Cybear Group Reports Third Quarter 2001 Results of Operations.Business Editors & Health/Medical/Technology 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)--Oct. 25, 2001 Andrx Corporation today announced financial results for the three and nine month periods ended September September: see month. 30, 2001, for the 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 Andrx Corporation's common stock that tracks the business of the Cybear Group. During the third quarter of 2001, Cybear Group was comprised of Andrx Corporation's wholly owned subsidiary Wholly Owned Subsidiary A subsidiary whose parent company owns 100% of its common stock. Notes: In other words, the parent company owns the company outright and there are no minority owners. , Cybear Inc., and its subsidiaries, and Mediconsult.com, Inc., and its subsidiaries ("Mediconsult"). For the third quarter of 2001, Cybear Group reported a net loss of $14.6 million, or $2.23 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, compared to a net loss of $8.5 million, or $2.23 per 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 diluted share for the comparable quarter in 2000. For the first nine months of 2001, Cybear Group reported a net loss of $27.6 million, or $5.04 per diluted share, compared to a net loss of $20.3 million, or $5.33 per pro forma diluted share for the comparable period in 2000. Cybear Group per share amounts, as reported in this release for the 2000 periods, are pro forma as the weighted average shares outstanding of Cybear 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 periods is based on the shares outstanding as of the September 7, 2000 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. . In July July: see month. 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 in this release reflect the reverse stock split. The third quarter of 2001 included other non-recurring charges of $9.3 million associated with the 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. of the remaining net goodwill created in the September 2000 reorganization described below. The 2001 third quarter other non-recurring charges also included an accrual accrual, n continually recurring short-term liabilities. Examples are accrued wages, taxes, and interest. of $1.1 million associated with an estimated loss that Cybear 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. in subleasing a portion of its headquarters in Boca Raton, Florida Boca Raton ("bōkə rə-tōn") is a city in Palm Beach County, Florida incorporated in May 1925. As of the 2000 census, the city had a total population of 74,764; the 2006 population recorded by the U.S. Census Bureau was 86,396. . The third quarter 2000 results included $317,000 in merger costs associated with the September 2000 reorganization and $4.0 million in other non-recurring charges consisting of an impairment associated with the termination of an agreement. Excluding the other non-recurring charges for both the 2001 and 2000 periods, Cybear's net loss was $4.2 million, or $0.64 per diluted share for the third quarter of 2001, compared to a net loss of $4.5 million, or $1.18 per pro forma diluted share for the comparable quarter in 2000. On September 7, 2000, Andrx Corporation completed a reorganization whereby Andrx Corporation acquired the outstanding shares of common stock of Cybear Inc. that it did not 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 the Cybear Group and Andrx common stock (Nasdaq:ADRX ADRX Andrx Corporation (stock symbol) ) to track the performance of Andrx Corporation and its subsidiaries other than the 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 common stock and .0372 shares of Cybear common stock. "During the third quarter, Cybear successfully negotiated strategic relationships with Aventis Aventis Is a pharmaceutical and lab assay testing company. It was formed in 1999 when Rhône-Poulenc S.A. merged with Hoechst AG. The merged company was based in Strasbourg, France. Sanofi-Aventis was formed in 2004 when Sanofi-Synthélabo purchased Aventis. Pharmaceuticals and Merck-MEDCO Managed Care," said Timothy E. Nolan, Cybear Inc.'s President and Chief Operating Officer Chief Operating Officer (COO) The officer of a firm responsible for day-to-day management, usually the president or an executive vice-president. . "The Aventis relationship covers three years and will generate $4.5 million of cash for Cybear; while the Merck-MEDCO relationship signals Cybear's entry into the PBM PBM - play by mail. See play by electronic mail. (pharmacy benefit management A Pharmacy Benefit Manager (PBM) is a third party administrator of prescription drug programs. They are primarily responsible for processing and paying prescription drug claims. ) market." Mr. Nolan also noted, "Network operations and support, product development and selling, general and administrative expenses declined by $600,000 from the second quarter of this year to the third quarter, providing tangible evidence of the effectiveness of our cost control efforts." Cybear Group recorded total revenues of $3.0 million for the third quarter 2001, an increase of $580,000, compared to total revenues of $2.4 million for the comparable 2000 quarter. Revenues in the third quarter of 2001 included total Cybearclub LC ("Cybearclub") revenues of $977,000, compared to total Cybearclub revenues of $2.1 million for the comparable 2000 quarter. Cybearclub is Cybear Group's joint venture with Andrx 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 telemarketers to transition Andrx 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 October: see month. 9, 2000, Cybearclub revenues consist of physician Internet sales entered by physician offices on the Internet and do not include revenues procured by Andrx telemarketers, which are recorded by Andrx. Cybearclub`s $977,000 in revenues for the third quarter of 2001 represented physician Internet sales, reported as "Cybearclub LC Internet product sales." For the third quarter of 2000, total Cybearclub revenues were $2.1 million consisting of $385,000 representing physician Internet sales reported as "Cybearclub LC Internet product sales," and $1.7 million representing orders procured by Andrx telemarketers and entered by Cybear employees over the Internet on behalf of customers reported as "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." Cybear Group generated $875,000 in revenue associated with its Web development, hosting and other services for the third quarter of 2001, compared to $71,000 for the comparable 2000 quarter. Web development, hosting and other services for the third quarter of 2001 included $300,000 primarily derived de·rive v. de·rived, de·riv·ing, de·rives v.tr. 1. To obtain or receive from a source. 2. from Mediconsult. Subscription revenues from Dr. Cybear were $140,000 for the third quarter of 2001, compared to $35,000 for the comparable 2000 quarter. Other revenues consist of $983,000 associated with the early termination of a contract by a customer during the third quarter of 2001. Gross profit from Cybearclub LC Internet product sales was $64,000 with a gross margin of 6.6% in the third quarter of 2001. Gross profit from total Cybearclub sales and other product sales was $161,000 with a gross margin of 7.0% for the third quarter of 2000. Network operations and support, product development and selling, general and administrative expenses were $4.6 million in the third quarter of 2001, compared to $3.6 million in the comparable 2000 quarter. The overall increase in these expenses was primarily the result of the inclusion of Mediconsult after the April acquisition. Depreciation and amortization expense was $1.8 million for the third quarter of 2001, compared to $1.2 million for the comparable 2000 quarter. The increase in depreciation and amortization in the third quarter of 2001 resulted primarily from the amortization of goodwill established as a result of the acquisition of Mediconsult in April 2001 and the September 2000 reorganization. Cybear Group recognized investment income of $99,000 for the third quarter of 2001, compared to $455,000 for the comparable 2000 quarter. The investment income 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 from the June June: see month. 1999 public offering of Cybear Inc. The increase in the basic and diluted weighted average shares of common stock outstanding for the 2001 periods presented was primarily attributable attributable emanating from or pertaining to attribute. attributable proportion see attributable risk (below). attributable risk to the April 2, 2001, stock-for-stock merger with Mediconsult whereby 2.3 million shares of Cybear common stock were issued in April 2001 and an additional 600,000 shares of Cybear common stock were issued in July 2001. As of September 30, 2001, Cybear Group had approximately $3.9 million in cash, cash equivalents and investments available-for-sale 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 approximately $2.0 million. As previously announced, Andrx and Cybear have entered into a $12.0 million committed line of credit which provides Cybear with the ability to begin drawing cash once Cybear's cash balance falls below $3.0 million. As of September 30, 2001, no amount had been drawn against this line of credit. Cybear common stock is a class of common stock of Andrx Corporation but is designed to reflect Cybear Group's performance. Holders of Cybear common stock have no specific rights to the assets of Cybear Group. Andrx Corporation continues to hold title to all of the Cybear Group assets and is responsible for all of its liabilities, regardless of how it allocates assets and liabilities among the classes of stock for financial statement presentation purposes. Holders of Cybear common stock are therefore subject to the risks of investing in the businesses, assets and liabilities of Andrx Corporation as a whole. For instance, the assets devoted to each class of stock are subject to company-wide claims of creditors, product liability plaintiffs and stockholder 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. . Andrx Corporation - Cybear common stock tracks the business of the Cybear Group. Headquartered in Boca Raton, Florida, the Cybear Group's products and technology are designed to allow the Internet to be used to improve the efficiency of clinical, administrative and communications tasks in the healthcare industry. The Cybear Group uses multiple networks, including its own secure private network, to provide access to the Internet, email, and productivity applications that are available on a transaction or subscription basis to physicians, physician organizations and hospitals. Product offerings also include a variety of healthcare products available to physicians through the Internet, online applications such as the Physicians' Online Web portal See portal. , business tools for hospital messaging, lab orders and results, streamlined purchasing, prescription writing, claims processing, eligibility verification, formulary-compliance, credentialing Credentialing is the administrative process for validating the qualifications of licensed professionals, organizational members or organizations, and assessing their background and legitimacy. , and physician-patient communications via the Internet. Through Cybearclub LC, Cybear Group's joint venture with Andrx, Cybear Group distributes healthcare products to physicians through the Internet. 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 "to," "may," "will," "expect," "believe," "anticipate," "intend," "could," "would," "estimate," or "continue" or the negative or 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. Cybear common stock is a class of common stock of Andrx Corporation, therefore Cybear Group 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 December: see month. 31, 2000 and its Quarterly Reports on Form 10-Q Form 10-Q See 10-Q. for the quarters ended March 31, 2001 and June 30, 2001. This release and additional information about Cybear Group and Andrx Corporation are also available on the Internet at: http://www.cybear.com and http://www.andrx.com.
Cybear Group
Unaudited Condensed Consolidated Statements of Operations
(in thousands, except for share and per share amounts)
Three Months Ended Nine Months Ended
September 30, September 30,
2001 2000 (1) 2001 2000 (1)
---- ---- ---- ----
Revenues
Cybearclub LC Internet
product sales (2) $ 977 $ 385 $ 3,000 $ 711
Cybearclub LC
telemarketing
product sales (2) -- 1,710 -- 2,581
Other product sales -- 194 -- 321
Web development, hosting
and other services 875 71 2,637 207
Subscription 140 35 416 43
Other revenues 983 -- 983 --
----- ----- ----- -----
Total revenues 2,975 2,395 7,036 3,863
----- ----- ----- -----
Operating expenses
Cost of sales 913 2,128 2,811 3,425
Network operations and
support 1,217 1,068 4,360 3,276
Product development 1,245 727 4,030 2,515
Selling, general and
administrative 2,141 1,843 5,412 6,652
Depreciation and
amortization 1,771 1,241 6,106 2,563
Merger costs -- 317 -- 1,202
Other non-recurring
charges 10,373 4,000 12,355 6,022
------ ------ ------ ------
Total operating
expenses 17,660 11,324 35,074 25,655
------ ------ ------ ------
Loss from operations (14,685) (8,929) (28,038) (21,792)
Other income
Investment income 99 455 406 1,519
------ ------ ------ ------
Net loss $(14,586) $(8,474) $(27,632) $(20,273)
====== ====== ====== ======
Basic and diluted net
loss per
share (3) (4) $ (2.23) $ (2.23) $ (5.04) $ (5.33)
====== ====== ====== ======
Basic and diluted
weighted average
shares of common stock
outstanding
(3) (4) 6,544,900 3,800,800 5,484,700 3,800,800
========= ========= ========= =========
(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 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 employees). Cybear has reclassified prior year
amounts to conform to this presentation.
(3) The pro forma basic and diluted net loss per share included herein
for the three and nine months ended September 30, 2000 has been
calculated assuming the pro forma basic and diluted weighted
average shares of common stock outstanding as of the September 7,
2000 reorganization (the effective date of issuance of the Cybear
common stock) were outstanding for these periods.
(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 and nine months ended September 30, 2001 and
2000 reflect the July 31, 2001 one-for-four reverse stock split.
Cybear Group
Unaudited Condensed Consolidated Balance Sheets
(in thousands)
September 30, December 31,
2001 2000
------------ ------------
ASSETS
Cash, cash equivalents and
investments available-for-sale $ 3,872 $16,701
Accounts receivable, net and
other current assets 2,344 1,441
------------ ------------
Total current assets 6,216 18,142
Total long-term assets, net 16,897 21,363
------------ ------------
Total assets $23,113 $39,505
============ ============
LIABILITIES AND GROUP EQUITY
Total current liabilities $ 8,241 $ 1,954
Group equity 14,872 37,551
------------ ------------
Total liabilities and group
equity $23,113 $39,505
============ ============
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