Allergan Reports Second Quarter Operating Results.-- Pharmaceutical Sales Increased 14 Percent for the Second Quarter -- Board of Directors Declares Second Quarter Dividend 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) ) today announced operating results for the second quarter ended June June: see month. 25, 2004. 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 second quarter dividend of $0.09 per share, payable on September September: see month. 16, 2004 to stockholders of record on August 18, 2004. Operating Results For the quarter ended June 25, 2004: --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 $506.2 million, including $27.3 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. --Pharmaceutical sales were up 13.7 percent, or 12.0 percent at constant currency, compared to pharmaceutical sales in the second quarter of 2003. --Allergan reported $0.69 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 , including recognition of an income tax benefit for previously paid state income taxes and the effect of an unrealized gain Unrealized Gain A profit that results from holding on to an asset rather than cashing it in and using the funds. Notes: Let's say you own a stock that has doubled, but you haven't sold it yet. This is said to be an unrealized gain. 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. , totaling $0.3 million pre-tax pre-tax adj → anterior al impuesto pre-tax adj → avant impôt(s) pre-tax adj → al lordo d'imposta and $6.3 million after tax, compared to the $0.83 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. loss per share reported for the second quarter of 2003. --Allergan's adjusted diluted earnings per share were $0.64, representing a 20.8 percent increase compared to adjusted diluted earnings per share of $0.53 reported for the second quarter of 2003. Adjusted diluted earnings per share for the second quarter of 2004 exclude the effects of the income tax benefit and the unrealized gain. A reconciliation of the adjustments made from reported earnings per share to adjusted earnings per share is contained in the financial tables of this document. "We are very pleased with our continued strong sales growth in the second quarter. During the second quarter, we entered into several strategic 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 agreements and completed the spin-off The situation that arises when a parent corporation organizes a subsidiary corporation, to which it transfers a portion of its assets in exchange for all of the subsidiary's capital stock, which is subsequently transferred to the parent corporation's shareholders. of our retinoid retinoid /ret·i·noid/ (ret´i-noid) 1. resembling the retina. 2. retinal, retinol, or any structurally similar natural derivative or synthetic compound, with or without vitamin A activity. discovery platform. These events should help continue to drive value maximization Value Maximization Increases in owners' wealth achieved by maximizing of the value of a firm's common stock. of our assets globally and further demonstrate Allergan's focus on positioning itself as a premier 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 company," said David E.I. Pyott, Allergan's Chairman of the Board, President and Chief Executive Officer. Product and Pipeline Update During the second quarter of 2004: --Allergan submitted a New Drug Application to the United States Food and Drug Administration United States Food and Drug Administration (FDA), n.pr a unit of the Public Health Service created to protect the health of the nation against impure and unsafe foods, drugs, and cosmetics. (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. ) for a new formulation formulation /for·mu·la·tion/ (for?mu-la´shun) the act or product of formulating. American Law Institute Formulation of Alphagan Alphagan Brimonidine Ophthalmology An alpha-2 agonist for treating open-angle glaucoma. See Open angle glaucoma. (R) P. --Allergan announced that it entered into an exclusive licensing agreement with Senju Pharmaceutical Co., Ltd. to develop and market Lumigan Lumigan is a drug used in the reduction of intraocular pressure (IOP) in patients with open-angle glaucoma or ocular hypertension; should be used in patients who are intolerant of other IOP-lowering medications or failed treatment with another IOP-lowering medication. (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 ophthalmic solution n. A sterile solution that is free from foreign particles and is compounded and dispensed for eyedrops. 0.03 percent) within the Japanese Japanese (jăp'ənēz`), language of uncertain origin that is spoken by more than 125 million people, most of whom live in Japan. There are also many speakers of Japanese in the Ryukyu Islands, Korea, Taiwan, parts of the United States, and ophthalmic ophthalmic /oph·thal·mic/ (of-thal´mik) ocular (1). oph·thal·mic adj. Of or relating to the eye; ocular. Ophthalmic Pertaining to the eye. specialty market. --Allergan announced that it entered into an exclusive licensing agreement with Kyorin Pharmaceutical Co., Ltd. to develop and market the Alphagan(R) / Alphagan(R) P Franchise (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. solution 0.2 percent and Brimonidine Tartrate Purite solution 0.15 percent) within the Japanese ophthalmic specialty market. Subsequently, Kyorin sub-licensed this right to Senju Pharmaceutical Co., Ltd. --Allergan announced that it was selected as a partner to supply its novel ophthalmic formulation of triamcinolone triamcinolone /tri·am·cin·o·lone/ (tri?am-sin´o-lon) a synthetic glucocorticoid used in replacement therapy for adrenocortical insufficiency and as an antiinflammatory and immunosuppressant in a wide variety of disorders. for two National Eye Institute sponsored clinical trials on macular edema macular edema Ophthalmology Waxing and waning retinal thickening due to the accumulation of fluid, seen in Pts with diabetic retinopathy, seen with a binocular slit lamp or stereoscopic fundus photography; while ME has no visual consequences, it is often (swelling swelling /swell·ing/ (swel´ing) 1. transient abnormal enlargement of a body part or area not due to cell proliferation. 2. an eminence, or elevation. of the retina). --Lupin Limited announced that its wholly owned subsidiary Wholly Owned Subsidiary A subsidiary whose parent company owns 100% of its common stock. Notes: In other words, the parent company owns the company outright and there are no minority owners. , Lupin Pharmaceuticals, Inc., entered into an agreement with Allergan to promote Zymar(R) 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. pediatric pediatric /pe·di·at·ric/ (pe?de-at´rik) pertaining to the health of children. pe·di·at·ric adj. Of or relating to pediatrics. specialty market. --Allergan announced that Concurrent At the same time. It implies that multiple processes are taking place simultaneously. See concurrent operation. Pharmaceuticals, Inc., a privately held biopharmaceutical company, agreed to acquire certain rights to Allergan's pre-clinical programs and its broad research portfolio in retinoid and rexinoid nuclear receptor In the field of molecular biology, nuclear receptors are a class of proteins found within the interior of cells that are responsible for sensing the presence of hormones and certain other molecules. compounds. Following the end of the second quarter of 2004: --Allergan filed Investigational New Drug (IND) applications with the FDA for PEP005 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. , a topical formulation of its lead component PEP005. The individual INDs are for the treatment of actinic keratosis actinic keratosis n. A warty lesion, often premalignant, occurring on the sun-exposed skin of the face or hands, especially of light-skinned persons. Also called senile keratosis. , a pre-cancerous skin condition, and for basal cell carcinoma basal cell carcinoma n. A slow-growing, locally invasive, but rarely metastasizing neoplasm of the skin derived from basal cells of the epidermis or hair follicles. Also called basal cell epithelioma. , the most common form of non-melanoma skin cancer Skin Cancer, Non-Melanoma Definition Non-melanoma skin cancer is a malignant growth of the external surface or epithelial layer of the skin. Description . --Allergan filed an IND application with the FDA for its proton pump inhibitor proton pump inhibitor n. A class of drugs that inhibit gastric acid secretion by interfering with the movement of hydrogen ions across cell membranes and are used mainly to treat peptic ulcers, gastroesophageal reflux disease, and esophagitis. pro drug for the treatment of gastrointestinal disease gastrointestinal disease, n an abnormal state or function of the GI system. . --On July July: see month. 12, 2004, the United States FDA Joint Dermatologic dermatological, dermatologic pertaining to dermatology; of or affecting the skin. & Ophthalmic Drugs and Drug Safety & Risk Management Advisory Committee recommended against approval of oral tazarotene tazarotene /ta·zar·o·tene/ (tah-zar´o-ten) a retinoid prodrug used topically in the treatment of acne vulgaris and psoriasis. tazarotene Allergan®, Tazorac®, Zorac® for the treatment of moderate to very severe 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 . Allergan maintains its belief that oral tazarotene may offer patients with moderate to severe psoriasis a safe and effective treatment option. Allergan intends to work closely with the FDA to address the issues raised by the FDA Joint Advisory Committee. --On July 20, 2004, Allergan announced that the FDA approved 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) for the treatment of severe primary axillary ax·il·lar·y n. Relating to the axilla. Axillary Located in or near the armpit. Mentioned in: Mastectomy axillary of or pertaining to the armpit. hyperhidrosis Hyperhidrosis Definition Hyperhidrosis is a disorder marked by excessive sweating. It usually begins at puberty and affects the palms, soles, and armpits. (severe underarm un·der·arm adj. Located, placed, or used under the arm. n. The armpit. sweating sweating /sweat·ing/ perspiration; the functional secretion of sweat. sweating 1. the production of sweat. Its importance as a cooling mechanism varies between species, being important in cows but not so in dogs. See also sweat. 2. ) that is inadequately managed with topical agents. Effective July 9, 2004, Ronald M. Cresswell Cresswell is a surname, and may refer to
Outlook For the third quarter of 2004, Allergan estimates: --Total pharmaceutical only sales between $470 million and $485 million. --Adjusted diluted earnings per share between $0.66 and $0.67. For the full year of 2004: --Allergan is increasing the expected range of Alphagan(R) Franchise sales by $15 million to between $215 million and $255 million. --All other product sales guidance provided in April 2004 remains unchanged. --Total pharmaceutical sales guidance and contract sales guidance provided in April 2004 remains unchanged. --Income statement ratio guidance provided in April 2004 remains unchanged. --Adjusted diluted earnings per share guidance between $2.72 and $2.75 provided in April 2004 remains unchanged. Adjusted diluted earnings per share guidance excludes any non-GAAP adjustments to diluted earnings per share. 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, and statements from Mr. Pyott, 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. 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 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. 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 2003 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 the Company's Form 10-Q Form 10-Q See 10-Q. for the quarter ended March 26, 2004. Copies of Allergan's 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 specialty pharmaceutical products worldwide. Allergan develops and commercializes products in the eye care, neuromodulator neuromodulator /neu·ro·mod·u·la·tor/ (-mod´u-la?ter) a substance, other than a neurotransmitter, released by a neuron and transmitting information to other neurons, altering their activities. , skin care 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 Operations and
Reconciliation of Non-GAAP Adjustments
(Unaudited)
Three months ended
in millions, except per share amounts June 25, 2004
Non-GAAP
GAAP Adjustments Adjusted
Product sales
Net sales $506.2 $-- $506.2
Cost of sales 96.2 -- 96.2
Product gross margin 410.0 -- 410.0
Research services
Research service revenues -- -- --
Cost of research services -- -- --
Research services margin -- -- --
Selling, general and administrative 196.7 -- 196.7
Research and development 88.5 -- 88.5
Operating income (loss) 124.8 -- 124.8
Interest income 2.2 -- 2.2
Interest expense (3.7) -- (3.7)
Unrealized gain (loss) on derivative
instruments, net 0.3 (0.3)(a) --
Gain (loss) on investments, net -- -- --
Other, net (1.2) -- (1.2)
(2.4) (0.3) (2.7)
Earnings (loss) before income taxes
and minority interest 122.4 (0.3) 122.1
Provision (benefit) for income taxes 30.4 6.0(c) 36.4
Minority interest 0.2 -- 0.2
Net earnings (loss) $91.8 $(6.3) $85.5
Net earnings (loss) per share:
Basic $ 0.70 $ 0.65
Diluted $ 0.69 $ 0.64
Weighted average number of common
shares outstanding:
Basic 131.6 131.6
Diluted 133.7 133.7
Selected ratios as a percentage of net
sales
Gross profit 81.0% 81.0%
Selling, general and administrative 38.9% 38.9%
Research and development 17.5% 17.5%
Three months ended
in millions, except per share amounts June 27, 2003
Non-GAAP
GAAP Adjustments Adjusted
Product sales
Net sales $441.5 $-- $441.5
Cost of sales 80.1 -- 80.1
Product gross margin 361.4 -- 361.4
Research services
Research service revenues 6.2 -- 6.2
Cost of research services 5.6 -- 5.6
Research services margin 0.6 -- 0.6
Selling, general and administrative 185.1 -- 185.1
Research and development 355.7 (278.8)(b) 76.9
Operating income (loss) (178.8) 278.8 100.0
Interest income 4.0 -- 4.0
Interest expense (4.6) -- (4.6)
Unrealized gain (loss) on derivative
instruments, net (0.2) 0.2(a) --
Gain (loss) on investments, net 0.1 -- 0.1
Other, net (1.4) -- (1.4)
(2.1) 0.2 (1.9)
Earnings (loss) before income taxes
and minority interest (180.9) 279.0 98.1
Provision (benefit) for income taxes (73.4) 100.9(d) 27.5
Minority interest 0.4 -- 0.4
Net earnings (loss) $(107.9) $178.1 $70.2
Net earnings (loss) per share:
Basic $ (0.83) $ 0.54
Diluted $ (0.83) $ 0.53
Weighted average number of common
shares outstanding:
Basic 130.3 130.3
Diluted 130.3 132.9
Selected ratios as a percentage of net
sales
Gross profit 81.9% 81.9%
Selling, general and administrative 41.9% 41.9%
Research and development 80.6% 17.4%
(a) Unrealized gain/(loss) on the mark-to-market adjustment to
derivative instruments.
(b) In-process research and development charge related to the
acquisition of Bardeen Sciences Company, LLC.
(c) Income tax benefit for previously paid state income taxes and tax
effect for non-GAAP adjustments.
(d) 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 six months ended June 25,
2004 and June 27, 2003. 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 Operations and
Reconciliation of Non-GAAP Adjustments
(Unaudited)
Six months ended
in millions, except per share amounts June 25, 2004
Non-GAAP
GAAP Adjustments Adjusted
Product sales
Net sales $978.6 $-- $978.6
Cost of sales 183.8 -- 183.8
Product gross margin 794.8 -- 794.8
Research services
Research service revenues -- -- --
Cost of research services -- -- --
Research services margin -- -- --
Selling, general and administrative 377.3 2.4(a) 379.7
Research and development 174.6 -- 174.6
Operating income (loss) 242.9 (2.4) 240.5
Interest income 4.2 -- 4.2
Interest expense (7.4) -- (7.4)
Unrealized gain (loss) on derivative
instruments, net 0.2 (0.2)(c) --
Gain (loss) on investments, net -- -- --
Other, net (1.3) -- (1.3)
(4.3) (0.2) (4.5)
Earnings (loss) before income taxes
and minority interest 238.6 (2.6) 236.0
Provision (benefit) for income taxes 65.5 5.1(d) 70.6
Minority interest 0.5 -- 0.5
Net earnings (loss) $172.6 $(7.7) $164.9
Net earnings (loss) per share:
Basic $ 1.32 $ 1.26
Diluted $ 1.29 $ 1.24
Weighted average number of common
shares outstanding:
Basic 131.2 131.2
Diluted 133.3 133.3
Selected ratios as a percentage of net
sales
Gross profit 81.2% 81.2%
Selling, general and administrative 38.6% 38.8%
Research and development 17.8% 17.8%
Six months ended
in millions, except per share amounts June 27, 2003
Non-GAAP
GAAP Adjustments Adjusted
Product sales
Net sales $832.7 $-- $832.7
Cost of sales 148.5 -- 148.5
Product gross margin 684.2 -- 684.2
Research services
Research service revenues 16.0 -- 16.0
Cost of research services 14.5 -- 14.5
Research services margin 1.5 -- 1.5
Selling, general and administrative 355.1 -- 355.1
Research and development 411.6 (278.8)(b) 132.8
Operating income (loss) (81.0) 278.8 197.8
Interest income 8.1 -- 8.1
Interest expense (8.3) -- (8.3)
Unrealized gain (loss) on derivative
instruments, net (1.0) 1.0(c) --
Gain (loss) on investments, net (0.2) -- (0.2)
Other, net (0.6) -- (0.6)
(2.0) 1.0 (1.0)
Earnings (loss) before income taxes
and minority interest (83.0) 279.8 196.8
Provision (benefit) for income taxes (46.0) 101.1(e) 55.1
Minority interest 0.7 -- 0.7
Net earnings (loss) $(37.7) $178.7 $141.0
Net earnings (loss) per share:
Basic $ (0.29) $ 1.08
Diluted $ (0.29) $ 1.07
Weighted average number of common
shares outstanding:
Basic 130.0 130.0
Diluted 130.0 132.3
Selected ratios as a percentage of net
sales
Gross profit 82.2% 82.2%
Selling, general and administrative 42.6% 42.6%
Research and development 49.4% 15.9%
(a) Patent infringement settlement.
(b) In-process research and development charge related to the
acquisition of Bardeen Sciences Company, LLC.
(c) Unrealized gain/(loss) on the mark-to-market adjustment to
derivative instruments.
(d) Income tax benefit for previously paid state income taxes and tax
effect for non-GAAP adjustments.
(e) Tax effect for non-GAAP adjustments.
"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)
June 25, December 31,
in millions 2004 2003
Assets
Cash and equivalents $650.6 $507.6
Trade receivables, net 282.3 220.1
Inventories 83.5 76.3
Other current assets 134.7 124.2
Total current assets 1,151.1 928.2
Property, plant and equipment, net 432.8 422.5
Other noncurrent assets 417.3 404.2
Total assets $2,001.2 $1,754.9
Liabilities and stockholders' equity
Notes payable $36.3 $24.4
Accounts payable 90.7 87.2
Accrued expenses and income taxes 253.7 271.8
Total current liabilities 380.7 383.4
Long-term debt 566.5 573.3
Other liabilities 107.3 79.6
Stockholders' equity 946.7 718.6
Total liabilities and stockholders' equity $2,001.2 $1,754.9
Days on Hand (DOH) 79 78
Days Sales Outstanding (DSO) 51 42
Cash, net of debt $47.8 $(90.1)
Debt-to-capital percentage 38.9% 45.4%
ALLERGAN, INC.
Reconciliation of Diluted Earnings Per Share
(Unaudited)
in millions, except per share Three months ended Six months ended
amounts June 25, June 27, June 25, June 27,
2004 2003 2004 2003
Net earnings (loss), as reported $91.8 $(107.9) $172.6 $(37.7)
Non-GAAP pre-tax adjustments:
In-process research and
development -- 278.8 -- 278.8
Patent infringement settlement -- -- (2.4) --
Unrealized (gain) loss on
derivative instruments (0.3) 0.2 (0.2) 1.0
91.5 171.1 170.0 242.1
Tax effect for above items 0.1 (100.9) 1.0 (101.1)
State income tax recovery (6.1) -- (6.1) --
Adjusted diluted earnings 85.5 70.2 164.9 141.0
Interest expense from convertible
subordinated notes, net of tax -- 0.2 -- 0.4
$85.5 $70.4 $164.9 $141.4
Weighted average number of shares
issued 131.6 130.3 131.2 130.0
Net shares assumed issued using
the treasury stock method for
options outstanding during each
period based on average market
price 2.1 2.2 2.1 1.9
Dilutive effect of assumed
conversion of convertible
subordinated notes outstanding -- 0.4 -- 0.4
133.7 132.9 133.3 132.3
Diluted earnings (loss) per share,
as reported $0.69 $(0.83) $1.29 $(0.29)
Effect of additional dilutive
shares(a) -- 0.02 -- 0.01
0.69 (0.81) 1.29 (0.28)
Non-GAAP earnings per share
adjustments:
In-process research and
development -- 1.34 -- 1.35
Patent infringement settlement -- -- (0.01) --
State income tax recovery (0.05) -- (0.04) --
Adjusted diluted earnings per
share $0.64 $0.53 $1.24 $1.07
Year over year change 20.8% 15.9%
(a) The number of shares used to calculate adjusted diluted earnings
per share includes the dilutive effect of outstanding stock options
and the assumed conversion of convertible subordinated notes.
ALLERGAN, INC.
Supplemental Non-GAAP Information
(Unaudited)
Three months ended
June 25, June 27, $ change in net sales
2004 2003 Total Perfor- Curr-
mance ency
in millions
Eye Care Pharmaceuticals $277.6 $253.3 $24.3 $19.8 $4.5
Botox/Neuromodulator 176.9 143.1 33.8 31.2 2.6
Skin Care 24.4 24.7 (0.3) (0.4) 0.1
Total 478.9 421.1 57.8 50.6 7.2
Other (primarily contract sales) 27.3 20.4 6.9 6.8 0.1
Net sales, as reported $506.2 $441.5 $64.7 $57.4 $7.3
Alphagan P and Alphagan $62.4 $64.7 $(2.3) $(3.3) $1.0
Lumigan 57.3 44.9 12.4 11.4 1.0
Other Glaucoma 5.3 5.9 (0.6) (0.8) 0.2
Restasis 20.1 11.8 8.3 8.3 --
Tazorac, Zorac and Avage 17.2 16.8 0.4 0.3 0.1
Domestic 68.7% 70.4%
International 31.3% 29.6%
Percent change in net sales
Total Performance Currency
Eye Care Pharmaceuticals 9.6% 7.8% 1.8%
Botox/Neuromodulator 23.6% 21.8% 1.8%
Skin Care (1.2)% (1.6)% 0.4%
Total 13.7% 12.0% 1.7%
Other (primarily contract sales) 33.8% 33.3% 0.5%
Net sales, as reported 14.7% 13.0% 1.7%
Alphagan P and Alphagan (3.6)% (5.1)% 1.5%
Lumigan 27.6% 25.4% 2.2%
Other Glaucoma (10.2)% (13.4)% 3.2%
Restasis 70.3% 70.3% --
Tazorac, Zorac and Avage 2.4% 1.7% 0.7%
Six months ended
June 25, June 27, $ change in net sales
2004 2003 Total Perfor- Curr-
mance ency
in millions
Eye Care Pharmaceuticals $549.7 $474.3 $75.4 $60.2 $15.2
Botox/Neuromodulator 327.6 266.2 61.4 53.3 8.1
Skin Care 49.1 50.6 (1.5) (1.6) 0.1
Total 926.4 791.1 135.3 111.9 23.4
Other (primarily contract
sales) 52.2 41.6 10.6 10.4 0.2
Net sales, as reported $978.6 $832.7 $145.9 $122.3 $23.6
Alphagan P and Alphagan $131.6 $142.1 $(10.5) $(13.8) $3.3
Lumigan 110.8 82.8 28.0 24.9 3.1
Other Glaucoma 10.2 11.2 (1.0) (1.7) 0.7
Restasis 41.4 11.8 29.6 29.6 --
Tazorac, Zorac and Avage 35.1 36.6 (1.5) (1.5) --
Domestic 69.6% 71.5%
International 30.4% 28.5%
Percent change in net sales
Total Performance Currency
Eye Care Pharmaceuticals 15.9% 12.7% 3.2%
Botox/Neuromodulator 23.1% 20.0% 3.1%
Skin Care (3.0)% (3.2)% 0.2%
Total 17.1% 14.1% 3.0%
Other (primarily contract sales) 25.5% 25.0% 0.5%
Net sales, as reported 17.5% 14.7% 2.8%
Alphagan P and Alphagan (7.4)% (9.7)% 2.3%
Lumigan 33.8% 30.0% 3.8%
Other Glaucoma (8.9)% (15.4)% 6.5%
Restasis 250.8% 250.8% --
Tazorac, Zorac and Avage (4.1)% (4.1)% --
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.
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