Allergan Reports Second Quarter Operating Results.Business Editors 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.--(BUSINESS WIRE)--July 24, 2002 -- Pharmaceutical-Only Earnings Per Share Up 21.6 Percent, Excluding One-Time Items -- Pharmaceutical-Only Sales Up 23.8 Percent, at Constant Currency Rates and Excluding Divested Products -- Botox sales increased 47.5 percent to $112 million, at Constant Currency Rates -- Board of Directors Declares Quarterly 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 quarter ended June June: see month. 28, 2002. Allergan also today announced that its Board of Directors has declared a second quarter dividend of $0.09 per share, payable on September September: see month. 19, 2002 to stockholders of record on August 22, 2002. Allergan & 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. Consolidated Allergan and Advanced Medical Optics, Inc. (AMO AMO - America's Multimedia Online ), which was spun-off from Allergan on June 29, 2002, reported consolidated 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 of $475.7 million for the quarter ended June 28, 2002. Worldwide net sales increased 14.0 percent, or 15.4 percent at constant currency rates excluding divested products, over the second quarter of 2001. At constant currency rates and excluding divested products, sales for the six months ended June 28, 2002 increased by 14.1 percent over the first six months of 2001. Including the impact of currency rates and divested products, sales for the first six months ended June 28, 2002 were $907.9 million, an 11.6 percent increase over the six months ended June 29, 2001. Allergan and AMO reported consolidated 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 of $0.03 for the second quarter ended June 28, 2002. Excluding pre-tax pre-tax adj → anterior al impuesto pre-tax adj → avant impôt(s) pre-tax adj → al lordo d'imposta restructuring restructuring - The transformation from one representation form to another at the same relative abstraction level, while preserving the subject system's external behaviour (functionality and semantics). , asset write-off Write-Off A reduction in the value of an asset or earnings by the amount of an expense or loss. Companies are able to write off certain expenses that are required to run the business, or have been incurred in the operation of the business and detract from retained revenues. and duplicate DUPLICATE. The double of anything. 2. It is usually applied to agreements, letters, receipts, and the like, when two originals are made of either of them. Each copy has the same effect. operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. of $94.4 million, or $0.51 per share, and an unrealized loss Unrealized Loss A loss that results from holding onto an asset rather than cashing it in and officially taking the loss. Notes: Let's say you own a stock that is down 50%, but you haven't sold it to realize the loss yet. This is said to be an unrealized loss. on derivatives derivatives In finance, contracts whose value is derived from another asset, which can include stocks, bonds, currencies, interest rates, commodities, and related indexes. Purchasers of derivatives are essentially wagering on the future performance of that asset. of $0.03 per share, the second quarter consolidated diluted earnings per share were $0.57. For the six months ended June 28, 2002, Allergan and AMO reported consolidated diluted earnings per share of $0.36. Excluding pre-tax restructuring, asset write-off and duplicate operating expenses of $116.6 million, or $0.63 per share, a $0.04 per share unrealized loss on derivative instruments Derivative instruments Contracts such as options and futures whose price is derived from the price of an underlying financial asset. , a $0.01 per share gain on partnering deals, and a $0.04 per share loss on equity investments, consolidated diluted earnings per share for the six months ended June 28, 2002 amounted to $1.06. At June 28, 2002, Allergan's net worth was $843.5 million. The Company held $854.8 million in cash and cash equivalents at June 28, 2002. Allergan's debt-to-capital percentage was 51 percent at June 28, 2002. Allergan's and AMO's consolidated debt of $865.7 million includes $297.2 million of new debt that was incurred by AMO in connection with its separation from Allergan. The Company's days-sales-outstanding was 64 and inventory days-on-hand level was 114. Allergan Specialty Pharmaceutical (Only) Performance At constant currency rates and excluding divested products, worldwide second quarter sales increased 23.8 percent over the comparable period last year for Allergan's specialty pharmaceutical businesses, including the eye care pharmaceutical, 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)/neuromodulator and skin care product lines. Net specialty pharmaceutical sales were $338.0 million for the quarter ended June 28, 2002. Excluding the unrealized non-cash loss on foreign currency derivative instruments of $0.02 per share, charges associated with 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 AMO, including a restructuring charge restructuring charge The expense of reorganizing a company's operations. A restructuring charge is an infrequent expense that generally results from asset writedowns or facility closings. and asset write-off of $0.28 per share and duplicate operating expenses of $0.17 per share, carve-out Carve-out 1. Sometimes known as a partial spinoff, a carve out occurs when a parent company sells a minority (usually 20% or less) stake in a subsidiary for an IPO or rights offering. 2. 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 for Allergan's specialty pharmaceutical businesses amounted to $0.45 per share for the quarter ended June 28, 2002. For the quarter ended June 28, 2002, the unaudited estimate of Allergan's specialty pharmaceutical businesses 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 was $0.43 per share, a 22.9% increase over $0.35 per share for last year's second quarter. The 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 estimates reflect the approximate impact of additional expenses that would have been incurred in the second quarters of both 2001 and 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. . Including the above restructuring and special charges and the unrealized loss on derivative instruments, Allergan's specialty pharmaceutical businesses reported a carve-out loss per share for the quarter ended June 28, 2002 of $0.02. Excluding the net year-to-date Year-to-date (YTD) The period beginning at the start of the calendar year up to the current date. unrealized non-cash loss on derivative instruments of $0.02 per share, charges associated with the spin-off of AMO, including a restructuring charge and asset write-off of $0.36 per share and duplicate operating expenses of $0.21 per share, and other one-time items of $0.03 per share, carve-out diluted earnings for Allergan's specialty pharmaceutical businesses for the first six months of 2002 were $0.90 per share. For the six months ended June 28, 2002, the unaudited estimate of pro forma diluted earnings for Allergan's specialty pharmaceutical businesses was $0.86 per share, a 22.9% increase over $0.70 per share for the first half of 2001. The pro forma earnings per share estimates reflect the approximate impact of additional expenses that would have been incurred in the first six months of both 2001 and 2002 if Allergan's specialty pharmaceutical businesses and AMO had been operating as stand-alone companies. The 2001 six-month earnings per share amount includes amortization of goodwill of $0.01 per share, which is not included in 2002 as a result of the adoption of SFAS SFAS Statement of Financial Accounting Standards SFAS Special Forces Assessment and Selection SFAS Student Financial Aid Services SFAS Sport Fishing Association of Singapore SFAS Safety Features Actuation System SFAS Statewide Fixed Assets System No. 142. Including the restructuring and special charges related to the AMO spin-off and the unrealized loss on derivative instruments, the loss on equity investment and gain on partnering deals, Allergan reported carve-out diluted earnings per share of $0.28 for the first six months of 2002. "Regulatory approvals received over the last 18 months continue to fuel Allergan's top-line growth. Allergan has completed the strategic spin-off of AMO on time and according to according to prep. 1. As stated or indicated by; on the authority of: according to historians. 2. In keeping with: according to instructions. 3. our business plan, at a time of accelerating sales and earnings strength. With the focus of two management teams on their respective pharmaceutical and medical device businesses, the prospects for both companies are extremely exciting," said Allergan Chairman, 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. , David E.I. Pyott. Eye Care Pharmaceutical Product Line At constant currency rates and excluding divested products, second quarter 2002 worldwide eye care pharmaceutical sales increased 15.5 percent over the second quarter of 2001. Including the effects of currency rates and divested products, second quarter worldwide eye care pharmaceutical sales amounted to $206.2 million, a 12.7 percent increase over last year's $182.9 million. At constant currency rates and excluding divested products, worldwide eye care pharmaceutical sales for the first six months of 2002 increased 14.3 percent over the same period in the prior year. Including the effects of currency rates and divested products, six-month worldwide eye care pharmaceutical sales for 2002 amounted to $414.0 million, an 11.1 percent increase over last year's $372.6 million. Worldwide net product sales for the Alphagan Alphagan Brimonidine Ophthalmology An alpha-2 agonist for treating open-angle glaucoma. See Open angle glaucoma. (R) ophthalmic solutions ophthalmic solution n. A sterile solution that is free from foreign particles and is compounded and dispensed for eyedrops. product line, which includes both Alphagan(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 0.2%) and Alphagan(R) P (Brimonidine Tartrate Ophthalmic Solution 0.15%), preserved with Purite(R), indicated for lowering intraocular pressure intraocular pressure n. The pressure of the intraocular fluid within the eye. intraocular pressure (in´tr (IOP IOP intraocular pressure. IOP Intraocular pressure, see there ) in patients with ocular hypertension Ocular hypertension (OHT) is intraocular pressure higher than normal in the absence of optic nerve damage or visual field loss.[1][2] Current consensus in ophthalmology defines normal introcular pressure (IOP) as that between 10 mmHg and 21 mmHg. and primary open angle glaucoma glaucoma (glôkō`mə), ocular disorder characterized by pressure within the eyeball caused by an excessive amount of aqueous humor (the fluid substance filling the eyeball). , were $59.9 million in the second quarter of 2002, an increase of 4.5 percent, or 4.3 percent at constant currency rates over the same period last year. For the six months ended June 28, 2002, worldwide net product sales for the Alphagan(R) ophthalmic solutions product line amounted to $134.7 million, an increase of 8.9 percent, or 9.4 percent at constant currency rates over the same period last year. Worldwide net product 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%), indicated for the reduction of elevated intraocular pressure (IOP) in patients with open-angle glaucoma o·pen-an·gle glaucoma n. Primary glaucoma in which the aqueous humor has free access to the trabecular reticulum. Also called simple glaucoma. or ocular hypertension who are intolerant in·tol·er·ant adj. Not tolerant, especially: a. Unwilling to tolerate differences in opinions, practices, or beliefs, especially religious beliefs. b. of other IOP-lowering medications or insufficiently responsive to another IOP-lowering medication, were $31.9 million for the second quarter and $53.0 million for the six months ended June 28, 2002. At constant currency rates, Allergan's sales of glaucoma products, comprising Alphagan(R), Alphagan(R) P, Lumigan(R) and Betagan(R), increased by 44.3 percent in the second quarter over the second quarter of 2001. During the second quarter of 2002, a new drug application (NDA (Non Disclosure Agreement) An agreement signed between two parties that have to disclose confidential information to each other in order to do business. In general, the NDA states why the information is being divulged and stipulates that it cannot be used for any ) was filed with the U.S. Food and Drug Administration (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 gatifloxacin gatifloxacin /gat·i·flox·a·cin/ (gat?i-flok´sah-sin) a fluoroquinoloneantibacterial effective against many gram-positive and gram-negative bacteria. 0.3% 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 . Allergan also received an approvable letter from the FDA on Combigan(TM) (brimonidine tartarate-timol maleate maleate /mal·e·ate/ (mal´e-at) any salt or ester of maleic acid. ma·le·ate n. 1. A salt of maleic acid. 2. An ester of maleic acid. ophthalmic solution) 0.2%/0.5%. The FDA response will necessitate ne·ces·si·tate tr.v. ne·ces·si·tat·ed, ne·ces·si·tat·ing, ne·ces·si·tates 1. To make necessary or unavoidable. 2. To require or compel. that an additional clinical trial be conducted. Allergan anticipates being able to supplement the NDA in the first half of 2004. Botox(R)/Neuromodulator Product Line At constant currency rates, Botox(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) net sales for the second quarter of 2002 increased by 47.5 percent over the second quarter of 2001. Including the effects of currency rates, sales for Botox(R) were $112.2 million during the second quarter of 2002, a 46.9 percent increase over 2001's second quarter sales of $76.4 million.At constant currency rates, Botox(R) net sales for the six months ended June 28, 2002 increased by 40.9 percent over the first half of 2001. Including the effects of currency rates, sales for Botox(R) were $200.8 million in the first six months of 2002, a 39.4 percent increase over the first half of 2001. During the second quarter of 2002, the FDA granted approval to 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) for the temporary improvement in the appearance of moderate-to-severe glabellar lines (vertical lines between the eyebrows) in adult men and women 65 or younger. Skin Care Product Line Sales for Allergan skin care products were $19.6 million for the quarter ended June 28, 2002, an increase of 4.8 percent from the $18.7 million in sales reported in the second quarter of 2001. Allergan reported skin care product sales of $41.4 million for the first six months of 2002, an increase of 12.8 percent over the comparable period in 2001. Worldwide net sales for Tazorac(R) and Zorac Zorac® Tazarotene, see there (R) brands (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® Gel and Cream 0.05% and 0.1%), 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 , were $14.5 million in the second quarter of 2002, a 44.1 percent increase, or a 44.2 percent increase at constant currency rates over the same period last year. For the first six months of 2002, worldwide net sales for the Tazorac(R) and Zorac(R) brands were $26.7 million, a 44.7 percent increase, or a 44.8 percent increase at constant currency rates over the same period last year. Year-to-date, Tazorac(R) new prescriptions and total prescriptions 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. have grown 45.7 percent and 49.2 percent, respectively, over the same period last year, according to Scott-Levin June 30, 2002 data. During the second quarter 2002, Allergan received an approvable letter for the supplemental New Drug Application for the use of tazarotene cream(0.1%) for signs and symptoms of premature aging of the skin caused by overexposure overexposure too long an exposure time or too high a milliamperage causing too black a picture, loss of detail and some anomalies of translucency. to the sun (photodamage photodamage Photoaging Dermatology The structural and functional deterioration of sun-exposed skin, resulting in wrinkling, roughness, altered texture, discoloration, acral lentigines, mottled hyperpigmentation, ↓ epidermal thickness, basophilic degeneration ). It is anticipated that the labeling will be finalized See finalization. and the product approved in the third quarter of this year. Allergan Specialty Pharmaceutical (Only) Additional Financial Highlights Excluding one-time items and duplicate operating expenses associated with the spin-off of AMO, gross profit for the second quarter of 2002 was $293.8 million, or 86.9 percent of net sales, which represents a 3.4 percentage point increase from the second quarter of 2001. The gross profit percentage for the six months ended June 28, 2002 was 86.4 percent, representing a 3.5 percentage point increase from the comparable 2001 percentage. The gross profit percentage increase in the first half 2002 compared with the first half of 2001 was primarily a result of shifts in the mix of products sold to higher margin products, Botox(R), Lumigan(R), and Tazorac(R), as well as an increase in the gross margin of all product lines. Excluding AMO and the effects of restructuring and asset write-offs and special charges, SG&A expenses increased $35.6 million in the second quarter over the same period last year to $156.0 million. SG&A for the pharmaceutical businesses only, excluding one-time items as a ratio to net sales was 46.2 percent for the second quarter of 2002, which compares with 43.3 percent for the second quarter of 2001. Excluding the effect of one-time items, research and development expenses for the pharmaceuticals businesses were $56.7 million and as a ratio to pharmaceutical net sales were 16.8 percent for the second quarter of 2002. Outlook for Allergan's Specialty Pharmaceutical Business For the third quarter of 2002, the Company estimates specialty pharmaceutical-only sales in the range of $330 million to $350 million. The Company estimates pharmaceutical-only earnings per share excluding one-time items of $0.44 for the third quarter and $0.55 in the fourth quarter of 2002. These estimates include anticipated costs estimated on a pro forma basis in the prior two quarters. The Company has increased year-over-year product line annual sales growth rate estimates for Botox(R) to approximately 40 percent and reiterated its guidance on growth in 11-18 percent range for the eye care and skin care pharmaceutical product lines. Allergan is updating its guidance for 2002 full-year product sales with an increase in Botox(R) to $430-440 million, an increase in Lumigan(R) to $105-115 million, a decrease in the Alphagan(R) franchise to $230-240 million and a decrease in Tazorac(R) to $65-75 million. As a result of exceeding the second quarter earnings per share consensus estimate by $0.01 and a tax adjustment that increased first quarter earnings by $0.01 per share, the Company is comfortable with increasing its 2002 pharmaceutical-only diluted earnings per share consensus by two cents to $1.85, on a full-year pro forma basis, excluding one-time items. This would represent a 25 percent increase over 2001 pharmaceutical-only pro forma diluted earnings of $1.48 per share. The pro forma earnings per share estimates reflect the approximate impact of additional expenses that would have been incurred in the full year of 2001 and first two quarters of 2002 if Allergan's specialty pharmaceutical businesses and AMO had been operating as stand-alone companies. In addition, Allergan has revised its objectives with respect to 2002 gross profit margins Gross profit margin Gross profit divided by sales, which is equal to each sales dollar left over after paying for the cost of goods sold. gross profit margin A measure calculated by dividing gross profit by net sales. excluding the impact of contract sales to AMO, to a level of approximately 85 percent. By 9:00 a.m. Eastern Daylight Time on July 25, 2002, historical quarterly statements of earnings will be on the Allergan Web site at www.allergan.com. Statements will provide quarterly earnings for 2001 and 2002 for: (1) consolidated as reported 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 Generally Accepted Accounting Principles The standard accounting rules, regulations, and procedures used by companies in maintaining their financial records. Generally accepted accounting principles (GAAP) provide companies and accountants with a consistent set of guidelines that cover both broad accounting (GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). ); (2) carve-out; (3) carve-out excluding non-recurring items; and (4) pharmaceutical-only with pro forma adjustments for the spin-off of AMO. 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 related 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, the Company's performance at times differs from its estimates and targets, and the Company often does not know what the actual results will be until after a quarter's end. Therefore, the Company 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 the Company. 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 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 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 2001 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 discussion under the heading "Risk Factors"in the Preliminary Information Statement filed as an exhibit to the amended a·mend v. a·mend·ed, a·mend·ing, a·mends v.tr. 1. To change for the better; improve: amended the earlier proposal so as to make it more comprehensive. 2. Form 10 filed by AMO with the Securities and Exchange Commission on April 18, 2002 and Allergan's Form 10-Q Form 10-Q See 10-Q. for the quarter ended March 28, 2002. 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, neuromuscular neuromuscular /neu·ro·mus·cu·lar/ (-mus´ku-ler) pertaining to nerves and muscles, or to the relationship between them. neu·ro·mus·cu·lar adj. 1. and skin care 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 Six Months Ended
June 28, June 29, June 28, June 29,
2002 2001 2002 2001
Product sales
Net sales $475.7 $417.2 $907.9 $813.3
Cost of sales 99.7 99.8 188.9 199.1
Product gross margin 376.0 317.4 719.0 614.2
Research services
Research service revenues
(primarily from related
parties through April 16,
2001) 8.7 14.6 18.2 41.5
Cost of research services 7.9 13.4 16.5 39.0
Research services margin 0.8 1.2 1.7 2.5
Selling, general and
administrative 244.2 179.1 446.2 368.3
Research and development 65.2 94.9 126.2 140.6
Technology fees from related
party -- (0.2) -- (0.7)
Restructuring charge and
asset write-off 50.7 -- 63.9 --
Operating income 16.7 44.8 84.4 108.5
Interest income 3.4 8.1 7.0 19.1
Interest expense (5.9) (5.6) (10.9) (10.9)
Gain on investments, net -- -- (8.0) --
Unrealized gains/(losses)
on derivative instruments (5.4) (1.1) (6.2) 4.9
Other, net (1.4) 1.4 2.8 2.0
(9.3) 2.8 (15.3) 15.1
Earnings before income taxes
and minority interest 7.4 47.6 69.1 123.6
Provision for income taxes 3.3 25.4 21.2 47.4
Minority interest 0.3 0.3 0.3 0.4
Net earnings before cumulative
effect of change in accounting
principle 3.8 21.9 47.6 75.8
Cumulative effect of change in
accounting principle, net $0.7
million of tax -- -- -- 1.8
Net earnings $ 3.8 $ 21.9(a) $ 47.6 $ 74.0(a)
Basic earnings per share:
Before cumulative effect of
change in accounting
principle $ 0.03 $ 0.17 $ 0.37 $ 0.57
Cumulative effect of
accounting change, net -- -- -- (0.01)
Net basic earnings per
share $ 0.03 $ 0.17(a) $ 0.37 $ 0.56(a)
Diluted earnings per share:
Before cumulative effect of
change in accounting
principle $ 0.03 $ 0.16 $ 0.36 $ 0.56
Cumulative effect of
accounting change, net -- -- -- (0.01)
Net diluted earnings per
share $ 0.03 $ 0.16(a) $ 0.36 $ 0.55(a)
Weighted average number of
common shares outstanding:
Basic 129.2 131.8 129.8 131.8
Diluted 130.9 134.6 131.4 134.4
(a) Includes amortization of goodwill amounting to $1.9 million, or
$0.01 per share, and $3.9 million, or $0.03 per share, after tax
for the three and six month periods ended June 29, 2001 which was
not included in 2002 due to adoption of SFAS No. 142.
ALLERGAN, INC.
Reconciliation of Non-Recurring Items
(Unaudited)
in millions, except
per share amounts Three Months Ended Six Months Ended
June 28, June 29, June 28, June 29,
2002 2001 2002 2001
Net earnings, as reported $ 3.8 $ 21.9(a) $ 47.6 $ 74.0(a)
Pro forma pre-tax
adjustments for
non-recurring items:
Restructuring charge and
asset write-off 57.8(b) -- 71.0(b) --
Duplicate operating
expenses 36.6 -- 45.6 --
Unrealized (gain)/loss on
derivative instruments 5.4 1.1 6.2 (2.4)
Partnering deals/ASTI
buyback -- 40.0 (1.0) 40.0
Loss on equity investment -- -- 8.0 --
99.8 41.1 129.8 37.6
Tax effect for
one-time/special items (29.3) (0.3) (38.0) 0.7
Net earnings, adjusted $ 74.3 $ 62.7(a) $139.4 $112.3(a)
Diluted earnings per
share, as reported $0.03 $0.16(a) $0.36 $0.55(a)
Non-recurring adjustments:
Restructuring charge and
asset write-off 0.31 -- 0.38 --
Duplicate operating expenses 0.20 -- 0.25 --
Unrealized (gain)/loss on
derivative instruments 0.03 0.01 0.04 (0.01)
Partnering deals/ASTI
buyback -- 0.30 (0.01) 0.30
Loss on equity investment -- -- 0.04 --
Adjusted earnings per share $ 0.57 $ 0.47(a) $ 1.06 $ 0.84(a)
Adjusted year over year
change 21.3% 26.2%
(a) Includes amortization of goodwill amounting to $1.9 million and
$3.9 million after tax for the three and six month periods ended
June 29, 2001, or $0.01 and $0.03 per share, respectively which is
not included in 2002 due to the adoption of SFAS No. 142.
(b) The restructuring charge and asset write-off include charges of
$3.6 million to cost of sales and $3.5 million to other, net for
the quarter and six months ended June 28, 2002.
ALLERGAN, INC.
Condensed Consolidated Balance Sheets
(Unaudited)
in millions June 27, December 31,
2002 2001
Assets
Cash and equivalents $ 854.8 $ 781.9
Trade receivables, net 333.3 279.4
Inventories 124.4 120.2
Other current assets 131.5 143.8
Total current assets 1,444.0 1,325.3
Property, plant and equipment, net 355.9 388.7
Other noncurrent assets 416.3 332.2
Total assets $2,216.2 $2,046.2
Liabilities and stockholders' equity
Notes payable $ 53.7 $ 94.1
Accounts payable 121.1 104.3
Accrued expenses and income taxes 306.4 291.6
Total current liabilities 481.2 490.0
Long-term debt 812.0 520.6
Other liabilities 79.5 58.2
Stockholders' equity 843.5 977.4
Total liabilities and stockholders'
equity $2,216.2 $2,046.2
ALLERGAN, INC.
Net Sales by Product Line
(Unaudited)
in millions Three Months Ended Six Months Ended
June 28, June 29, June 28, June 29,
2002 2001 2002 2001
Specialty Pharmaceuticals:
Eye Care Pharmaceuticals $206.2 $182.9 $414.0 $372.6
Skin Care 19.6 18.7 41.4 36.7
Botox/Neuromodulator 112.2 76.4 200.8 144.0
Total 338.0 278.0 656.2 553.3
Medical Devices and
OTC Product Lines:
Ophthalmic Surgical 70.9 65.5 128.3 122.2
Contact Lens Care 66.8 73.7 123.4 137.8
Total 137.7 139.2 251.7 260.0
TOTAL NET SALES $475.7 $417.2 $907.9 $813.3
Domestic 58% 55% 60% 57%
International 42% 45% 40% 43%
ALLERGAN, INC. (Pharma Only)
Condensed Combined Statements of Earnings
(Unaudited)
Three Months Ended Six Months Ended
in millions, except per June 28, 2002 June 28, 2002
share amounts
Product sales
Net sales $338.0 $656.2
Cost of sales 46.3 91.2
Product gross margin 291.7 565.0
Research services
Research service revenues,
(primarily from related parties
through April 16, 2001) 8.7 18.2
Cost of research services 7.9 16.5
Research services margin 0.8 1.7
Selling, general and administrative 184.5 332.4
Research and development 57.3 111.3
Technology fees from related party -- --
Restructuring charge and asset
write-off 50.7 63.9
Operating income -- 59.1
Interest income 3.3 6.9
Interest expense (4.5) (8.8)
Gain on investments, net -- (8.0)
Unrealized gains/(losses) on
derivative instruments (3.7) (4.3)
Other, net 1.7 6.0
(3.2) (8.2)
(Loss)/earnings before income taxes
and minority interest (3.2) 50.9
(Benefit)/provision for income taxes (0.8) 14.2
Minority interest expense 0.3 0.3
Net (loss)/earnings $ (2.7) $ 36.4
(Loss)/earnings per share:
Basic $ (0.02) $ 0.28
Diluted $ (0.02) $ 0.28
Weighted average number of common
shares outstanding:
Basic 129.2 129.8
Diluted 129.2 131.4
ALLERGAN, INC. (Pharma Only)
Condensed Combined Statements of Earnings,
Adjusted for Non-Recurring Items
(Unaudited)
Three Months Ended Six Months Ended
in millions, except June 28, 2002 June 28, 2002
per share amounts
Product sales
Net sales $338.0 $656.2
Cost of sales 44.2 89.1
Product gross margin 293.8 567.1
Research services
Research service revenues,
(primarily from related parties
through April 16, 2001) 8.7 18.2
Cost of research services 7.9 16.5
Research services margin 0.8 1.7
Selling, general and administrative 156.0 296.7
Research and development 56.7 106.7
Operating income 81.9 165.4
Interest income 3.3 6.9
Interest expense (4.5) (8.8)
Other, net 1.7 0.9
0.5 (1.0)
Earnings before income taxes and
minority interest 82.4 164.4
Provision for income taxes 23.1 46.0
Minority interest expense 0.3 0.3
Net earnings $ 59.0 $118.1
Earnings Per Share:
Basic $ 0.46 $ 0.91
Diluted $ 0.45 $ 0.90
Weighted average number of common
shares outstanding:
Basic 129.2 129.8
Diluted 130.9 131.4
ALLERGAN, INC. (Pharma Only)
Reconciliation of Non-Recurring Items
(Unaudited)
in millions, except Three Months Ended Six Months Ended
per share amounts June 28, 2002 June 28, 2002
Net (loss) earnings, as reported $ (2.7) $ 36.4
Pro forma pre-tax adjustments
for non-recurring items:
Restructuring charge and asset
write-off 51.8(a) 65.0(a)
Duplicate operating expenses 30.1 37.2
Unrealized (gain)/loss on
derivative instruments 3.7 4.3
Partnering deals -- (1.0)
Loss on equity investments -- 8.0
85.6 113.5
Tax effect for one-time/special
items (23.9) (31.8)
Adjusted net earnings, carve-out
basis $ 59.0 $118.1
Diluted (loss) earnings per share,
as reported $(0.02) $0.28
Non-recurring adjustments:
Restructuring charge and asset
write-off 0.28 0.36
Duplicate operating expenses 0.17 0.21
Unrealized (gain)/loss on
derivative instruments 0.02 0.02
Partnering deals -- (0.01)
Loss on equity investment -- 0.04
Adjusted earnings per share,
carve out basis $ 0.45 $ 0.90
Pro forma adjustments (Net effect
of G&A disynergies, cash from
distribution and estimated income
from contract sales to AMO) (0.02) (0.04)
Pro forma earnings per share $ 0.43 $ 0.86
(a) The restructuring charge and asset write-off include charges of
$1.1 million to cost of sales for the quarter and six months ended
June 28, 2002.
By 9:00 a.m. Eastern Daylight Time on July 25, 2002, historical quarterly statements of earnings will be on the Allergan Web site at www.allergan.com. Statements will provide quarterly earnings for 2001 and 2002 for: (1) consolidated as reported in accordance with Generally Accepted Accounting Principles (GAAP); (2) carve-out; (3) carve-out excluding non-recurring items; and (4) pharmaceutical-only with pro forma adjustments for the spin-off of AMO. |
|
||||||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion