Allergan Reports Third Quarter Operating Results; Pharmaceutical Sales Increased 15 Percent for the Third Quarter; Board of Directors Declares Third Quarter Dividend.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) ) today announced operating results for the third quarter ended September September: see month. 24, 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 third quarter dividend of $0.09 per share, payable on December December: see month. 9, 2004, to stockholders of record on November November: see month. 10, 2004. Operating Results For the quarter ended September 24, 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 $510.8 million, including $26.0 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 June: see month. 29, 2002. --Pharmaceutical sales were up 14.9 percent, or 13.0 percent at constant currency, compared to pharmaceutical sales in the third quarter of 2003. --Allergan reported $0.70 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 the recognition of a technology transfer fee received from Elan (Emulated LAN) A virtual LAN in the ATM world. See LANE and virtual LAN. Elan - ["Top-down Programming with Elan", C.H.A. Koster, Ellis Horwood 1987]. Corporation for the sale of Elan's worldwide rights to Mybloc(TM) / Neurobloc(TM) injectable in·ject·a·ble adj. Capable of being injected. Used of a drug. n. A drug or medicine that can be injected. solution to Solstice solstice (sŏl`stĭs) [Lat.,=sun stands still], in astronomy, either of the two points on the ecliptic that lie midway between the equinoxes (separated from them by an angular distance of 90°). Neurosciences, Inc. and the effect of 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 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 $4.9 million pre-tax pre-tax adj → anterior al impuesto pre-tax adj → avant impôt(s) pre-tax adj → al lordo d'imposta , compared to the $0.57 diluted earnings per share reported for the third quarter of 2003. --Allergan's adjusted diluted earnings per share were $0.67, representing a 17.5 percent increase compared to the adjusted diluted earnings per share of $0.57 reported for the third quarter of 2003. Adjusted diluted earnings per share for the third quarter of 2004 exclude the effects of the Elan technology transfer fee and the unrealized loss. 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 extremely pleased with the Company's results and performance in the third quarter. We continue to drive forward our key clinical programs, which are the fuel for our innovation and 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. sales growth," said David E.I. Pyott, Allergan's Chairman of the Board, President and Chief Executive Officer. Product and Pipeline Update During the third quarter of 2004: --Allergan filed an Investigational New Drug Application (IND) with 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. Food & 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 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. . --Allergan filed an IND application with the FDA for an alpha adrenergic agonist An adrenergic is a drug, or other substance, which has effects similar to, or the same as, epinephrine (adrenaline). Alternatively, it may refer to something which is susceptible to epinephrine, or similar substances, such as a biological receptor (specifically, the adrenergic for the treatment of neuropathic neuropathic /neu·ro·path·ic/ (-path´ik) pertaining to or characterized by neuropathy. neuropathic pertaining to disease of the nervous system. pain. --On July July: see month. 12, 2004, the FDA Joint Dermatologic dermatological, dermatologic pertaining to dermatology; of or affecting the skin. & 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. Drugs and Drug Safety & Risk Management Advisory Committee recommended against the 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 . --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) (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) for the treatment of severe primary axillary ax·il·lar·yn. 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 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. agents. --On August 2, 2004, Allergan announced that the FDA issued an approvable letter for its 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) timolol timolol /ti·mo·lol/ (ti´mo-lol) a nonselective beta-adrenergic blocking agent used as the maleate salt in the treatment of hypertension, the treatment and prophylaxis of recurrent myocardial infarction and the prophylaxis of migraine; combination product for 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). (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. 0.03 percent/timolol 0.05 percent ophthalmic solution ophthalmic solution n. A sterile solution that is free from foreign particles and is compounded and dispensed for eyedrops. ). --On August 24, 2004, Allergan announced that it filed a 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. lawsuit lawsuit: see procedure; tort. against Alcon Laboratories, Inc., Alcon Research, Ltd. and Alcon, Inc. (NYSE:ACL See access control list. 1. ACL - Access Control List. 2. ACL - Association for Computational Linguistics. 3. ACL - A Coroutine Language. A Pascal-based implementation of coroutines. ["Coroutines", C.D. ) (collectively "Alcon") in response to Alcon's filing of a New Drug Application with the FDA under section 505(b)(2) of the Federal Food, Drug and Cosmetic Act Federal Food, Drug and Cosmetic Act a regulation in the United States which requires all drugs used in animals to be approved by the Food and Drug Administration. . Alcon seeks to market a 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. 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 0.15% in the United States. Following the end of the third quarter of 2004: --On September 27, 2004, Allergan announced that the FDA issued a non-approvable letter for oral tazarotene for the treatment of moderate to very severe psoriasis. Allergan will continue to work with the FDA towards its goal of bringing oral tazarotene to patients suffering from moderate to very severe psoriasis. --On October October: see month. 8, 2004, Allergan and Peplin Ltd. agreed to discontinue dis·con·tin·ue v. dis·con·tin·ued, dis·con·tin·u·ing, dis·con·tin·ues v.tr. 1. To stop doing or providing (something); end or abandon: their collaboration Working together on a project. See collaborative software. for the development and commercialization of skin cancer products in North America North America, third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere. and South America South America, fourth largest continent (1991 est. pop. 299,150,000), c.6,880,000 sq mi (17,819,000 sq km), the southern of the two continents of the Western Hemisphere. based on Peplin's proprietary and novel anti-cancer compound PEP005. --On October 8, 2004, Allergan announced that the jury in the Irena Medavoy vs. Arnold Klein Klein , Melanie 1882-1960. Austrian-born British psychoanalyst who first introduced play therapy and was the first to use psychoanalysis to treat young children. , M.D., and Allergan, Inc. lawsuit found that Allergan's product Botox(R) (botulinum toxin type A) was not responsible for the conditions Irena Medavoy alleged she suffered following her treatment with Botox(R) for migraine migraine (mī`grān), headache characterized by recurrent attacks of severe pain, usually on one side of the head. It may be preceded by flashes or spots before the eyes or a ringing in the ears, and accompanied by double vision, nausea, . The court also dismissed dis·miss tr.v. dis·missed, dis·miss·ing, dis·miss·es 1. To end the employment or service of; discharge. 2. all claims against both Allergan and Dr. Klein pertaining per·tain intr.v. per·tained, per·tain·ing, per·tains 1. To have reference; relate: evidence that pertains to the accident. 2. to the 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). Business and Professions Code. Effective July 9, 2004, Ronald M. Cresswell Cresswell is a surname, and may refer to
On July 28, 2004, Allergan announced the appointments of Prof. Trevor Trev·or , William Originally William Trevor Cox. Born 1928. Irish writer noted for his darkly comedic stories and novels, including The Old Boys (1964) and The Day We Got Drunk on Cake (1967). M. Jones to the Company's Board of Directors and Dr. Scott Whitcup to the position of Executive Vice President, Research & Development. Effective October 27, 2004, Allergan's Board of Directors approved certain 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). activities related to the planned termination The point where a line, channel or circuit ends. See SCSI termination and hybrid. of Allergan's manufacturing and supply agreement with Advanced Medical Optics, Inc. Allergan anticipates that the pre-tax restructuring charges 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. , expected to total between $24 million and $28 million, will be recorded beginning in the fourth quarter of 2004 up through the fourth quarter of 2005. Outlook For the fourth quarter of 2004, Allergan estimates: --Total pharmaceutical only sales between $495 million and $510 million. --Adjusted diluted earnings per share between $0.83 and $0.84. For the full year of 2004: --Allergan is increasing the expected range of Alphagan Alphagan Brimonidine Ophthalmology An alpha-2 agonist for treating open-angle glaucoma. See Open angle glaucoma. (R) Franchise sales to between $245 million and $265 million. --Total pharmaceutical sales guidance, contract sales guidance and all other product sales guidance provided in July 2004 remains unchanged. --Income statement ratio guidance provided in July 2004 remains unchanged. --Allergan is narrowing its adjusted diluted earnings per share guidance to between $2.74 and $2.75. Adjusted diluted earnings per share guidance excludes any non-GAAP adjustments to diluted earnings per share. Non-GAAP adjustments include the restructuring activities discussed above. 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 the 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 June 25, 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 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 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 Earnings and
Reconciliation of Non-GAAP Adjustments
(Unaudited)
Three months ended
----------------------------
in millions, except per share amounts September 24, 2004
----------------------------------------- ----------------------------
Non-GAAP
GAAP Adjustments Adjusted
------- ----------- --------
Product sales
Net sales $510.8 $-- $510.8
Cost of sales 99.1 -- 99.1
------- ----------- --------
Product gross margin 411.7 -- 411.7
Research services
Research service revenues -- -- --
Cost of research services -- -- --
------- ----------- --------
Research services margin -- -- --
Selling, general and administrative 195.5 -- 195.5
Research and development 83.0 -- 83.0
------- ----------- --------
Operating income 133.2 -- 133.2
Interest income 2.6 -- 2.6
Interest expense (6.8) -- (6.8)
Unrealized gain (loss) on derivative
instruments, net (0.1) 0.1(a) --
Gain on investments, net -- -- --
Other, net 3.6 (5.0)(b) (1.4)
------- ----------- --------
(0.7) (4.9) (5.6)
------- ----------- --------
Earnings before income taxes and
minority interest 132.5 (4.9) 127.6
Provision (benefit) for income taxes 40.3 (1.9)(c) 38.4
Minority interest 0.2 -- 0.2
------- ----------- --------
Net earnings $92.0 $(3.0) $89.0
======= =========== ========
Net earnings per share:
Basic $0.70 $0.68
======= ========
Diluted $0.70 $0.67
======= ========
Weighted average number of common shares
outstanding:
Basic 131.5 131.5
Diluted 132.2 132.2
Selected ratios as a percentage of net
sales
--------------------------------------
Gross profit 80.6% 80.6%
Selling, general and administrative 38.3% 38.3%
Research and development 16.2% 16.2%
Three months ended
----------------------------
in millions, except per share amounts September 26, 2003
----------------------------------------- ----------------------------
Non-GAAP
GAAP Adjustments Adjusted
------- ----------- --------
Product sales
Net sales $443.3 $-- $443.3
Cost of sales 82.8 -- 82.8
------- ----------- --------
Product gross margin 360.5 -- 360.5
Research services
Research service revenues -- -- --
Cost of research services -- -- --
------- ----------- --------
Research services margin -- -- --
Selling, general and administrative 171.1 -- 171.1
Research and development 81.0 -- 81.0
------- ----------- --------
Operating income 108.4 -- 108.4
Interest income 2.6 -- 2.6
Interest expense (3.9) -- (3.9)
Unrealized gain (loss) on derivative
instruments, net 0.1 (0.1)(a) --
Gain on investments, net 0.2 -- 0.2
Other, net (1.0) -- (1.0)
------- ----------- --------
(2.0) (0.1) (2.1)
------- ----------- --------
Earnings before income taxes and
minority interest 106.4 (0.1) 106.3
Provision (benefit) for income taxes 29.8 -- 29.8
Minority interest 0.6 -- 0.6
------- ----------- --------
Net earnings $76.0 $(0.1) $75.9
======= =========== ========
Net earnings per share:
Basic $0.58 $0.58
======= ========
Diluted $0.57 $0.57
======= ========
Weighted average number of common shares
outstanding:
Basic 130.5 130.5
Diluted 133.0 133.0
Selected ratios as a percentage of net
sales
--------------------------------------
Gross profit 81.3% 81.3%
Selling, general and administrative 38.6% 38.6%
Research and development 18.3% 18.3%
(a) Unrealized gain/(loss) on the mark-to-market adjustment to
derivative instruments.
(b) Technology transfer fee.
(c) 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 nine months ended September
24, 2004 and September 26, 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 Earnings and
Reconciliation of Non-GAAP Adjustments
(Unaudited)
Nine months ended
-------------------------------
in millions, except per share amounts September 24, 2004
-------------------------------------- -------------------------------
Non-GAAP
GAAP Adjustments Adjusted
--------- ----------- ---------
Product sales
Net sales $1,489.4 $-- $1,489.4
Cost of sales 282.9 -- 282.9
--------- ----------- ---------
Product gross margin 1,206.5 -- 1,206.5
Research services
Research service revenues -- -- --
Cost of research services -- -- --
--------- ----------- ---------
Research services margin -- -- --
Selling, general and administrative 572.8 2.4(a) 575.2
Research and development 257.6 -- 257.6
--------- ----------- ---------
Operating income 376.1 (2.4) 373.7
Interest income 6.8 -- 6.8
Interest expense (14.2) -- (14.2)
Unrealized gain (loss) on derivative
instruments, net 0.1 (0.1)(c) --
Gain on investments, net -- -- --
Other, net 2.3 (5.0)(d) (2.7)
--------- ----------- ---------
(5.0) (5.1) (10.1)
--------- ----------- ---------
Earnings before income taxes and
minority interest 371.1 (7.5) 363.6
Provision (benefit) for income taxes 105.8 3.2(e) 109.0
Minority interest 0.7 -- 0.7
--------- ----------- ---------
Net earnings $264.6 $(10.7) $253.9
========= =========== =========
Net earnings per share:
Basic $2.02 $1.93
========= =========
Diluted $1.99 $1.91
========= =========
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 81.0% 81.0%
Selling, general and administrative 38.5% 38.6%
Research and development 17.3% 17.3%
Nine months ended
-------------------------------
in millions, except per share amounts September 26, 2003
-------------------------------------- -------------------------------
Non-GAAP
GAAP Adjustments Adjusted
--------- ----------- ---------
Product sales
Net sales $1,276.0 $-- $1,276.0
Cost of sales 231.3 -- 231.3
--------- ----------- ---------
Product gross margin 1,044.7 -- 1,044.7
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 526.2 -- 526.2
Research and development 492.6 (278.8)(b) 213.8
--------- ----------- ---------
Operating income 27.4 278.8 306.2
Interest income 10.7 -- 10.7
Interest expense (12.2) -- (12.2)
Unrealized gain (loss) on derivative
instruments, net (0.9) 0.9(c) --
Gain on investments, net -- -- --
Other, net (1.6) -- (1.6)
--------- ----------- ---------
(4.0) 0.9 (3.1)
--------- ----------- ---------
Earnings before income taxes and
minority interest 23.4 279.7 303.1
Provision (benefit) for income taxes (16.2) 101.0(f) 84.8
Minority interest 1.3 -- 1.3
--------- ----------- ---------
Net earnings $38.3 $178.7 $217.0
========= =========== =========
Net earnings per share:
Basic $0.29 $1.67
========= =========
Diluted $0.29 $1.64
========= =========
Weighted average number of common
shares outstanding:
Basic 130.2 130.2
Diluted 132.1 132.5
Selected ratios as a percentage of net
sales
--------------------------------------
Gross profit 81.9% 81.9%
Selling, general and administrative 41.2% 41.2%
Research and development 38.6% 16.8%
(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) Technology transfer fee.
(e) Favorable recovery of previously paid state income taxes and tax
effect for non-GAAP adjustments.
(f) 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 table.
ALLERGAN, INC.
Condensed Consolidated Balance Sheets
(Unaudited)
in millions September 24, December 31,
2004 2003
------------------------------------------ ------------- -------------
Assets
Cash and equivalents $778.9 $507.6
Trade receivables, net 262.0 220.1
Inventories 84.8 76.3
Other current assets 111.5 124.2
------------- -------------
Total current assets 1,237.2 928.2
Property, plant and equipment, net 448.2 422.5
Other noncurrent assets 413.8 404.2
------------- -------------
Total assets $2,099.2 $1,754.9
============= =============
Liabilities and stockholders' equity
Notes payable $21.6 $24.4
Accounts payable 97.3 87.2
Accrued expenses and income taxes 306.8 271.8
------------- -------------
Total current liabilities 425.7 383.4
Long-term debt 568.3 573.3
Other liabilities 107.7 79.6
Stockholders' equity 997.5 718.6
------------- -------------
Total liabilities and stockholders' equity $2,099.2 $1,754.9
============= =============
Days on Hand (DOH) 78 78
Days Sales Outstanding (DSO) 47 42
Cash, net of debt $189.0 $(90.1)
Debt-to-capital percentage 37.2% 45.4%
ALLERGAN, INC.
Reconciliation of Diluted Earnings Per Share
(Unaudited)
in millions, except per share amounts Three months ended
---------------------------------------- -----------------------------
September 24, September 26,
2004 2003
-------------- --------------
Net earnings, as reported $92.0 $76.0
Non-GAAP pre-tax adjustments:
Technology transfer fee (5.0) --
In-process research and development -- --
Patent infringement settlement -- --
Unrealized (gain) loss on derivative
instruments 0.1 (0.1)
-------------- --------------
87.1 75.9
Tax effect for above items 1.9 --
State income tax recovery -- --
-------------- --------------
Adjusted diluted earnings 89.0 75.9
Interest expense from convertible
subordinated notes, net of tax -- 0.2
-------------- --------------
$89.0 $76.1
============== ==============
Weighted average number of shares issued 131.5 130.5
Net shares assumed issued using the
treasury stock method for options
outstanding during each period based on
average market price 0.7 2.1
Dilutive effect of assumed conversion of
convertible subordinated notes
outstanding -- 0.4
-------------- --------------
132.2 133.0
============== ==============
Diluted earnings per share, as reported $0.70 $0.57
Non-GAAP earnings per share adjustments:
Technology transfer fee (0.03) --
In-process research and development -- --
Patent infringement settlement -- --
State income tax recovery -- --
Unrealized (gain) loss on derivative
instruments -- --
-------------- --------------
Adjusted diluted earnings per share $0.67 $0.57
============== ==============
Year over year change 17.5%
=====
in millions, except per share amounts Nine months ended
---------------------------------------- -----------------------------
September 24, September 26,
2004 2003
-------------- --------------
Net earnings, as reported $264.6 $38.3
Non-GAAP pre-tax adjustments:
Technology transfer fee (5.0) --
In-process research and development -- 278.8
Patent infringement settlement (2.4) --
Unrealized (gain) loss on derivative
instruments (0.1) 0.9
-------------- --------------
257.1 318.0
Tax effect for above items 2.9 (101.0)
State income tax recovery (6.1) --
-------------- --------------
Adjusted diluted earnings 253.9 217.0
Interest expense from convertible
subordinated notes, net of tax -- 0.6
-------------- --------------
$253.9 $217.6
============== ==============
Weighted average number of shares issued 131.3 130.2
Net shares assumed issued using the
treasury stock method for options
outstanding during each period based on
average market price 1.7 1.9
Dilutive effect of assumed conversion of
convertible subordinated notes
outstanding -- 0.4
-------------- --------------
133.0 132.5
============== ==============
Diluted earnings per share, as reported $1.99 $0.29
Non-GAAP earnings per share adjustments:
Technology transfer fee (0.03) --
In-process research and development -- 1.34
Patent infringement settlement (0.01) --
State income tax recovery (0.04) --
Unrealized (gain) loss on derivative
instruments -- 0.01
-------------- --------------
Adjusted diluted earnings per share $1.91 $1.64
============== ==============
Year over year change 16.5%
=====
ALLERGAN, INC.
Supplemental Non-GAAP Information
(Unaudited)
Three months ended $ change in net sales
September 24, September 26, ---------------------
2004 2003 Total Perfor- Curr-
mance ency
------------- ------------- ------- ------- -----
in millions
-------------------
Eye Care
Pharmaceuticals $285.4 $252.8 $32.6 $27.5 $5.1
Botox/Neuromodulator 174.6 139.9 34.7 31.8 2.9
Skin Care 24.8 29.2 (4.4) (4.4) --
------------- -------------- ------- ------- -----
Total 484.8 421.9 62.9 54.9 8.0
Other (primarily
contract sales) 26.0 21.4 4.6 4.6 --
------------- -------------- ------- ------- -----
Net sales, as
reported $510.8 $443.3 $67.5 $59.5 $8.0
============= ============== ======= ======= =====
Alphagan P and
Alphagan $73.0 $71.4 $1.6 $0.4 $1.2
Lumigan 60.3 46.8 13.5 12.3 1.2
Other Glaucoma 4.6 5.5 (0.9) (1.1) 0.2
Restasis 24.1 10.7 13.4 13.5 (0.1)
Tazorac, Zorac and
Avage 18.8 22.3 (3.5) (3.6) 0.1
Domestic 69.2% 69.3%
International 30.8% 30.7%
Percent change in net sales
-----------------------------
Total Performance Currency
----- ------------ ---------
Eye Care Pharmaceuticals 12.9% 10.9% 2.0%
Botox/Neuromodulator 24.8% 22.7% 2.1%
Skin Care (15.1)% (15.1)% --%
Total 14.9% 13.0% 1.9%
Other (primarily contract sales) 21.5% 21.5% --%
Net sales, as reported 15.2% 13.4% 1.8%
Alphagan P and Alphagan 2.2% 0.6% 1.6%
Lumigan 28.8% 26.3% 2.5%
Other Glaucoma (16.4)% (20.0)% 3.6%
Restasis 125.2% 126.2% (1.0)%
Tazorac, Zorac and Avage (15.7)% (16.1)% 0.4%
Nine months ended $ change in net sales
September 24, September 26, ---------------------
2004 2003 Total Perfor- Curr-
mance ency
-------------- ------------- ------- ------- -----
in millions
-------------------
Eye Care
Pharmaceuticals $835.1 $727.1 $108.0 $87.7 $20.3
Botox/Neuromodulator 502.2 406.1 96.1 85.1 11.0
Skin Care 73.9 79.8 (5.9) (6.0) 0.1
------------- ------------- ------- ------- -----
Total 1,411.2 1,213.0 198.2 166.8 31.4
Other (primarily
contract sales) 78.2 63.0 15.2 15.0 0.2
------------- ------------- ------- ------- -----
Net sales, as
reported $1,489.4 $1,276.0 $213.4 $181.8 $31.6
============= ============= ======= ======= =====
Alphagan P and
Alphagan $204.7 $213.6 $(8.9) $(13.3) $4.4
Lumigan 171.1 129.6 41.5 37.1 4.4
Other Glaucoma 14.8 16.7 (1.9) (2.8) 0.9
Restasis 65.5 22.5 43.0 43.0 --
Tazorac, Zorac and
Avage 53.9 58.9 (5.0) (5.0) --
Domestic 69.4% 70.7%
International 30.6% 29.3%
Percent change in net sales
-----------------------------
Total Performance Currency
----- ----------- ---------
Eye Care Pharmaceuticals 14.9% 12.1% 2.8%
Botox/Neuromodulator 23.7% 21.0% 2.7%
Skin Care (7.4)% (7.5)% 0.1%
Total 16.3% 13.8% 2.5%
Other (primarily contract sales) 24.1% 23.8% 0.3%
Net sales, as reported 16.7% 14.2% 2.5%
Alphagan P and Alphagan (4.2)% (6.2)% 2.0%
Lumigan 32.0% 28.6% 3.4%
Other Glaucoma (11.4)% (16.8)% 5.4%
Restasis 191.1% 191.1% --%
Tazorac, Zorac and Avage (8.5)% (8.5)% --%
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 Growth Rates The compounded annualized rate of growth of a company's revenues, earnings, dividends, or other figures. Notes: Remember, historically high growth rates don't always mean a high rate of growth looking into the future. 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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