FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarter Ended March 31, 1999
Commission File Number: 1-10432
ROBERTS PHARMACEUTICAL CORPORATION
(Exact name of registrant as specified in its charter)
NEW JERSEY 22-2429994
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
MERIDIAN CENTER II
4 INDUSTRIAL WAY WEST
EATONTOWN, NEW JERSEY 07724
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code:
(732) 676-1200
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
Class Outstanding Shares at
May 7, 1999
Common Stock 31,620,098
<PAGE>
ROBERTS PHARMACEUTICAL CORPORATION
INDEX
Page
Part I
Item 1 - Financial Statements 2
Item 2 - Management's Discussion and Analysis 9
Part II
Item 6 - Exhibits and Reports on Form 8-K 14
Signatures 15
FORWARD LOOKING STATEMENTS
Certain statements included in the notes to the Registrant's
consolidated financial statements and Items 2 and 6 of this form
10-Q are intended to be, and are hereby identified as, forward
looking statements for purposes of the safe harbor provided by
Section 21E of the Securities Exchange Act of 1934, as amended, and
Section 27A of the Securities Act of 1933, as amended. The
Registrant cautions readers that forward looking statements,
including, without limitation, those relating to the Registrant's
research and development, income taxes, liquidity and capital
resources, Euro conversion, and year 2000 readiness are subject to
certain risks and uncertainties, including, without limitation, the
ability of the Registrant to secure regulatory approval in the
United States and in foreign jurisdictions for the Registrant's
developmental pipeline drugs, the efforts of the Registrant's
competitors and the introduction of rival pharmaceutical products
which may prove to be more effective than the Registrant's
products, general market conditions, the availability of capital,
and the uncertainty over the future direction of the healthcare
industry, that could cause actual results to differ materially from
those indicated in the forward looking statements.
<PAGE>
ROBERTS PHARMACEUTICAL CORPORATION
CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)
<TABLE>
March 31, 1999 December 31, 1998
(Unaudited)
-------------- -----------------
<C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 20,196 $ 39,280
Marketable securities 52,571 36,062
Accounts receivable, net 31,422 40,412
Inventory 22,927 23,573
Notes receivable, current 7,552 9,426
Deferred tax assets 5,222 5,222
Other current assets 3,244 3,259
---------- ----------
Total current assets 143,134 157,234
Fixed assets, net 35,184 34,911
Intangible assets 318,912 315,865
Notes receivable 1,753 2,369
Deferred non-current tax asset 3,392 3,392
Other assets 12,222 12,465
---------- ----------
Total assets $514,597 $526,236
========== ==========
</TABLE>
The accompanying notes are an integral part of these financial statements.
- 2 -
<PAGE>
ROBERTS PHARMACEUTICAL CORPORATION
CONSOLIDATED BALANCE SHEETS
(in thousands, except share data)
(Unaudited)
<TABLE>
March 31, 1999 December 31, 1998
-------------- -----------------
<C> <C>
LIABILITIES AND
SHAREHOLDERS' EQUITY
Current liabilities:
Current installments of
long-term debt $ 7,802 $ 11,178
Accounts payable 10,186 21,897
Other current liabilities 25,708 24,612
---------- ----------
Total current liabilities 43,696 57,687
Long-term debt, excluding
current installments 122,813 126,739
Shareholders' equity:
Common stock, $.01 par,
100,000,000 shares authorized,
31,541,292 and 31,507,442
outstanding 321 320
Additional paid-in capital 382,861 381,631
Accumulated other comprehensive
income (2,684) (2,716)
Deficit (32,173) (37,188)
Treasury stock, 387,594 shares
of common stock, at cost (237) (237)
---------- ----------
Total shareholders' equity 348,088 341,810
---------- ----------
Total liabilities and
shareholders' equity $514,597 $526,236
========== ==========
</TABLE>
The accompanying notes are an integral part of these financial statements.
- 3 -
<PAGE>
ROBERTS PHARMACEUTICAL CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands except share and per share data)
(Unaudited)
<TABLE>
For the three months
ended March 31,
1999 1998
---------- ----------
<S> <S>
Sales and Revenue:
Sales $ 44,083 $ 32,588
Other revenue 456 259
---------- ----------
Total sales and revenue 44,539 32,847
---------- ----------
Operating costs and expenses:
Cost of sales 15,365 12,603
Research & development 2,740 2,660
Marketing 9,798 7,863
Administration 7,385 7,187
---------- ----------
Total operating costs & expenses 35,288 30,313
---------- ----------
Operating income 9,251 2,534
---------- ----------
Other income (expense):
Interest income 1,037 1,273
Interest expense (2,547) (269)
Foreign currency gain (loss) (18) (26)
Other, net (23) (43)
---------- ----------
Total other income (expense) (1,551) 935
---------- ----------
Income before taxes 7,700 3,469
Provision for income taxes 2,685 1,324
---------- ----------
Net income $ 5,015 $ 2,145
========== ==========
Net income per share of common stock:
Basic $ .16 $ .07
========== ==========
Diluted $ .16 $ .07
========== ==========
Weighted average number of
common shares outstanding:
Basic 31,541,292 30,185,163
Diluted 32,142,743 30,205,280
</TABLE>
The accompanying notes are an integral part of these financial statements.
- 4 -
<PAGE>
ROBERTS PHARMACEUTICAL CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
<TABLE>
For the three months
ended March 31,
1999 1998
---------- ----------
<S> <S>
Cash flows from operating activities: $ 7,155 $ 2,972
---------- ----------
Cash flows from investing activities:
Purchase of marketable securities (16,509) (5,120)
Purchases of intangible assets (5,474) (45)
Purchases of fixed assets (529) (3,221)
Collection on notes receivable 2,490 100
---------- ----------
Net cash by used in
investing activities (20,022) (8,286)
---------- ----------
Cash flows from financing activities:
Payments on notes payable and
long term debt (7,411) (4,200)
5% Preferred stock dividends paid 0 (150)
Net proceeds from issuance of
common stock 1,231 76
Net proceeds from issuance of
5% preferred stock 0 3,957
Net cash used in
financing activities (6,180) (317)
---------- ----------
Exchange rate changes on cash and
cash equivalents (37) 62
---------- ----------
Change in cash and cash equivalents (19,084) (5,569)
Beginning cash and cash equivalents 32,280 42,950
---------- ----------
Ending cash and cash equivalents $20,196 $37,381
========== ==========
Supplemental cash flow information:
Interest paid $ 5,361 $ 638
Income taxes paid $ 306 $ 15
</TABLE>
The accompanying notes are an integral part of these financial statements.
- 5 -
<PAGE>
ROBERTS PHARMACEUTICAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
March 31, 1999
1. Summary of Significant Accounting Policies
------------------------------------------
Interim Reporting
- -----------------
The accompanying unaudited financial statements have been prepared
in accordance with generally accepted accounting principles for
interim financial information and with the instructions to Form
10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do not
include all of the information and footnote disclosures normally
included in complete financial statements prepared in accordance
with generally accepted accounting principles. For further
information, such as significant accounting policies followed by
the Company, refer to the notes to the Company's audited
consolidated financial statements.
In the opinion of management, the unaudited financial statements
include all necessary adjustments (consisting of normal, recurring
accruals) for a fair presentation of the financial position,
results of operations and cash flows for the interim periods
presented. The results of operations for the three-month periods
ended March 31, 1999 and 1998, are not necessarily indicative of
the operating results to be expected for a full year.
Basis of Presentation
- ---------------------
Roberts Pharmaceutical Corporation is an international
pharmaceutical company which licenses, acquires, develops and
commercializes post-discovery drugs in selected therapeutic
categories. The Company currently markets approved pharmaceutical
products in the United States, Canada, the United Kingdom and
several other European countries. The consolidated financial
statements include the accounts of Roberts Pharmaceutical
Corporation and its wholly-owned subsidiaries. All significant
intercompany transactions are eliminated. All dollar amounts are
presented in thousands, except for earnings per share.
New Accounting Pronouncements
- -----------------------------
In June 1998, the FASB issued SFAS No. 133, "Accounting for
Derivative Instruments and Hedging Activities". This Statement
requires that all derivatives be recorded in the balance sheet as
either an asset or liability measured at its fair value and that
changes in the derivative's fair value be recognized currently in
earnings unless specific hedge accounting criteria are met. This
statement is effective for fiscal years beginning after June 15,
1999. The provisions of this statement shall not be applied
retroactively to financial statements of prior periods. The Company
is in the process of evaluating this statement and has not yet
determined the future impact on its consolidated financial
statements.
- 6 -
<PAGE>
ROBERTS PHARMACEUTICAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
March 31, 1999
2. Inventory
---------
Inventory at March 31, 1999 consists of:
Raw Materials $ 6,497
Work in Process 1,406
Finished Goods 15,024
--------
Total $22,927
========
3. Earnings per Share
------------------
Net income per share used in the calculation of earnings per share
was calculated as follows:
<TABLE>
March 31, March 31,
1999 1998
--------- ---------
<C> <C>
Net income $ 5,015 $ 2,145
Preferred dividends --- 34
--------- ---------
Net income for computation
of earnings per share $ 5,105 $ 2,111
========= =========
</TABLE>
Total common stock and potentially dilutive common stock for the
calculation of diluted earnings per share were calculated as
follows:
<TABLE>
March 31, March 31,
1999 1998
---------- ----------
<C> <C>
Weighted average common
shares outstanding 31,541,292 30,185,163
Dilutive effect of:
Stock options 601,417 11,045
Common stock warrants 34 ---
Preferred stock warrants --- 9,072
---------- ----------
Total shares for computation
of EPS 32,142,743 30,205,280
========== ==========
</TABLE>
- 7 -
<PAGE>
ROBERTS PHARMACEUTICAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
March 31, 1999
4. Segment Reporting
-----------------
The Company has three segments, determined geographically which are
made up of the operations of the U.S., Canada, and the U.K. Each
segment sells pharmaceutical products; the Canadian operations also
include a manufacturing plant. Manufacturing revenues were not
material to the Canadian operations or to the consolidated
operations. Each segment has its own management team, markets to
different countries and the results of each segment are evaluated
independently.
The Company evaluates performance based on profit or loss from
operations before income taxes, with intercompany revenues, shown
below, eliminated. The accounting policies of the reportable
segments are consistent with the corporate accounting policies
except that the results of the foreign operations are translated at
the budgeted rate rather than the actual rate with the differences
accumulated and shown separately as an adjustment to operating
income.
The changes in total assets by segment between December 31, 1998,
and March 31, 1999, were not material.
Selected operating results of the reportable segments for the three
month periods ended March 31, 1999 and 1998 are as follows:
<TABLE>
<S> <S> <S> <S>
1999 U.S. Canada U.K. Total
--------------------- ------- ------- ------- -------
Revenues 35,506 3,808 5,397 44,711
Segment profit 6,701 5 994 7,700
Intersegment revenues 2,870 1,369 --- 4,239
1998 U.S. Canada U.K. Total
--------------------- ------- ------- ------- -------
Revenues 24,029 3,312 5,452 32,793
Segment profit 2,231 96 1,142 3,469
Intersegment revenues 4,067 805 --- 4,872
</TABLE>
5. Comprehensive Income
--------------------
Presented below is a reconciliation of net income to comprehensive
income:
<TABLE>
For the three months
ended March 31,
1999 1998
-------- --------
<S> <S>
Net income $ 5,015 $ 2,145
Foreign currency translation adjustment 32 203
-------- --------
Comprehensive income $ 5,047 $ 2,348
======== ========
- 8 -
<PAGE>
Item 2. Management's Discussion and Analysis of Financial
Conditions and Results of Operations
Results of Operations
Three months ended March 31, 1999 and 1998
Corporate Revenues
- ------------------
Total revenue for the three months ended March 31, 1999 increased
$11.7 million as compared with the first three months of 1998.
This increase was principally due to an increase in revenues from
product sales.
Product Sales
- -------------
For the three months ended March 31, 1999, product sales increased
$11.5 million from $32.6 million to $44.1 million.
U.S. product sales increased $11.3 million from $24.0 million to
$35.3 million. PENTASA, which was not added to the mix until second
quarter 1998, provided $15.0 million of this increase, and
PROAMATINE and AGRYLIN added $2.9 million and $1.5 million,
respectively. NOROXIN and SALUTENSIN sales decreases of $5.0
million and $0.9 million, respectively, partially offset the sales
increases. The Company's United Kingdom subsidiary, Monmouth
Pharmaceuticals, Ltd. remained consistent with prior year. Sales
of the Company's Canadian subsidiary increased slightly by $0.03
million from $3.2 million to $3.5 million.
Cost of Sales
- -------------
For the three months ended March 31, 1999, cost of sales amounted
to 34.9% of product sales, a 3.8% decrease as compared to the prior
year's comparable period. This decrease in cost of sales and
corresponding increase in gross profit percentage is principally
due to the addition to the product mix of PENTASA and the growth of
AGRYLIN and PROAMATINE and their higher gross profit margins and
the decrease in NOROXIN sales, which is a lower margin product.
Research and Development
- ------------------------
Research and Development expenses remained constant at $2.7 million
during the three months ended March 31, 1999 as compared to the
comparable prior year period as the Company continues to fund the
development of the product pipeline, particularly DIRAME. Research
and development expenses are expected to be at higher levels in the
remaining three quarters of 1999 primarily due to the DIRAME
studies and preparation for the NDA compilation.
- 9 -
<PAGE>
Marketing
- ---------
For the three months ended March 31, 1999, Marketing expenses
increased $1.9 million from $7.9 to $9.8 as a result of many
factors, including $0.5 million for the outside sales force program
in the UK, implemented this year, $0.4 million in increased
journal, radio and television advertising and $0.3 million for new
marketing programs.
Administrative Expenses
- -----------------------
For the three months ended March 31, 1999, Administrative expense
increased $0.2 million from $7.2 million to $7.4 million. The
largest components of the increase are a $0.9 million increase in
amortization expense and a $0.6 million of Supplemental Executive
Retirement Plan (SERP) expense, offset by a $1.4 million decrease
in stock appreciation rights (SAR) expense. First quarter 1998 SERP
expense was accrued in second quarter 1998 when the plan was finalized,
the amortization of PENTASA did not begin until second quarter
1998, subsequent to the Company's purchase of the product in April
1998, and there was no SAR expense in first quarter 1999 due to the
exercise of all SARs in second quarter 1998.
Interest Income and Expense
- ---------------------------
Interest income decreased $0.2 million due to lower cash and
marketable securities balances. Interest expense increased by $2.3
million as a result of the debt incurred in connection with the
acquisition of PENTASA.
Income Taxes
- ------------
For the three months ended March 31, 1999 and 1998, income tax
expense was calculated using the expected effective statutory rate
except for certain taxes related to foreign operations.
The Company has recorded net deferred tax assets of approximately
$8.6 million. Realization is dependent upon generating sufficient
taxable income to utilize such items. Although realization is not
assured, management believes it is more likely than not that the
deferred tax assets for which a valuation allowance has not been
provided, will be realized. The amount of the deferred tax assets
considered realizable, however, could be reduced at any time if
estimates of future taxable income are reduced.
Liquidity and Capital Resources
- -------------------------------
Operating activities provided $7.2 million in cash flow to the
Company. The primary components of cash provided by operating
activities were net income of $5.0 million, which includes $3.1
million of non-cash charges, including depreciation and
amortization and decreases in accounts receivable and inventory of
$9.0 million and $0.7 million, respectively, offset by a decrease
in accounts payable of $11.7 million. As of March 31, 1999, the
Company had cash, cash equivalents and marketable securities of
$72.8 million.
- 10 -
<PAGE>
Investing activities used $20.0 million, comprised primarily of
$16.5 million in marketable securities purchases and $6.0 million
in purchases of intangible and fixed assets primarily the LODINE
rights. The purchases of marketable securities are primarily due
to changes in investment mix. Total cash and marketable securities
balances decreased only $2.6 million from December 31, 1998.
Financing activities used $6.2 million, including $7.4 million of
payments on notes payable offset by proceeds from the issuance of
Common Stock of $1.2 million, primarily stock options exercises.
The Company's funding requirements depend on a number of factors,
including the Company's product development programs, product
acquisitions, the level of resources required for the expansion of
marketing capabilities as the product base expands, increased
investment in accounts receivable and inventory which may arise
from increased sales levels, competitive and technological
developments, the timing and cost of obtaining required regulatory
approvals for new products, relationships with parties to
collaborative agreements, the success of acquisition activities and
the continuing revenues generated from sales of PROAMATINE, AGRYLIN
and PENTASA.
Existing cash and securities balances and cash generated from
operations are expected to be sufficient to fund operating
activities for the foreseeable future, as well as support near and
long term debt obligations, completion of the capital improvements
to the manufacturing facility, development of the existing pipeline
compounds and to fund future acquisitions of products. Cash
equivalents and marketable securities currently consist of
immediately available money market fund balances and investment
grade securities.
Foreign Currency Fluctuations
- -----------------------------
Roberts has subsidiary operations outside the United States. As a
result, Roberts is subject to fluctuations in revenues and costs
reported in United States dollars as a consequence of changing
currency exchange rates, especially rates for the British pound and
Canadian dollar. Fluctuations in foreign currency exchange rates
were not material for the quarter ended March 31, 1999.
Euro Conversion
- ---------------
On January 1, 1999, a majority of the European Union member
countries converted to a common currency, the "Euro". The existing
national currencies of the participating countries will continue to
be acceptable until January 1, 2002 after which the Euro will be
the sole legal tender for the participating countries. The Company
is currently evaluating the economic and operational impact,
including competition, pricing, contracts, taxation and foreign
currency exchange rate risk, of the Euro conversion but does not
expect it to have a material effect on its financial condition or
results of operations.
- 11 -
<PAGE>
Year 2000 Conversion
- --------------------
The year 2000 conversion problem arises from the inability of some
information systems and other date-sensitive equipment with
embedded chips or processors to properly recognize and process
information after January 1, 2000. The Company's project to
identify and remediate year 2000 issues is proceeding on schedule.
The four main areas that have been or are being addressed are
financial systems, non-financial systems, customers and suppliers
readiness and other date-sensitive equipment.
Over the past year, the Company has replaced or upgraded much of
its software and systems in the normal course of business. The
financial system was replaced with an Enterprise Resource Planning
System which the developer states is 2000 compliant. The Company
intends to obtain and review the developer's certification
documentation. The system was implemented in the U.S. in April,
1998, due to the need for an integrated, more advanced system to
link the Finance and Sales departments located at headquarters with
the new distribution facility. The Canadian and U.K. subsidiary
implementations were completed as of January 4, 1999. These
upgrades are also due to the new integrated reporting system and
not year 2000 compliance. Due to the completion of the
implementation, the three financial locations are electronically
linked, enabling more timely completion of financial requirements.
Non-financial software and hardware were also replaced in the
normal course of business as the previous systems were outdated.
The manufacturing plant, located in Canada, which was purchased by
the Company in 1997, required various upgrades to its operating
systems. New hardware and upgraded software were installed. The
hardware was installed to replace outdated processing equipment.
The software was installed to ensure year 2000 compliance. The
Company's investment in this software was approximately $225,000
U.S. dollars.
One of the Company's customers requires the Company to meet certain
electronic data interface (EDI) requirements related to year 2000
compliance in order for the customer to continue its relationship
with the Company. The Company completed the testing and
implementation of the compliant version in 1998 and is now listed
on a national database of Y2K compliant trading partners in the
healthcare pharmaceutical industry. The cost of meeting these EDI
requirements was approximately $1,000. Approximately 50 to 60
percent of the Company's sales are currently made through EDI,
through primarily one clearinghouse. This clearinghouse is year
2000 compliant and upgrades non-year 2000 compliant incoming
transmissions to compliant transmissions. In the event that a non-
compliant customer could not interface electronically, orders can
be transmitted via phone, fax or mail, and therefore no disruption
of sales would be expected.
- 12 -
<PAGE>
The Company is attempting to ascertain the compliance of other
customers and suppliers, including the Company's toll
manufacturers, through the means of a survey. This program is
ongoing and assessments regarding additional work necessary will be
made as responses are received. To assist in the effort, the
Company is developing a tracking database to help monitor which
business partners have taken part in the Company's survey, surveyed
the Company or received a compliance letter from the Company. In
the event that any of the Company's significant customers or
suppliers do not achieve compliance on a timely basis, the
Company's business or operations could be adversely impacted if new
customers or alternate suppliers can not be found.
Other date-sensitive equipment includes primarily telephones and
building systems such as heating and lighting systems. The
telephone system at the U.S. headquarters was replaced in 1998 in
the normal course of business as the lease on the former system
expired. The new system is year 2000 compliant. The phone systems
at the Canadian and U.K. locations have been replaced in order to
be year 2000 compliant. The phone system at the distribution
facility will be replaced by the second quarter of 1999 as it is
not currently year 2000 compliant. The total cost of these new
systems is approximately $70,000 U.S. dollars. The Company has
received assurances that the building systems are compliant and
will be obtaining documentation to that effect over the next
several months.
In accordance with the Company's fixed asset capitalization policy,
the hardware, software and phone systems purchased are added to
fixed assets and amortized over the appropriate useful life. The
Company has not retained any consultants nor hired additional
employees to assist in achieving compliance. Other IT projects
have not been delayed by the Company's year 2000 readiness project.
Based on the Company's progress to date and timeline to complete
the work on the Year 2000 compliance issue, the Company does not
foresee significant financial or operational risks associated with
its compliance at this time. However, these expectations are
subject to uncertainties. These include, but are not limited to
the ability to assess suppliers and customers readiness, failure to
identify all susceptible systems and the availability and cost of
personnel necessary to remediate any unforeseen problems.
- 13 -
<PAGE>
Item 6 EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
(b) Reports on Form 8-K
During the first quarter ended March 31, 1999, the following
reports on Form 8-K were filed by the Company with the Securities
and Exchange Commission:
Form 8-K (Item 5. Other Events), date of earliest event reported
January 15, 1999, with respect to the Company's presentation at the
17th annual Hambrecht & Quist Healthcare Conference.
Form 8-K (Item 5. Other Events), date of earliest event reported
February 1, 1999, with respect to an agreement with Yuhan
Corporation to distribute AGRYLIN in Korea and to obtain the
necessary regulatory approval to do so.
Form 8-K (Item 5. Other Events), date of earliest event reported
February 8, 1999, with respect to the market for the Company's late
stage development product RL0903.
Form 8-K (Item 5. Other Events), date of earliest event reported
March 9, 1999, with respect to the acquisition of the rights to
LODINE in the UK and ROI.
Form 8-K (Item 5. Other Events), date of earliest event reported
March 16, 1999, with respect to the preliminary review of data from
Phase III post-operative dental pain study and its indication of
strong analgesic potential.
- 14 -
<PAGE>
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, thereunto duly authorized.
Roberts Pharmaceutical Corporation
----------------------------------
(Registrant)
/s/ Peter M. Rogalin
Date: -------------------- ----------------------------------
Peter M. Rogalin
Vice President and Treasurer
(Principal Financial and
Accounting Officer)
- 15 -
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
Form 10-Q for the Quarter ended March 31, 1999.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> MAR-31-1999
<CASH> 20,196
<SECURITIES> 52,571
<RECEIVABLES> 31,422
<ALLOWANCES> 0
<INVENTORY> 22,927
<CURRENT-ASSETS> 143,134
<PP&E> 35,184
<DEPRECIATION> 0
<TOTAL-ASSETS> 514,597
<CURRENT-LIABILITIES> 43,696
<BONDS> 122,813
0
0
<COMMON> 321
<OTHER-SE> 347,767
<TOTAL-LIABILITY-AND-EQUITY> 514,597
<SALES> 44,083
<TOTAL-REVENUES> 44,539
<CGS> 15,365
<TOTAL-COSTS> 15,365
<OTHER-EXPENSES> 2,740
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 2,547
<INCOME-PRETAX> 7,700
<INCOME-TAX> 2,685
<INCOME-CONTINUING> 5,015
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 5,015
<EPS-PRIMARY> 0.16
<EPS-DILUTED> 0.16
</TABLE>
