8-K/A 1 g70793ae8-ka.txt IVAX CORPORATION - AMENDMENT TO JULY 5, 2001 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ----------------------------------- FORM 8-K/A Current Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of Earliest Event Reported): JULY 5, 2001 IVAX CORPORATION (Exact Name of Registrant as Specified in its Charter) FLORIDA 1-09623 16-1003559 ------------------------------- ------------------------ ------------------- (State or Other Jurisdiction of (Commission File Number) (IRS Employer Incorporation) Identification No.) 4400 BISCAYNE BOULEVARD, MIAMI, FLORIDA 33137 (Address of Principal Executive Offices) (305) 575-6000 (Registrant's Telephone Number, Including Area Code) N/A (Former Name or Former Address, if Changed since Last Report) -------------------------------------------------- 2 This Form 8-K/A amends the Form 8-K filed with the Commission on July 20, 2001 relating to the acquisition by IVAX Corporation ("IVAX") of Laboratorio Chile S.A. ("LabChile"). This Form 8-K/A is being filed to include the information required by Item 7 of Form 8-K with respect to the LabChile acquisition. ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS. (a) FINANCIAL STATEMENTS OF BUSINESS ACQUIRED. The audited financial statements of LabChile for the years ended December 31, 2000 and 1999 are incorporated by reference to the Form 20-F filed by LabChile on June 22, 2001. The unaudited financial statements for the three months ended March 31, 2001 are attached hereto as Attachment 7(a) and are incorporated herein by this reference. (b) PRO FORMA FINANCIAL INFORMATION The unaudited pro forma combined consolidated balance sheet as of December 31, 2000, and statements of operations for the year ended December 31, 2000, and for the three months ended March 31, 2001 are attached hereto as Attachment 7(b) and are incorporated herein by this reference. (c) EXHIBITS. The Exhibits to this Form 8-K are listed on the Exhibit Index and are incorporated herein by reference. SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. Date: July 31, 2001 IVAX CORPORATION By:/s/ THOMAS E. BEIER ---------------------------------- Thomas E. Beier Senior Vice President-Finance Chief Financial Officer 2 3 Attachment 7(a) LABORATORIO CHILE S.A. CONSOLIDATED BALANCE SHEETS AS OF MARCH 31, 2001 AND 2000 (IN THOUSANDS OF CONSTANT CHILEAN PESOS)
ASSETS 03/31/01 03/31/00 CH$ `000 CH$ `000 ------------------------------------------------------------------------------------------------------ CURRENT ASSETS Cash 4,061,097 1,174,151 Time deposits 699,087 11 Marketable securities 4,759,052 5,030,572 Accounts receivable 21,414,295 16,861,717 Notes receivable 2,853,115 2,063,285 Sundry accounts receivable 1,045,693 1,735,272 Accounts receivable from related companies -- -- Inventories 17,555,006 13,868,601 Recoverable taxes 685,284 173,585 Prepaid expenses 742,376 499,710 Deferred taxes 957,246 911,284 Other current assets 58,324 164,319 ------------------------------------------------------------------------------------------------------ TOTAL CURRENT ASSETS 54,830,575 42,482,507 ------------------------------------------------------------------------------------------------------ PROPERTY, PLANT AND EQUIPMENT Land 1,455,809 1,432,174 Constructions and infrastructure 12,401,174 11,211,594 Machinery and equipment 12,460,070 10,814,260 Other property, plant and equipment 10,161,969 10,228,705 Technical revaluation 549,382 549,557 Depreciation (13,713,393) (11,502,626) ------------------------------------------------------------------------------------------------------ NET PROPERTY, PLANT AND EQUIPMENT 23,315,011 22,733,664 ------------------------------------------------------------------------------------------------------ OTHER NON- CURRENT ASSETS Investment in related companies 20,300 67,804 Goodwill 48,127,023 44,944,361 Negative goodwill -- -- Long-term accounts receivable 1,209,630 1,338,853 Long-term receivables from related companies -- -- Intangibles 1,290,872 1,109,387 Accumulated amortization (845,069) (689,534) Other 30,047 26,327 ------------------------------------------------------------------------------------------------------ TOTAL OTHER NON-CURRENT ASSETS 49,832,803 46,797,198 ------------------------------------------------------------------------------------------------------ TOTAL ASSETS 127,978,389 112,013,369 ------------------------------------------------------------------------------------------------------
3 4 LABORATORIO CHILE S.A. CONSOLIDATED BALANCE SHEETS AS OF MARCH 31, 2001 AND 2000 (IN THOUSANDS OF CONSTANT CHILEAN PESOS)
LIABILITIES AND SHAREHOLDERS' EQUITY 03/31/01 03/31/00 CH$ `000 CH$ `000 ------------------------------------------------------------------------------------------------------------------ CURRENT LIABILITIES Short-term bank liabilities 10,773,102 17,650,924 Short-term portion of long-term bank liabilities 328,794 5,295,133 Dividends payable 27,032 5,778 Accounts payable 5,674,549 5,712,794 Notes Payable 5,408,261 3,676,201 Sundry accounts payable 3,215,037 805,727 Accounts payable to related companies -- 1,834 Provisions 2,014,660 1,889,423 Withholdings 1,728,507 1,918,668 Income Taxes payable 2,000,853 813,683 Deferred taxes 202,302 164,924 Others 10,401 3,888 ------------------------------------------------------------------------------------------------------------------ TOTAL CURRENT LIABILITIES 31,383,498 37,938,977 ------------------------------------------------------------------------------------------------------------------ LONG-TERM LIABILITIES Long-term bank liabilities 30,402,967 14,127,348 Bonds payable -- -- Notes payable 384,744 119,426 Long-term payable to related companies -- -- Provisions 734,285 799,049 Other 840,111 570,677 ------------------------------------------------------------------------------------------------------------------ TOTAL LONG-TERM LIABILITIES 32,362,107 15,616,500 ------------------------------------------------------------------------------------------------------------------ SHAREHOLDERS' EQUITY Paid-in capital 36,134,222 35,823,613 Price-level restatement reserve 36,134 358,237 Share premium 2,679,860 2,680,711 Other reserves 1,079,430 (24,362) Retained earnings 20,237,930 16,639,858 Net income for the period 4,065,208 2,979,835 Interim dividends ------------------------------------------------------------------------------------------------------------------ TOTAL SHAREHOLDERS' EQUITY 64,232,784 58,457,892 ------------------------------------------------------------------------------------------------------------------ TOTAL LIABILITIES AND SHAREHOLDERS` EQUITY 127,978,389 112,013,369 ------------------------------------------------------------------------------------------------------------------
4 5 LABORATORIO CHILE S.A. CONSOLIDATED INCOME STATEMENT (IN THOUSANDS OF CONSTANT CHILEAN PESOS) OPERATING RESULTS
For the three months ended March 31st 2001 2000 ----------------------------------------------------------------------------------------------------------- NET SALES 25,212,316 22,347,439 Cost of goods Sold (less)* (7,508,497) (7,243,367) Gross operating income 17,703,819 15,104,072 Selling, general & administrative expenses (less) (10,399,095) (8,558,572) Operating Income 7,304,724 6,545,500 NON-OPERATING RESULTS Financial income 84,513 76,491 Share of net income of related companies 1,599 408 Other non-operating income 99,182 239,283 Amortization of goodwill (less) (792,109) (694,035) Interest expense (less) (1,214,581) (938,240) Other non-operating expenses (less) (150,954) (66,264) Price-level restatement 475,357 (938,074) NON-OPERATING INCOME (EXPENSE) (1,496,993) (2,320,431) Income before taxes 5,807,731 4,225,069 Income taxes (1,742,523) (1,245,234) Minority interest (less) -- -- Negative goodwill -- -- NET INCOME FOR THE PERIOD 4,065,208 2,979,835 Earnings per share Ch$ 12.86 Ch$ 9.43 Earnings per ADR US$ 0.43 US$ 0.32 EXCHANGE RATE AT 03/31/01 CH$ 594.97 PER US$
5 6 NET CONSOLIDATED SALES Consolidated sales for the three month period ended March 31, 2001 were up by 13% to Ch$ 25,212 million (US$ 42.4 million) from the Ch$ 22,347 million (US$ 37.6 million) reported for the first quarter of 2000. This growth is the result of higher sales in all of the Company's main markets, despite flat or slightly negative growth of the pharmaceutical industry in most of the Region. In Chile, although industry growth had picked up during the last quarter of 2000, expectations were again dampened towards the end of the first quarter of 2001. The consolidated revenue contribution by country during the first quarter of 2001 was: Chile (48.7%), Argentina (42.6%), Peru (8.4%), and others (0.3%). Compared to earlier periods, this represents a significant increase in the contribution of Peru to consolidated revenue, and a slight decline in the Chilean contribution. Chilean sales include net sales of Laboratorio Chile and Pharmatrade; intercompany sales have been eliminated. Exports made from Chile to Peru are also excluded from Chilean sales. Argentine sales include the consolidated net sales of Laboratory Armstrong Syncro.(1) GROSS INCOME The Company's gross income increased 17.2% to Ch$ 17,704 million (US$ 29.8 million) during the first quarter of 2001, as compared to Ch$ 15,104 million (US$ 25.4 million) in the first quarter of 2000. This growth reflects mainly higher sales, as well as lower purchase costs of raw materials, further improved operating efficiencies, which have permitted cost reductions, and a more favorable sales mix, as compared to the same period in 2000. Thus, as a percentage of sales, the gross margin increased from 67.6% in the first quarter of 2000 to 70.2% in the first quarter of 2001. SELLING, GENERAL AND ADMINISTRATIVE EXPENSE SG&A expense amounted to Ch$ 10,399 million (US$ 17.5 million), up 22% from the Ch$ 8,559 million (US$ 14.4 million) reported in the same period in 2000. This increase in SG&A expenses results mainly from increased medical promotion costs in both Chile and Argentina, and to a lesser extent in Peru. In Chile, the number of medical representatives was increased from around 200 at the beginning of 2000 to over 240 professionals at present, in order to support the product launches carried out during 2000 and in the pipeline for 2001. As a percentage of sales, SG&A increased from 38% as of March 2000 to 41% as of March 2001. CONSOLIDATED EBITDA Consolidated EBITDA during the three month period ended March 31, 2001 amounted to Ch$ 7,841 million (US$ 13.2 million), growing 11.7% from the Ch$ 7,021 million (US$ 11.8 million) reported during the first quarter of 2000. OPERATING INCOME Operating income during the first quarter of 2001 amounted to Ch$ 7,305 million (US$ 12.3 million), up 12% from the Ch$ 6,545 million (US$11.0 million) in the same period in 2000. The consolidated operating margin as a percentage of sales, remained stable at 29%. The growth in consolidated operating income primarily reflects the growth in sales during the period in all of the Company's main markets, lower costs of raw material and greater production efficiencies, both in Chile and Argentina, as well as a more profitable sales mix in the Chilean domestic operations. -------- (1) As of April 1, 2000, Armstrong absorbed Syncro, continuing with its activities. 6 7 Of the total operating income earned during the first quarter of 2001, the Chilean operations contributed 34.5%, the Argentine operations 58.4%, Peruvian operations 2.3%, and others(2) 4.8%. NON-OPERATING EXPENSES The group reported non-operating expenses of Ch$ 1,497 million (US$ 2.5 million), 36% lower than the Ch$ 2,320 million (US$3.9 million) reported in the same period in 2000. The main items included in non-operating results are explained below: GOODWILL AMORTIZATION EXPENSE Goodwill amortization expense, which is associated with the Argentine acquisitions completed in 1997, amounted to Ch$ 792 million (US$ 1.3 million) for the period ended March 31, 2000, versus Ch$ 694 million (US$ 1.2 million) reported during the first quarter of 2000. Goodwill is being amortized over a twenty- year period, using the straight line method. Goodwill is carried on the books of the Argentine subsidiary in U.S. dollars and is converted to Chilean pesos at the close of the reporting period. INTEREST EXPENSE During the three months ended March 31, 2000, interest expense amounted to Ch$ 1,215 million (US$ 2.0 million), increasing 30% from Ch$ 938 million (US$ 1.6 million) during the first quarter of 2000. This increase is mainly explained by the cost associated with the forward exchange rate contracts taken in January 2001, covering around 80% of the debt in Argentina for one year. These contracts hedge the financial risk of an eventual devaluation in Argentina. Consolidated bank debt as of March 31, 2000 amounted to Ch$ 41,505 million (US$ 69.8 million), of which 27% is short term financing and 73% is medium term financing. During the first quarter of 2001, the Company refinanced outstanding short and medium term loans with Banco de A. Edwards and First Union National Bank through medium term loans obtained from BBVB and Dresdner for US$ 17 million and US$ 19.9 million, respectively. Leverage (total debt/equity) increased from 0.91 as of March 31, 2000 to 1.00 as of March 31, 2001 reflecting the effect of the variation in the exchange rate on the US$ denominated loans. PRICE-LEVEL RESTATEMENT AND EXCHANGE RATE DIFFERENCE The Company reported a non-cash flow price-level restatement gain of Ch$ 169 million (US$ 284 thousand) in the first quarter of 2001, and an exchange rate difference gain of Ch$ 306 million (US$ 515 thousand), as compared to price-level restatement and exchange rate difference losses of Ch$ 332 million (US$ 558 thousand) and Ch$ 606 million (US$ 1.0 million) respectively, obtained during the first quarter of 2000. The price-level restatement and exchange rate difference gain reported during the period mainly relates to the net asset position in U.S. dollars of Laboratorio Chile and the devaluation of the Chilean Peso in relation to the U.S. dollar during the period. INCOME TAXES The current corporate tax rate is 15% in Chile and 35% in Argentina. The consolidated accounting pre-tax income was Ch$5,808 million (US$ 9.8 million) for the first quarter of 2001. Income taxes as a percentage of pre-tax income were 30.0% on a consolidated basis for the period ended March 31, 2001. NET INCOME Net income reported as of March 31, 2001 totaled Ch$ 4,065 million (US$ 6.8 million), increasing 36% over the net income of Ch$ 2,980 million (US$ 5.0 million) reported for the same period of 2000, continuing the Company's positive track record of earnings. This signified a net return on sales of ---------- (2) Others include LBC International and subsidiaries 7 8 16.1% for the three month period ended March 31, 2001. Earnings per common share amounted to Ch$ 12.86 (Ch$ 9.43 as of March 2000) and earnings per ADR amounted to US$0.43 (US$ 0.32 as of March 2000). CASH FLOW Consolidated cash flow(3) reached Ch$ 4,741 million (US$ 8.0 million) during the first quarter of 2001, decreasing 7% in relation to Ch$5,100 million (US$ 8.6 million) in the first quarter of 2000. The decrease in cash flow is mainly explained by an increase in the Company's working capital. This increase is explained by the growth in sales, which in consequence also increased the level of stocks. Free cash flow during the period was primarily used to pay dividends and for CAPEX requirements. -------------- (3) Cash flow = Net Profit + Depreciation and Amortization + (-) Loss (Profit) from Related Company Investments + (-) Price level Restatement (gains) & losses + Goodwill + (-) other non-cash items 8 9 Consolidating Companies: As of March 31, 2000, LabChile consolidates with Pharmatrade S.A., Armstrong S.A.C.I.F., Newpharm S.A., LabChile Investment Corp, LBC Pharmaceuticals Colombia, and LBC International Corp. (in thds of Ch$) 03/31/01 03/31/00 --------- ---------- Operating Income 7,304,724 6,545,500 Depreciation 497,185 438,820 Amortization of Intangibles 39,186 36,401 EBITDA 7,841,095 7,020,721 9 10 LABORATORIO CHILE S.A. CONSOLIDATED INCOME STATEMENT (IN THOUSANDS OF US$ TRANSLATED FROM CONSTANT CHILEAN PESOS) OPERATING RESULTS
For the three months ended March 31st 2001 2000 ---------------------------------------------------------------------------------------------------------------- NET SALES 42,376 37,561 Cost of goods Sold (less)* (12,620) (12,174) Gross operating income 29,756 25,387 Selling, general & administrative expenses (less) (17,479) (14,386) Operating Income 12,277 11,001 NON-OPERATING RESULTS Financial income 142 129 Share of net income of related companies (3) 1 Other non-operating income 167 402 Amortization of goodwill (less) (1,331) (1,167) Interest expense (less) (2,041) (1,577) Other non-operating expenses (less) (249) (111) Price-level restatement and exchange rate diff. 799 (1,577) NON-OPERATING INCOME (EXPENSE) (2,516) (3,900) Income before taxes 9,761 7,101 Income taxes (less) (2,928) (2,093) Minority interest (less) Negative goodwill NET INCOME FOR THE PERIOD 6,833 5,008 Earnings per common share Ch$ 12.86 Ch$ 9.43 Earnings per ADR US$ 0.43 US$ 0.32 EXCHANGE RATE AT 03/31/01 CH$ 594.97 PER US$
10 11 Consolidating Companies: As of March 31, 2000, LabChile consolidates with Pharmatrade S.A., Armstrong S.A.C.I.F., Newpharm S.A., LabChile Investment Corp, LBC Pharmaceuticals Colombia S.A., and LBC International Corp. (in thds of US$) 03/31/01 03/31/00 -------- -------- Operating Income 12,277 11,001 Depreciation 836 738 Amortization of Intangibles 66 61 EBITDA 13,179 11,800 SIGNIFICANT DIFFERENCES BETWEEN CHILEAN AND U.S. GENERALLY ACCEPTED ACCOUNTING PRINCIPLES The first quarter 2001 financial results reported by Lab Chile include income statements translated at the March 31, 2001 exchange rate. U.S. generally accepted accounting principles ("GAAP") requires income statements be translated at the weighted average exchange rate for the period. See note (i) in the Notes to Unaudited Pro Forma Combined Consolidated Financial Information for discussion of the gain required to be recorded on derivative instruments under Statement of Financial Accounting Standards No. 133, Accounting for Derivative Instruments and Hedging Activities, which was not required under Chilean GAAP. See Notes to the Consolidated Financial Statements in Lab Chile's Annual Report on Form 20-F for the year ended December 31, 2000, for descriptions of other differences between U.S. and Chilean GAAP. 11 12 Attachment 7(b) UNAUDITED PRO FORMA COMBINED CONSOLIDATED BALANCE SHEET AND STATEMENTS OF OPERATIONS The following unaudited pro forma combined consolidated balance sheet as of December 31, 2000, and statements of operations for the year ended December 31, 2000, and for the three months ended March 31, 2001, give effect to the acquisition on July 5, 2001, of 99.6% of Laboratorio Chile S.A. ("Lab Chile") and the issuance in May of $725 million of IVAX' 4.5% Convertible Subordinated Notes. The unaudited pro forma combined consolidated balance sheet and statements of operations are based on the estimates and assumptions described in the notes to unaudited pro forma financial information ("Notes"). This information should be read in conjunction with the historical financial statements and notes thereto included in IVAX' Annual Report on Form 10-K for the year ended December 31, 2000, and Quarterly report on Form 10-Q for the quarterly period ended March 31, 2001, and in Lab Chile's Annual Report on Form 20-F for the year ended December 31, 2000. The acquisition will be accounted for as a purchase business combination. The pro forma adjustments are described in the Notes. The unaudited pro forma combined consolidated balance sheet and statements of operations assume the acquisition had occurred as of January 1, 2000, and include preliminary estimates of purchase price allocation. The purchase accounting is governed by Statement of Financial Accounting Standards No. 141, Business Combinations, which was issued in June 2001 and is effective for business combinations consummated after June 30, 2001. Accordingly, the pro forma adjustments do not include amortization of goodwill. These preliminary estimates of purchase price allocation are subject to change based upon completion of an independent appraisal of the assets acquired and liabilities assumed. If the appraised amounts of depreciable and amortizable assets are significantly higher than estimated or have significantly shorter lives than used in the pro forma adjustments, the amount of depreciation and amortization reflected in the pro forma statement of operations could increase significantly. The amount and weighted average life of identifiable intangible assets of Lab Chile included in the preliminary purchase price allocation are consistent with the amount used in IVAX' analysis of the consideration paid for the acquisition. These pro forma results are not necessarily indicative of results that may have been achieved had the acquisition actually occurred on January 1, 2000. 12 13 UNAUDITED PRO FORMA COMBINED CONSOLIDATED BALANCE SHEET AS OF MARCH 31, 2001 (In thousands)
PRO FORMA IVAX LAB CHILE ADJUSTMENTS COMBINED ---- --------- ----------- -------- ASSETS Current assets: Cash and cash equivalents $ 203,045 $ 16,000 $ 301,343 (a) $ 520,388 Accounts receivable, net 189,990 42,546 232,536 Inventories 197,550 29,071 226,621 Other current assets 66,380 5,768 72,148 ------------ ------------ ------------ ------------ Total current assets 656,965 93,385 301,343 1,051,693 Property, plant and equipment, net 273,834 36,772 310,606 Intangible assets, net 248,337 98,109 281,668 (b) 628,114 Other assets 42,053 1,631 18,850 (c) 62,534 ------------ ------------ ------------ ------------ Total assets $ 1,221,189 $ 229,897 $ 601,861 $ 2,052,947 ============ ============= ============= ============= LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Loans payable $ 20,257 $ 17,640 $ 37,897 Current portion of long-term debt 977 553 1,530 Accounts payable 57,244 18,628 75,872 Accrued income taxes payable 23,575 3,363 26,938 Accrued expenses and other current liabilities 157,767 11,758 169,525 ------------ ------------ ------------ ------------ Total current liabilities 259,820 51,942 311,762 Long-term debt, net of current portion 253,616 52,335 $ 725,000 (a) 1,030,951 Other long-term liabilities 33,241 1,986 35,227 Minority interest 14,467 -- 495 (d) 14,962 Shareholders' equity: Common stock 19,977 58,008 (58,008) (h) 19,977 Capital in excess of par value 383,067 4,298 (4,298) (h) 383,067 Put options 62,500 -- 62,500 Retained earnings 263,338 58,190 (58,190) (h) 263,338 Accumulated other comprehensive loss (68,837) 3,138 (3,138) (h) (68,837) ------------ ------------ ------------ ------------ Total shareholders' equity 660,045 123,634 (123,634) 660,045 ------------ ------------ ------------ ------------ Total liabilities and shareholders' equity $ 1,221,189 $ 229,897 $ 601,861 $ 2,052,947 ============ ============ ============ ============
The accompanying Notes to Unaudited Pro Forma Combined Consolidated Financial Information are an integral part of these balance sheets. 13 14 UNAUDITED PRO FORMA COMBINED CONSOLIDATED STATEMENT OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 2000 (In thousands, except per share data)
PRO FORMA IVAX LAB CHILE ADJUSTMENTS COMBINED ---- --------- ----------- -------- Net product revenues $ 699,671 $ 174,999 $ -- $ 874,670 Other revenues 93,734 513 94,247 ----------- ------------ ------------ ------------ Total net revenues 793,405 175,512 968,917 ----------- ------------ ------------ ------------ Cost of product sales 408,599 54,554 463,153 Cost of other revenues 1,304 -- 1,304 ----------- ------------ ------------ ------------ Total cost of sales 409,903 54,554 464,457 ----------- ------------ ------------ ------------ Gross profit 383,502 120,958 504,460 ----------- ------------ ------------ ------------ Operating expenses: Selling 92,032 63,020 155,052 General and administrative 84,900 12,918 97,818 Research and development 65,331 350 65,681 Amortization of intangible assets 9,042 4,459 3,641 (e) 17,142 Restructuring reversal (4,535) -- (4,535) ----------- ------------- ------------- ------------- Total operating expenses 246,770 80,747 3,641 331,158 ----------- ------------ ------------ ------------ Income (loss) from operations 136,732 40,211 (3,641) 173,302 Other income (expense): Interest income 13,986 849 14,835 Interest expense (14,624) (6,935) (19,720) (f) (41,279) Other income, net 17,497 1,892 19,389 ----------- ------------ ------------ ------------ Total other income 16,859 (4,194) (19,720) (7,055) ----------- ------------- ------------- ------------- Income from continuing operations before income taxes and minority interest 153,591 36,017 (23,361) 166,247 Provision for income taxes 13,214 9,475 (6,902) (g) 15,787 ----------- ------------ ------------ ------------ Income from continuing operations before minority interest 140,377 26,542 (16,459) 150,460 Minority interest (608) -- (106) (d) (714) ----------- ------------ ------------ ------------ Income from continuing operations $ 139,769 $ 26,542 $ (16,565) $ 149,746 ============ ============ ============ ============= Income from continuing operations per common share Basic $ 0.71 $ 0.76 ============ ============ Diluted $ 0.68 $ 0.73 =========== ============ Weighted average common shares outstanding Basic 196,276 196,276 ============ ============ Diluted 204,059 204,059 ============ ============
The accompanying Notes to Unaudited Pro Forma Combined Consolidated Financial Information are an integral part of these statements. 14 15 UNAUDITED PRO FORMA COMBINED CONSOLIDATED STATEMENT OF OPERATIONS FOR THE THREE MONTHS ENDED MARCH 31, 2001 (In thousands, except per share data)
PRO FORMA IVAX LAB CHILE ADJUSTMENTS COMBINED ---- --------- ----------- -------- Net revenues $ 259,932 $ 43,203 $ -- $ 303,135 Cost of sales 123,724 13,815 137,539 ----------- ------------ ------------ ------------ Gross profit 136,208 29,388 165,596 ----------- ------------ ------------ ------------ Operating expenses: Selling 27,502 13,640 41,142 General and administrative 23,721 3,114 26,835 Research and development 18,883 138 19,021 Amortization of intangible assets 3,593 959 1,066 (e) 5,618 ----------- ------------ ------------ ------------ Total operating expenses 73,699 17,851 1,066 92,616 ----------- ------------ ------------ ------------ Income (loss) from operations 62,509 11,537 (1,066) 72,980 Other income (expense): Interest income 3,808 147 3,955 Interest expense (4,359) (1,956) (4,930) (f) (11,245) Other income, net 1,750 3,995 (i) 5,745 Gain on partial sale of IVAX Diagnostics, Inc. 10,278 10,278 ----------- ------------ ------------ ------------ Total other income 11,477 2,186 (4,930) 8,733 ----------- ------------- ------------- ------------- Income from continuing operations before income taxes and minority interest 73,986 13,723 (5,996) 81,713 Provision for income taxes 13,755 4,197 (1,725) (g) 16,227 ----------- ------------ ------------ ------------ Income from continuing operations before minority interest 60,231 9,526 (4,270) 65,487 Minority interest (99) (39) (d) (138) ----------- ------------ ------------ ------------ Income from continuing operations $ 60,132 $ 9,526 $ (4,309) $ 65,349 =========== ============ ============ ============= Income from continuing operations per common share Basic $ 0.30 $ 0.33 ============ ============ Diluted $ 0.29 $ 0.32 =========== ============ Weighted average common shares outstanding Basic 199,255 199,255 ============ ============ Diluted 206,270 206,270 ============ ============
The accompanying Notes to Unaudited Pro Forma Combined Consolidated Financial Information are an integral part of these statements. 15 16 NOTES TO UNAUDITED PRO FORMA COMBINED CONSOLIDATED FINANCIAL INFORMATION Note: The following pro forma adjustments were made: (a) to record net proceeds of the $725 million 4.5% Convertible Subordinated Notes IVAX sold in May 2001 less cash paid for Lab Chile and estimated acquisition costs; (b) to record estimated goodwill and identifiable intangible assets of Lab Chile; (c) to record debt issue costs related to IVAX' 4.5% Convertible Subordinated Notes; (d) to record minority interest; (e) to record estimated amortization of identifiable intangible assets of $8.1 million annually assuming a 10 year weighted average life and eliminate Lab Chile's historical amortization of intangibles; (f) to record interest expense at 4.5% plus amortization of debt issuance costs on the assumed amount of debt IVAX would have issued if the acquisition had occurred on January 1, 2000; (g) to record the tax benefit of interest expense deduction; (h) to eliminate IVAX' investment against Lab Chile's equity; (i) amount for Lab Chile includes a gain under Statement of Financial Accounting Standards No. 133, Accounting for Derivative Instruments and Hedging Activities, of $2.3 million on financial instruments entered into during the first quarter of 2001. 16 17 EXHIBIT INDEX EXHIBIT NO. DESCRIPTION ----------- ----------- 23.1 Consent of Arthur Andersen LLP 17