EXHIBIT 99.1
IVAX Reports First Quarter 2005 Results;
Revenues up 15.6% to $491.6 Million;
Net Income $33.5 Million; EPS $0.12; 2005 Earnings Guidance Improved;
2006 Earnings Guidance Confirmed
MIAMI--(BUSINESS WIRE)--April 28, 2005--IVAX Corporation
(AMEX:IVX) (LSE:IVX.L) (WSE:IVX) reported first quarter 2005 net
revenues of $491.6 million and gross profit of $202.8 million, 15.6%
and 1.7% increases, respectively, over net revenues of $425.2 million
and gross profit of $199.4 million in the first quarter 2004. Net
income in the first quarter 2005 was $33.5 million. Earnings per share
were $0.12 for the first quarter 2005. Net income in the first quarter
2004 was $42.3 million and EPS $0.16.
IVAX' earnings per share in the first quarter 2005 were reduced by
the impact of a recent accounting pronouncement relating to
contingently convertible debt which resulted in approximately ten
million additional IVAX shares considered outstanding. The EPS impact
of the rule change will be almost entirely eliminated in future
quarters as a result of the exchange offer we completed during the
first quarter 2005.
Neil Flanzraich, vice chairman and president of IVAX Corporation,
said, "As announced previously, we anticipated lower earnings in the
first quarter 2005 that would be followed by higher earnings later in
the year. In fact, first quarter results exceeded our expectations,
and we now believe that our earnings this year will be between the
middle to upper end of our previously announced guidance range.
"Our North American revenues in the first quarter 2005 increased
34.1% to $227.9 million from $170.0 million in 2004. Our U.S. generic
business was the major contributor to this growth and promises to
perform even better during the remainder of the year because of new
product introductions.
"Revenues from the sale of our branded products in North America
also grew. Sales of QVAR(R), our CFC-free aerosol corticosteroid for
asthma continued to increase. Our albuterol HFA product, launched
December 2004, has moved into second place among albuterol HFA
products in total prescriptions (TRx) and new prescriptions (NRx) and
is the fastest growing of the albuterol HFA products. We believe that
our albuterol HFA breath operated inhaler product, when approved, will
permit us to obtain a significant part of the large albuterol inhaler
market.
"Our Latin American operations' first quarter 2005 revenues
increased 18.1% to $87.2 million from $73.8 million in 2004. As with
our U.S. generics business, we expect increased product launches
during the remainder of 2005 to enhance our Latin American results.
IVAX is also optimistic about our launch of Pediatrix Medical Group,
Inc.'s (NYSE:PDX) proprietary StepOne(TM) Newborn Screening Program
throughout Latin America, as announced earlier in the first quarter
2005. We believe this system for screening newborns for metabolic
disorders will be a substantial growth driver for our Latin American
operations this year, and in the future, and help raise the standard
of healthcare to this region's children.
"Our European operations' first quarter 2005 revenues were $180.4
million compared to $188.5 million in the first quarter 2004. In the
first quarter 2004, IVAX received a $25.5 million collaboration
payment in Europe and no such payment was received in 2005. Our
generic businesses in Western Europe were affected by pricing
pressures. Both these factors contributed to a lower consolidated
gross profit margin in the first quarter 2005 as compared to the first
quarter 2004. We expect our European business performance to improve
during the next three quarters and beyond as a result of new generic
launches, the continued growth of QVAR sales, and corporate-wide cost
cutting efforts.
"In the first quarter 2005, our operating expenses increased by
approximately 13% compared to the same quarter last year. This
increase included the cost of integration of recent acquisitions,
professional fees related to Sarbanes-Oxley compliance, and continued
R&D spending. First quarter 2005 selling expenses were 23% higher than
in 2004. These increases are in part related to the costs of the sales
teams we added with the acquisitions of Polfo Kutno, in Poland, and
Medco and BTL, in Peru, and the U.S. launch of the albuterol HFA MDI.
Additionally, in the first quarter 2005, IVAX had restructuring
charges - particularly in Europe - related to increasing efficiencies.
In the first quarter, we announced our intention to reduce operational
costs in 2005. The success of our cost cutting efforts can be more
clearly seen in IVAX having reduced its first quarter 2005 operating
expenses below expenditures in the fourth quarter 2004.
"IVAX also expects its new veterinary pharmaceutical subsidiary to
become a strong growth driver in 2005 and beyond. This company is
being formed by merging our highly successful veterinary medicine
subsidiary, DVM Pharmaceuticals, Inc, with Phoenix Scientific, the
industry's leading manufacturer of generic veterinary pharmaceutical
products. The Phoenix Scientific acquisition is expected to close
later this quarter.
"For these reasons, and others, we confirm our 2005 earnings
guidance of $0.76 - $0.86 per share and we believe that our earnings
this year will be between the middle to upper end of this range. We
also confirm our 2006 guidance of $1.35 - $1.55 per share and we
remain confident that we will be granted a six-month period of
marketing exclusivity for Zocor(R), with present U.S. brand sales of
$4.6 billion, which we expect could add approximately $1.45 more per
share to our 2006 earnings."
IVAX will discuss first quarter 2005 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 800-762-4832 from anywhere in the U.S. or by dialing
480-629-9557 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 April 28th and will
continue until May 4th. To listen to the replay of the conference
call, dial 800-475-6701 and enter ID# 780219. Replays of the webcast
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 will be at
the middle or upper end of the range, that the results for the year
2006 will be in a range of $1.35 to $1.55 per share, or that a generic
equivalent of Zocor(R) would add approximately $1.45 more per share to
2006 earnings; that earnings may not be higher later in 2005 than in
the first quarter; that our U.S. generics business and our Latin
American business may not perform better during the remainder of the
year due to new product introductions, or at all; that our European
business performance may not improve due to new generic launches,
continued growth of QVAR(R) sales, corporate cost cutting, or at all;
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 receive a six-month exclusivity
period for its generic equivalent of Zocor(R), and even if it does,
may not be alone on the market during any such period; 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; 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 albuterol HFA in a breath operated
inhaler may not obtain a significant part of the albuterol inhaler
market; that market acceptance and demand for IVAX' respiratory
products may not be as anticipated; that the launch of the StepOneTM
Newborn Screening Program may be delayed or may not occur at all; that
the collaboration with Pediatrix may not achieve the results expected;
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' veterinary
pharmaceutical subsidiary may be less than anticipated; and that IVAX
may not be able to increase efficiency or reduce costs during the
remainder of 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. Zocor(R) is a registered
trademark of Merck & Co., Inc.
IVAX Corporation and Subsidiaries
Condensed Consolidated Statements of Operations
(Unaudited)
Period Ended March 31, 2005 2004
----------------------
(In thousands, except per share data)
Net revenues $491,591 $425,191
Cost of sales (excludes amortization, which is
presented below) 288,829 225,785
----------------------
Gross profit 202,762 199,406
----------------------
Operating expenses:
Selling 75,322 61,371
General and administrative 36,886 36,506
Research and development 33,721 32,350
Amortization of intangible assets 6,746 5,505
Restructuring costs 1,548 633
----------------------
Total operating expenses 154,223 136,365
----------------------
Operating income 48,539 63,041
Total other expense, net (3,600) (10,315)
----------------------
Income before income taxes and minority interest 44,939 52,726
Provision for income taxes 11,349 10,381
----------------------
Income before minority interest 33,590 42,345
Minority interest (44) (4)
----------------------
Net income $ 33,546 $ 42,341
======================
Earnings per common share:
Basic $ 0.13 $ 0.17
======================
Diluted $ 0.12 $ 0.16
======================
Weighted average number of common shares
outstanding:
Basic 261,118 246,343
======================
Diluted 275,164 257,248
======================
IVAX Corporation and Subsidiaries
Condensed Consolidated Balance Sheets
March 31, December 31,
2005 2004
----------------------
(In thousands) (Unaudited)
Assets
- ------
Cash & cash equivalents $ 337,734 $ 391,988
Marketable Securities, short term 71,668 6,058
Other current assets 1,111,905 1,123,597
Property, plant and equipment, net 592,583 604,647
Other assets 1,065,285 1,085,729
----------------------
Total assets $3,179,175 $3,212,019
======================
Liabilities and Shareholders' Equity
- ------------------------------------
Current portion of long-term debt $ 61,048 $ 60,145
Other current liabilities 466,963 518,276
Long-term debt 1,058,555 1,057,843
Other long-term liabilities 81,242 72,855
Minority interest 12,614 12,571
Shareholders' equity 1,498,753 1,490,329
----------------------
Total liabilities and shareholders' equity $3,179,175 $3,212,019
======================
IVAX Corporation and Subsidiaries
Reportable Segment Data
(Unaudited)
Period Ended March 31, Three Months
(In thousands) 2005 2004
--------------------------
North America
External sales $226,634 $166,789
Intersegment sales 575 2,074
Other revenues 679 1,103
--------------------------
Net revenues - North America 227,888 169,966
--------------------------
Europe
External sales 155,472 141,784
Intersegment sales 19,480 18,103
Other revenues 5,413 28,566
--------------------------
Net revenues - Europe 180,365 188,453
--------------------------
Latin America
External sales 86,933 73,436
Other revenues 262 406
--------------------------
Net revenues - Latin America 87,195 73,842
--------------------------
Corporate & other
External sales 13,562 11,556
Intersegment sales (20,055) (20,177)
Other revenues 2,636 1,551
--------------------------
Net revenues - Corporate &
other (3,857) (7,070)
--------------------------
--------------------------
Consolidated net revenues $491,591 $425,191
==========================
CONTACT: IVAX Corporation, Miami
David Malina, 305-575-6043
Director/Investor Relations & Corporate Communications