Andrx Reports First Profits.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)--Oct. 29, 1998--ANDRX CORPORATION (Nasdaq:ADRX ADRX Andrx Corporation (stock symbol) ) today announced its results for the three and nine months ended September 30, 1998. For the 1998 third quarter, Andrx reported net income of $4,862,000 or $0.31 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 $2,865,000 or $0.19 per diluted weighted average share outstanding for the 1997 third quarter. For the nine months ended September 30, 1998, Andrx reported net income of $2,186,000 or $0.14 per diluted weighted average share outstanding as compared to a net loss of $6,529,000 or $0.47 per diluted weighted average share outstanding for the nine months ended September 30, 1997. Although the Company continued to increase its research and development spending, it became profitable in the 1998 periods for the first time as a result of fees generated by the Company pursuant to 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 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 and agreement with Hoechst Marion Roussel Inc. and Carderm Capital L.P. (collectively "HMR HMR Hazardous Materials Regulations HMR Human Resources HMR Home Meal Replacement HMR Hamrun (postal locality, Malta) HMR Hôpital Maisonneuve-Rosemont (Montréal, Canada) "), the continued growth in profitability of the Company's distribution operation and profits realized from the sale of the Company's first manufactured product. Total revenues increased by 57.7% to $67,266,000 for the 1998 third quarter as compared to $42,661,000 for the 1997 third quarter. For the third 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 29.9% to $55,312,000 as compared to $42,573,000 for the third quarter of 1997. Net sales from manufactured products were $2,731,000 for the 1998 third quarter. There were no comparable sales of manufactured products in the 1997 third quarter, as the Company launched its first manufactured product, a 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 Dilacor Di·la·cor A trademark for the drug diltiazem hydrochloride. XR(tm) in October 1997. As previously announced, following the U.S. Food and Drug Administration's ("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. ") final approval of the Company's Abbreviated New Drug Application abbreviated new drug application Pharmacology An application made in the US by a pharmaceutical company requesting authority to market a 'new' drug for which both its therapeutic indications and formulation were previously approved by the FDA in another similar ("ANDA ANDA abbr. abbreviated new drug application ") for 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 on July 9, 1998, Andrx received its first $10 million quarterly payment due under its status quo stipulation and agreement with HMR. The stipulation fees for the 1998 third quarter were $9,130,000, prorated from July 9, 1998. Gross profits from net sales of distributed products were $8,424,000 or 15.2% in the 1998 quarter, as compared to $6,071,000 or 14.3% in the 1997 third quarter. This represents the 25th consecutive quarter (every quarter since inception) with an increase in gross profits from the distribution operation. Manufacturing costs for the 1998 third quarter of $1,502,000 consist of costs of manufactured products as well as idle manufacturing facility costs. Manufacturing costs for the 1997 third quarter of $522,000 consist solely of idle manufacturing facility costs, as the Company did not launch its first manufactured product until October 1997. Selling, general and administrative expenses were $8,321,000 or 12.4% of total revenues for the quarter ended September 30, 1998, as compared to $4,915,000 or 11.5% of total revenues for the quarter ended September 30, 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 both distributed products and the Company's first manufactured product and includes a royalty to the Company's Chief Scientist, who is also a principal shareholder and director, with respect to the stipulation fees. Research and development expenses were $4,996,000 in the 1998 third quarter, as compared to $3,031,000 in the 1997 third quarter. The increase in research and development expenses of $1,965,000 or 64.8% reflects the progress and expansion of the Company's development activities for its bioequivalent (ANDA) 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 ), was $228,000 in the 1998 third quarter, as compared to $498,000 in the 1997 third quarter. In September 1998, upon receiving FDA 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 third quarter, the Company incurred $935,000 of software development and administration costs as compared to $393,000 in the 1997 third quarter. The increase in software development and administration costs primarily relates to the progress in the Company's CyBear(R) software application and the establishment of the related administrative infrastructure. In the 1998 third quarter, Andrx recognized $500,000 in gain on the sale of CyBear, Inc. shares of common stock to CyBear, Inc.'s new Chairman. Such sale was at $3.00 a share or approximately a $40 million valuation for CyBear, Inc. In the 1998 third quarter, the Company provided $90,000 for federal alternative minimum taxes. The Company was not required to provide for federal or state income taxes in the 1998 third quarter due to its 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 15.9 million in the 1998 third quarter as compared to 14.7 million for the 1997 third quarter, and 15.9 million in the 1998 nine month period as compared to 14.0 million in the 1997 nine month period. 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. "Being profitable is an achievement, the importance of which cannot be overstated o·ver·state tr.v. o·ver·stat·ed, o·ver·stat·ing, o·ver·states To state in exaggerated terms. See Synonyms at exaggerate. o ," 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' Chief Executive Officer, "Yet, this is but a single highlight in the evolving Andrx story, with many more successes to come. Having crossed this milestone, we look forward to continuing to reward our shareholders, by keeping Andrx on its exciting, ambitious path." Dr. Chih-Ming J. Chen, President of Andrx Pharmaceuticals and Andrx' Chief Scientist added, "This milestone of profitability is the result of our dedicated employees, who we thank very much." 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 risks and uncertainties, including those risks and uncertainties detailed in the Company's filings with the Securities and Exchange Commission. Contact: Angelo C. Malahias, Vice President and Chief Financial Officer of Andrx Corporation, 4001 S.W. 47th Avenue, Fort Lauderdale, Florida Fort Lauderdale, known as the "Venice of America" due to its expansive and intricate canal system, is a city in Broward County, Florida, United States. The city's population is described as metropolitan, where diverse culture is commonplace. According to 2006 U.S. 33314, 954-584-0300. This release and additional information about Andrx Corporation are also available on the Internet at: http://www.andrx.com Summary financial highlights are as follows: -0-
ANDRX CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
(in thousands, except for share and per share amounts)
Three Months Ended Nine Months Ended
September 30, September 30,
--------------------- -------------------
1998 1997(a) 1998 1997(a)
--------- -------- --------- ----------
Revenues
Distributed products, net $ 55,312 $ 42,573 $ 156,247 $ 105,794
Manufactured products, net 2,731 - 8,020 -
Stipulation fees 9,130 - 9,130 -
Licensing 93 88 519 88
---------- ---------- ---------- ---------
Total revenues 67,266 42,661 173,916 105,882
---------- --------- ---------- ---------
Operating expenses
Cost of distributed
products 46,888 36,502 132,707 90,048
Manufacturing costs 1,502 522 3,808 994
(including idle facility
costs)
Selling, general and
administrative 8,321 4,915 20,796 13,094
Research and development 4,996 3,031 12,176 6,761
Equity in losses of
joint venture 228 498 914 1,261
Software development and
administration 935 393 2,171 969
---------- ---------- ---------- ---------
Total operating expenses 62,870 45,861 172,572 113,127
---------- ---------- ---------- ---------
Income (loss) from operations 4,396 (3,200) 1,344 (7,245)
Other income
Gain on sale of CyBear, Inc.
shares 500 - 500 -
Interest income, net 56 335 432 716
---------- ---------- ----------- --------
Income (loss) before
income taxes 4,952 (2,865) 2,276 (6,529)
Income taxes 90 - 90 -
----------- --------- ----------- --------
================ ===============
================= ==================
Net income (loss) $ 4,862 $(2,865) $ 2,186 $ (6,529)
=========== ========= =========== =========
Basic net income (loss)
per share $ 0.32 $ (0.19) $ 0.15 $ (0.47)
========== ========= =========== =========
Diluted net income (loss)
per share $ 0.31 $ (0.19) $ 0.14 $ (0.47)
========== ========= =========== =========
Basic weighted average
shares of common stock
outstanding 15,064,800 14,736,300 14,991,100 14,006,200
========== =========== ========== ==========
Diluted weight average
shares of common
stock outstanding 15,912,900 14,736,300 15,890,600 14,006,200
========== =========== ========== ==========
(a) Certain prior year amounts have been reclassified to conform
with the current year presentation.
CONDENSED CONSOLIDATED
BALANCE SHEETS
(Unaudited)
(in thousands)
September 30, December 31,
1998 1997
-------------- ----------------
Assets
Cash, cash equivalents and
investments available-for-sale $ 16,135 $ 25,543
Accounts receivable, inventories,
and other current assets 63,881 49,585
--------------- ----------------
Total current assets 80,016 75,128
Property, plant and equipment
and other assets 18,341 15,717
--------------- ----------------
Total assets $ 98,357 $ 90,845
=============== ================
Liabilities and Shareholders' Equity
Total current liabilities $ 33,279 $ 29,984
Total shareholders' equity 65,078 60,861
-------------- ----------------
Total liabilities and
shareholders' equity $ 98,357 $ 90,845
=============== ================
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