EXHIBIT 99.1
IVAX Reports Revenues And Earnings For Fourth Quarter And Year 2004 And Gives
Guidance For 2005 And 2006
MIAMI--(BUSINESS WIRE)--March 15, 2005--IVAX Corporation
(AMEX:IVX)(LSE:IVX.L)(WSE:IVX):
-- Record Revenues For 4Q2004 Up 28% To $509.2 Million
-- Record Revenues For Y2004 Up 29% To $1.84 Billion
-- Income For 4Q2004 Up 115% To $63.2 Million
-- Income For Y2004 Up 63% To $198.0 Million
-- EPS For 4Q2004 Up 100% To $0.24
-- EPS For Y2004 Up 53% To $0.75
IVAX Corporation's (AMEX:IVX)(LSE:IVX.L)(WSE:IVX) fourth quarter
2004 net revenues of $509.2 million, the highest quarterly revenues in
IVAX' history, were up 28% over net revenues of $399.0 million in the
fourth quarter of 2003. Fourth quarter net income was up 115% to $63.2
million from $29.3 million in 2003; per share earnings were up 100% in
fourth quarter 2004 to $0.24 from $0.12 in 2003. Record revenues for
the year 2004 were $1.84 billion, up 29% over the $1.42 billion in
2003. Net income for 2004 was $198.0 million or $0.75 per share
compared to $121.3 million or $0.49 per share for 2003, increases
respectively, of 63% and 53%. In the fourth quarter 2004, gross profit
margins increased to 47% from 45% in 2003. For the full year 2004,
gross profit margins increased to 46% from 45% in 2003. All per share
numbers are on a fully diluted basis and have been adjusted for a
five-for-four stock split in August 2004.
IVAX' per share earnings in the fourth quarter and year 2004 were
reduced by an accounting rule change by the Emerging Issues Task Force
of the Financial Accounting Standards Board (FASB) regarding
contingently convertible debt, which required a significant number of
additional shares to be considered outstanding during the period,
reducing IVAX' per share earnings by $.01 for the fourth quarter and
$.03 for the full year 2004.
All major business regions contributed to fourth quarter 2004
growth. North American revenues were up 44% to $248.4 million from
$171.9 million; European revenues were up 18% to $192.8 million from
$164.0 million; Latin American revenues were up 15% to $82.8 million
from $71.8 million. For the full year 2004, North American revenues
were up 32% to $859.7 million from $650.6 million; European revenues
were up 32% to $704.0 million from $532.5 million; and Latin American
revenues were up 25% to $315.8 million from $251.9 million. This is
the eighth consecutive quarter that our North American and European
operations, and the seventh consecutive quarter that our Latin
American operations, have achieved year-over-year quarterly revenue
growth.
IVAX' U.S. generic products division, IVAX Pharmaceuticals,
continued its strong growth in 2004, its revenues benefiting from
six-month exclusivities on three important generic launches -
metformin ER, glyburide/metformin HCl and gabapentin tablets. At year
end, IVAX had 60 Abbreviated New Drug Applications (ANDAs) pending
with the FDA (36% more than in 2003), of which 12 were potential
first-to-files with related annual brand sales of almost $14 billion.
IVAX submitted 33 new generic applications to the U.S. FDA in 2004, an
IVAX record.
IVAX' U.S. branded products division, IVAX Laboratories,
experienced strong growth during 2004. Worldwide respiratory revenues
continue to grow and were up 18% to $371.5 million from $316.0 million
in 2003. We expect our worldwide respiratory revenues to grow even
more rapidly in 2005 and beyond driven by U.S. sales of our recently
launched albuterol HFA (CFC-free) metered dose inhaler, the expected
2005 U.S. approval and sales of our albuterol HFA breath operated
inhaler, worldwide sales of QVAR(R), and sales of other new
respiratory products. IVAX' proprietary pipeline of respiratory, as
well as central nervous system and oncology projects continued to
progress during 2004. Subject to an expected closing in second quarter
2005, Phoenix Scientific, Inc. will be merged with our U.S. veterinary
company, DVM Pharmaceuticals, Inc. We expect significant profit
contributions to result from the growing profits of these units and
the synergies between them.
In fourth quarter 2004, IVAX spent 24% more on marketing and sales
than in 2003; for all of 2004, 28% more. New product introductions,
company acquisitions and commissions on greater sales in existing
units all contributed to these increases. R&D spending increased 12%
for fourth quarter 2004 over fourth quarter 2003 and 31% for full year
2004 compared to 2003. In fourth quarter 2004, general and
administrative costs increased 34% over fourth quarter 2003 and for
full year 2004, 33% more than in 2003. Professional services related
to Sarbanes-Oxley compliance, due diligence associated with
acquisition activity, start-up costs for two production facilities,
operating expenses of businesses acquired during 2004 and incentive
compensation contributed to higher G&A costs. As mentioned in our
shareholders' letter of February 2, 2005, IVAX is engaged in an
extensive global program to increase efficiency and reduce costs.
These efforts will result in restructuring charges as they are
implemented.
For 2005, IVAX expects to earn $0.76 - $0.86 per share. This
estimate does not include sales of generic Flonase(R), or sales from
any new product launches currently subject to patent challenges
including Zyprexa(R) or Lexapro(R). We expect strong performance from
all our business units in 2005. In particular, we believe that in the
U.S. sales of generic products and our albuterol HFA metered dose
inhaler and, when approved, our albuterol HFA breath operated inhaler,
QVAR and other new respiratory products worldwide, will contribute to
growth in 2005. Our Latin American and Central and Eastern European
units and our U.S. veterinary business are expected to contribute to
higher operating income in 2005 compared to 2004. However, this higher
operating income will be impacted by a higher tax rate (27-30%),
restructuring charges related to streamlining operations, particularly
in Europe, integration of recent acquisitions and launch expenses in
the second half of the year for our albuterol HFA breath operated
inhaler. As in the past, we anticipate that earnings will not be
evenly distributed throughout the year. In 2005, we expect that
earnings in the first quarter will be significantly lower followed by
higher earnings later in the year. Although we expect solid results in
2005, we consider this a transitional year with more significant
earnings increases to come in 2006 and beyond.
At present, we anticipate 2006 earnings to be in the $1.35 - $1.55
per share range. Again, this estimate does not include sales of
generic Flonase(R), or sales from any new product launches currently
subject to patent challenges including Zyprexa(R) and Lexapro(R).
Important in our earnings guidance for 2006 are six-month periods of
marketing exclusivity for Zoloft(R), with present annual U.S. brand
sales of $3.1 billion and Proscar(R), with present annual U.S. brand
sales of $370 million. We are also confident that we will be granted a
six-month period of marketing exclusivity for Zocor(R), with present
annual U.S. brand sales of $4.6 billion, which could add approximately
$1.45 more per share to 2006 after tax earnings.
IVAX will discuss fourth quarter 2004 and year 2004 results and
other topics when it hosts a conference call and simultaneous webcast
at 10 a.m. Eastern (Miami) Time. Interested parties can access the
conference call by dialing 1-866-205-3921 from anywhere in the U.S. or
by dialing 612-332-1025 from non-U.S. locations. To access and
register for the webcast, go to IVAX' website at http://www.ivax.com
at least fifteen minutes before the 10 a.m. conference call and click
on the webcast link on IVAX' home page.
Replays of the conference call will be available starting at
approximately 1:30 p.m. Eastern (Miami) Time on March 15th and will
continue until March 22nd. To listen to the replay of the conference
call, dial 1-800-475-6701 and enter ID#773261. Replays of the webscast
via IVAX' website will also be available.
IVAX Corporation, headquartered in Miami, Florida, discovers,
develops, manufactures, and markets branded and brand equivalent
(generic) pharmaceuticals and veterinary products in the U.S. and
internationally.
Copies of this and other news releases may be obtained free of
charge from IVAX' website at http://www.ivax.com.
Except for the historical matters contained herein, statements in
this press release are forward-looking and are made pursuant to the
safe harbor provisions of the Private Securities Litigation Reform Act
of 1995. Investors are cautioned that forward-looking statements,
including, among others, statements relating to goals, plans,
expectations, estimates and projections regarding the company's
financial position, results of operations, market position and
business strategy involve risks and uncertainties that cannot be
predicted or quantified and, consequently, actual results may differ
materially from those expressed or implied by such forward-looking
statements. Such risks and uncertainties include, among others, the
risks that there are uncertainties and matters beyond the control of
management, as well as a variety of assumptions and estimates with
respect to financial data, which if they do not occur, or prove to be
incorrect, could affect IVAX' earnings expectations and IVAX may not,
therefore, meet its guidance that the results for the year 2005 will
be in a range of $0.76 to $0.86 per share, that the results for the
year 2006 will be in a range of $1.35 to $1.55, or that a generic
equivalent of Zocor(R) would add $1.45 more per share to 2006
earnings; that sales of IVAX' branded drugs and worldwide respiratory
product revenues may not achieve continued growth in 2005 and beyond;
that all of our business units may not perform better in 2005; that
operating income may not increase in 2005; that our effective tax rate
in 2005 may be higher than expected; that earnings may not be higher
later in 2005 than in the first quarter; that we may not experience
significant earnings increases during 2006 and beyond; that IVAX may
not receive six-month exclusivity periods for its generic equivalents
of Proscar(R), Zoloft(R) and Zocor(R), and even if it does, may not be
alone on the market during any such period; that IVAX may not increase
the number of products in its generic portfolio; that IVAX may not
receive approval of its pending ANDAs, or that if approved, the
products will not be successfully commercialized; that IVAX may not
have or retain first to file status on 12 ANDAs and that the market
for these products may decline significantly from that obtained by
brand sales; the impact of competitive products and pricing, including
the impact of "authorized generics"; the difficulty of predicting the
timing of U.S. Food and Drug Administration, or FDA, approvals,
including the timing of the approval for IVAX' generic equivalent of
Flonase(R); the impact of FDA's or other administrative or judicial
agency's decisions on exclusivity periods; competitors' ability to
extend exclusivity periods past initial patent terms; that growth in
any of the geographic areas in which IVAX operates may be less than
anticipated; the difficulty of predicting the timeliness or outcome of
product development efforts and the filing of regulatory applications;
that IVAX may not receive final approval for HFA albuterol in its
breath operated inhaler or that its launch will be delayed; that
market acceptance and demand for IVAX' respiratory products may not be
as anticipated; that CFC propellants may not be removed from the
market when anticipated or at all; that sales of QVAR(R) and new
respiratory products may not continue to grow in the U.S., Europe or
worldwide; that growth in any of the geographic areas in which IVAX
operates may be less than anticipated; that the acquisition of Phoenix
Scientific may be delayed or may not be consummated at all and that
the acquisition may not provide the synergies or benefits anticipated;
that the growth of IVAX' Animal Health group may be less than
anticipated and may not generate significant operating income in 2005
as compared to 2004; that sales of HFA albuterol in a metered dose
inhaler and in IVAX' breath operated inhaler may not be important
contributors to 2006 earnings or provide the engine for earnings
growth in 2007; and that IVAX may not be able to increase efficiency
or reduce costs in 2005. In addition to the risk factors set forth
above, IVAX' forward looking statements may also be adversely affected
by general market factors; product availability; federal and state
regulations and legislation, including changes in accounting
regulations; the regulatory process for new products and indications;
manufacturing issues that may arise; trade buying patterns; exchange
rate fluctuations; patent positions and the timing and outcome of
legal proceedings; changing market conditions; the availability and
cost of raw materials and other third party products; the impact of
competitive products and pricing; and other risks and uncertainties
based on economic, competitive, governmental, technological and other
factors. For further details and discussion of these and other risks
and uncertainties, see IVAX' Annual Report on Form 10-K and other
filings with the Securities and Exchange Commission. IVAX undertakes
no obligation to publicly update any forward-looking statements to
reflect events or circumstances after the date hereof or to reflect
the occurrence of unanticipated events. Flonase(R) is a registered
trademark of GlaxoSmithKline Corporation. Zyprexa(R) is a registered
trademark of Eli Lilly and Company. Lexapro(TM) is a trademark of
Forest Laboratories. Zoloft(R) is a registered trademark of Pfizer.
Proscar(R) and Zocor(R) are registered trademarks of Merck & Co., Inc.
IVAX Corporation and Subsidiaries
Condensed Consolidated Statements of Operations
(Unaudited)
Three Months Twelve Months
Period Ended December 31, 2004 2003 2004 2003
---------------------- ----------------------
(In thousands, except per
share data)
Net revenues $509,179 $399,023 $1,837,418 $1,420,339
Cost of sales (excludes
amortization, which is
presented below) 271,402 217,698 985,125 781,383
---------------------- ----------------------
Gross profit 237,777 181,325 852,293 638,956
---------------------- ----------------------
Operating expenses:
Selling 78,261 63,011 272,569 212,192
General and
administrative 41,893 31,165 162,391 122,414
Research and
development 36,953 32,888 141,604 108,347
Amortization of
intangible assets 6,041 5,302 22,488 19,719
Restructuring costs 260 2,908 1,374 3,706
---------------------- ----------------------
Total operating
expenses 163,408 135,274 600,426 466,378
---------------------- ----------------------
Operating income 74,369 46,051 251,867 172,578
Total other
expense, net (4,489) (8,413) (30,043) (28,160)
---------------------- ----------------------
Income before income
taxes and minority
interest 69,880 37,638 221,824 144,418
Provision for income
taxes 6,663 8,319 23,757 45,559
---------------------- ----------------------
Income before minority
interest 63,217 29,319 198,067 98,859
Minority interest (7) 26 (40) 188
---------------------- ----------------------
Income from continuing
operations 63,210 29,345 198,027 99,047
Income from discontinued
operations, net of tax
of $12,763 - - - 22,204
---------------------- ----------------------
Net income $ 63,210 $ 29,345 $ 198,027 $ 121,251
====================== ======================
Basic earnings per common
share:
Continuing operations $ 0.25 $ 0.12 $ 0.79 $ 0.41
Discontinued
operations - - - 0.09
---------------------- ----------------------
Net income $ 0.25 $ 0.12 $ 0.79 $ 0.50
====================== ======================
Diluted earnings per
common share:
Continuing operations $ 0.24 $ 0.12 $ 0.75 $ 0.40
Discontinued
operations - - - 0.09
---------------------- ----------------------
Net income $ 0.24 $ 0.12 $ 0.75 $ 0.49
====================== ======================
Weighted average number
of common shares
outstanding:
Basic 252,526 245,651 249,250 244,532
====================== ======================
Diluted 273,777 250,987 268,792 248,625
====================== ======================
IVAX Corporation and Subsidiaries
Condensed Consolidated Balance Sheets
(Unaudited)
December 31, December 31,
2004 2003
---------------------------
(In thousands)
Assets
- ------
Cash, cash equivalents and short-term
marketable securities $ 398,046 $ 157,340
Other current assets 1,123,597 838,376
Property, plant and equipment, net 604,647 502,942
Other assets 1,085,729 874,276
---------------------------
Total assets $3,212,019 $2,372,934
===========================
Liabilities and Shareholders' Equity
- ------------------------------------
Current portion of long-term debt $ 60,145 $ 58,607
Other current liabilities 518,276 427,942
Long-term debt 1,057,843 855,335
Other long-term liabilities 72,855 56,208
Minority interest 12,571 12,531
Shareholders' equity 1,490,329 962,311
---------------------------
Total liabilities and shareholders'
equity $3,212,019 $2,372,934
===========================
IVAX Corporation and Subsidiaries
Reportable Segment Data
(Unaudited)
Period Ended December 31, Three Months Twelve Months
(In thousands) 2004 2003 2004 2003
--------------------- --------------------
North America
External sales $246,454 $169,540 $850,839 $625,523
Intersegment sales 611 1,565 4,667 2,289
Other revenues 1,358 829 4,164 22,767
--------------------- --------------------
Net revenues -
North America 248,423 171,934 859,670 650,579
--------------------- --------------------
Europe
External sales 152,897 138,708 551,697 440,259
Intersegment sales 23,918 21,770 86,805 66,645
Other revenues 15,992 3,563 65,540 25,568
--------------------- --------------------
Net revenues -
Europe 192,807 164,041 704,042 532,472
--------------------- --------------------
Latin America
External sales 82,153 71,353 312,900 251,067
Other revenues 630 437 2,914 838
--------------------- --------------------
Net revenues -
Latin America 82,783 71,790 315,814 251,905
--------------------- --------------------
Corporate & other
External sales 15,331 14,961 53,137 52,053
Intersegment sales (24,529) (23,335) (91,472) (68,934)
Other revenues (5,636) (368) (3,773) 2,264
--------------------- --------------------
Net revenues -
Corporate & other (14,834) (8,742) (42,108) (14,617)
--------------------- --------------------
--------------------- --------------------
Consolidated net revenues $509,179 $399,023 $1,837,418 $1,420,339
===================== ====================
CONTACT: IVAX Corporation, Miami
David Malina, 305-575-6043
Director/Investor Relations & Corporate Communications