Andrx Reports Earnings for Three and Six Months Ended June 30, 1999
Business Wire - July 27, 1999 09:01
FORT LAUDERDALE, Fla.--(BUSINESS WIRE)--July 27, 1999--ANDRX CORPORATION (Nasdaq:ADRX) today announced its results for the three and six month periods ended June 30, 1999. For the 1999 second quarter, Andrx reported net income of $48.9 million or $1.51 per diluted share as compared to a net loss of $1.7 million or $0.06 per diluted share for the 1998 second quarter. For the six months ended June 30, 1999, Andrx reported net income of $55.8 million or $1.73 per diluted share, as compared to a net loss of $2.7 million or $0.09 per diluted share for the six months ended June 30, 1998.
In June 1999, Cybear, Inc. (Nasdaq:CYBA), Andrx' 75% owned internet-based portal and provider of healthcare communications and applications subsidiary, completed a public offering of its common shares at $16.00 per share raising net proceeds of approximately $50.8 million. Exclusive of the net losses of Cybear, Inc., Andrx reported net income of $50.8 million or $1.57 per diluted share for the 1999 second quarter, as compared to a net loss of $1.0 million or $0.03 per diluted share for the 1998 second quarter. For the six months ended June 30, 1999, exclusive of Cybear's net losses, Andrx reported net income of $59.5 million or $1.85 per diluted share, as compared to a net loss of $1.4 million or $0.05 per diluted share for the six months ended June 30, 1998.
The record results for the 1999 second quarter are primarily the result of the resolution of the Hoechst Marion Roussel Inc. and Carderm Capital L.P. ("HMRI") patent infringement claim involving Andrx' bioequivalent version of Cardizem(R) CD. During the 1999 second quarter, the Company received interim and final fees pursuant to a Stipulation and Agreement with HMRI, and on June 23, 1999, the Company launched its bioequivalent version of Cardizem(R) CD, Cartia XT(TM).
Total revenues increased by 194.1% to $164.6 million for the 1999 second quarter, as compared to $56.0 million for the 1998 second quarter.
For the second quarter of 1999, sales from distributed products increased by 25.1% to $66.1 million, as compared to $52.9 million for the 1998 second quarter.
Sales from manufactured products increased to $36.5 million for the 1999 second quarter, as compared to $2.7 million for the 1998 second quarter. Sales from manufactured products include the Company's bioequivalent version of Dilacor XR(R), Diltia XT(R) and, commencing June 23, 1999, the Company's bioequivalent version of Cardizem(R) CD, Cartia XT(TM).
In the 1999 second quarter, Andrx received $60.7 million in interim and final fees from HMRI pursuant to a Stipulation and Agreement related to the recently resolved patent infringement litigation.
The Company recorded $1.2 million of licensing and other revenues in the 1999 second quarter as compared to $426,000 in the 1998 second quarter. Such revenues were primarily generated from the Company's domestic and international licensing arrangements.
Gross profits from sales of distributed products were $12.5 million or a gross margin of 18.9% in the 1999 second quarter, as compared to $8.0 million or a gross margin of 15.1% in the 1998 second quarter. This represents the 28th consecutive quarter (every quarter since inception) with an increase in gross profits from the distribution operation.
Gross profits from sales of manufactured products were $30.5 million or a gross margin of 83.5% for the 1999 second quarter as compared to $1.4 million or a gross margin of 51.1% for the 1998 second quarter. Manufacturing costs for the 1998 second quarter include idle manufacturing facility costs.
Selling, general and administrative expenses were $16.1 million or 9.8% of total revenues for the quarter ended June 30, 1999, as compared to $6.4 million or 11.4% of total revenues for the quarter ended June 30, 1998. The increase in selling, general and administrative expenses was primarily due to an increase in the activities necessary to support the increase in sales from distributed and manufactured products and includes a royalty to the Company's Co-Chairman and Chief Scientific Officer related to Stipulation fees and sales of the Company's bioequivalent version of Cardizem(R) CD.
Research and development expenses were $7.2 million in the 1999 second quarter, as compared to $4.1 million in the 1998 second quarter. The increase in research and development expenses of $3.1 million or 76.0 % reflects the progress and expansion of the Company's development activities for its bioequivalent (ANDA) and brand name (NDA) drug development programs. The Company's NDA program currently has one product in Phase III clinical trials.
The Company's equity share of ANCIRC Pharmaceuticals, its 50/50 joint venture with Watson Pharmaceuticals, Inc. (NYSE:WPI), was $277,000 of income for the 1999 second quarter, as compared to $388,000 of loss in the 1998 second quarter. The current quarter's profitability was primarily attributed to the launch of ANCIRC products - a bioequivalent version of Trental(R) in September 1998, and a bioequivalent version of Oruvail(R) in April 1999.
In the 1999 second quarter, through its Cybear, Inc. subsidiary, the Company incurred $3.2 million of software development and administrative costs, as compared to $746,000 in the 1998 second 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. During the 1999 second quarter, Cybear, Inc. launched its first product, SolutionsMD(SM).
In the 1999 second quarter, the Company provided $30.0 million for Federal and state income taxes or 38.0% of income before income taxes.
The diluted weighted average shares of common stock outstanding were 32.5 million in the 1999 second quarter as compared to 30.0 million for the 1998 second quarter. The increase in such diluted weighted average shares of common stock outstanding in the 1999 quarter, as compared to the comparable 1998 quarter resulted primarily from the inclusion of stock equivalents in the profitable 1999 quarter. All shares and related per share calculations for all 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.
"Our recently announced licensing agreement, raising over $50 million for Cybear - what we believe represents the future for healthcare - and, after six years of R&D and litigation, being able to commence selling our bioequivalent version of Cardizem(R) CD as successfully as we have -- obviously, it has been an incredible quarter," said Alan P. Cohen, Chief Executive Officer and Co-Chairman of Andrx.
Summary financial highlights are as follows:
ANDRX CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) (in thousands, except for share and per share amounts)
Three Months Ended Six Months Ended June 30, June 30, 1999 1998(a) 1999 1998(a) ---------- ---------- ---------- ----------
Revenues Distributed products $ 66,108 $52,855 $129,133 $100,935 Manufactured products 36,516 2,674 40,889 5,289 Stipulation fees 60,733 - 70,733 - Licensing and other 1,203 426 1,729 426 ---------- ---------- ---------- ----------
Total revenues 164,560 55,955 242,484 106,650 ---------- ---------- ---------- ----------
Operating expenses Cost of distributed products 53,587 44,880 104,156 85,819
Manufacturing costs 6,033 1,308 8,290 2,306
Selling, general and administrative 16,065 6,395 24,873 12,475 Research and development 7,186 4,084 11,591 7,180
Equity in (income) losses of joint venture (277) 388 (129) 686 Software development and administrative 3,182 746 5,926 1,236 Legal settlement - - 545 -
---------- ---------- ---------- ---------- Total operating expenses 85,776 57,801 155,252 109,702 ---------- ---------- ---------- ----------
Income (loss) from operations 78,784 (1,846) 87,232 (3,052)
Other income Gain on sale of Cybear, Inc. shares - - 300 - Interest income, net 54 128 266 375 ---------- ------------ ---------- ----------
Income (loss) before income taxes 78,838 (1,718) 87,798 (2,677)
Income taxes 29,958 - 31,974 - ---------- ------------ ---------- ----------
Net income (loss) $ 48,880 $ (1,718) $ 55,824 $ (2,677) ========== ============ ========== ==========
Basic net income (loss) per share $ 1.60 $ (0.06) $ 1.83 $ (0.09) ========== ============ ========== ==========
Diluted net income (loss) per share $ 1.51 $ (0.06) $ 1.73 $ (0.09) ========== ============ ========== ==========
EXCLUSIVE OF CYBEAR, INC. NET LOSSES:
Net income (loss) $ 50,805 $ (972) $ 59,544 $ (1,441) ========== ============ ========== ==========
Basic net income (loss) per share $ 1.66 $ (0.03) $ 1.95 $ (0.05) ========== ============ ========== ==========
Diluted net income (loss) per share $ 1.57 $ (0.03) $ 1.85 $ (0.05) ========== ============ ========== ==========
Basic weighted average shares of common stock outstanding 30,614,000 30,039,000 30,525,000 29,908,000 ========== ========== ========== ==========
Diluted weighted average shares of common stock outstanding 32,461,000 30,039,000 32,261,000 29,908,000 ========== ========== ========== ==========
(a) Restated for the Company's May 17, 1999 two-for-one stock split effected in the form of a 100% stock dividend. ANDRX CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) (in thousands)
-------------------- -------------------- June 30, December 31, 1999 1998 -------------------- -------------------- Assets
Cash, cash equivalents and investments available-for-sale $ 124,936 $ 23,092
Accounts receivable-net, inventories and other current assets 154,498 76,868 -------------------- --------------------
Total current assets 279,434 99,960
Property, plant and equipment - net and other assets 30,955 21,238 -------------------- -------------------- Total assets $ 310,389 $ 121,198 ==================== ====================
Liabilities and Shareholders' Equity
Total current liabilities and minority interest $ 139,184 $ 48,615
Total shareholders' equity 171,205 72,583 -------------------- -------------------- Total liabilities and shareholders' equity $ 310,389 $ 121,198 ==================== ====================
Forward-looking statements (statements which are not historical facts) in this release are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act 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 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: andrx.com.
CONTACT: Andrx Corporation, Fort Lauderdale
Angelo C. Malahias, Vice President and
Chief Financial Officer
954/584-0300 |
