Allergan Reports First Quarter 2003 Operating Results.Business Editors/Health/Medical Writers IRVINE, Calif.--(BUSINESS WIRE)--April 28, 2003 -- Allergan announces intent to exercise Bardeen option (subject to regulatory approval) -- Board of Directors declares first quarter dividend Allergan, Inc. (NYSE NYSE See: New York Stock Exchange :AGN AGN Again (Amateur Radio) AGN Active Galactic Nucleus AGN Acute Glomerulonephritis AGN Accountants Global Network AGN Air Gabon (ICAO code) ) today announced operating results for the quarter ended March 28, 2003. Allergan also today announced that its Board of Directors has declared a first quarter dividend of $0.09 per share, payable on June 12, 2003 to stockholders of record on May 15, 2003. For the quarter ended March 28, 2003, Allergan's 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 were $391.2 million, including $21.2 million of non-pharmaceutical product sales, primarily consisting of contract manufacturing sales to Advanced Medical Optics Advanced Medical Optics, Inc., (NYSE: EYE) (known as AMO) is a global medical device leader focused on the discovery and delivery of innovative vision technologies that optimize the quality of life for people of all ages. , Inc. (AMO AMO - America's Multimedia Online ), a former subsidiary that was spun-off from Allergan on June 29, 2002. Excluding sales of non-pharmaceutical products, net sales were up 14.6 percent at constant currency, compared with net sales from continuing operations continuing operations Parts of a business that are expected to be maintained as an ongoing segment of an overall business operation. Income and losses from continuing operations are reported separately if any segments have been discontinued during the in the first quarter of 2002. Including the effect of an unrealized non-cash loss on the mark-to-market Mark-to-market Adjustment of the book value or collateral value of a security to reflect current market value. adjustment to foreign currency derivative instruments Derivative instruments Contracts such as options and futures whose price is derived from the price of an underlying financial asset. of $0.8 million pre-tax, or $0.01 per share on an after-tax basis After-tax basis The comparison basis used to analyze the net after-tax returns on a corporate taxable bond and a municipal tax-free bond. , Allergan reported $0.53 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 from continuing operations for the quarter ended March 28, 2003, a 76.7 percent increase over the $0.30 diluted earnings per share reported in the same quarter of 2002. Excluding the effect of the unrealized non-cash loss, Allergan's diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. earnings from continuing operations were $0.54 per share for the quarter ended March 28, 2003, a 25.6 percent increase over the unaudited estimate of pro forma As a matter of form or for the sake of form. Used to describe accounting, financial, and other statements or conclusions based upon assumed or anticipated facts. The phrase pro forma diluted earnings per share of $0.43 for 2002. The 2002 pro forma earnings pro forma earnings Income not necessarily calculated in accordance with generally accepted accounting principles. For example, a company might report pro forma earnings that exclude depreciation expense and nonrecurring expenses such as restructuring costs. per share amount excludes non-recurring items totaling $0.15 per share. In addition, the 2002 pro forma earnings per share estimate reflects the approximate impact of additional expenses that would have been incurred in the first three months of 2002 if Allergan's specialty pharmaceutical businesses and AMO had been operating as stand-alone companies stand-alone company An independent operating firm. For example, a large diversified firm may consider spinning off a subsidiary because, as a stand-alone company, the subsidiary would command a higher price-earnings ratio than the parent. . "We are very pleased with the results of the first quarter and remain poised to deliver strong earnings growth for 2003. In addition, we are excited about the numerous product launches and product approvals anticipated throughout 2003 and an acceleration of growth during the remainder of 2003," said David E.I. Pyott, Chairman of the Board, President and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. . Eye Care Pharmaceutical Product Line First quarter 2003 worldwide eye care pharmaceutical sales were $221.0 million, a 6.4 percent increase over the $207.8 million reported in the same quarter of 2002. At constant currency, first quarter 2003 worldwide eye care pharmaceutical sales increased 4.6 percent over the first quarter of 2002. For the first quarter 2003, worldwide net sales of Alphagan Alphagan Brimonidine Ophthalmology An alpha-2 agonist for treating open-angle glaucoma. See Open angle glaucoma. (R) (Brimonidine brimonidine /bri·mo·ni·dine/ (bri-mo´ni-den) an a agonist used as the tartrate salt in the treatment of open-angle glaucoma and ocular hypertension. Tartrate tartrate /tar·trate/ (tahr´trat) a salt of tartaric acid. tar·trate n. A salt or ester of tartaric acid. tartrate a salt of tartaric acid. Ophthalmic Solution ophthalmic solution n. A sterile solution that is free from foreign particles and is compounded and dispensed for eyedrops. 0.2%) and Alphagan(R) P (Brimonidine Tartrate Ophthalmic Solution 0.15%), preserved with Purite(R) (the Alphagan(R) Franchise) were $77.3 million, an increase of 3.3 percent, or a 1.5 percent increase at constant currency over the $74.8 million reported in the same quarter last year. For the first quarter 2003, worldwide net sales of Lumigan(R) (Bimatoprost bimatoprost /bi·mat·o·prost/ (bi-mat´o-prost) a synthetic prostaglandin analogue used topically in the treatment of open-angle glaucoma and ocular hypertension. Ophthalmic Solution 0.03%) were $38.0 million, an increase of 80.1 percent, or a 75.4 percent increase at constant currency over the $21.1 million reported in the same quarter last year. During the first quarter of 2003, Allergan received approval for Zymar(TM) (Gatifloxacin Ophthalmic Solution 0.3%), an anti-infective and the first fourth-generation fluoroquinilone to enter the market. Zymar(TM) is indicated for the treatment of bacterial bacterial /bac·te·ri·al/ (-al) pertaining to or caused by bacteria. bacterial pertaining to or caused by bacteria. bacterial adhesiveness see adhesins. conjunctivitis conjunctivitis (kənjəngtəvī`təs), inflammation or infection of the mucosal membrane that covers the eyeball and lines the eyelid, usually acute, caused by a virus or, less often, by a bacillus, an allergic reaction, or an caused by susceptible strains of bacteria. Allergan launched Zymar(TM) in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. in April 2003. Allergan also received European approval for Relestat(TM) (Epinastine Ophthalmic Solution 0.05%), for the treatment of ocular ocular /oc·u·lar/ (ok´u-lar) 1. of, pertaining to, or affecting the eye. 2. eyepiece. oc·u·lar adj. 1. Of or relating to the eye or the sense of sight. allergy allergy, hypersensitive reaction of the body tissues of certain individuals to certain substances that, in similar amounts and circumstances, are innocuous to other persons. Allergens, or allergy-causing substances, can be airborne substances (e.g. . To prepare for the European allergy season, Allergan anticipates launching Relestat(TM) in Europe in the fourth quarter of 2003. Allergan launched Restasis(TM) (Cyclosporine Ophthalmic Emulsion cyclosporine ophthalmic emulsion Sandimmun (UK), Restasis Pharmacologic class: Polypeptide antibiotic Therapeutic class: Immunosuppressant Pregnancy risk category C FDA Boxed Warning0.05%) in the United States in April of 2003. Restasis(TM) is the first and only therapy approved by the U.S. Food and Drug Administration for patients with keratoconjunctivitis sicca keratoconjunctivitis sic·can. See dry eye. keratoconjunctivitis sicca (ker´ (chronic dry eye disease), whose tear production is presumed to be suppressed sup·press tr.v. sup·pressed, sup·press·ing, sup·press·es 1. To put an end to forcibly; subdue. 2. To curtail or prohibit the activities of. 3. due to ocular inflammation inflammation, reaction of the body to injury or to infectious, allergic, or chemical irritation. The symptoms are redness, swelling, heat, and pain resulting from dilation of the blood vessels in the affected part with loss of plasma and leucocytes (white blood . Shipments of Restasis(TM) commenced at the beginning of April 2003. Botox(R)/Neuromodulator Product Line First quarter 2003 worldwide net sales for Botox(R) and Botox(R) Cosmetic cosmetic /cos·met·ic/ (koz-met´ik) 1. pertaining to cosmesis. 2. a beautifying substance or preparation. cos·met·ic n. (Botulinum Toxin Type A botulinum toxin type A Botox, Botox Cosmetic, Dysport (UK), Vistabel (UK) Pharmacologic class: Neurotoxin Therapeutic class: Neuromuscular blocker Pregnancy risk category C Action) were $123.1 million, a 38.9 percent increase over the $88.6 million reported in the same quarter last year. At constant currency, worldwide net sales of Botox(R) increased 36.9 percent over the first quarter of 2002.During the first quarter of 2003, Allergan received approval for Vistabel(R) (the European trade name for Botox(R) Cosmetic) in France for the treatment of glabellar lines (brow brow (brou) the forehead, or either lateral half of it. brow n. 1. The eyebrow. 2. See forehead. brow the forehead, or either lateral half of it. furrow furrow /fur·row/ (fur´o) a groove or sulcus. atrioventricular furrow the transverse groove marking off the atria of the heart from the ventricles. ). France will act as the Reference Member State in the mutual recognition process for this indication within the European Union European Union (EU), name given since the ratification (Nov., 1993) of the Treaty of European Union, or Maastricht Treaty, to the European Community . Allergan anticipates continued approvals for the treatment of glabellar lines in a number of European countries during the remainder of 2003. In addition, Allergan received a positive opinion from the Committee for Proprietary Medicinal Products medicinal product, n a substance administered to humans or animals through injection, application, oral ingestion, inhalation, and so forth, whose purpose is to ultimately restore health or eliminate disease in an individual. in Europe for Botox(R) for the treatment of hyperhidrosis. Allergan anticipates national licenses for this indication to be issued by individual European countries during the second half of 2003. Skin Care Product Line First quarter 2003 worldwide net sales for Allergan skin care products were $25.9 million, an 18.8 percent increase in constant currency over the $21.8 million reported in the same quarter last year. For the first quarter of 2003, worldwide net sales for the Tazorac(R) and Zorac(R) brands, indicated for the treatment of acne acne, common inflammatory disease of the hair follicles and sebaceous glands characterized by blackheads, whiteheads, pustules, nodules and, in the more severe forms, by cysts and scarring. The lesions appear on the face, neck, back, chest, and arms. and psoriasis psoriasis (sôrī`əsĭs), occasionally acute but usually chronic and recurrent inflammation of the skin. The exact cause is unknown, but the disease appears to be an inherited, possibly autoimmune disorder that causes the , combined with the sales of Avage(TM) Cream, indicated for the treatment of hyper- and hypo-pigmentation and fine wrinkling, were $19.7 million, an increase of 61.5 percent over the $12.2 million reported in the same quarter last year. On March 24, 2003, at the American Academy of Dermatology The American Academy of Dermatology (AAD) is the largest organization of dermatologists in the world. The Academy grants Fellowships and Associate Memberships, as well as Fellowships for Nonresidents (of the United States of America or Canada). meeting in San Francisco, California “San Francisco” redirects here. For other uses, see San Francisco (disambiguation). The City and County of San Francisco (EN IPA: [sænfrənˈsɪskoʊ] , Allergan announced the completion of two Phase III Noun 1. phase III - a large clinical trial of a treatment or drug that in phase I and phase II has been shown to be efficacious with tolerable side effects; after successful conclusion of these clinical trials it will receive formal approval from the FDA trials for an oral formulation formulation /for·mu·la·tion/ (for?mu-la´shun) the act or product of formulating. American Law Institute Formulation of Tazarotene, investigating its use in treating moderate to severe psoriasis. Based upon those results, Allergan anticipates filing for approval with the U.S. Food and Drug Administration during the second half of 2003. On March 20, 2003, Allergan announced an agreement for the co-promotion of Berlex's newly approved topical topical /top·i·cal/ (top´i-k'l) pertaining to a particular area, as a topical antiinfective applied to a certain area of the skin and affecting only the area to which it is applied. top·i·cal adj. rosacea Rosacea Definition Rosacea is a skin disease typically appearing in people during their 30s and 40s. It is marked by redness (erythema) of the face, flushing of the skin, and the presence of hard pimples (papules) or pus-filled pimples (pustules), and treatment Finacea(TM) (Azelaic Acid azelaic acid /az·e·la·ic ac·id/ (az?e-la´ik) a topical antibacterial used in the treatment of acne vulgaris. azelaic acid (az´ Gel 15%). Additional Financial Highlights For the first quarter of 2003, gross profit was $322.8 million, or 82.5 percent of net sales. In addition, selling, general and administrative expenses (SG&A) amounted to $170.0 million, or 43.5 percent of net sales, and research and development expenses amounted to $55.9 million, or 14.3 percent of net sales. This lower research and development expense as a percentage of net sales ratio was principally driven by the timing of key research and development programs. At March 28, 2003, Allergan's stockholders' equity Stockholders' Equity The portion of the balance sheet that includes capital received from investors in exchange for stock (paid-in capital), donated capital, and retained earnings. This is equal to total assets minus liabilities, preferred stock and intangible assets. was $887.6 million. Cash and equivalents were $878.3 million. Allergan had cash net of debt of $257.7 million. Allergan's debt-to-capital percentage was 41.1 percent. Allergan's days-sales-outstanding was 50 and inventory days-on-hand level was 105. Bardeen Sciences Company, LLC (Logical Link Control) See "LANs" under data link protocol. LLC - Logical Link Control Allergan's Board of Directors has authorized au·thor·ize tr.v. au·thor·ized, au·thor·iz·ing, au·thor·iz·es 1. To grant authority or power to. 2. To give permission for; sanction: management to exercise the acquisition option for Bardeen Sciences Company, LLC, which is subject to additional Federal Trade Commission approval. The acquisition will occur through the exercise of a previously granted equity purchase option that became operable operable /op·er·a·ble/ (op´er-ah-b'l) subject to being operated upon with a reasonable degree of safety; appropriate for surgical removal. op·er·a·ble adj. as a result of the implications of the provisions of FASB FASB See: Financial Accounting Standards Board FASB See Financial Accounting Standards Board (FASB). Interpretation No. 46. The option uses a set formula to determine the option purchase price, which is anticipated to be between approximately $250 and $260 million. Based on a preliminary valuation and in-process research and development study performed by an independent third party, Allergan anticipates that it will write-off substantially all of the purchase price as in-process research and development in the second quarter of 2003. This accounting treatment has been reviewed by Allergan's independent auditors Independent Auditor An external auditor with a certified public accounting designation that qualifies him or her to provide an auditor's report. Notes: These auditors aren't affiliated with the company being audited. , KPMG KPMG Klynveld Peat Marwick Goerdeler (accounting firm) KPMG Kaiser Permanente Medical Group KPMG Keiner Prüft Mehr Genau (German) KPMG Kommen Prüfen Meckern Gehen LLP LLP - Lower Layer Protocol . As a result of this transaction, Allergan anticipates research and development as a percentage of sales will be between 17.5 and 18.0 percent for the full year 2003, excluding the anticipated effect from the write-off of in-process research and development. Allergan currently intends to continue development of the key projects within Bardeen, including Tazarotene oral for the treatment of acne, a Lumigan(R)/Timolol combination, Androgen androgen (ăn`drəjən): see testosterone. androgen Any of a group of hormones that mainly influence the development of the male reproductive system. Tears and Memantine. Outlook For the second quarter of 2003, Allergan estimates total worldwide sales, including contract sales to AMO, between $415 million and $435 million. Due to the partial quarter anticipated effect of the Bardeen programs, Allergan estimates diluted earnings per share before non-recurring items in the second quarter of $0.52. For the third quarter of 2003, due to the first full quarter impact of the additional research and development programs, Allergan estimates diluted earnings per share growth before non-recurring items of approximately 18.0 percent. Allergan is forecasting income statement ratios for the full year 2003 as follows: consolidated gross profit, including contract sales, of approximately 81.5 percent, SG&A expenses of approximately 39 percent, and research and development expenses of approximately 17.5 to 18.0 percent. Diluted earnings per share guidance is $2.31 excluding non-recurring items, or the high end of the range provided in January 2003. This includes the ongoing impact of the Bardeen Sciences Company acquisition but excludes any one-time write-offs associated with in-process research and development, marketing rights and other items associated with the Bardeen transaction that are expected to occur in the second quarter of 2003. Full year sales guidance remains unchanged from what was provided in January. Forward-Looking Statements 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. In this press release, the statements regarding the outlook for Allergan's earnings per share and revenue forecasts, statements from Mr. Pyott and statements regarding anticipated product approvals, among other statements above, are forward-looking statements. Because forecasts are inherently estimates that cannot be made with precision, Allergan's performance at times differs from its estimates and targets, and Allergan often does not know what the actual results will be until after a quarter's end and year's end. Therefore, Allergan will not report or comment on its progress during the quarter. Any statement made by others with respect to progress mid-quarter cannot be attributed to Allergan. Any other statements in this press release that refer to Allergan's estimated or anticipated future results are forward-looking statements. All forward-looking statements in this press release reflect Allergan's current analysis of existing trends and information and represent Allergan's judgment only as of the date of this press release. Actual results may differ from current expectations based on a number of factors affecting Allergan's businesses, including, among other things, changing competitive, market and regulatory conditions; the timing and uncertainty of the results of both the research and development and regulatory processes; domestic and foreign health care and cost containment cost containment, n the features of a dental benefits program or of the administration of the program designed to reduce or eliminate certain charges to the plan. reforms; technological advances and patents obtained by competitors; the performance, including the approval, introduction and consumer acceptance of new products and the continuing acceptance of currently marketed products; the effectiveness of advertising and other promotional campaigns; the timely and successful implementation of strategic initiatives; the uncertainty associated with the identification of and successful consummation CONSUMMATION. The completion of a thing; as the consummation of marriage; (q.v.) the consummation of a contract, and the like. 2. A contract is said to be consummated, when everything to be done in relation to it, has been accomplished. and execution of external corporate development initiatives and strategic partnering transactions; and Allergan's ability to obtain and successfully maintain a sufficient supply of products to meet market demand in a timely manner. In addition, matters generally affecting the economy, such as changes in interest and currency exchange rates; international relations international relations, study of the relations among states and other political and economic units in the international system. Particular areas of study within the field of international relations include diplomacy and diplomatic history, international law, and geopolitical ge·o·pol·i·tics n. (used with a sing. verb) 1. The study of the relationship among politics and geography, demography, and economics, especially with respect to the foreign policy of a nation. 2. a. issues; and the state of the economy worldwide, can affect Allergan's results. Therefore, the reader is cautioned not to rely on these forward-looking statements. Allergan expressly disclaims any intent or obligation to update these forward-looking statements. Additional information concerning these and other risk factors can be found in press releases issued by Allergan as well as Allergan's public periodic filings with the Securities and Exchange Commission, including the discussion under the heading "Certain Factors and Trends Affecting Allergan and its Businesses" in Allergan's 2002 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. . Copies of Allergan press releases and additional information about Allergan is available on the World Wide Web at, www.allergan.com or you can contact the Allergan Investor Relations Investor relations The process by which the corporation communicates with its investors. Department by calling 714-246-4636. About Allergan, Inc. Allergan, Inc., with headquarters in Irvine, California Irvine is an incorporated city in Orange County, California, United States. It is a planned city, mainly developed by the Irvine Company since the 1960s. Formally incorporated on December 28 1971, the 69.7 square mile (180.5 km²) city has a population of 202,079 (as of 2007). , is a technology-driven, global health care company providing eye care and specialty pharmaceutical products worldwide. Allergan develops and commercializes products in the eye care, neuromodulator, skin care and other specialty markets that deliver value to our customers, satisfy unmet un·met adj. Not satisfied or fulfilled: unmet demands. medical needs, and improve patients' lives.
ALLERGAN, INC.
Condensed Consolidated Statements of Earnings
(Unaudited)
in millions, except per share amounts Three Months
Ended
March March
28, 29,
2003 2002
Product sales
Net sales $391.2 $318.2
Cost of sales 68.4 44.9
Product gross margin 322.8 273.3
Research services
Research service revenues 9.8 9.5
Cost of research services 8.9 8.6
Research services margin 0.9 0.9
Selling, general and administrative 170.0 147.9
Research and development 55.9 54.0
Restructuring charge and asset write-offs -- 13.2
Operating income 97.8 59.1
Interest income 4.1 3.6
Interest expense (3.7) (4.3)
Unrealized loss on derivative instruments (0.8) (0.6)
Loss on investments (0.3) (8.0)
Other, net 0.8 4.3
0.1 (5.0)
Earnings from continuing operations
before income taxes and minority interest 97.9 54.1
Provision for income taxes 27.4 15.0
Minority interest expense 0.3 --
Earnings from continuing operations 70.2 39.1
Earnings from discontinued operations, net of
applicable income tax expense of $2.9 million -- 4.7
Net earnings $ 70.2 $ 43.8
Basic earnings per share:
Continuing operations $ 0.54 $ 0.30
Discontinued operations -- 0.04
Net basic earnings per share $ 0.54 $ 0.34
Diluted earnings per share:
Continuing operations $ 0.53 $ 0.30
Discontinued operations -- 0.03
Net diluted earnings per share $ 0.53 $ 0.33
Weighted average number of common
shares outstanding:
Basic 129.7 130.3
Diluted 131.8 131.9
ALLERGAN, INC.
Condensed Consolidated Balance Sheets
(Unaudited)
in millions March December
28, 31,
2003 2002
Assets
Cash and equivalents $ 878.3 $ 774.0
Trade receivables, net 216.1 220.6
Inventories 78.7 70.4
Other current assets 124.4 135.2
Total current assets 1,297.5 1,200.2
Property, plant and equipment, net 359.8 352.0
Other noncurrent assets 256.7 254.4
Total assets $1,914.0 $1,806.6
Liabilities and stockholders' equity
Notes payable $ 92.9 $ 89.7
Accounts payable 79.5 82.0
Accrued expenses and income taxes 256.4 231.9
Total current liabilities 428.8 403.6
Long-term debt 527.7 526.4
Other liabilities 69.9 68.3
Stockholders' equity 887.6 808.3
Total liabilities and stockholders' equity $1,914.0 $1,806.6
ALLERGAN, INC.
Net Sales by Product Line
(unaudited)
Three Months Ended
March 28, March 29,
in millions 2003 2002
Specialty Pharmaceuticals:
Eye Care Pharmaceuticals $221.0 $207.8
Botox/Neuromodulators 123.1 88.6
Skin Care 25.9 21.8
Total 370.0 318.2
Other (primarily contract sales) 21.2 --
TOTAL NET SALES $391.2 $318.2
Alphagan and Alphagan P $77.3 $74.8
Lumigan 38.0 21.1
Tazorac, Zorac and Avage 19.7 12.2
Domestic 72.8% 73.5%
International 27.2% 26.5%
ALLERGAN, INC.
Reconciliation of Non-Recurring and Other Items
(Unaudited)
in millions, except per share amounts Three Months
Ended
March March
28, 29,
2003 2002
Earnings from continuing operations, as reported $70.2 $ 39.1
Pre-tax adjustments for non-recurring items:
Unrealized loss on derivative instruments 0.8 0.6
Restructure charge and asset write-off -- 13.2
Duplicate operating expenses -- 7.1
Loss on investments -- 8.0
Partnering deals -- (1.0)
71.0 67.0
Tax effect for non-recurring items (0.2) (7.9)
Adjusted earnings from continuing operations $70.8 $ 59.1
Diluted earnings per share from continuing
operations, as reported $0.53 $ 0.30
Non-recurring adjustments:
Unrealized loss on derivative instruments 0.01 0.01
Restructure charge and asset write-off -- 0.07
Duplicate operating expenses -- 0.04
Loss on investments -- 0.04
Partnering deals -- (0.01)
Adjusted diluted earnings per share from continuing
operations 0.54 0.45
Pro forma adjustments (Net effect of G&A dissynergies,
cash from distribution and estimated income from
contract sales to AMO) -- (0.02)
Pro forma diluted earnings per share from continuing
operations $0.54 $ 0.43
Pro forma year over year change 25.6%
ALLERGAN, INC.
Condensed Combined Statements of Earnings from Continuing Operations,
Adjusted for Non-Recurring Items
(Unaudited)
in millions, except per share amounts Three Months
Ended
March March
28, 29,
2003 2002
Product sales
Net sales $391.2 $318.2
Cost of sales 68.4 44.9
Product gross margin 322.8 273.3
Research services
Research service revenues 9.8 9.5
Cost of research services 8.9 8.6
Research services margin 0.9 0.9
Selling, general and administrative 170.0 140.8
Research and development 55.9 50.0
Operating income 97.8 83.4
Interest income 4.1 3.6
Interest expense (3.7) (4.3)
Loss on investments (0.3) --
Other, net 0.8 (0.7)
0.9 (1.4)
Earnings from continuing operations
before income taxes and minority interest 98.7 82.0
Provision for income taxes 27.6 22.9
Minority interest 0.3 --
Earnings from continuing operations $ 70.8 $ 59.1
Earnings per share from continuing operations:
Basic $ 0.55 $ 0.45
Diluted $ 0.54 $ 0.45
Pro forma Diluted(a) -- $ 0.43
Weighted average number of common
shares outstanding:
Basic 129.7 130.3
Diluted 131.8 131.9
(a) Reflects the approximate impact of additional expenses that
would have been incurred in the first three months of 2002 if
Allergan's specialty pharmaceutical businesses and AMO had been
operating as stand-alone companies.
ALLERGAN, INC.
Reconciliation of Diluted Earnings Per Share
(Unaudited)
in millions, except per share amounts Three Months
Ended
March March
28, 29,
2003 2002
Earnings from continuing operations, as reported $ 70.2 $ 39.1
Interest expense from convertible subordinated
notes, net of tax 0.2 --
Diluted earnings from continuing operations 70.4 39.1
Non-recurring adjustments, net of tax 0.6 20.0
Adjusted diluted earnings from continuing operations $ 71.0 $ 59.1
Weighted average number of shares issued 129.7 130.3
Net shares assumed issued using the treasury stock
method for options outstanding during each period
based on average market price 1.7 1.6
Diluted effect of assumed conversion of convertible
subordinated notes outstanding 0.4 --
131.8 131.9
Diluted earnings per share from continuing operations $ 0.53 $ 0.30
Earnings per share for non-recurring items 0.01 0.15
Adjusted diluted earnings per share from continuing
operations $ 0.54 $ 0.45
Pro forma diluted earnings per share from continuing
operations(a) -- $ 0.43
Note: The effect of the assumed conversion of the Company's $641.5
million senior convertible notes issued November 2002 has been
excluded from the calculation of diluted earnings per share for the
three months ended March 28, 2003 because none of the conditions that
would permit conversion had been satisfied during the period.
(a) Reflects the approximate impact of additional expenses that
would have been incurred in the first three months of 2002 if
Allergan's specialty pharmaceutical businesses and AMO had been
operating as stand-alone companies.
ALLERGAN, INC.
Supplemental Non-GAAP Information
(Unaudited)
in millions, except per share amounts Three Months
Ended
March March
28, 29,
2003 2002
Net sales, as reported $391.2 $318.2
Non-pharmaceutical products (21.2)
Net sales, excluding non-pharmaceutical 370.0
Currency effect (5.5)
Net sales, excluding non-pharmaceutical
and currency effect $364.5
Eye care pharmaceuticals net sales, as reported $221.0 $207.8
Currency effect (3.7)
Eye care pharmaceuticals net sales, excluding
currency effect $217.3
Alphagan Franchise, as reported $ 77.3 $ 74.8
Currency effect (1.4)
Alphagan Franchise, excluding currency effect $ 75.9
Lumigan, as reported $ 38.0 $ 21.1
Currency effect (1.0)
Lumigan, excluding currency effect $ 37.0
Other Glaucoma, as reported $ 5.4 $ 6.7
Currency effect (0.2)
Other Glaucoma, excluding currency effect $ 5.2
Tazorac, Zorac and Avage, as reported $ 19.7 $ 12.2
Currency effect --
Tazorac, Zorac and Avage,
excluding currency effect $ 19.7
Botox, as reported $123.1 $ 88.6
Currency effect (1.8)
Botox, excluding currency effect $121.3
Note: Currency effect is determined by comparing adjusted 2003
reported amounts, calculated using 2002 monthly average exchange
rates, to the actual 2002 reported amounts. Constant currency sales is
not a GAAP defined measure of revenue growth. The Company routinely
evaluates its net sales performance at constant currency rates because
the Company believes it provides a useful measure of actual local
currency sales performance year over year. Constant currency sales as
defined and presented by the Company may not be comparable to similar
measures reported by other companies.
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