Allergan Reports First Quarter Results; Net Sales Increase 13 percent.

IRVINE, Calif.--(BUSINESS WIRE)--April 17, 1996--Allergan Inc. (NYSE:AGN) announced first quarter 1996 worldwide sales of $258.1 million, an increase of $29.8 million or 13 percent over the first quarter of 1995.

Excluding the impact of foreign currency changes, sales increased 12 percent or $27.6 million over the first quarter of 1995.

Earnings per share for the first quarter of 1996 were $0.35 compared to $0.34 for the first quarter of 1995. Declines in cataract surgeries due to inclement weather, together with the initiation of a limited voluntary recall of certain AMO(R) PhacoFlex II(R) Model SI-30 intraocular lenses (IOLs) had a significant impact on the first quarter operating results.

Eye Care Business Unit Performance

Pharmaceuticals

Worldwide sales for the eye care pharmaceutical business were $98.0 million for the first three months of 1996, a 14 percent increase over 1995 first quarter sales of $85.6 million. During the second quarter of 1995, Allergan acquired Laboratorios Frumtost SA, a company operating in Brazil for 25 years in the eye care market. Sales of Frumtost products contributed $9.6 million to pharmaceutical sales in the first quarter of 1996. Excluding the impact of these product sales, the pharmaceutical business grew 3 percent during the first quarter of 1996.

Surgical

Sales for the ophthalmic surgical business were $40.5 million during the first quarter of 1996, an increase of 1 percent or $0.4 million over the first quarter of 1995.

Optical

Sales for the optical contact lens care business were $91.5 million for the first quarter of 1996, an increase of 8 percent from first quarter 1995 sales of $85.0 million. Late in the fourth quarter of 1995, Allergan acquired the worldwide contact lens care business of Pilkington Barnes Hind. Sales of these products contributed $10.1 million to optical sales in the first quarter of 1996. Excluding the impact of these product sales, the optical business sales declined 4 percent during the first quarter of 1996. Optical sales in the U.S. grew 11 percent during the first quarter of 1996 while optical sales in Europe declined due to new private label competition and the continuing market shift from traditional peroxide disinfection systems to more convenient and lower priced one-bottle disinfection systems.

Skin Care Business Unit

Sales for Allergan Herbert (skin care) products were $13.8 million during the first quarter of 1996, an increase of 84 percent from the $7.5 million in sales during the same period last year. During the third quarter of 1995, Allergan acquired the assets of Herald Pharmacal, a leader in the aesthetic skin care market. Sales of Herald products contributed $4.1 million to skin care sales during the first quarter of 1996.

Excluding the impact of these product sales, the skin care business grew 30 percent in the first quarter. Contributing to this growth was Azelex (R) (azelaic acid) cream for the topical treatment of mild to moderate inflammatory acne vulgaris, launched in February at the American Academy of Dermatology meeting. Allergan filed an application for U.S. marketing approval mid-year 1995 for its receptor-selective retinoid Zorac(TM) (tazarotene) gel for the treatment of both psoriasis and acne.

Botox/Neuromuscular Business Unit

Sales for Botox(R) (Botulinum Toxin Type A) purified neurotoxin complex were $14.3 million during the first quarter of 1996. This represents an increase of 42 percent over the $10.1 million in sales during the first quarter of 1995. Last year, additional clinical trials were started to support a new claim for the treatment of a neck and shoulder movement disorder known as cervical dystonia (spasmodic torticollis) which affects approximately 160,000 people in the U.S.

Recent Developments

Vince Anido, corporate vice president and president, Americas Region, has resigned from the Company to accept a position as chief executive officer at a start-up company.

In February of this year, the Company announced that it expected its 1996 sales to represent double digit growth over 1995 sales. First quarter results are in line with this expectation and current trends would suggest that sales growth of approximately 10 percent for the year is an achievable goal. This forward looking statement reflects the Company's current analysis of existing trends and information. Actual results of the remainder of the year may differ from current expectations based on a number of factors affecting Allergan's businesses including competitive conditions, the approval and performance of new products, the impact of the Company's previously announced voluntary, limited recall of certain of its intraocular lenses on its surgical business, contributions from recently acquired businesses, and the results of geographic expansion efforts. Allergan assumes no responsibility to update or revise its sales expectations for the remainder of the year except through the regular publication of historical quarterly and year-end results.

Additional Financial Highlights

The gross profit margin was 66.8 percent in the first quarter of 1996 compared to 68.9 percent for the same period last year. The gross margin percentage declined in the first quarter of 1996 compared to 1995 primarily as a result of declines in margins in the contact lens care product line. Such declines were due, in part, to lower margins in the recently acquired Barnes Hind product line. Declines in realized sales prices of eye care pharmaceutical products also contributed to the decline in the gross margin percentage.

Research and development expenses were $26.8 million during the first quarter of 1996, an increase of 5 percent compared to 1995. SG&A related expenses were $114.3 million during the first quarter of 1996, an increase of 10 percent. Acquisitions in 1995 contributed to the increase in SG&A during 1996. Non-operating income declined $2.0 million in the first quarter of 1996. Interest expense on higher debt and lower interest income as a result of lower average interest rates contributed to this decrease.

Allergan, Inc., a global health care company headquartered in Irvine, California, develops, manufactures, and markets specialty therapeutic products for eye and skin care and movement disorders. A technology-driven company, Allergan is working to be the partner of choice for ever better health care.

The following tables represent condensed consolidated statements of income, condensed consolidated balance sheets, and a statement of net sales by division. -0-

                         ALLERGAN INC.
           Condensed Consolidated Statements of Income

  (in millions,             Three Months
   except                  Ended March 31,
   per share)
                                           pct Inc
                           1996     1995    (Dec)

   Net Sales              $258.1   $228.3  13 pct
     Costs and
     expenses
   Cost of sales            85.7     71.1
   Selling,
    general
    and
    administra-
    tive                   114.3    103.5
   Research and
    development             26.8     25.6
   Operating
    Income                  31.3     28.1  11 pct
      Interest income        2.3      3.1
      Interest expense      (3.3)    (2.3)
      Other, net             2.2      2.4
   Interest and
    other, net               1.2      3.2
   Total costs
    and expenses           225.6    197.0
   Earnings before
    income taxes and
    minority interest       32.5     31.3
   Provision for
    income taxes             9.4      9.2
   Minority
    interest                  -       0.4
   Net Earnings           $ 23.1   $ 21.7   6 pct
     Net earnings
     per common
     share                $  0.35  $  0.34  3 pct
   Weighted
   average
   number of
   common shares
   outstanding              65.6     64.5
-0-

                         ALLERGAN, INC.
            Condensed Consolidated Balance Sheets

  (in millions)                   March 31,    December 31,
                                    1996           1995

   Assets
   Cash and equivalents            $108.2         $102.3
   Trade receivables, net           214.0          205.7
   Inventories                      129.8          120.8
   Other current assets             101.6           93.5
   Total current assets             553.6          522.3
   Property, plant and equipment,
     net                            353.8          357.5
   Other noncurrent assets          429.6          436.5
   Total assets                  $1,337.0       $1,316.3
   Liabilities and stockholders'
     equity
   Notes payable                   $ 62.5         $ 58.5
   Accounts payable                  55.2           58.7
   Accrued expenses and
     income taxes                   206.7          214.4
   Total current liabilities        324.4          331.6
   Long-term debt                   271.8          266.7
   Other liabilities                 48.4           49.1
   Stockholders' equity             692.4          668.9
   Total liabilities and
     stockholders' equity        $1,337.0       $1,316.3
-0-

                         ALLERGAN, INC.
                      Net Sales by Division

                               Three Months
   (in millions)               Ended March 31,

                              1996     1995

Pharmaceuticals              $ 98.0   $ 85.6
Surgical                       40.5     40.1
Optical Lens Care              91.5     85.0
   Total Eye Care             230.0    210.7
Skin Care                      13.8      7.5
Botox                          14.3     10.1
TOTAL NET SALES              $258.1   $228.3

Domestic                        42%      45%
International                   58%      55%

CONTACT: Allergan Inc.

Jeff D'Eliscu, 714/246-4636 work

714/675-9475 home