Allergan Reports Fourth Quarter Operating Results.IRVINE Irvine, town, Scotland Irvine (ûr`vĭn), town (1991 pop. 32,507), North Ayrshire, SW Scotland, on the Irvine River estuary. Industries include iron and brass foundries. Other products are chemicals, electric goods, and clothing. , Calif. -- Allergan Allergan, Inc., is a global specialty pharmaceutical company. Their product ranges include ophthalmic pharmaceuticals, dermatology products, and neurological products. The company's most notable neurologic product is Botox, used around the world to treat a variety of debilitating , 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) ): --Pharmaceutical Sales Increased 11.3 Percent for the Fourth Quarter --Board of Directors Declares Fourth Quarter Dividend Allergan, Inc. (NYSE:AGN) today announced operating results for the fourth quarter ended December December: see month. 31, 2005. Allergan also announced that its Board of Directors has declared de·clare v. de·clared, de·clar·ing, de·clares v.tr. 1. To make known formally or officially. See Synonyms at announce. 2. To state emphatically or authoritatively; affirm. 3. a fourth quarter dividend of $0.10 per share, payable on March 14, 2006 to stockholders of record on February February: see month. 17, 2006. Operating Results For the quarter ended December 31, 2005: --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 $594.9 million. --Pharmaceutical sales increased 11.3 percent, or 11.7 percent at constant currency, compared to pharmaceutical sales in the fourth quarter of 2004. --Allergan reported $0.90 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 compared to the $0.85 diluted earnings per share reported for the fourth quarter of 2004. The reported $0.90 diluted earnings per share includes:
-- the incurrence of net restructuring charges related to:
-- the scheduled termination of Allergan's manufacturing
and supply agreement with Advanced Medical Optics
(AMO);
-- the streamlining of Allergan's research and
development and select commercial activities
throughout Europe; and
-- the re-organization of Allergan's operations in Japan
as a result of Allergan's development and promotion
arrangements with GlaxoSmithKline (GSK) relating to
Botox(R);
-- the incurrence of transition and duplicate operating
expenses related to the streamlining activities throughout
Europe mentioned above;
-- the recognition of a loss on the sale of assets that were
primarily used for contract manufacturing and the
distribution of AMO related products in Ireland;
-- the incurrence of non-capitalized charges associated with
Allergan's proposed acquisition of Inamed Corporation;
-- the recognition of a gain on the sale of a former
manufacturing plant in Argentina;
-- a decrease in the amount of taxes previously estimated in
connection with the repatriation of foreign earnings that
had been permanently re-invested outside the United
States;
-- a reduction in the estimated tax benefit related to the
resolution of several significant income tax audit issues
related to tax years currently under examination or not
yet settled through expiration of the statute of
limitations; and
-- the effect of an unrealized gain on the mark-to-market
adjustment to foreign currency derivative instruments.
The items above included in diluted earnings per share total $2.3 million, which consists of $8.4 million pre-tax pre-tax adj → anterior al impuesto pre-tax adj → avant impôt(s) pre-tax adj → al lordo d'imposta less $6.1 million related to the provision for income taxes. --Allergan's adjusted diluted earnings per share were $0.91, representing a 5.8 percent increase compared to adjusted diluted earnings per share of $0.86 reported for the fourth quarter of 2004. The adjusted diluted earnings per share of $0.91 compares to guidance provided in November November: see month. 2005 of $0.88 to $0.89. Adjusted diluted earnings per share for the fourth quarter of 2005 exclude the items outlined above and a reconciliation of the adjustments made from reported earnings per share to adjusted diluted earnings per share is contained in the financial tables of this document. "We are extremely pleased with our sales growth and performance in 2005 and we believe Allergan is well-positioned for the future as we continue to build leadership positions in our specialties." said David E.I. Pyott, Allergan's Chairman of the Board, President and Chief Executive Officer. "Additionally, we continue to make excellent progress toward completing the Inamed acquisition and we look forward to offering the benefits of the transaction to our customers, patients, employees and our stockholders, as we create this leading global medical aesthetics aesthetics (ĕsthĕt`ĭks), the branch of philosophy that is concerned with the nature of art and the criteria of artistic judgment. franchise." For full year 2005, therapeutic sales accounted for approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. 57% of total Botox Botox Trademark for botulinum toxin type A, a drug produced by the bacterium Clostridium botulinum. It contains the same toxin that causes severe food poisoning (botulism). (R) (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) sales and therapeutic sales grew at approximately 16%. For full year 2005, cosmetic cosmetic /cos·met·ic/ (koz-met´ik)1. pertaining to cosmesis. 2. a beautifying substance or preparation. cos·met·ic n. sales accounted for approximately 43% of total Botox(R) sales and cosmetic sales grew at approximately 21%. As a result of Allergan's development and promotion agreements with GSK GSK GlaxoSmithKline plc (pharmaceutical company) GSK Glycogen Synthase Kinase GSK Gruppentraining Sozialer Kompetenzen (Germany) GSK Greenland Shark (FAO fish species code) , Allergan has provided 2005 and 2004 quarterly Botox(R) net sales in Japan, which are contained in the financial tables of this document. For full years 2005 and 2004, Botox(R) net sales in Japan were $38.8 million and $32.5 million, respectively. Product and Pipeline Update During the fourth quarter of 2005: --On October October: see month. 3, 2005, Allergan announced that it entered into a long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. agreement with GSK to develop and promote Allergan's Botox(R) in Japan and China and to co-promote GSK's products Imitrex Im·i·trex A trademark for the drug sumatriptan and its succinate form. sumatriptan succinate Imigran (UK), Imitrex Pharmacologic class: Selective 5-hydroxytryptamine1 (5-HT1 STATdose System(R) (sumatriptan succinate sumatriptan succinate (soo´m  trip´-tan suk´s ) and Amerge(R)
(naratriptan hydrochloride naratriptan hydrochlorideAmerge, Naramig (UK) Pharmacologic class: Selective 5-hydroxytryptamine1 (5-HT1) agonist Therapeutic class: Vascular headache suppressant, antimigraine drug ) 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. . --On October 3, 2005, Allergan made a milestone “Milemarker” redirects here. For the American indie rock band, see Milemarker (band). A milestone or kilometre sign is one of a series of numbered markers placed along a road at regular intervals, typically at the side of the road or in a median. payment to Acadia Pharmaceuticals in connection with the advancement A gift of money or property made by a person while alive to his or her child or other legally recognized heir, the value of which the person intends to be deducted from the child's or heir's eventual share in the estate after the giver's death. of a clinical program directed at novel treatments for neuropathic neuropathic /neu·ro·path·ic/ (-path´ik) pertaining to or characterized by neuropathy. neuropathic pertaining to disease of the nervous system. pain. --On October 24, 2005, Allergan entered into an agreement with NPS NPS National Park Service NPS Naval Postgraduate School NPS Net Promoter Score (customer management) NPS Non-Point Source pollution NPS Native Plant Society NPS Norfolk Public Schools (Virginia) Pharmaceuticals to promote Restasis(R) (cyclosporine ophthalmic emulsion cyclosporine ophthalmic emulsion Sandimmun (UK), Restasis Pharmacologic class: Polypeptide antibiotic Therapeutic class: Immunosuppressant Pregnancy risk category C FDA Boxed Warning0.05%) to rheumatologists in the United States.--On December 29, 2005, the United District Court for the Northern District of California California (kăl'ĭfôr`nyə), most populous state in the United States, located in the Far West; bordered by Oregon (N), Nevada and, across the Colorado River, Arizona (E), Mexico (S), and the Pacific Ocean (W). granted a temporary restraining order temporary restraining order: see injunction. in the Acular Noun 1. Acular - nonsteroidal anti-inflammatory drug (trade names Acular and Toradol) that is administered only intramuscularly ketorolac tromethamine, Toradol (R) 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. case in favor of upon the side of; favorable to; for the advantage of. See also: favor Allergan against Apotex Apotex is a Canadian pharmaceutical corporation. It was founded in 1974, and has become the largest producer of generic drugs in Canada. According to [1], Apotex currently produces more than 260 generic pharmaceuticals in approximately 4000 dosages. , Inc., Apotex Corp., and Novex Pharma Pharma may be an abbreviation for:
A preliminary injunction is regarded as extraordinary relief. should issue, from commercially manufacturing, using, offering to sell, or selling within the United States or importing into the United States" the generic Generic Describes the characteristics and/or experience of the total universe of a coupon of MBS sector type; that is, in contrast to a specific pool or collateral group, as in a specific CMO issue. version of Acular(R). Following the fourth quarter of 2005: --Allergan received approval for Botox(R) in the United Kingdom (UK) (from the Medicines Healthcare product and Regulatory Agency regulatory agency Independent government commission charged by the legislature with setting and enforcing standards for specific industries in the private sector. The concept was invented by the U.S. ) and in Germany Germany (jûr`mənē), Ger. Deutschland, officially Federal Republic of Germany, republic (2005 est. pop. 82,431,000), 137,699 sq mi (356,733 sq km). (from the Bundesinstitut fur Arzneimittel und Medizinprodukte) for the treatment of moderate to severe glabellar lines in adult women and men aged 65 and younger. With dosing specific to treat glabellar lines, Botox(R) for cosmetic use will be marketed in the UK and Germany under the brand name Vistabel(R) and is the only brand of botulinum toxin type A licensed for glabellar lines in these countries. Inamed Acquisition On November 15, 2005, Allergan announced its proposal to acquire Inamed Corporation for a per share consideration of $84.00 in cash or 0.8498 of a share of common Allergan stock, subject to proration Proration A situation during a corporate action in which the available cash or shares are not sufficient to satisfy the offers tendered by shareholders. Therefore, a proportion of both cash and shares is granted for each offer tendered. . Allergan and Inamed are continuing to work with the Federal Trade Commission (FTC FTC See Federal Trade Commission (FTC). ) to obtain clearance CLEARANCE, com. law. The name of a certificate given by the collector of a port, in which is stated the master or commander (naming him) of a ship or vessel named and described, bound for a port, named, and having on board goods described, has entered and cleared his ship or vessel of the transaction. Allergan is making good progress and will separately announce when the FTC has cleared the transaction. Outlook Allergan estimates 2006 diluted earnings per share, prior to the acquisition of Inamed, to be between $3.56 and $3.62, which includes a $0.20 negative impact related to the estimated effect of expensing stock options in accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with Financial Accounting Standards Board Financial Accounting Standards Board (FASB) Board composed of independent members who create and interpret Generally Accepted Accounting Principles (GAAP). Statement No. 123R (FAS 123R). Consistent with the Securities and Exchange Commission's requirement, Allergan will begin implementing FAS 123R in the first fiscal quarter of 2006. Allergan anticipates that the acquisition of Inamed will be neutral to its 2006 diluted earnings per share guidance which excludes the following non-GAAP adjustments: --amortization of acquired 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. associated with the proposed Inamed acquisition; --merger-related integration and transition costs associated with the proposed Inamed acquisition; and --purchase accounting adjustments related to inventory and in-process research and development associated with the proposed Inamed acquisition. The estimated pre-tax impact from expensing stock options under FAS 123R is approximately $44.0 million and the estimated allocation The apportionment or designation of an item for a specific purpose or to a particular place. In the law of trusts, the allocation of cash dividends earned by a stock that makes up the principal of a trust for a beneficiary usually means that the dividends will be treated as is as follows: --approximately 7% to Cost of Sales --approximately 22% to Research and Development --approximately 71% to SG&A Allergan intends to provide additional 2006 guidance for the combined company following FTC clearance of the Inamed acquisition and the completion of the exchange offer. 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 new product development, market potential, expected growth, efficiencies, costs and savings, as well as the outlook for Allergan's earnings per share and revenue forecasts, 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 materially 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 a current quarter except through public announcement. Any statement made by others with respect to progress during a current quarter cannot be attributed to Allergan. Any other statements in this press release that refer to Allergan's expected, 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 materially from current expectations based on a number of factors affecting Allergan's businesses, including, among other things, changing competitive, market and regulatory reg·u·late tr.v. reg·u·lat·ed, reg·u·lat·ing, reg·u·lates 1. To control or direct according to rule, principle, or law. 2. 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 COMPETITORS, French law. Persons who compete or aspire to the same office, rank or employment. As an English word in common use, it has a much wider application. Ferriere, Dict. de Dr. h.t. ; the performance, including the approval, introduction, and consumer and physician 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 results of any pending or future litigations, investigations or claims; 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 the state of the economy worldwide, can materially 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 except as required to do so by law. Additional information concerning the above-referenced risk factors 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 2004 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. and Allergan's Form 10-Q Form 10-Q See 10-Q. for the quarter ended September September: see month. 30, 2005. Copies of Allergan's press releases and additional information about Allergan is available 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. Allergan has filed a Registration Statement on Form S-4 and a Tender Offer Statement on Schedule TO in connection with the exchange offer. Inamed stockholders should read those filings, and any other filings made by Allergan with the SEC in connection with the proposed Inamed acquisition, as they contain important information. These SEC filings, as well as Allergan's other public SEC filings, can be obtained without charge at the SEC's website at www.sec.gov See .gov and GovNet. (networking) gov - The top-level domain for US government bodies. , and at www.Allergan.com. 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 specialty A contract under seal. A specialty is a written document that has been sealed and delivered and is given as security for the payment of a specifically indicated debt. pharmaceutical products worldwide. Allergan develops and commercializes products in the ophthalmology ophthalmology (ŏf'thălmŏl`əjē), branch of medicine specializing in the anatomy, function and diseases of the eye. Ophthalmologists specialize in the medical and surgical treatment of eye disorders, vision measurements for , neurosciences, medical dermatology dermatology (dûrmətŏl`əjē), branch of medicine concerned with diagnosis and treatment of diseases and disorders of the skin. , medical aesthetics and other specialty markets that deliver value to its 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 and
Reconciliation of Non-GAAP Adjustments
(Unaudited)
Three months ended
----------------------------------------
in millions, except per share December 31, 2005
amounts
----------------------------- ----------------------------------------
Non-GAAP
GAAP Adjustments Adjusted
------- ----------- --------
Product sales
Net sales $594.9 $-- $594.9
Cost of sales 95.3 (0.1)(a)(c) 95.2
------- ----------- --------
Product gross margin 499.6 0.1 499.7
Selling, general and
administrative 224.4 (1.8)(a)(b)(g)(h) 222.6
Research and development 107.5 (0.4)(a) 107.1
Restructuring charges 6.2 (6.2)(c) --
------- ----------- --------
Operating income 161.5 8.5 170.0
Interest income 12.4 -- 12.4
Interest expense (5.7) -- (5.7)
Unrealized gain (loss) on
derivative instruments, net 0.1 (0.1)(d) --
Gain on investments -- -- --
Other, net 0.4 -- 0.4
------- ----------- --------
7.2 (0.1) 7.1
------- ----------- --------
Earnings before income taxes
and minority interest 168.7 8.4 177.1
Provision for income taxes 46.5 6.1 (f) 52.6
Minority interest 0.2 -- 0.2
------- ----------- --------
Net earnings $122.0 $2.3 $124.3
======= =========== ========
Net earnings per share:
Basic $0.92 $0.94
Diluted $0.90 $0.91
======= ========
Weighted average number of common shares
outstanding:
Basic 132.0 132.0
Diluted 136.3 136.3
Selected ratios as a
percentage of net sales
-----------------------------
Gross profit 84.0% 84.0%
Selling, general and
administrative 37.7% 37.4%
Research and development 18.1% 18.0%
Three months ended
----------------------------------------
in millions, except per share December 31, 2004
amounts
----------------------------- ----------------------------------------
Non-GAAP
GAAP Adjustments Adjusted
---------------- ----------- --------
Product sales
Net sales $556.2 $-- $556.2
Cost of sales 103.8 -- 103.8
---------------- ----------- --------
Product gross margin 452.4 -- 452.4
Selling, general and
administrative 206.1 -- 206.1
Research and development 88.0 -- 88.0
Restructuring charges 7.0 (7.0)(i) --
---------------- ----------- --------
Operating income 151.3 7.0 158.3
Interest income 7.3 -- 7.3
Interest expense (3.9) -- (3.9)
Unrealized gain (loss) on
derivative instruments, net (0.5) 0.5 (d) --
Gain on investments 0.3 -- 0.3
Other, net 6.5 (6.5)(e) --
---------------- ----------- --------
9.7 (6.0) (3.7)
---------------- ----------- --------
Earnings before income taxes
and minority interest 161.0 1.0 162.0
Provision for income taxes 48.2 (1.4)(j) 46.8
Minority interest 0.3 -- 0.3
---------------- ----------- --------
Net earnings $112.5 $2.4 $114.9
================ =========== ========
Net earnings per share:
Basic $0.86 $0.88
Diluted $0.85 $0.86
================ ========
Weighted average number of common shares
outstanding:
Basic 131.3 131.3
Diluted 133.0 133.0
Selected ratios as a
percentage of net sales
-----------------------------
Gross profit 81.3% 81.3%
Selling, general and
administrative 37.1% 37.1%
Research and development 15.8% 15.8%
(a) Transition/duplicate operating expenses, consisting of Cost of
sales of $0.2 million; Selling, general and administrative expense
of $1.9 million and Research and development expense of $0.4
million
(b) Costs related to the pending acquisition of Inamed of $0.4 million
(c) Restructuring charge of $6.2 million and related inventory
adjustment of $(0.1) million
(d) Unrealized loss on the mark-to-market adjustment to derivative
instruments
(e) Income from revised Vitrase collaboration agreement with ISTA
pharmaceuticals
(f) Total tax effect for non-GAAP pre-tax adjustments and other income
tax adjustments, consisting of the following amounts (in
millions):
Tax effect
Non-GAAP pre-tax adjustments of $8.4 million $(2.8)
Resolution of uncertain tax positions 1.3
Extraordinary dividends of $674 million under the American Jobs
Creation Act of 2004 (2.9)
Additional repatriation of foreign earnings of $85.8 million
above extraordinary dividends amount (1.7)
-------
$(6.1)
=======
(g) Gain on sale of a former manufacturing plant in Argentina of $0.6
million
(h) Loss on sales of assets primarily used for AMO Contract
Manufacturing of $0.1 million
(i) Restructuring charge related to the scheduled termination of
Allergan's manufacturing and supply agreement with AMO
(j) Tax effect for non-GAAP adjustments
"GAAP" refers to financial information presented in accordance
with generally accepted accounting principles in the United States.
This press release includes historical non-GAAP financial
measures, as defined in Regulation G promulgated by the Securities and
Exchange Commission, with respect to the three and twelve months ended
December 31, 2005 and December 31, 2004. Allergan believes that its
presentation of historical non-GAAP financial measures provides useful
supplementary information to investors. The presentation of historical
non-GAAP financial measures is not meant to be considered in isolation
from or as a substitute for results prepared in accordance with
accounting principles generally accepted in the United States.
In this press release, Allergan reported the non-GAAP financial
measure "adjusted earnings" and related "adjusted diluted earnings per
share." Allergan uses adjusted earnings to enhance the investor's
overall understanding of the financial performance and prospects for
the future of Allergan's core business activities. Specifically,
Allergan believes that a report of adjusted earnings provides
consistency in its financial reporting and facilitates the comparison
of results of core business operations between its current, past and
future periods. Adjusted earnings is one of the primary indicators
management uses for planning and forecasting in future periods.
Allergan also uses adjusted earnings for evaluating management
performance for compensation purposes.
ALLERGAN, INC.
Condensed Consolidated Statements of Earnings and
Reconciliation of Non-GAAP Adjustments
(Unaudited)
Twelve months ended
----------------------------------------
in millions, except per share December 31, 2005
amounts
----------------------------- ----------------------------------------
Non-GAAP
GAAP Adjustments Adjusted
--------- ----------- ---------
Product sales
Net sales $2,319.2 $-- $2,319.2
Cost of sales 399.6 (0.5)(a)(c) 399.1
--------- ----------- ---------
Product gross margin 1,919.6 0.5 1,920.1
Selling, general and
administrative 913.9 10.0 (a)(j)(n) 923.9
Research and development 391.0 (4.5)(a)(b) 386.5
Restructuring charges 43.8 (43.8)(c) --
--------- ----------- ---------
Operating income 570.9 38.8 609.7
Interest income 35.4 (2.2)(d)(f) 33.2
Interest expense (13.2) (6.5)(d) (19.7)
Unrealized gain (loss) on
derivative instruments, net 1.1 (1.1)(e) --
Gain on investments 0.8 (0.8)(l) --
Other, net 3.4 (3.5)(f) (0.1)
--------- ----------- ---------
27.5 (14.1) 13.4
--------- ----------- ---------
Earnings before income taxes
and minority interest 598.4 24.7 623.1
Provision for income taxes 209.7 (27.9)(g) 181.8
Minority interest 2.9 (3.1)(m) (0.2)
--------- ----------- ---------
Net earnings $385.8 $55.7 $441.5
========= =========== =========
Net earnings per share:
Basic $2.94 $3.37
Diluted $2.88 $3.29
========= =========
Weighted average number of common shares
outstanding:
Basic 131.1 131.1
Diluted 134.0 134.0
Selected ratios as a
percentage of net sales
-----------------------------
Gross profit 82.8% 82.8%
Selling, general and
administrative 39.4% 39.8%
Research and development 16.9% 16.7%
Twelve months ended
----------------------------------------
in millions, except per share December 31, 2004
amounts
----------------------------- ----------------------------------------
Non-GAAP
GAAP Adjustments Adjusted
--------------- ----------- ---------
Product sales
Net sales $2,045.6 $-- $2,045.6
Cost of sales 386.7 -- 386.7
--------------- ----------- ---------
Product gross margin 1,658.9 -- 1,658.9
Selling, general and
administrative 778.9 2.4 (h) 781.3
Research and development 345.6 -- 345.6
Restructuring charges 7.0 (7.0)(o) --
--------------- ----------- ---------
Operating income 527.4 4.6 532.0
Interest income 14.1 -- 14.1
Interest expense (18.1) -- (18.1)
Unrealized gain (loss) on
derivative instruments, net (0.4) 0.4 (e) --
Gain on investments 0.3 -- 0.3
Other, net 8.8 (11.5)(k) (2.7)
--------------- ----------- ---------
4.7 (11.1) (6.4)
--------------- ----------- ---------
Earnings before income taxes
and minority interest 532.1 (6.5) 525.6
Provision for income taxes 154.0 1.8 (i) 155.8
Minority interest 1.0 -- 1.0
--------------- ----------- ---------
Net earnings $377.1 $(8.3) $368.8
=============== =========== =========
Net earnings per share:
Basic $2.87 $2.81
Diluted $2.82 $2.75
=============== =========
Weighted average number of common shares outstanding:
Basic 131.3 131.3
Diluted 133.9 133.9
Selected ratios as a
percentage of net sales
-----------------------------
Gross profit 81.1% 81.1%
Selling, general and
administrative 38.1% 38.2%
Research and development 16.9% 16.9%
(a) Transition/duplicate operating expenses, consisting of Cost of
sales of $0.3 million; Selling, general and administrative expense
of $3.8 million and Research and development expense of $1.5
million
(b) Buy-out of license agreement with Johns Hopkins
(c) Restructuring charge of $43.8 million and related inventory
write-offs of $0.2 million
(d) Interest income related to previously paid state income taxes and
reversal of interest expense related to tax settlements
(e) Unrealized gain on the mark-to-market adjustment to derivative
instruments
(f) Termination of ISTA Vitrase collaboration agreement (including
interest income of $0.1 million)
(g) Total tax effect for non-GAAP pre-tax adjustments and other income
tax adjustments, consisting of the following amounts (in
millions):
Tax effect
Non-GAAP pre-tax adjustments of $24.7 million $( 2.1)
Additional benefit for state income taxes (1.4)
Resolution of uncertain tax positions (18.2)
Extraordinary dividends of $674 million under the American
Jobs Creation Act of 2004 29.9
Additional repatriation of foreign earnings of $85.8 million
above extraordinary dividends amount 19.7
-------
$27.9
=======
(h) Patent infringement settlement
(i) Income tax benefit for previously paid state income taxes and tax
effect for non-GAAP adjustments
(j) Gain on sale of assets primarily used for AMO contract
manufacturing ($5.7 million), gain on sale of distribution
business in India ($7.9 million), and gain on sale of a former
manufacturing plant in Argentina ($0.6 million)
(k) Technology transfer fee and income from revised Vitrase
collaboration agreement with ISTA pharmaceuticals
(l) Gain on sale of third party equity investment
(m) Minority interest related to gain on sale of distribution business
in India
(n) Costs related to the pending acquisition of Inamed of $0.4 million
(o) Restructuring charge related to the scheduled termination of
Allergan's manufacturing and supply agreement with AMO
"GAAP" refers to financial information presented in accordance with
generally accepted accounting principles in the United States. See
non-GAAP financial measures disclosure on previous page.
ALLERGAN, INC.
Condensed Consolidated Balance Sheets
(Unaudited)
in millions December December
31, 31,
2005 2004
-------------------------------------------------- --------- ---------
Assets
Cash and equivalents $1,296.3 $894.8
Trade receivables, net 246.1 243.5
Inventories 90.1 89.9
Other current assets 189.4 147.8
--------- ---------
Total current assets 1,821.9 1,376.0
Property, plant and equipment, net 494.0 468.5
Other noncurrent assets 522.2 412.5
--------- ---------
Total assets $2,838.1 $2,257.0
========= =========
Liabilities and stockholders' equity
Notes payable $169.6 $13.1
Convertible notes, net of discount 520.0 -
Accounts payable 92.3 97.9
Accrued expenses and income taxes 267.8 348.6
--------- ---------
Total current liabilities 1,049.7 459.6
Long-term debt 57.5 56.5
Long-term convertible notes, net of discount - 513.6
Other liabilities 182.1 111.1
Stockholders' equity 1,548.8 1,116.2
--------- ---------
Total liabilities and stockholders' equity $2,838.1 $2,257.0
========= =========
Days on Hand (DOH) 86 79
Days Sales Outstanding (DSO) 38 40
Cash, net of debt $549.2 $311.6
Debt-to-capital percentage 32.5% 34.3%
ALLERGAN, INC.
Reconciliation of Diluted Earnings Per Share
(Unaudited)
in millions, except per share Three months ended Twelve months
amounts ended
---------------------------------------------------- -----------------
December December December December
31, 31, 31, 31,
2005 2004 2005 2004
-------- -------- -------- --------
Net earnings, as reported $122.0 $112.5 $385.8 $377.1
Non-GAAP earnings per share
adjustments:
Restructuring charge (a) 6.1 7.0 44.0 7.0
Inamed transaction costs 0.4 -- 0.4 --
Sale of former manufacturing
plant in Argentina (0.6) -- (0.6) --
Transition/duplicate operating
expense 2.5 -- 5.6 --
Buy-out of license agreement
with Johns Hopkins -- -- 3.0 --
Gain on sale of distribution
business in India -- -- (7.9) --
Loss/(gain) on sale of assets
primarily used for AMO
contract manufacturing 0.1 -- (5.7) --
Termination of ISTA Vitrase
collaboration agreement -- -- (3.6)
Gain on sale of equity
investment -- -- (0.8) --
Interest related to previously
paid state income taxes and
income tax settlements -- -- (8.6) --
Technology transfer fee -- -- -- (5.0)
Income from ISTA Vitrase
collaboration -- (6.5) -- (6.5)
Patent infringement settlement -- -- -- (2.4)
Unrealized (gain) loss on
derivative instruments (0.1) 0.5 (1.1) 0.4
-------- -------- -------- --------
130.4 113.5 410.5 370.6
Tax effect for above items (2.8) 1.4 (2.1) 4.3
Resolution of uncertain tax
positions 1.3 -- (18.2) --
Tax effect of dividend
repatriation (4.6) -- 49.6 --
State income tax recovery -- -- (1.4) (6.1)
Minority interest effect of sale
of distribution business in India -- -- 3.1 --
-------- -------- -------- --------
Adjusted diluted earnings $124.3 $114.9 $441.5 $368.8
======== ======== ======== ========
Weighted average number of shares
issued 132.0 131.3 131.1 131.3
Net shares assumed issued using
the treasury stock method for
options outstanding during each
period based on average
market price 2.3 1.2 1.7 1.6
Dilutive effect of assumed
conversion of convertible
subordinated notes
outstanding 2.0 0.5 1.2 1.0
-------- -------- -------- --------
136.3 133.0 134.0 133.9
======== ======== ======== ========
Diluted earnings per share, as
reported $0.90 $0.85 $2.88 $2.82
Non-GAAP earnings per share
adjustments:
Restructuring charge (a) 0.03 0.04 0.28 0.04
Transition/duplicate operating
expense 0.01 -- 0.03 --
Buy-out of license agreement
with Johns Hopkins -- -- 0.02 --
Gain on sale of distribution
business in India -- -- (0.05) --
Loss/(gain) on sale of assets
primarily used for AMO
contract manufacturing -- -- (0.04) --
Termination of ISTA Vitrase
collaboration agreement -- -- (0.03) --
Interest related to previously
paid state income taxes and
income tax settlements -- -- (0.04) --
Technology transfer fee -- -- -- (0.02)
Patent infringement settlement -- -- -- (0.01)
Income from ISTA Vitrase
collaboration -- (0.03) -- (0.03)
Unrealized (gain) loss on
derivative instruments -- -- -- --
Resolution of uncertain tax
positions 0.01 -- (0.14) --
Tax effect of dividend
repatriation (0.04) -- 0.37 --
State income tax recovery -- -- (0.01) (0.05)
Minority interest effect of
sale of distribution business
in India -- -- 0.02 --
-------- -------- -------- --------
Adjusted diluted earnings per
share $0. 91 $0.86 $3.29 $2.75
======== ======== ======== ========
Year over year change 5.8% 19.6%
================= =================
(a) Including inventory adjustments reported in cost of sales of
$(0.1) million and $0.2 million for the three and twelve month
periods ending December 31, 2005, respectively.
ALLERGAN, INC.
Supplemental Non-GAAP Information
(Unaudited)
Three months ended $ change Percent change
Dec. 31, Dec. 31, in net sales in net sales
2005 2004 Total Perf- Cur- Total Perf- Curr-
ormance rency ormance ency
in millions
---------------
Eye Care
Pharma-
ceuticals $340.6 $302.0 $38.6 $39.2 $(0.6) 12.8% 13.0%(0.2)%
Botox/
Neuro-
modulator 227.3 202.9 24.4 25.8 (1.4) 12.0% 12.7%(0.7)%
Skin Care 27.0 29.5 (2.5) (2.5) -- (8.5)% (8.5)% --%
--------------------------------
Total Pharma-
ceutical sales 594.9 534.4 60.5 62.5 (2.0) 11.3% 11.7%(0.4)%
Other
(primarily
contract
sales) 0.0 21.8 (21.8)(21.8) -- (100.0)%(100.0)% --%
--------------------------------
Net sales, as
reported $594.9 $556.2 $38.7 $40.7 $(2.0) 7.0% 7.3%(0.3)%
================================
Alphagan P,
Alphagan
and Combigan $71.1 $63.9 $7.2 $7.6 $(0.4) 11.3% 11.9%(0.6)%
Lumigan 71.2 61.8 9.4 10.0 (0.6) 15.4% 16.3%(0.9)%
Other Glaucoma 4.3 4.3 -- -- -- --% --% --%
Restasis 53.2 34.3 18.9 18.8 0.1 55.0% 54.9% 0.1%
Domestic 66.9% 68.3%
International 33.1% 31.7%
Twelve months ended $ change Percent change
Dec. 31, Dec. 31, in net sales in net sales
2005 2004 Total Perf- Cur- Total Perf- Curr-
ormance rency ormance ency
in millions
---------------
Eye Care
Pharma-
ceuticals $1,321.7 $1,137.1 $184.6 $170.3 $14.3 16.2% 15.0%1.2%
Botox/
Neuro-
modulator 830.9 705.1 125.8 118.1 7.7 17.8% 16.7%1.1%
Skin Care 120.2 103.4 16.8 16.7 0.1 16.2% 16.2% --%
--------------------------------------
Total Pharma-
ceutical
sales 2,272.8 1,945.6 327.2 305.1 22.1 16.8% 15.7%1.1%
Other
(primarily
contract
sales) 46.4 100.0 (53.6) (53.8) 0.2 (53.6)%(53.8)%0.2%
--------------------------------------
Net sales, as
reported $2,319.2 $2,045.6 $273.6 $251.3 $22.3 13.4% 12.3%1.1%
======================================
Alphagan P,
Alphagan
and Combigan $277.2 $268.9 $8.3 $6.1 $2.2 3.1% 2.3%0.8%
Lumigan 267.6 232.9 34.7 32.5 2.2 14.9% 13.9%1.0%
Other
Glaucoma 18.0 19.1 (1.1) (1.6) 0.5 (5.9)% (8.5)%2.6%
Restasis 190.9 99.8 91.1 90.9 0.2 91.2% 91.0%0.2%
Domestic 67.5% 69.1%
International 32.5% 30.9%
In this press release, Allergan reported sales performance using
the non-GAAP financial measure of constant currency sales. Constant
currency sales represent current period reported sales adjusted for
the translation effect of changes in average foreign exchange rates
between the current period and the corresponding period in the prior
year. Allergan calculates the currency effect by comparing adjusted
current period reported amounts, calculated using the monthly average
foreign exchange rates for the corresponding period in the prior year,
to the actual current period reported amounts. Management refers to
growth rates at constant currency so that sales results can be viewed
without the impact of changing foreign currency exchange rates,
thereby facilitating period-to-period comparisons of Allergan's sales.
Generally, when the dollar either strengthens or weakens against other
currencies, the growth at constant currency rates will be higher or
lower, respectively, than growth reported at actual exchange rates.
ALLERGAN, INC.
Supplemental Non-GAAP Information Regarding Botox(R) Net Sales
in Japan
(Unaudited)
Year ended
December December
31, 31,
2005 2004
Japan Botox(R) Net Sales (in
millions)
------------------------------
Fiscal Quarter 1 $7.9 $6.4
Fiscal Quarter 2 9.4 8.3
Fiscal Quarter 3 10.1 8.3
Fiscal Quarter 4 11.4 9.5
------------------
Total Year $38.8 $32.5
==================
|
|
||||||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion