will be able to introduce bioequivalent versions of Tiazac and Wellbutrin SR/Zyban during the second half of the year. Other product introductions in 2002 may also include the Company's generic version of Prilosec as well as its bioequivalent versions of Naprelan, Procardia Pro·car·di·a A trademark for the drug nifedipine. nifedipine Adalat CC, Adalat PA (CA), Adalat XL (CA), Adipine (UK), Afeditab CR, Angiopine (UK), Apo-Nifed (CA), Calchan (UK), Cardilate MR (UK), Cordacten (UK), (R) XL and various undisclosed products. These product launches are dependent on a number of factors, including receipt of final FDA marketing approval. 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 herein 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, Andrx notes that there can be no assurance as to whether or when certain products will be launched, and that words such as "may," "will," "to," "plan," "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. 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. , as amended a·mend v. a·mend·ed, a·mend·ing, a·mends v.tr. 1. To change for the better; improve: amended the earlier proposal so as to make it more comprehensive. 2. , for the year ended December 31, 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
March 31,
---------------------
2002 2001 (1)
----------- -----------
Revenues
Distributed products $ 128,510 $ 107,956
Andrx products 54,536 44,754
Other 1,738 4,632
------------ -----------
Total revenues 184,784 157,342
------------ -----------
Operating expenses
Cost of goods sold 127,982 94,592
Selling, general and administrative 36,439 22,953
Research and development 9,922 14,324
Cybear Internet operating expenses 4,846 5,490
------------ -----------
Total operating expenses 179,189 137,359
------------ -----------
Income from operations 5,595 19,983
Other income 2,231 3,476
------------ -----------
Income before income taxes 7,826 23,459
Income taxes 3,313 8,856
------------ ------------
Net income $ 4,513 $ 14,603
============ ============
EARNINGS (LOSS) PER SHARE
ANDRX COMMON STOCK:
Net income allocated to Andrx Group $ 8,395 $ 19,169
============ ============
Net income per share of Andrx common
stock:
Basic $ 0.12 $ 0.28
============ ============
Diluted $ 0.12 $ 0.27
============ ============
Weighted average shares of Andrx
common stock outstanding:
Basic 70,551,700 69,596,000
============ ============
Diluted 72,317,200 71,917,600
============ ============
CYBEAR COMMON STOCK:
Net loss allocated to Cybear Group $ (3,882) $ (4,566)
============ ============
Basic and diluted net loss per share
of Cybear common stock (2) $ (0.58) $ (1.20)
============ ============
Basic and diluted weighted average shares of
Cybear common stock outstanding (2) 6,742,700 3,800,800
============ ============
(1) Certain 2001 amounts have been reclassified to conform to the
current period presentation.
(2) 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 ended
March 31, 2002 and 2001 reflect the July 31, 2001 one-for-four
reverse stock split for Cybear common stock.
ANDRX CORPORATION AND SUBSIDIARIES
Unaudited Condensed Consolidated Balance Sheets
(in thousands)
March 31, December 31,
2002 2001
--------- ---------
Assets
Cash, cash equivalents and
investments available-for-sale $ 233,075 $ 245,424
Accounts receivable, net, inventories
and other current assets 332,102 337,649
--------- ---------
Total current assets 565,177 583,073
Property, plant and equipment, net
and other assets 217,315 206,141
--------- ---------
Total assets $ 782,492 $ 789,214
========= =========
Liabilities and Stockholders'
Equity
Total current liabilities $ 121,876 $ 136,238
Other liabilities 5,299 5,082
Commitments and contingencies
Total stockholders' equity 655,317 647,894
--------- ---------
Total liabilities and stockholders'
equity $ 782,492 $ 789,214
========= =========
ANDRX GROUP
(Representing Andrx Corporation and its subsidiaries
other than Cybear Group)
Unaudited Condensed Consolidated Supplemental Statements of Income
(in thousands)
Three Months Ended
March 31,
--------------------------
2002 2001 (1)
----------- -----------
Revenues
Distributed products $ 127,272 $ 107,031
Andrx products 54,536 44,754
Other 843 3,974
----------- -----------
Total revenues 182,651 155,759
----------- -----------
Operating expenses
Cost of goods sold 126,840 93,721
Selling, general and administrative 36,439 22,953
Research and development 9,922 14,324
----------- -----------
Total operating expenses 173,201 130,998
----------- -----------
Income from operations 9,450 24,761
Other income 2,258 3,264
----------- -----------
Income before income taxes 11,708 28,025
Income taxes 3,313 8,856
----------- -----------
Net income $ 8,395 $ 19,169
=========== ===========
(1) Certain 2001 amounts have been reclassified to conform to the
current period presentation.
ANDRX GROUP
(Representing Andrx Corporation and its subsidiaries
other than Cybear Group)
Unaudited Condensed Consolidated Supplemental Balance Sheets
(in thousands)
March 31, December 31,
2002 2001
---------- -----------
Assets
Cash, cash equivalents and investments
available-for-sale $ 232,964 $ 244,190
Accounts receivable, net, inventories
and other current assets 330,947 335,729
---------- ----------
Total current assets 563,911 579,919
Property, plant and equipment, net and
other assets, including $2,030
and $2,001 note receivable from
Cybear Group as of March 31, 2002
and December 31, 2001, respectively 207,072 194,388
---------- ----------
Total assets $ 770,983 $ 774,307
========== ==========
Liabilities and Andrx Group
Equity
Total current liabilities $ 115,669 $ 130,235
Other liabilities 3,428 3,428
Commitments and contingencies
Total Andrx Group equity 651,886 640,644
---------- ----------
Total liabilities and Andrx
Group equity $ 770,983 $ 774,307
========== ==========
CYBEAR GROUP
(Representing Cybear Inc. and Mediconsult.com, Inc. and their
respective subsidiaries)
Unaudited Condensed Consolidated Supplemental
Statements of Operations
(in thousands)
Three Months Ended
March 31,
-------------------------------
2002 2001 (1)
------------- -------------
Revenues
Cybearclub LC Internet product sales $ 1,238 $ 925
Portal services 737 -
Application services 147 376
Website development, hosting and
other services 11 148
Subscription services - 134
---------- ---------
Total revenues 2,133 1,583
---------- ---------
Operating expenses
Cost of sales 1,142 871
Network operations and operations
support 952 1,048
Product development 880 1,429
Selling, general and administrative 1,952 1,482
Depreciation and amortization 1,062 1,531
---------- ---------
Total operating expenses 5,988 6,361
---------- ---------
Loss from operations (3,855) (4,778)
Other income (expense), net (27) 212
---------- ---------
Loss before income taxes (3,882) (4,566)
Income taxes - -
---------- ---------
Net loss $ (3,882) $ (4,566)
========== =========
(1) Certain 2001 amounts have been reclassified to conform to the
current period presentation.
CYBEAR GROUP
(Representing Cybear Inc. and Mediconsult.com, Inc. and their
respective subsidiaries)
Unaudited Condensed Consolidated Supplemental Balance Sheets
(in thousands)
March 31, December 31,
2002 2001
----------- -----------
Assets
Cash and cash equivalents $ 111 $ 1,234
Other assets, net 1,155 1,920
----------- -----------
Total current assets 1,266 3,154
Total long-term assets 12,972 13,933
----------- -----------
Total assets $ 14,238 $ 17,087
=========== ===========
Liabilities and Cybear Group Equity
Total current liabilities $ 6,906 $ 6,182
Other liabilities, including $2,030
and $2,001 note payable to Andrx
Group as of March 31, 2002 and
December 31, 2001, respectively 3,901 3,655
Commitments and contingencies
Total Cybear Group equity 3,431 7,250
----------- -----------
Total liabilities and Cybear Group
equity $ 14,238 $ 17,087
=========== ===========
--30--bl/mi & mw/mi*
CONTACT: Andrx Corporation, Fort Lauderdale
Angelo C. Malahias, 954/584-0300
KEYWORD: FLORIDA
INDUSTRY KEYWORD: PHARMACEUTICAL MEDICAL INTERNET E-COMMERCE
EARNINGS CONFERENCE CALLS
SOURCE: Andrx Corporation
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