Andrx Reports 229% Increase In Fourth Quarter Net Income.Business Editors FORT LAUDERDALE Fort Lauderdale (lô`dərdāl), residential, commercial, and resort city (1990 pop. 149,377), seat of Broward co., SE Fla., on the Atlantic coast; settled around a fort built (c.1837) in the Seminole War, inc. 1911. , Fla.--(BUSINESS WIRE)--February 10, 2000 ANDRX CORPORATION (Nasdaq:ADRX ADRX Andrx Corporation (stock symbol) ) today announced its results for the three months and year ended December December: see month. 31, 1999. Andrx reported net income of $20.4 million or $0.63 per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share for the 1999 fourth quarter, as compared to net income of $6.2 million or $0.19 per diluted share for the 1998 fourth quarter. Andrx reported net income of $94.1 million or $2.90 per diluted share for the year ended December 31, 1999, as compared to net income of $8.4 million or $0.26 per diluted share for the year ended December 31, 1998. For the year ended December 31, 1999, the consolidated statement of income includes $50.7 million 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 related to the final payment from the Stipulation and Agreement upon the resolution of the patent infringement patent infringement n. the manufacture and/or use of an invention or improvement for which someone else owns a patent issued by the government, without obtaining permission of the owner of the patent by contract, license or waiver. litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. on the Company's 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. Excluding the net losses of Cybear, Inc. (Nasdaq:CYBA CYBA Charter Yacht Broker Association CYBA Conejo Youth Basketball Association (Conejo Valley, California) CYBA California Yacht Brokers Association CYBA Cybertron Army CYBA Columbia Yacht Brokers Association ), Andrx reported net income of $23.5 million or $0.72 per diluted share for the 1999 fourth quarter, as compared to net income of $8.0 million or $0.25 per diluted share for the 1998 fourth quarter. For the year ended December 31, 1999, excluding Cybear's net losses, Andrx reported net income of $105.0 million or $3.23 per diluted share, as compared to net income of $12.2 million or $0.38 per diluted share for the year ended December 31, 1998. Cybear is Andrx' majority owned Internet-based portal and provider of healthcare communications and applications subsidiary. On December 21, 1999, the Company announced a recapitalization Recapitalization Restructuring a company's debt and equity mixture often with the aim of making a company's capital structure more stable. Notes: Companies often want to diversify their debt-to-equity ratio to improve liquidity. plan pursuant to which Andrx would acquire the minority interest in Cybear which it does not own in exchange for a new class of Andrx common stock, commonly known as &uot;Tracking Stock,&uot; that will separately reflect the performance of Cybear. Andrx' 228.6% increase in net income, from $6.2 million in the 1998 fourth quarter to $20.4 million in the 1999 fourth quarter, is attributable, in large part, to sales of Cartia Cartia® Diltiazem HCl Cardiology A generic Cardizem® used for angina and HTN. See Angina, Hypertension. XT(TM), Andrx' bioequivalent version of Cardizem(R) CD, which enjoyed a 180 day period of marketing exclusivity through December 19, 1999. In comparison, the 1998 fourth quarter included interim Stipluation fees pursuant to the Company's Stipulation and Agreement related to the then pending patent infringement litigation involving Cartia XT(TM). The Company's total revenues increased by 66.9% to $122.1 million for the 1999 fourth quarter, as compared to $73.1 million for the 1998 fourth quarter. Sales from distributed products increased by 12.6% to $67.2 million for the 1999 fourth quarter, as compared to $59.7 million for the 1998 fourth quarter. Sales from manufactured products increased to $51.8 million for the 1999 fourth quarter, as compared to $3.5 million for the 1998 fourth quarter. Sales from manufactured products include Diltia XT(R), the Company's bioequivalent version of Dilacor Di·la·cor A trademark for the drug diltiazem hydrochloride. XR(R) and commencing June 23, 1999, Cartia XT(TM). In comparison, in the 1998 fourth quarter, Andrx received interim Stipulation fees of $10.0 million pursuant to the Stipulation and Agreement. The Company recorded $3.1 million of licensing and other revenues in the 1999 fourth quarter, as compared to $33,000 in the 1998 fourth quarter. Such revenues were generated from the Company's domestic and international licensing arrangements. Gross profit from sales of distributed and manufactured products were $56.0 million, with a gross margin of 47.0% in the 1999 fourth quarter, as compared to $11.4 million, with a gross margin of 18.1% in the 1998 fourth quarter. The increase in gross profit and gross margin percentage is primarily the result of the increase in sales of manufactured products within the product mix. Selling, general and administrative expenses were $13.9 million or 11.4% of total revenues for the 1999 fourth quarter, as compared to $8.4 million or 11.4% of total revenues for the 1998 fourth quarter. The increase in selling, general and administrative expenses was primarily due to an increase in the activities necessary to support the increased sales from distributed and manufactured products, including a royalty paid to the Company's Co-Chairman and Chief Scientific Officer related to sales of Cartia XT(TM) in the 1999 fourth quarter and interim Stipulation fees in the 1998 fourth quarter. Research and development expenses were $9.4 million in the 1999 fourth quarter, as compared to $5.2 million in the 1998 fourth quarter. The increase in research and development expenses of $4.2 million or 80.0% reflects the continuing progress in and expansion of both the Company's bioequivalent (ANDA ANDA abbr. abbreviated new drug application ) and brand name (NDA (Non Disclosure Agreement) An agreement signed between two parties that have to disclose confidential information to each other in order to do business. In general, the NDA states why the information is being divulged and stipulates that it cannot be used for any ) drug development programs. The Company's NDA program currently has one product (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 XL) in Phase III clinical trials Noun 1. phase III clinical trial - a large clinical trial of a treatment or drug that in phase I and phase II has been shown to be efficacious with tolerable side effects; after successful conclusion of these clinical trials it will receive formal approval from the . A second 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) is expected to enter Phase III clinical trials in the second quarter of 2000. In the 1999 fourth quarter, the Company incurred $5.0 million of Internet Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. through Cybear, as compared to $1.9 million in the 1998 fourth quarter. The increase in costs primarily relates to progress in the development of applications and the establishment of the related operational and administrative infrastructure of Cybear. The diluted weighted average shares of common stock outstanding were 32.6 million in the 1999 fourth quarter, as compared to 32.1 million in the 1998 fourth quarter. All shares and related per share calculations for prior periods have been restated for the Company's May 17, 1999 two-for-one stock split effected in the form of a 100% stock dividend on June 1, 1999. 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, stated, &uot;It has been an exceptional quarter for Andrx, once again. But while most people's attention has been focused on the stellar results of Cartia XT (our bioequivalent version of Cardizem(R) CD), other developments seemed to have slipped in under the radar This article is about the magazine. For other uses, see Under the Radar (disambiguation). Under the Radar is an American magazine that bills itself as "The solution to music pollution." It features interviews with accompanying photo-shoots. screen. Two years after its launch, Diltia XT(R) (our bioequivalent version of Dilacor XR(R)) had its best quarter ever. Even more promising, our NDA and ANDA programs made important progress, and our new 250,000 square foot manufacturing and R& facility moves toward completion. This new building expands Andrx' facilities to over 500,000 square feet and, after the approval we expect, will enable us to supply all of the U.S. with 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) - the largest selling prescription product in the U.S. - rather than the brand manufactured and marketed by AstraZeneca. All told, we hope you're enjoying being part of the Andrx adventure as much as we enjoy having your support.&uot; Andrx is engaged in the formulation formulation /for·mu·la·tion/ (for?mu-la´shun) the act or product of formulating. American Law Institute Formulation and commercialization of oral controlled-release pharmaceuticals utilizing its proprietary drug delivery technologies. In its ANDA program, the Company is developing generic versions of selected high sales volume controlled-release brand name pharmaceuticals. In its NDA program, the Company is developing its own brand name formulations of certain existing drugs that it believes may be improved by the application of the Company's drug delivery technologies. The Company also markets and distributes pharmaceutical products manufactured by third parties and, through its Cybear, Inc. subsidiary, is developing internet-based software and applications for the healthcare industry. Forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. (statements which are not historical facts) in this release are made pursuant to the safe harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. provisions of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995. For this purpose, any statements contained in this report that are not statements of historical fact may be deemed to be forward-looking statements. Without limiting the generality gen·er·al·i·ty n. pl. gen·er·al·i·ties 1. The state or quality of being general. 2. An observation or principle having general application; a generalization. 3. of the foregoing, words such as &uot;may,&uot; &uot;will,&uot; &uot;expect,&uot; &uot;believe,&uot; &uot;anticipate,&uot; &uot;intend,&uot; &uot;could,&uot; &uot;would,&uot; &uot;estimate,&uot; or &uot;continue&uot; 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. Summary financial highlights are as follows:
ANDRX CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
(in thousands, except for share and per share amounts)
Three Months Ended Year Ended
December 31, December 31,
1999 1998(1) 1999 1998(1)
Revenues
Distributed products $ 67,156 $ 59,656 $ 262,402 $ 215,903
Manufactured products 51,815 3,452 134,796 11,472
Stipulation fees - 10,000 70,733 19,130
Licensing and other 3,120 33 8,059 552
Total revenues 122,091 73,141 475,990 247,057
Operating expenses
Cost of goods sold 63,020 51,711 235,346 188,226
Selling, general and
administrative 13,894 8,373 52,840 29,157
Research and development 9,393 5,219 27,708 17,395
Equity in losses of
joint venture 334 17 370 931
Cybear, Inc. Internet
operating expenses 4,973 1,858 14,789 4,090
Total operating expenses 91,614 67,178 331,053 239,799
Income from operations 30,477 5,963 144,937 7,258
Other income
Minority interest in
Cybear, Inc. 1,154 36 1,937 85
Gain on sale of
Cybear, Inc. shares 343 200 643 700
Interest income, net 935 253 1,942 684
Income before income taxes 32,909 6,452 149,459 8,727
Income taxes 12,505 243 55,405 333
Net income $ 20,404 $ 6,209 $ 94,054 $ 8,394
Basic net income per
share $ 0.65 $ 0.21 $ 3.03 $ 0.28
Diluted net income per
share $ 0.63 $ 0.19 $ 2.90 $ 0.26
Basic weighted average
shares of common
stock outstanding 31,474,000 30,234,000 30,990,000 30,045,000
Diluted weighted
average shares of
common stock
outstanding 32,554,000 32,068,000 32,477,000 31,853,000
Exclusive of Cybear, Inc.'s Net Losses:
Net income $ 23,541 $ 7,961 $ 105,042 $ 12,246
Basic net income per
share $ 0.75 $ 0.26 $ 3.39 $ 0.41
Diluted net income
per share $ 0.72 $ 0.25 $ 3.23 $ 0.38
(1) Restated for the Company's May 17, 1999 two-for-one stock
split effected in the form of a 100% stock dividend. Certain prior
period amounts have been reclassified to conform with the current
period presentation.
ANDRX CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
(in thousands)
December 31,
1999 1998
Assets
Cash, cash equivalents and
investments available-for-sale $ 123,417 $ 23,092
Accounts receivable-net,
inventories and other current
assets 181,041 76,868
Total current assets 304,458 99,960
Property, plant and equipment -
net and other assets 53,587 21,238
Total assets $ 358,045 $ 121,198
Liabilities and Shareholders' Equity
Total liabilities $ 137,073 $ 48,615
Total shareholders' equity 220,972 72,583
Total liabilities and
shareholders' equity $ 358,045 $ 121,198
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