DRAXIS Health Reports Fourth Quarter and Full Year 1998 Results; Anipryl Milestones Boost Revenues and Contribute to EPS of $0.16 for the Year.MISSISSAUGA Mississauga (mĭsĭsaw`gə), city (1991 pop. 463,388), S Ont., Canada, 12 mi (20 km) W of Toronto on Lake Ontario. A residential suburb of Toronto and a growing transportation and industrial center, it is one of Canada's fastest-growing , Ontario--(BW HealthWire)--Feb. 11, 1999--DRAXIS Health Inc.(NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on :DRAXF) (TSE See Tokyo Stock Exchange. TSE 1. See Tokyo Stock Exchange (TSE). 2. See Toronto Stock Exchange (TSE). :DAX.) DRAXIS Health Inc. today reported results for the fourth quarter of 1998. Total revenues for the quarter of $28,815,000 included $19,903,000 of milestone “Milemarker” redirects here. For the American indie rock band, see Milemarker (band). A milestone or kilometre sign is one of a series of numbered markers placed along a road at regular intervals, typically at the side of the road or in a median. income. Excluding this special item, quarterly revenues amounted to $8,912,000, up 8.3 percent over the prior year. Including the milestone income, earnings per share were $0.27 for the quarter and $0.16 for the year. In commenting on the fourth quarter results, Dr. Martin Barkin, President and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. of DRAXIS, stated: "In late December December: see month. the Company received United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. approval for Anipryl(R) for the control of clinical signs associated with canine canine or canid Any domestic or wild dog or doglike mammal (e.g., wolf, jackal, fox) in the family Canidae, found throughout the world except in Antarctica and on most ocean islands. Cognitive cog·ni·tive adj. 1. Of, characterized by, involving, or relating to cognition. 2. Having a basis in or reducible to empirical factual knowledge. Dysfunction dysfunction /dys·func·tion/ (dis-funk´shun) disturbance, impairment, or abnormality of functioning of an organ.dysfunc´tional erectile dysfunction impotence (2). Syndrome syndrome /syn·drome/ (sin´drom) a set of symptoms occurring together; the sum of signs of any morbid state; a symptom complex. See also entries under disease. (CDS) and Australian Australian pertaining to or originating in Australia. Australian bat lyssavirus disease see Australian bat lyssavirus disease. Australian cattle dog a medium-sized, compact working dog used for control of cattle. approval for the control of clinical signs associated with uncomplicated canine pituitary-dependent hyperadrenocorticism hyperadrenocorticism /hy·per·adre·no·cor·ti·cism/ (-ah-dre?no-kor´ti-sizm) hyperadrenocorticalism. hyperadrenocorticism (hī´p (PDH PDH - Plesiochronous Digital Hierarchy or Cushing's disease Cushing's disease: see Cushing, Harvey Williams. ) and CDS. This very important and positive development enables Pfizer Pfizer Incorporated (NYSE: PFE) is a major research-based pharmaceutical company, which ranks number two in sales The company is based in New York City. It produces the number-one selling drug Lipitor (atorvastatin, used to lower blood cholesterol); the oral antifungal , our global marketing partner, to commence its full-scale full-scale adj. 1. Of actual or full size; not reduced: a full-scale model. 2. Employing all resources; not limited or partial: promotional campaign for Anipryl(R) in the United States, Canada Canada (kăn`ədə), independent nation (2001 pop. 30,007,094), 3,851,787 sq mi (9,976,128 sq km), N North America. Canada occupies all of North America N of the United States (and E of Alaska) except for Greenland and the French islands of and Australia Australia (ôstrāl`yə), smallest continent, between the Indian and Pacific oceans. With the island state of Tasmania to the south, the continent makes up the Commonwealth of Australia, a federal parliamentary state (2005 est. pop. . Subsequent to year end we received $19.9 million in milestones resulting from these approvals which has significantly enhanced the Company's liquidity." -0-
FINANCIAL HIGHLIGHTS
(thousands of Canadian dollars except per share amounts)
1998 1997
----------------------------------- ------
Q4 Q3 Q2 Q1 Q4
----------------------------------- ------
Operations
----------
Revenues
--------
Canadian
Pharmaceuticals $3,741 $3,660 $3,512 $3,182 $4,828
Radio-
pharmaceuticals 1,728 2,145 1,968 1,667 1,455
Veterinary 864 873 738 404 1,945
Manufacturing 2,579 3,150 3,227 - -
------ ------ ------ ------ ------
8,912 9,828 9,445 5,253 8,228
Milestones 19,903 - - - 21,198
------ ------ ------ ------ ------
$28,815 $9,828 $9,445 $5,253 $29,426
------ ------ ------ ------ ------
EBITDA(1) 14,659 (963) (1,122) (777) (7,903)
Depreciation and
Amortization (1,174) (1,056) (967) (890) (1,499)
Income (Loss) From
Operations 13,485 (2,019) (2,089) (1,667) (9,402)
Net Income (Loss) 8,425 (1,268) (1,087) (1,025) (13,412)(2)
Net Income (Loss)
Per Share $0.27 $(0.04) $(0.04) $(0.03) $(0.45)(2)
Financial Position
------------------
Cash and Cash
Equivalents $3,676(3) $7,984 $6,726 $15,100 $20,262
Shareholders'
Equity 56,892 48,472 49,653 48,398 48,828
Weighted
Average
Shares
Outstanding 32,280,524 32,273,654 31,945,854 31,288,331 30,086,415
(1) Earnings (loss) before interest, taxes, depreciation and
amortization. (2) Includes non-recurring expenses aggregating $9,315,
or $ 0.31 per share. (3) Does not include $19,903 of milestone income
which was received in January 1999.
-0- FINANCIAL REVIEW Excluding the Pfizer milestone payments, consolidated con·sol·i·date v. con·sol·i·dat·ed, con·sol·i·dat·ing, con·sol·i·dates v.tr. 1. To unite into one system or whole; combine: fourth quarter revenues of $8,912,000 represented an increase of 8 percent over the corresponding quarter of 1997. On a similar basis, consolidated 1998 revenues of $33,438,000 increased by 44 percent over 1997. Included in revenues from May 1, 1998 onward on·ward adj. Moving or tending forward. adv. also on·wards In a direction or toward a position that is ahead in space or time; forward. are the results of DRAXIS Pharma Pharma may be an abbreviation for:
Cost of sales and selling, general and administration expenses (SG&A) increased to $10,791,000 in the fourth quarter and $36,186,000 for the full year representing increases of 22 percent and 32 percent, respectively, as compared to the corresponding periods in 1997. These increases were primarily due to the inclusion of DRAXIS Pharma's results during 1998. Income from operations before depreciation and amortization (EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) A metric used to show a company's profitability, but not its cash flow. EBITDA became popular in the 1980s to show the potential profitability of leveraged buyouts, but has become ) of $14,659,000 for the fourth quarter compares with a loss of $7,903,000 incurred last year. Full year EBITDA of $11,797,000 compares with a $12,773,000 loss in 1997. The current year figures include the impact of the Anipryl(R) milestones, partially offset by the United States dermatology dermatology (dûrmətŏl`əjē), branch of medicine concerned with diagnosis and treatment of diseases and disorders of the skin. restructuring restructuring - The transformation from one representation form to another at the same relative abstraction level, while preserving the subject system's external behaviour (functionality and semantics). provision. Depreciation and amortization of $1,174,000 during the fourth quarter compares with $1,499,000 for the fourth quarter of 1997. For the full year, depreciation and amortization amounted to $4,087,000 as compared with $5,518,000 in 1997. The 1997 amortization expense includes amounts related to Anipryl(R), the carrying costs Carrying costs Costs that increase with increases in the level of investment in current assets. of which were written off in December 1997 in conjunction with the global licensing agreement entered into with Pfizer Inc. Depreciation related to DRAXIS Pharma commenced in 1998. Earnings per share for the fourth quarter of 1998 were $0.27 and $0.16 for the full year, as compared with a per share loss last year of $0.45 and $0.70, respectively. Cash and cash equivalents at year end were $3,676,000 as compared with September September: see month. 30, 1998 balances of $7,984,000 representing a decrease of $4,308,000 due primarily to the funding of capital expenditures and operations in the fourth quarter. The Anipryl( milestone income of $19.9 million was received in early January January: see month. 1999. UNITED STATES GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). INFORMATION The following table summarizes DRAXIS' results under both United States and Canadian Canadian (kənā`dēən), river, 906 mi (1,458 km) long, rising in NE New Mexico. and flowing E across N Texas and central Oklahoma into the Arkansas River in E Oklahoma. Generally Accepted Accounting Principles The standard accounting rules, regulations, and procedures used by companies in maintaining their financial records. Generally accepted accounting principles (GAAP) provide companies and accountants with a consistent set of guidelines that cover both broad accounting (GAAP): -0-
US AND CANADIAN GAAP INFORMATION
(thousands of Canadian dollars except per share amounts)
1998 1997
--------------------------------- ------
Q4 Q3 Q2 Q1 Q4
--------------------------------- ------
US GAAP
-------
Net Income (Loss) $8,540 $(1,153) $(972) $(910) $13,377
Net Income (Loss)
Per Share $0.27 $(0.04) $(0.03) $(0.03) $0.44
Canadian GAAP
-------------
Net Income (Loss) $8,425 $(1,268) $(1,087) $(1,025) $(13,412)
Net Income (Loss)
Per Share $0.27 $(0.04) $(0.04) $(0.03) $(0.45)
-0- VETERINARY veterinary /vet·er·i·nary/ (vet´er-i-nar?e) 1. pertaining to domestic animals and their diseases. 2. veterinarian. vet·er·i·nar·y adj. (PFIZER ALLIANCE) Veterinary segment sales for the fourth quarter include Anipryl(R) royalty Compensation for the use of property, usually copyrighted works, patented inventions, or natural resources, expressed as a percentage of receipts from using the property or as a payment for each unit produced. income and product revenues, which taken together, amounted to $864,000, as compared with $1,945,000 for the fourth quarter of 1997. Last year's figures include the positive impact of the transfer of inventory to Pfizer pursuant to the licensing agreement signed in December 1997. Certain planned shipments of Anipryl(R) to Pfizer were re-scheduled from December 1998 to early 1999. CANADIAN PHARMACEUTICALS (DRAXIS PHARMACEUTICA) As announced in mid-January n. 1. the middle part of January. Noun 1. mid-January - the middle part of January period, period of time, time period - an amount of time; "a time period of 30 years"; "hastened the period of time of his recovery"; "Picasso's blue period" 1999, the management and operations of DRAXIS' two Canadian pharmaceutical marketing units, which had previously operated separately as DRAXIS Pharmaceutica and SpectroPharm Dermatology, were amalgamated a·mal·ga·mate v. a·mal·ga·mat·ed, a·mal·ga·mat·ing, a·mal·ga·mates v.tr. 1. To combine into a unified or integrated whole; unite. See Synonyms at mix. 2. and will continue operations under the name DRAXIS Pharmaceutica. DRAXIS has discontinued 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: the detailing of SpectroDerm(R) to dermatologists in the United States while continuing to explore options to maximize this product's future value to the Company in that market including partnering opportunities with established marketing and sales organizations. The Company took a restructuring charge restructuring charge The expense of reorganizing a company's operations. A restructuring charge is an infrequent expense that generally results from asset writedowns or facility closings. of $2.5 million in the fourth quarter of 1998 for the implementation of this initiative. Fourth quarter financial performance for the combined unit was in line with management's expectations. Pharmaceutica currently has four files submitted for Canadian regulatory reg·u·late tr.v. reg·u·lat·ed, reg·u·lat·ing, reg·u·lates 1. To control or direct according to rule, principle, or law. 2. approval including Alertec(R), approval for which is expected in early 1999. RADIOPHARMACEUTICALS (DRAXIMAGE INC.) Fourth quarter revenues from the Company's radiopharmaceutical radiopharmaceutical /ra·dio·phar·ma·ceu·ti·cal/ (-fahr?mah-soo´ti-k'l) a radioactive pharmaceutical, nuclide, or other chemical used for diagnostic or therapeutic purposes. line increased 19 percent as compared to the same period last year. Earnings for this business unit remained strong during the fourth quarter and exceeded management's expectations for the twelve months. The Phase II study for Fibrimage(R) is expected to be completed in the first quarter of 1999. MANUFACTURING (DRAXIS PHARMA INC.) Results for DRAXIS Pharma for both the fourth quarter and year to date were within management's expectations. Operating losses operating loss The excess of operating expenses over revenue. As with operating income, operating losses exclude revenues and expenses from operations that are not considered a regular part of the business. Also called deficit. Compare operating income. experienced in the quarter were sheltered by the loss-sharing arrangements entered into as part of the acquisition of this business. DRAXIS Pharma is in the process of negotiating a number of new contract manufacturing opportunities although there can be a delay of several months between securing new business and the recognition of revenues. During the Christmas Christmas [Christ's Mass], in the Christian calendar, feast of the nativity of Jesus, celebrated in Roman Catholic and Protestant Churches on Dec. 25. In liturgical importance it ranks after Easter, Pentecost, and Epiphany (Jan. 6). shutdown shut·down n. A cessation of operations or activity, as at a factory. shutdown Noun the closing of a factory, shop, or other business Verb shut down , several improvements were successfully completed to the sterile sterile /ster·ile/ (ster´il) 1. unable to produce offspring. 2. aseptic. ster·ile adj. 1. Not producing or incapable of producing offspring. 2. production area and production was successfully restarted in early January. The construction of a specialized spe·cial·ize v. spe·cial·ized, spe·cial·iz·ing, spe·cial·iz·es v.intr. 1. To pursue a special activity, occupation, or field of study. 2. radioactive ra·di·o·ac·tive adj. Of or exhibiting radioactivity. radioactive characterized by radioactivity. radioactive decay laboratory and production area for Draximage is scheduled to be completed in the second quarter of 1999. The expansion of the sterile production department, which will accommodate the planned lyophilization lyophilization /ly·oph·i·li·za·tion/ (li-of?i-li-za´shun) the creation of a stable preparation of a biological substance by rapid freezing and dehydration of the frozen product under high vacuum. capability, continues on plan with completion scheduled for the fourth quarter of 1999. YEAR 2000 ISSUE (Y2K See Y2K problem and Y2K compliant. Y2K - Year 2000 ) During the spring of 1998, the Company undertook a detailed review of all its computerized computerized adapted for analysis, storage and retrieval on a computer. computerized axial tomography see computed tomography. systems and assessed the potential exposure to Year 2000 systems issues which might have had a detrimental det·ri·men·tal adj. Causing damage or harm; injurious. det  ri·men impact on
the ongoing operations of the business. This review formed the basis of
a detailed information systems plan which was completed and adopted by
the Company in July July: see month. 1998.The central focus of the Company's plan is the implementation of a new company-wide enterprise resource planning See ERP. (application, business) Enterprise Resource Planning - (ERP) Any software system designed to support and automate the business processes of medium and large businesses. system. The total cost of this project is estimated at $2.4 million, of which approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. $608,000 has been spent during 1998; the balance of funds required have been allocated, primarily within the Company's capital expenditure budget for 1999. This project is proceeding on schedule with the system expected to become operational late in the second quarter of 1999. Certain process control systems at DRAXIS Pharma were identified as having potential exposure to Year 2000 risk. Rectification rectification /rec·ti·fi·ca·tion/ (rek?ti-fi-ka´shun) 1. the act of making straight, pure, or correct. 2. redistillation of a liquid to purify it. and testing of these systems was substantially completed by December 31, 1998, the aggregate cost of which was less than $100,000. Risks of third party compliance are not directly within the Company's control and are difficult to assess. Accordingly, it is not possible to be certain that all aspects of Year 2000 issues which could affect the Company, including those related to the efforts of customers, suppliers, or other third parties, will be fully resolved. The Company is working with its major business partners to mitigate mit·i·gate v. To moderate in force or intensity. mit i·ga tion n. its
exposure to any risks in this area. OUTLOOKFollowing the restructuring of the Company's dermatology operations and the resulting reduction in United States marketing costs, management expects an improvement in operating results starting in the first quarter of 1999. As well, management anticipates steady improvement to operating results thereafter, with the extent and timing of these improvements largely dependent on sales of Anipryl(R) by Pfizer. Operating losses at DRAXIS Pharma will continue into 1999 with performance expected to improve during the second half of the year once new manufacturing contracts begin to come on stream. These losses will begin to be realized by the Company in the first quarter of 1999 following full utilization utilization, n 1. the extent to which a given group uses a particular service in a specified period. Although usually expressed as the number of services used per year per 100 or per 1000 persons eligible for the service, utilization rates may be of the loss-sharing arrangements entered into as part of the acquisition of this business. DRAXIS Health Inc. is a diversified diversified (di·verˑ·s and fully integrated pharmaceutical company operating in three niche markets A niche market also known as a target market is a focused, targetable portion (subset) of a market sector. By definition, then, a business that focuses on a niche market is addressing a need for a product or service that is not being addressed by mainstream providers. : Veterinary (through its global alliance with Pfizer Inc.) Radiopharmaceuticals (Draximage), and Canadian sales and marketing (DRAXIS Pharmaceutica). DRAXIS supports its own as well as third party manufacturing requirements through its subsidiary, DRAXIS Pharma, located in Kirkland, Quebec Kirkland is a municipality on the Island of Montreal in southwestern Quebec, Canada. As of October 2005, the population was 21,735. It is named after Dr. Charles-Aimé Kirkland, a Quebec provincial politician. . Except for historical information, this news release contains certain 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. that involve risk and uncertainties, which may cause actual results to differ materially from the statements made. Such factors include, but are not limited to, changing market conditions, clinical trial results, the establishment of new corporate alliances, the impact of competitive products and pricing, the timely development, regulatory approval and market acceptance of the Company's products, and other risks detailed from time-to-time in the Company's filings with the U.S. Securities and Exchange Commission and Canadian securities authorities. -0-
DRAXIS HEALTH INC.
CONSOLIDATED BALANCE SHEET
(stated in thousands of Canadian dollars and in accordance with
Canadian GAAP)
(unaudited)
December 31,
------------------------
1998 1997
-------- --------
ASSETS
Current Assets
Cash and cash equivalents $ 3,676 $ 20,262
Accounts receivable 27,275 6,370
Inventory 6,091 3,580
Prepaid expenses 774 903
-------- --------
37,816 31,115
-------- --------
Long-term investments 691 691
Fixed assets 18,743 1,776
Goodwill 9,355 10,494
Patents, licenses and other
deferred charges 18,032 11,577
Deferred income taxes 5,486 3,206
-------- --------
$ 90,123 $ 58,859
-------- --------
-------- --------
LIABILITIES
Current
Accounts payable and accrued charges $ 11,413 $ 6,273
Income taxes payable (recoverable) 4,401 (219)
-------- --------
15,814 6,054
Long-term debt 11,417 3,977
Other 6,000 -
-------- --------
33,231 10,031
-------- --------
SHAREHOLDERS' EQUITY
Capital stock 61,752 58,734
Contributed surplus 9,701 9,701
Deficit (14,561) (19,607)
-------- --------
56,892 48,828
-------- --------
$ 90,123 $ 58,859
-------- --------
-------- --------
DRAXIS HEALTH INC.
CONSOLIDATED STATEMENT OF OPERATIONS
(stated in thousands of Canadian dollars except share related data
and in accordance with Canadian GAAP)
(unaudited)
For the Quarter Ended
December 31,
------------------------
1998 1997
-------- --------
Revenues
Cana $ 4,828
Radiopharmaceuticals 1,728 1,455
Veterinary 864 1,945
Manufacturing 2,579 -
-------- --------
8,912 8,228
Milestones 19,903 21,198
-------- --------
28,815 29,426
Expenses
Cost of sales 6,016 3,203
Selling, general and administration 4,775 5,643
Restructuring charges 2,500 -
Disposal of product rights - 27,954
Research and development 964 809
Investment tax credits on research
and development (99) (280)
-------- --------
Loss from operations before
depreciation and amortization 14,659 (7,903)
-------- --------
Depreciation and amortization 1,174 1,499
-------- --------
Income (loss) from operations 13,485 (9,402)
-------- --------
Financial
Interest income 161 207
Financing expense (263) (908)
-------- --------
(102) (701)
-------- --------
Other (expense) income - (2,559)
Income (loss) before income taxes
and undernoted item 13,383 (12,662)
Tax provision (recovery) of income taxes 4,958 750
-------- --------
Income (loss) before undernoted item 8,425 (13,412)
Equity share of loss of affiliated companies - -
-------- --------
Net income (loss) for the period $ 8,425 $ (13,412)
-------- --------
Net income (loss) per share $ 0.27 $ (0.45)
-------- --------
-------- --------
Weighted Average Number
of Shares Outstanding 32,280,524 30,086,415
For the Year Ended
December 31,
------------------------
1998 1997
-------- --------
Revenues
Canadian Pharmaceuticals $ 14,095 $ 16,215
Radiopharmaceuticals 7,508 3,123
Veterinary 2,879 3,952
Manufacturing 8,956 -
-------- --------
33,438 23,290
Milestones 19,903 21,198
-------- --------
53,341 44,488
Expenses
Cost of sales 18,332 7,535
Selling, general and administration 17,854 19,781
Restructuring charges 2,500 -
Disposal of product rights - 27,954
Research and development 3,242 2,271
Investment tax credits on research
and development (384) (280)
-------- --------
Loss from operations before
depreciation and amortization 11,797 (12,773)
-------- --------
Depreciation and amortization 4,087 5,518
-------- --------
Income (loss) from operations 7,710 (18,291)
-------- --------
Financial
Interest income 711 654
Financing expense (716) (1,092)
-------- --------
(5) (438)
-------- --------
Other (expense) income - (2,559)
Income (loss) before income taxes
and undernoted item 7,705 (21,288)
Tax provision (recovery) of income taxes 2,660 (593)
-------- --------
Income (loss) before undernoted item 5,045 (20,695)
Equity share of loss of affiliated companies - (228)
-------- --------
Net income (loss) for the period $ 5,045 $ (20,923)
-------- --------
Net income (loss) per share $ 0.16 $ (0.70)
-------- --------
-------- --------
Weighted Average Number
of Shares Outstanding 31,950,704 29,695,743
Note: The comparative consolidated financial statements have been
reclassified to conform with the current year's presentation.
DRAXIS HEALTH INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
(stated in thousands of Canadian dollars and in accordance with
Canadian GAAP)
(unaudited)
For The Quarter Ended
December 31,
------------------------
1998 1997
-------- --------
Cash Flows used in from Operating Activities
Net income (loss) for the year $ 8,425 $ (13,412)
Non cash transactions reflected in net income
Depreciation and amortization 1,174 1,499
Deferred income taxes (1,605) 223
Other non-cash items - 2,596
Loss on sale of product rights - 6,756
Equity share of loss of affiliated companies - -
-------- --------
7,994 (2,338)
-------- --------
Changes in current assets and
current liabilities impacting cash
flows from operations (7,211) 2,070
-------- --------
Net cash flows used in
operating activities 783 (268)
-------- --------
Cash Flows used in Investing Activities
Acquisition of fixed assets (2,392) (166)
Acquisitions (net of cash acquired) - -
Proceeds from sale of product rights, net - 18,336
(Increase) decrease in other
deferred charges (8,738) 116
-------- --------
Net cash flows used in investing
activities (11,130) 18,286
-------- --------
Cash Flows from Financing Activities
Increase (decrease) in
long term debt, net 45 (9,868)
Obligation under licensing agreement 6,000 -
Other issuances of shares and warrants (6) 3,931
-------- --------
Net cash flows from
financing activities 6,039 (5,937)
-------- --------
Net increase (decrease)
in cash and cash equivalents (4,308) 12,081
Cash and cash equivalents
at beginning of period 7,984 8,181
-------- --------
Cash and cash equivalents
at end of period $ 3,676 $ 20,262
-------- --------
-------- --------
For The Year Ended
December 31,
------------------------
1998 1997
-------- --------
Cash Flows used in from Operating Activities
Net income (loss) for the year $ 5,045 $ (20,923)
Non cash transactions reflected in net income
Depreciation and amortization 4,087 5,518
Deferred income taxes (2,280) (2,870)
Other non-cash items - 2,764
Loss on sale of product rights - 6,756
Equity share of loss of affiliated companies - 228
-------- --------
6,852 (8,527)
-------- --------
Changes in current assets and
current liabilities impacting cash
flows from operations (9,765) (2,951)
-------- --------
Net cash flows used in
operating activities (2,913) (11,478)
-------- --------
Cash Flows used in Investing Activities
Acquisition of fixed assets (6,034) (446)
Acquisitions (net of cash acquired) (15,557) (20,869)
Proceeds from sale of product rights, net - 18,336
(Increase) decrease in other
deferred charges (8,540) (875)
-------- --------
Net cash flows used in investing
activities (30,131) (3,854)
-------- --------
Cash Flows from Financing Activities
Increase (decrease) in long
term debt, net 7,440 3,845
Obligation under licensing agreement 6,000 -
Other issuances of shares and warrants 3,018 5,921
-------- --------
Net cash flows from
financing activities 16,458 9,766
-------- --------
Net increase (decrease)
in cash and cash equivalents (16,586) (5,566)
Cash and cash equivalents
at beginning of period 20,262 25,828
-------- --------
Cash and cash equivalents
at end of period $ 3,676 $ 20,262
-------- --------
-------- --------
Cash and cash equivalents comprise cash, commercial paper and
treasury bills.
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