SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2003
Commission File Number 1-09623
IVAX CORPORATION
| Florida (State or other jurisdiction of incorporation or organization) |
16-1003559 (I.R.S. Employer Identification No.) |
| 4400 Biscayne Boulevard, Miami, Florida (Address of principal executive offices) |
33137 (Zip Code) |
(305) 575-6000
(Registrant’s telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨
Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Securities Exchange Act of 1934). Yes x No ¨
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.
194,955,735 shares of Common Stock, $.10 par value, outstanding as of April 25, 2003.
IVAX CORPORATION
| PAGE NO. | ||||||
| PART I – FINANCIAL INFORMATION |
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| Item 1 – Financial Statements |
||||||
| Consolidated Balance Sheets as of March 31, 2003 and December 31, 2002 |
2 | |||||
| Consolidated Statements of Operations for the three months ended March 31, 2003 and 2002 |
3 | |||||
| Consolidated Statement of Shareholders’ Equity for the three months ended March 31, 2003 |
4 | |||||
| Consolidated Statements of Cash Flows for the three months ended March 31, 2003 and 2002 |
5 | |||||
| 6 | ||||||
| Item 2 – Management’s Discussion and Analysis of Financial Condition and Results of Operations |
13 | |||||
| Item 3 – Quantitative and Qualitative Disclosures About Market Risk |
21 | |||||
| 22 | ||||||
| PART II – OTHER INFORMATION |
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| 23 | ||||||
| 24 | ||||||
PART I – FINANCIAL INFORMATION
IVAX CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands, except per share data)
| March 31, 2003 |
December 31, 2002 |
|||||||
| (Unaudited) |
||||||||
| ASSETS |
||||||||
| Current assets: |
||||||||
| Cash and cash equivalents |
$ |
146,881 |
|
$ |
155,408 |
| ||
| Marketable securities, short-term |
|
13,770 |
|
|
28,873 |
| ||
| Accounts receivable, net of allowances for doubtful accounts of $21,844 in 2003 and $21,719 in 2002 |
|
203,480 |
|
|
224,768 |
| ||
| Inventories |
|
318,790 |
|
|
309,655 |
| ||
| Other current assets |
|
145,043 |
|
|
162,513 |
| ||
| Total current assets |
|
827,964 |
|
|
881,217 |
| ||
| Property, plant and equipment, net |
|
432,915 |
|
|
420,246 |
| ||
| Goodwill, net |
|
405,663 |
|
|
407,403 |
| ||
| Intangible assets, net |
|
281,462 |
|
|
283,298 |
| ||
| Other assets |
|
69,605 |
|
|
55,595 |
| ||
| Total assets |
$ |
2,017,609 |
|
$ |
2,047,759 |
| ||
| LIABILITIES AND SHAREHOLDERS’ EQUITY |
||||||||
| Current liabilities: |
||||||||
| Accounts payable |
$ |
104,245 |
|
$ |
111,590 |
| ||
| Current portion of long-term debt |
|
26,496 |
|
|
28,617 |
| ||
| Loans payable |
|
11,918 |
|
|
14,935 |
| ||
| Accrued income taxes payable |
|
27,314 |
|
|
50,555 |
| ||
| Accrued expenses and other current liabilities |
|
217,928 |
|
|
228,366 |
| ||
| Total current liabilities |
|
387,901 |
|
|
434,063 |
| ||
| Long-term debt, net of current portion |
|
852,598 |
|
|
872,339 |
| ||
| Other long-term liabilities |
|
51,317 |
|
|
46,115 |
| ||
| Minority interest |
|
12,344 |
|
|
10,379 |
| ||
| Shareholders’ equity: |
||||||||
| Common stock, $.10 par value, authorized 437,500 shares, |
||||||||
| issued and outstanding 194,956 shares in 2003 and 194,372 shares in 2002 |
|
19,495 |
|
|
19,437 |
| ||
| Capital in excess of par value |
|
318,507 |
|
|
311,367 |
| ||
| Retained earnings |
|
598,210 |
|
|
569,225 |
| ||
| Accumulated other comprehensive loss |
|
(222,763 |
) |
|
(215,166 |
) | ||
| Total shareholders’ equity |
|
713,449 |
|
|
684,863 |
| ||
| Total liabilities and shareholders’ equity |
$ |
2,017,609 |
|
$ |
2,047,759 |
| ||
The accompanying Notes to Consolidated Financial Statements are an integral part of these statements.
2
IVAX CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(In thousands, except per share data)
| Three Months Ended March 31, |
2003 |
2002 |
||||||
| Net revenues |
$ |
317,693 |
|
$ |
272,222 |
| ||
| Cost of sales |
|
171,550 |
|
|
150,247 |
| ||
| Gross profit |
|
146,143 |
|
|
121,975 |
| ||
| Operating expenses: |
||||||||
| Selling |
|
45,595 |
|
|
42,146 |
| ||
| General and administrative |
|
25,068 |
|
|
27,266 |
| ||
| Research and development |
|
20,421 |
|
|
19,054 |
| ||
| Amortization of intangible assets |
|
4,491 |
|
|
3,015 |
| ||
| Restructuring costs |
|
463 |
|
|
488 |
| ||
| Total operating expenses |
|
96,038 |
|
|
91,969 |
| ||
| Income from operations |
|
50,105 |
|
|
30,006 |
| ||
| Other income (expense): |
||||||||
| Interest income |
|
1,234 |
|
|
2,399 |
| ||
| Interest expense |
|
(10,949 |
) |
|
(12,408 |
) | ||
| Other income, net |
|
5,623 |
|
|
5,022 |
| ||
| Total other income |
|
(4,092 |
) |
|
(4,987 |
) | ||
| Income before income taxes and minority interest |
|
46,013 |
|
|
25,019 |
| ||
| Provision for income taxes |
|
17,106 |
|
|
5,813 |
| ||
| Income before minority interest |
|
28,907 |
|
|
19,206 |
| ||
| Minority interest |
|
78 |
|
|
94 |
| ||
| Income from continuing operations |
|
28,985 |
|
|
19,300 |
| ||
| Cumulative effect of accounting change |
|
— |
|
|
4,161 |
| ||
| Net income |
$ |
28,985 |
|
$ |
23,461 |
| ||
| Basic earnings per common share: |
||||||||
| Continuing operations |
$ |
0.15 |
|
$ |
0.10 |
| ||
| Cumulative effect of accounting change |
|
— |
|
|
0.02 |
| ||
| Net income |
$ |
0.15 |
|
$ |
0.12 |
| ||
| Diluted earnings per common share: |
||||||||
| Continuing operations |
$ |
0.15 |
|
$ |
0.10 |
| ||
| Cumulative effect of accounting change |
|
— |
|
|
0.02 |
| ||
| Net income |
$ |
0.15 |
|
$ |
0.12 |
| ||
| Weighted average number of common shares outstanding: |
||||||||
| Basic |
|
194,969 |
|
|
196,227 |
| ||
| Diluted |
|
196,653 |
|
|
199,988 |
| ||
The accompanying Notes to Consolidated Financial Statements are an integral part of these statements.
3
IVAX CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF SHAREHOLDERS’ EQUIT Y
(Unaudited)
(In thousands)
| Common Stock |
Capital in |
Accumulated Other |
||||||||||||||||||||
| Number of Shares |
Amount |
Excess of Par Value |
Retained Earnings |
Comprehensive Income (Loss) |
Total |
|||||||||||||||||
| BALANCE, January 1, 2003 |
194,372 |
|
$ |
19,437 |
|
$ |
311,367 |
|
$ |
569,225 |
$ |
(215,166 |
) |
$ |
684,863 |
| ||||||
| Comprehensive income: |
||||||||||||||||||||||
| Net income |
— |
|
|
— |
|
|
— |
|
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