Andrx Reports: Increase in Profits and Development Spending.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. 17, 1999--ANDRX CORPORATION (Nasdaq:ADRX ADRX Andrx Corporation (stock symbol) ) today announced its results for the three months and year ended December 31, 1998. For the 1998 fourth quarter, Andrx reported net income of $6,209,000 or $0.39 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. weighted average share outstanding as compared to a net loss of $1,108,000 or $0.07 per diluted weighted average share outstanding for the 1997 fourth quarter. For the year ended December 31, 1998, Andrx reported net income of $8,394,000 or $0.53 per diluted weighted average share outstanding as compared to a net loss of $7,636,000 or $0.54 per diluted weighted average share outstanding for the year ended December 31, 1997. The Company increased its net income while continuing to increase its investment spending in pharmaceutical research and development and software development. Total revenues increased by 66.9% to $73,141,000 for the 1998 fourth quarter as compared to $43,817,000 for the 1997 fourth quarter. For the fourth quarter of 1998, 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 from distributed products increased by 47.5% to $59,656,000 as compared to $40,443,000 for the 1997 fourth quarter. Net sales from manufactured products increased to $3,452,000 for the 1998 fourth quarter as compared to $3,324,000 for the 1997 fourth quarter. In the 1998 fourth quarter, Andrx earned $10,000,000 in stipulation An agreement between attorneys that concerns business before a court and is designed to simplify or shorten litigation and save costs. During the course of a civil lawsuit, criminal proceeding, or any other type of litigation, the opposing attorneys may come to an agreement fees under its status quo [Latin, The existing state of things at any given date.] Status quo ante bellum means the state of things before the war. The status quo to be preserved by a preliminary injunction is the last actual, peaceable, uncontested status which preceded the pending controversy. stipulation and agreement with Hoechst Marion Roussel Inc. and Carderm Capital L.P. Gross profits from net sales of distributed products were $9,660,000 or 16.2% in the 1998 fourth quarter, as compared to $6,315,000 or 15.6% in the 1997 fourth quarter. This represents the 26th consecutive quarter (every quarter since inception) with an increase in gross profits from the distribution operation. Manufacturing costs, which consist of costs of manufactured products as well as idle facility costs, were $1,715,000 for the 1998 fourth quarter compared to $1,631,000 for the 1997 fourth quarter. Selling, general and administrative expenses were $8,373,000 or 11.4% of total revenues for the quarter ended December 31, 1998, as compared to $5,642,000 or 12.9% of total revenues for the quarter ended December 31, 1997. The increase in selling, general and administrative expenses was primarily due to an increase in the activities necessary to support the increase in net sales from distributed and manufactured products, and includes a royalty to the Company's Chief Scientific Officer, who is also a principal shareholder and the Company's Co-Chairman, with respect to the stipulation fees. Research and development expenses were $5,219,000 in the 1998 fourth quarter, as compared to $3,008,000 in the 1997 fourth quarter. The increase in research and development expenses of $2,211,000 or 73.5% reflects the progress and expansion of the Company's development activities for its 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. (ANDA ANDA abbr. abbreviated new drug application ) and brand name (NDA (Non Disclosure Agreement) An agreement signed between two parties that have to disclose confidential information to each other in order to do business. In general, the NDA states why the information is being divulged and stipulates that it cannot be used for any ) programs, including legal costs related 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. claims associated with the Company's ANDA filings. The Company's equity share of losses in ANCIRC Pharmaceuticals, its 50/50 joint venture with Watson Pharmaceuticals Watson Pharmaceuticals, Incorporated (NYSE: WPI) is the 5th largest pharmaceutical company in the United States based on number of prescriptions dispensed. Based in Corona, California, Watson's Generics division markets over 150 pharmaceutical product families, including one of the , Inc. (NYSE NYSE See: New York Stock Exchange :WPI WPI - Worcester Polytechnic Institute ), decreased to $17,000 for the 1998 fourth quarter, as compared to $421,000 in the 1997 fourth quarter. In September 1998, upon receiving 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. approval, ANCIRC launched its first product, a generic version of Trental Tren·tal A trademark for the drug pentoxifylline. pentoxifylline Apo-Pentoxyphylline (CA), Neotren (UK), Nu-Pentoxyphylline SR (CA), Pentoxil, Trental Pharmacologic class: (tm). This product was formulated for·mu·late tr.v. for·mu·lat·ed, for·mu·lat·ing, for·mu·lates 1. a. To state as or reduce to a formula. b. To express in systematic terms or concepts. c. by Andrx, is being manufactured by Watson and is being marketed by Andrx. In the 1998 fourth quarter, the Company incurred $1,822,000 of software development and administrative costs administrative costs, n.pl the overhead expenses incurred in the operation of a dental benefits program, excluding costs of dental services provided. as compared to $473,000 in the 1997 fourth quarter. The increase in software development and administrative costs primarily relates to progress in software applications and the establishment of the related administrative infrastructure by CyBear, Inc. (OTC Bulletin Board OTC Bulletin Board An electronic quotation listing of the bid and asked prices of OTC stocks that do not meet the requirements to be listed on the NASDAQ stock-listing system. : CYBR CYBR Copy Byte Right ), the Company's Internet based communications technology Noun 1. communications technology - the activity of designing and constructing and maintaining communication systems engineering, technology - the practical application of science to commerce or industry subsidiary. In the 1998 fourth quarter, Andrx recognized a gain of $200,000 on the sale of CyBear, Inc. common stock to CyBear, Inc.'s Chairman pursuant to the previously announced subscription agreement. In the 1998 fourth quarter, the Company provided $243,000 for federal alternative premium taxes. The Company was not required to provide for other federal or state income taxes in the 1998 fourth quarter due to the utilization of net operating loss carryforwards Net operating loss carryforwards Application of losses to offset earnings in future years. . The diluted weighted average shares of common stock outstanding were 16.0 million in the 1998 fourth quarter as compared to 14.8 million for the 1997 fourth quarter and 15.9 million for the year ended 1998 as compared to 14.2 million for the year ended 1997. The increase in such diluted weighted average shares of common stock outstanding in the 1998 periods, as compared to the comparable 1997 periods resulted primarily from the inclusion of stock equivalents in the profitable 1998 periods. "We are proud to have earned $6.2 million or $0.39 per diluted share for our shareholders this past quarter," said Alan P. Cohen cohen or kohen (Hebrew: “priest”) Jewish priest descended from Zadok (a descendant of Aaron), priest at the First Temple of Jerusalem. The biblical priesthood was hereditary and male. , Andrx' Co-Chairman and Chief Executive Officer. "This achievement is especially notable in light of our increased spending in the quarter for pharmaceutical research and development to $5.2 million and software development for our CyBear Internet technologies to $1.8 million - prudent spending from which we believe Andrx and its shareholders will reap rewards for years to come." Forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. (statements which are not historical facts) in this release are made pursuant to the safe harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. provisions of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995. For this purpose, any statements contained in this report that are not statements of historical fact may be deemed to be forward-looking statements. Without limiting the generality gen·er·al·i·ty n. pl. gen·er·al·i·ties 1. The state or quality of being general. 2. An observation or principle having general application; a generalization. 3. of the foregoing, words such as "may," "will," "expect," "believe," "anticipate," "intend," "could," "would," "estimate," or "continue" or the negative other variations thereof or comparable terminology are intended to identify forward-looking statements. Investors are cautioned that all forward-looking statements involve risk and uncertainties, including those risks and uncertainties detailed in the Company's filings with the Securities and Exchange Commission. This release and additional information about Andrx Corporation are also available on the Internet at: http://www.andrx.com. -0-
Summary financial highlights are as follows:
ANDRX CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
(in thousands, except per share amounts)
Three Months Ended Year Ended
December 31, December 31,
------------------ ------------------
1998 1997 1998 1997
---- ---- ---- ----
Revenues
Distributed products,
net $ 59,656 $ 40,443 $ 215,903 $ 146,237
Manufactured products,
net 3,452 3,324 11,472 3,324
Stipulation fees 10,000 -- 19,130 --
Licensing 33 50 552 137
--------- --------- --------- ---------
Total revenues 73,141 43,817 247,057 149,698
--------- --------- --------- ---------
Operating expenses
Cost of distributed
products 49,996 34,128 182,703 124,177
Manufacturing costs
(including idle
facility costs) 1,715 1,631 5,523 2,625
Selling, general and
administrative 8,373 5,642 29,157 18,734
Research and
development 5,219 3,008 17,395 9,769
Equity in losses of
joint venture 17 421 931 1,682
Software development
and administrative 1,822 473 4,005 1,442
--------- --------- --------- ---------
Total operating
expenses 67,142 45,303 239,714 158,429
--------- --------- --------- ---------
Income (loss) from
operations 5,999 (1,486) 7,343 (8,731)
Other income
Gain on sale of CyBear,
Inc. shares 200 -- 700 --
Interest income, net 253 378 684 1,095
--------- --------- --------- ---------
Income (loss) before
income taxes 6,452 (1,108) 8,727 (7,636)
Income taxes 243 -- 333 --
--------- --------- --------- ---------
Net income (loss) $ 6,209 $ (1,108) $ 8,394 $ (7,636)
========= ========= ========= =========
Basic net income (loss)
per share $ 0.41 $ (0.07) $ 0.56 $ (0.54)
========= ========= ========= =========
Diluted net income
(loss) per share $ 0.39 $ (0.07) $ 0.53 $ (0.54)
========= ========= ========= =========
Basic weighted average
shares of common
stock outstanding 15,117 14,834 15,023 14,213
========= ========= ========= =========
Diluted weighted average
shares of common
stock outstanding 16,034 14,834 15,927 14,213
========= ========= ========= =========
ANDRX CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
(in thousands)
December 31,
--------------------------------------
1998 1997
----------------- -----------------
Assets
Cash, cash equivalents and
investments available-for-sale $ 23,092 $ 25,543
Accounts receivable-net,
inventories and other current
assets 76,868 49,585
----------------- -----------------
Total current assets 99,960 75,128
Property, plant and equipment -
net and other assets 21,238 15,717
----------------- -----------------
Total assets $ 121,198 $ 90,845
================= =================
Liabilities and Shareholders' Equity
Total current liabilities $ 48,615 $ 29,984
Total shareholders' equity 72,583 60,861
----------------- -----------------
Total liabilities and
shareholders' equity $ 121,198 $ 90,845
================= =================
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