Abraxis BioScience Reports Second Quarter 2006 Adjusted Earnings Per Share, Excluding Merger-Related Items and Stock Compensation Expense, of $0.17 versus $0.06 in the Prior Year.LOS ANGELES Los Angeles (lôs ăn`jələs, lŏs, ăn`jəlēz'), city (1990 pop. 3,485,398), seat of Los Angeles co., S Calif.; inc. 1850. -- Abraxis BioScience, Inc. (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on :ABBI Advanced Breast Biopsy Instrument (ABBI) Uses a rotating circular knife and thin heated electrical wire to remove a large cylinder of abnormal breast tissue. Mentioned in: Fibrocystic Condition of the Breast ): --Net Sales Increase 29 Percent to $160.7 Million versus the Prior-Year Quarter --Company Revises Guidance for ABRAXANE Abraxis BioScience, Inc. (NASDAQ:ABBI), an integrated, global biopharmaceutical company, today reported financial results for the second quarter ended June 30, 2006. The financial results for all periods presented represent the combined company formed as a result of the merger of American Pharmaceutical Partners and its parent company, American BioScience, which was completed in the second quarter. Adjusted net income per diluted share, which excludes merger-related items and non-cash stock compensation expense, was $0.17 versus $0.06 in the prior year period. Adjusted net income per diluted share for the first six months of 2006 was $0.27, reflecting, in part, the higher effective reported tax rate for American BioScience in the first quarter of 2006, versus $0.22 per share in the same period of 2005. On a reported basis and calculated in accordance with U.S. Generally Accepted Accounting Principles The standard accounting rules, regulations, and procedures used by companies in maintaining their financial records. Generally accepted accounting principles (GAAP) provide companies and accountants with a consistent set of guidelines that cover both broad accounting (GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). ), the company reported a net loss of $90.8 million, or $0.57 per diluted share, for the second quarter of 2006, versus net income of $1.0 million, or $0.01 per diluted share, in the second quarter of last year. For the first six months of 2006, net loss was $88.9 million, or $0.56 per diluted share, versus net income of $16.9 million, or $0.11 per diluted share. Refer to the attached table for additional information regarding the basis for the adjusted net income per diluted share calculation. Financial results in 2006 included pre-tax costs of $149.2 million related to the merger, the majority of which were incurred in the second quarter. These charges include the $105.8 million charge resulting from the write-off of acquired in-process research and development, amortization of merger-related intangible assets Intangible Asset An asset that is not physical in nature. Notes: Examples are things like copyrights, patents, intellectual property, and goodwill. These are the opposite of tangible assets. totaling $11.3 million, $15.3 million of merger and transaction related legal and consulting costs, a $7.8 million charge included in cost of goods sold Cost of goods sold The total cost of buying raw materials, and paying for all the factors that go into producing finished goods. cost of goods sold resulting from the write-up of finished goods inventory to fair market value in the merger and a $9.0 million merger-related stock compensation charge. The merger also resulted in a $17.9 million income tax benefit in the second quarter resulting from the recognition of previously reserved net operating loss carryforwards Net operating loss carryforwards Application of losses to offset earnings in future years. . For the 2006 second quarter, net sales Net Sales The amount a seller receives from the buyer after costs associated with the sale are deducted. Notes: This amount is calculated by subtracting the following items from gross sales: merchandise returned for credit, allowances for damaged or missing goods, freight grew 29 percent to $160.7 million. ABRAXANE(R) (paclitaxel paclitaxel /pac·li·tax·el/ (pak?li-tak´sel) an antineoplastic that promotes and stabilizes polymerization of microtubules, isolated from the Pacific yew tree (Taxus brevifolia); protein-bound particles for injectable in·ject·a·ble adj. Capable of being injected. Used of a drug. n. A drug or medicine that can be injected. suspension) (albumin-bound) revenue increased 87 percent to $36.3 million. Hospital-based product sales increased 15 percent to $120.6 million versus the prior year period. Research-related revenue, resulting from the licensing of ABRAXANE in Japan, totaled $3.8 million in the second quarter of 2006. For the first six months of 2006, net sales increased 24 percent to $305.3 million. ABRAXANE sales increased 23 percent to $66.4 million. Hospital-based sales increased 23 percent to $234.2 million, versus the first six months of 2005. Research revenue in the first six months of 2006 totaled $4.6 million. Sales for the hospital-based business in the second quarter did not include sales of the eight products (over 100 SKUs) acquired from AstraZeneca on June 28, 2006. The company has revised guidance for ABRAXANE and now anticipates sales in 2006 to be in the range of $170 to $190 million versus the previously announced guidance; however, the company believes the underlying demand for ABRAXANE is strong. According to according to prep. 1. As stated or indicated by; on the authority of: according to historians. 2. In keeping with: according to instructions. 3. IMS (1) See IP Multimedia Subsystem. (2) (Information Management System) An early IBM hierarchical DBMS for IBM mainframes. IMS was widely implemented throughout the 1970s under MVS and continues to be used under z/OS. , ABRAXANE growth in the first half of 2006 compared to the second half of 2005 was 19 percent while the overall growth of the taxane market for the same period was 10 percent. "I am very proud of the growth we have made this quarter and we will continue to invest in a comprehensive development program for both ABRAXANE as well as our hospital-based business, and pursue strategic acquisitions and partnerships to augment capabilities and product offerings," said Patrick Soon-Shiong, M.D., chairman and chief executive officer of Abraxis BioScience. Gross margin for the second quarter of 2006 was 57.9 percent, or 62.7 percent excluding a $7.8 million merger-related inventory write-up charge, versus 54.7 percent in the comparable 2005 quarter. Improved gross margin was due to continued strong margins in the core hospital products business, a greater proportion of higher-margin ABRAXANE sales, and $3.8 million derived from the licensing of ABRAXANE in Japan. Gross margin for the first six months of 2006 was 61.4 percent excluding a $7.8 million merger related inventory write-up charge, compared with gross margin for the first half of 2005 of 58.1 percent. Operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. related to ABRAXANE totaled $18.4 million and $16.7 million in the 2006 and 2005 second quarters, respectively. Adjusted net income per diluted share is comprised of reported diluted earnings per share diluted earnings per share An earnings measure calculated by dividing net income less preferred stock dividends for a period by the average number of shares of common stock that would be outstanding if all convertible securities were converted into shares of excluding the impact of merger-related purchase accounting, other merger and transaction-related direct costs, non-cash stock compensation, minority interests, non-cash amortization of acquired intangible assets and other significant non-operating items. The company believes that this non-GAAP measure is relevant to investors in understanding the underlying operating performance of the company and uses this measure internally to monitor, measure and reward performance. Please refer to the attached reconciliation between U.S. GAAP net income and diluted earnings per share and adjusted net income and adjusted net income per diluted share for each of the three and six month periods ending June 30, 2006 and 2005 for additional information. Second Quarter Product and Pipeline Updates ABRAXANE In June 2006, the company received approval for ABRAXANE from the Therapeutic Products Directorate Therapeutic Products Directorate (TPD) is a Canadian federal authority that regulates pharmaceutical drugs and medical devices for human use, a role performed by the Food and Drug Administration in the United States. of Health Canada Health Canada (French: Santé Canada) is the department of the government of Canada with responsibility for national public health. Health Canada's goal is to improve Canadian life by improving Canadian longevity, lifestyle and use of public healthcare. under a Notice of Compliance for the treatment of metastatic Metastatic The term used to describe a secondary cancer, or one that has spread from one area of the body to another. Mentioned in: Coagulation Disorders metastatic pertaining to or of the nature of a metastasis. breast cancer in Canada. Canada is the first major commercial market to grant an approval for ABRAXANE that includes first-line treatment A first-line treatment or first-line therapy is a medical therapy recommended for the initial treatment of a disease, sign or symptom, usually on the basis of empirical evidence for its efficacy. of metastatic breast cancer. On July 1, 2006, Abraxis and AstraZeneca successfully launched its five and a half year U.S. co-promotion of ABRAXANE. This agreement effectively doubles the sales force and promotional investment in ABRAXANE and allows for the sharing of cost of certain portions of the ABRAXANE clinical development program. In July, Elan (Emulated LAN) A virtual LAN in the ATM world. See LANE and virtual LAN. Elan - ["Top-down Programming with Elan", C.H.A. Koster, Ellis Horwood 1987]. Corp. filed a lawsuit against Abraxis alleging patent infringement patent infringement n. the manufacture and/or use of an invention or improvement for which someone else owns a patent issued by the government, without obtaining permission of the owner of the patent by contract, license or waiver. in relation to ABRAXANE and asserting that ABRAXANE uses technology protected by two Elan-owned patents. Abraxis is confident in the integrity of its patents and believes that ABRAXANE does not infringe on the patent rights of Elan. The company intends to vigorously defend against this lawsuit to protect its patent rights. Hospital-Based Products In the second quarter, the Abraxis Pharmaceutical Products division launched three new products, carboplatin 600 mg, mitoxantrone and octreotide. This follows the launch of two products in the first quarter, azithromycin and ceftriaxone ceftriaxone /cef·tri·ax·one/ (cef?tri-ak´son) a semisynthetic, ß–resistant, third-generation cephalosporin effective against a wide range of gram-positive and gram-negative bacteria, used as the sodium salt. , for a total of five products launched in the first six months of 2006. In late June, the company completed its acquisition of the AstraZeneca U.S. branded anesthetic anesthetic Agent that produces a local or general loss of sensation, including pain, and therefore is useful in surgery and dentistry. General anesthesia induces loss of consciousness, most often using hydrocarbons (e.g. and analgesic analgesic (ăn'əljē`zĭk), any of a diverse group of drugs used to relieve pain. Analgesic drugs include the nonsteroidal anti-inflammatory drugs (NSAIDs) such as the salicylates, narcotic drugs such as morphine, and synthetic drugs injectable product portfolios for a purchase price of $334 million. These products are complementary to the company's existing hospital-based products and encompass more than 100 additional dosage forms A dosage form is the physical form of a dose of medication, such as a capsule or injection. The route of administration is dependent on the dosage form of a given drug. . The company has received eight ANDA ANDA abbr. abbreviated new drug application approvals in 2006. Abraxis currently has 24 ANDAs pending at the FDA FDA abbr. Food and Drug Administration FDA, n.pr See Food and Drug Administration. FDA, n.pr the abbreviation for the Food and Drug Administration. and is well on its way to achieving its goal of approximately 10 approvals per year. Pipeline Updates ABRAXANE was approved under Section 505(b)(2) of the federal Food, Drug and Cosmetic Act Federal Food, Drug and Cosmetic Act a regulation in the United States which requires all drugs used in animals to be approved by the Food and Drug Administration. which permitted Abraxis to rely on safety and efficacy information in the approved New Drug Application (NDA (Non Disclosure Agreement) An agreement signed between two parties that have to disclose confidential information to each other in order to do business. In general, the NDA states why the information is being divulged and stipulates that it cannot be used for any ) for Taxol(R) and on a direct comparative trial of ABRAXANE versus Taxol that resulted in an approval for ABRAXANE in metastatic breast cancer that is identical to that of Taxol. At a recent meeting between Abraxis and the FDA's Division of Oncology Drug Products, the FDA decided to seek the advice of the Oncologic Drugs Advisory Committee (ODAC ODAC Old Dominion Athletic Conference ODAC Oracle Data Access Components ODAC Oil Depletion Analysis Centre ODAC Oncologic Drugs Advisory Committee ODAC Open Democracy Advice Centre ODAC Open Document Architecture Consortium ODAC Old Dominion Aquatic Club ) regarding the evaluation of ABRAXANE for the treatment of women with node-positive breast cancer in the adjuvant adjuvant /ad·ju·vant/ (aj?dbobr-vant) (a-joo´vant) 1. assisting or aiding. 2. a substance that aids another, such as an auxiliary remedy. 3. setting. The ODAC meeting has been scheduled for September 7, 2006. The company continues to study the use of ABRAXANE in a variety of oncology settings where it has demonstrated a high degree of activity, including early stage breast cancer, lung, ovarian ovarian /ovar·i·an/ (o-var´e-an) pertaining to an ovary or ovaries. ovarian pertaining to an ovary. ovarian agenesis , melanoma melanoma: see skin cancer. melanoma Dark-coloured malignant tumour of skin cells that produce the protective skin-darkening pigment melanin. , prostate, pancreatic pancreatic /pan·cre·at·ic/ (pan?kre-at´ik) pertaining to the pancreas. pancreatic pertaining to the pancreas. See also pancreatitis, diabetes mellitus, cystic pancreatic duct. and head and neck cancers. Abraxis is also targeting six Investigational New Drug (IND) submissions over the next 12 to 18 months for new molecules which use the proven nab(TM) technology platform, including nab(TM) docetaxel. In June, the company presented data at the American Society of Clinical Oncology American Society of Clinical Oncology, or ASCO, is an organization that represents all clinical oncologists. Every year, ASCO holds a large symposium where physicians and researchers meet to convey and discuss research and ideas. (ASCO ASCO American Society of Clinical Oncology ASCO Association of Schools and Colleges of Optometry (since 1941; Rockville, Maryland) ASCO Australian Standard Classification of Occupations ASCO Automatic Switch Company ) Annual Meeting from three Phase II studies confirming activity of ABRAXANE as first line treatment in non-small cell lung cancer Lung Cancer, Non-Small Cell Definition Non-small cell lung cancer (NSCLC) is a disease in which the cells of the lung tissues grow uncontrollably and form tumors. Description There are two kinds of lung cancers, primary and secondary. (NSCLC NSCLC non (or cancer). NSCLC Non-small cell lung cancer, see there ) and showing higher tumor tumor: see neoplasm. response rates than current standard of care. COROXANE(TM) (nab- paclitaxel) is currently in clinical development for both coronary and peripheral artery restenosis restenosis /re·ste·no·sis/ (re?ste-no´sis) recurrent stenosis, especially of a cardiac valve after surgical correction of the primary condition.restenot´ic re·ste·no·sis n. . Use of COROXANE in coronary artery disease coronary artery disease, condition that results when the coronary arteries are narrowed or occluded, most commonly by atherosclerotic deposits of fibrous and fatty tissue. with bare metal 1. bare metal - New computer hardware, unadorned with such snares and delusions as an operating system, an HLL, or even assembler. Commonly used in the phrase "programming on the bare metal", which refers to the arduous work of bit bashing needed to create these basic tools stents is in Phase II studies, peripheral arterial disease is in Phase II/III and shunt To divert, switch or bypass. patency pa·ten·cy n. The state or quality of being open, expanded, or unblocked. patency the condition of being open. in hemodialysis hemodialysis /he·mo·di·al·y·sis/ (-di-al´i-sis) removal of certain elements from the blood by virtue of the difference in rates of their diffusion through a semipermeable membrane while being circulated outside the body; the process patients in Phase I. Conference Call Information On Thursday, August 3, 2006, the company will host a conference call with interested parties beginning at 11:30 a.m. (EDT EDT abbr. Eastern Daylight Time EDT Eastern Daylight Time EDT n abbr (US) (= Eastern Daylight Time) → hora de verano de Nueva York EDT ) to review the results of operations for the second quarter ended June 30, 2006. The conference call may be heard by interested parties through a live audio Internet broadcast at www.abraxisbio.com and www.earnings.com. For those unable to listen to the live broadcast, a playback of the webcast will be available at both websites for approximately six months beginning shortly after the conclusion of the call. About ABRAXANE The U.S. Food and Drug Administration approved ABRAXANE(R) for Injectable Suspension (paclitaxel protein-bound particles for injectable suspension) (albumin-bound) in January 2005 for the treatment of breast cancer after failure of combination chemotherapy for metastatic disease or relapse within six months of adjuvant chemotherapy Adjuvant chemotherapy Treatment of the tumor with drugs after surgery to kill as many of the remaining cancer cells as possible. Mentioned in: Neuroblastoma . Prior therapy should have included an anthracycline unless clinically contraindicated. For the full prescribing information for ABRAXANE(R) please visit www.abraxane.com. About Abraxis BioScience, Inc. Abraxis BioScience, Inc. is an integrated global biopharmaceutical company dedicated to meeting the needs of critically ill patients. The company develops, manufactures and markets one of the broadest portfolios of injectable products and leverages revolutionary technology such as its nab(TM) platform to discover and deliver breakthrough therapeutics that transform the treatment of cancer and other life-threatening diseases. The first FDA approved product to use this nab platform, ABRAXANE(R), was launched in 2005 for the treatment of metastatic breast cancer. Abraxis trades on the Nasdaq National Market under the symbol ABBI. For more information about the company and its products, please visit www.abraxisbio.com. FORWARD-LOOKING STATEMENT forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. The statements contained in this press release that are not purely historical are forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements in this press release include statements regarding our expectations, beliefs, hopes, goals, intentions, initiatives or strategies, including statements regarding the benefits of the merger with American BioScience, the benefits of the co promotion and product acquisition agreements with AstraZeneca and guidance on operations in 2006. Because these forward-looking statements involve risks and uncertainties, there are important factors that could cause actual results to differ materially from those in the forward-looking statements. These factors include, without limitation, failure of the benefits of the merger to materialize, difficulties in integrating the businesses and operations of the two companies, the adverse impact of production delays on the sales and marketing of the combined company's products, the costs associated with the ongoing launch of ABRAXANE and research and development associated with the nab(TM) technology platform, the continued market adoption and demand of ABRAXANE in North America North America, third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere. and its potential market penetration Noun 1. market penetration - the extent to which a product is recognized and bought by customers in a particular market penetration - the act of entering into or through something; "the penetration of upper management by women" outside of the U.S., difficulties or delays in developing, testing, obtaining regulatory approval of, and producing and marketing any other products, including those in Abraxis BioScience's pipeline, the impact of pharmaceutical industry regulation, the impact of competitive products and pricing, the availability and pricing of ingredients used in the manufacture of pharmaceutical products, the ability to successfully manufacture products in a time-sensitive and cost effective manner, the acceptance and demand of new pharmaceutical products, the impact of patents and other proprietary rights held by competitors and other third parties. Additional relevant information concerning risks can be found in Abraxis BioScience's Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. for the year ended December 31, 2005 and other documents it has filed with the Securities and Exchange Commission. Taxol(R) is a registered trademark of Bristol-Myers Squibb Bristol-Myers Squibb (NYSE: BMY), colloquially referred to as BMS, is a pharmaceutical corporation, formed by a 1989 merger between pharmaceutical companies Bristol-Myers Company, founded in 1887 by William McLaren Bristol and John Ripley Myers in Clinton, NY (both were Company.
ABRAXIS BIOSCIENCE, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited, in thousands, except per share amounts)
Three months ended Six months ended
June 30, June 30,
------------------- ------------------
2006 2005 2006 2005
--------- -------- --------- --------
Hospital-Based Products
Anti-infective $53,782 $48,815 $106,628 $89,676
Critical Care 47,978 42,211 93,252 76,821
Oncology 16,302 14,099 30,146 24,349
Contract manufacturing 2,547 - 4,195 120
--------- -------- --------- --------
Total hospital-based products 120,609 105,125 234,221 190,966
Abraxane 36,301 19,384 66,443 54,224
Research revenue 3,829 324 4,603 392
--------- -------- --------- --------
Net sales 160,739 124,833 305,267 245,582
Cost of sales 67,677 56,530 125,757 102,807
--------- -------- --------- --------
Gross profit 93,062 68,303 179,510 142,775
--------- -------- --------- --------
Percent to sales 57.9% 54.7% 58.8% 58.1%
Research and development 21,918 17,468 41,526 26,976
Selling, general and
administrative 43,619 34,130 79,252 68,049
Amortization of merger related
intangible assets 11,258 - 11,258 -
Merger-related in-process
research and development
charge 105,777 - 105,777 -
Merger and transaction expense 18,628 - 24,267 -
Equity income (307) (986) (783) (1,525)
--------- -------- --------- --------
Total operating expenses 200,893 50,612 261,297 93,500
--------- -------- --------- --------
Percent to sales 125.0% 40.5% 85.6% 38.1%
(Loss) income from operations (107,831) 17,691 (81,787) 49,275
Percent to sales -67.1% 14.2% -26.8% 20.1%
Interest income 1,490 278 2,340 641
Interest expense (2,034) (895) (5,055) (1,209)
Minority interests (2,041) (6,065) (11,383) (13,447)
--------- -------- --------- --------
(Loss) income before income
taxes (110,416) 11,009 (95,885) 35,260
Income tax (benefit) expense (19,629) 10,050 (6,982) 18,355
--------- -------- --------- --------
Net (loss) income $(90,787) $959 $(88,903) $16,905
========= ======== ========= ========
Net (loss) income per share:
Basic $(0.57) $0.01 $(0.56) $0.11
========= ======== ========= ========
Diluted $(0.57) $0.01 $(0.56) $0.11
========= ======== ========= ========
Weighted - average common
shares outstanding:
Basic 158,765 157,658 158,643 157,241
========= ======== ========= ========
Diluted 158,765 159,975 158,643 159,883
========= ======== ========= ========
The composition of stock-based
compensation included above is
as follows:
Cost of sales $786 $963 $1,514 $1,792
Research and development 1,438 205 1,593 381
Selling, general and
administrative 3,269 2,446 5,118 4,550
Merger related stock
compensation 8,999 - 8,999 -
--------- -------- --------- --------
$14,492 $3,614 $17,224 $6,723
========= ======== ========= ========
ABRAXIS BIOSCIENCE, INC.
CONSOLIDATED BALANCE SHEETS
(in thousands)
June 30, December 31,
2006 2005
------------ ------------
ASSETS (Unaudited) (Audited)
Current assets:
Cash and cash equivalents $54,051 $28,818
Short-term investments 231 54,455
Accounts receivable, net 34,002 61,868
Inventory, net 203,151 175,282
Prepaid expenses and other 15,137 13,553
Deferred income taxes 42,869 16,936
------------ ------------
Total current assets 349,441 350,912
------------ ------------
Property, plant and equipment, net 175,301 152,630
Goodwill 401,600 -
Intangible and other non-current assets,
net 780,305 10,641
Other assets 10,962 10,046
------------ ------------
Total assets $1,717,609 $524,229
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $51,707 $35,593
Deferred revenue 39,225 -
Accrued expenses 51,571 67,035
Notes payable 69,597 -
------------ ------------
Total current liabilities 212,100 102,628
Long-term debt 175,500 190,000
Long-term portion of deferred revenue 177,823 -
Long-term deferred income tax liability 165,876 -
Other non-current liabilities 1,089 1,400
------------ ------------
Total liabilities 732,388 294,028
Minority interests - 162,061
Stockholders' Equity
Common stock 165 15,131
Additional paid-in capital 1,076,962 -
Retained (deficit) earnings (37,522) 51,380
Accumulated other comprehensive income 1,890 1,629
Less treasury stock, at cost (56,274) -
------------ ------------
Total stockholders' equity 985,221 68,140
------------ ------------
Total liabilities and stockholders'
equity $1,717,609 $524,229
============ ============
Adjusted Net Income and Adjusted Net Income per Diluted Share are
defined as reported net income and reported diluted earnings per share
excluding the impact of merger-related purchase accounting, merger-
and transaction-related costs, stock compensation, minority interests,
non-cash amortization of acquired intangible assets and other
significant items. We believe that these non-GAAP measures are
relevant to investors in understanding the underlying operating
performance of the company and we use the measure internally to
monitor, measure and reward performance. The Adjusted Net Income and
Adjusted Net Income per Diluted Share metrics should be used in
conjunction with United States Generally Accepted Accounting
Principles, or GAAP, net income and diluted earnings per share and are
not substitutes or alternatives for U.S. GAAP net income or diluted
earnings per share. Reconciliation between U.S. GAAP net income and
diluted earnings per share and Adjusted Net Income and Adjusted Net
Income per Diluted Share for each of the three and six month periods
ending each of June 30, 2006 and 2005 are as follows:
GAAP TO ADJUSTED NET (LOSS) INCOME RECONCILIATION
(unaudited, in thousands, except per share amounts)
Three months ended Six months ended
June 30, June 30,
------------------ ------------------
2006 2005 2006 2005
--------- -------- --------- --------
Reported net (loss) income $(90,787) $959 $(88,903) $16,905
Merger related items
In-process research and
development charge 105,777 - 105,777 -
Sale of inventory written
up to fair-market value 4,817 - 4,817 -
Intangible amortization 6,952 - 6,952 -
Stock compensation charge 5,901 - 5,901 -
Merger and transaction
expense 6,346 - 10,011 -
--------- -------- --------- --------
Total merger related costs 129,792 - 133,457 -
Stock compensation (FAS
123(R)) 3,617 2,349 5,393 4,370
Minority interests 2,041 6,065 11,383 13,447
Merger related income tax
benefit (17,884) - (17,884) -
--------- -------- --------- --------
Adjusted net income $26,779 $9,373 $43,446 $34,722
========= ======== ========= ========
Adjusted net income per diluted
share $0.17 $0.06 $0.27 $0.22
========= ======== ========= ========
Weighted - average common
shares outstanding diluted 158,765 159,975 158,643 159,883
========= ======== ========= ========
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