Allergan reports 10.3 percent sales growth for the year - board of directors declares quarterly dividend.

IRVINE, Calif.--(BUSINESS WIRE)--Jan. 24, 1995--Allergan, Inc. (NYSE:AGN) announced 1994 worldwide sales of $947.2 million, an increase of $88.3 million or 10.3 percent over 1993.

Excluding the impact of foreign currency, sales increased 10.1 percent or $86.3 million over the prior year. Earnings per share for 1994 from continuing operations were $1.73, compared to $1.58 for 1993, an increase of 9.5 percent.

Allergan's board of directors declared a fourth quarter dividend of $0.11 per share, payable March 10, 1995, to stockholders of record on February 17, 1995.

During the fourth quarter of 1994, worldwide sales were $270.2 million, an increase of 16.8 percent over 1993. Excluding the impact of foreign currency, sales increased $31.2 million or 13.5 percent over the comparable quarter of the prior year. Earnings per share for the fourth quarter of 1994 from continuing operations were $0.54, compared to $0.47 for 1993, an increase of 14.9 percent.

"1994 was a year of significant accomplishments," said Allergan President and Chief Executive Officer William C. Shepherd. "We successfully executed our generic strategy with Schein last March. Complete(R) brand solution was approved in the U.S. and the U.K. mid-year. We enhanced our global market position with the strategic acquisitions of Ioptex Research Inc. in September and Lorsen SA in December. Our commitment to geographic expansion was evident by our first prescription product approvals in China and in India, as part of our joint venture with Nicholas Piramal. We are taking steps to accelerate our technology investment and further expand our efforts in the managed care segment of the market."

"Our strategy is to continue to focus on our three core eye care businesses, which includes ophthalmic pharmaceuticals, surgical products and contact lens care products. In addition to the eye care businesses, we will invest in Botox(R) for neuromuscular disorders and receptor- selective retinoids for skin care and oncology," said Shepherd.

Eye Care Business Unit Performance

Pharmaceutical

Worldwide sales for the eye care pharmaceutical business were $390.7 million, an 8.3 percent increase over 1993 sales of $360.9 million. During the year approximately sixty percent of domestic sales were under contract to managed care organizations. Fourth quarter sales were favorably impacted due to wholesaler buy-in in anticipation of a price increase.

Surgical

Worldwide sales for the ophthalmic surgical business were $144.3 million during 1994, a 25.2 percent increase over 1993 sales of $115.3 million. During the third quarter of 1994, Allergan acquired Ioptex Research Inc. Excluding the impact of Ioptex sales during 1994, ophthalmic surgical sales increased 19.2 percent over 1993 sales. Additionally, both the launch of the AMO(R) SI-30(TM), a high-index silicone IOL, and AMO(R) Prestige(R), the world's most advanced phacoemulsification equipment, favorably impacted sales. The positive impact of these new products, as well as increased unit sales of IOLs in the U.S., were partially offset by continued IOL price declines and government health care funding restrictions.

Optical

Worldwide sales for the Optical business (contact lens care products) were $339.4 million during 1994, up 4.4 percent from $325.0 million during 1993. Complete(R) brand multi-purpose contact lens disinfection system was successfully launched in the U.S. and the U.K. mid-year 1994. Its introduction makes Allergan competitive in the convenience market and gives Allergan the most comprehensive range of products in the industry.

Skin Care Business Unit

Sales for Allergan Herbert (skin care) products were $37.3 million during 1994, a $4.9 million increase over 1993 sales of $32.4 million. Sales were favorably impacted as a result of combining the pharmaceutical eye care and skin care sales forces in the U.S. During the fourth quarter of 1994, Allergan completed Phase III clinical trials on its receptor- selective topical retinoid tazarotene (AGN190168) for both acne and psoriasis. The results of these trials are part of an application for marketing approval that is expected to be filed mid-year 1995 in most major markets except Japan.

Botox/Neuromuscular Business Unit

Sales for Botox(R) (Botulinum Toxin Type A) purified neurotoxin complex were $35.5 million during 1994, compared to $25.3 million during 1993. In March 1991, an application was filed with the FDA for approval of a new claim for an indication related to a neck and shoulder neuromuscular disorder known as cervical dystonia (torticollis). Allergan has been asked to provide supplemental clinical data to support the torticollis filing.

Recent Developments

The Ninth Circuit Federal Court of Appeals affirmed the summary dismissal of a lawsuit filed by Staar Surgical Company, Inc. against Allergan, Inc. and its ophthalmic surgical division, Allergan Medical Optics (AMO), in the U.S. District Court for the Central District of California on December 19, 1991. In response to a motion filed by Allergan, the District Court ruled in February 1993 that the suit was so lacking in merit that it should not even proceed to trial. Staar's appeal was argued before the Ninth Circuit Court in December 1994.

Ed Cummins, corporate vice president and chief financial officer, has made a personal decision to take early retirement effective February 28th.

Additional Financial Highlights

The gross profit margin was 70.1 percent for the fourth quarter of 1994 and 69.7 percent for the full year. Over the past four years, research and development spending increased by $49 millionQto $111.5 million in 1994 from $62.5 million in 1990. As a percentage of net sales during that same three- year period, research and development investments reached 11.8 percent in 1994 compared to 8.8 percent in 1990. This increase is primarily in the areas of glaucoma therapies, contact lens care disinfection systems, products associated with cataract surgery, neuromuscular disorders, and receptor-selective retinoids. Despite this increased investment in research and development, a number of promising technologies in Allergan's eye care portfolio are only partially funded.

Allergan Inc. and Ligand Pharmaceuticals Inc. formed a joint venture in July of 1992 to research, develop and commercialize pharmaceutical products based on retinoid technology. On December 20, 1994, Allergan and Ligand announced the formation of a new company, Allergan Ligand Retinoid Therapeutics, Inc., to accelerate the activities related to the discovery, development and commercialization of drugs based on retinoids.

"Our objective continues to be to increase our technology investment by reducing SG&A as a percentage of net sales. SG&A as a percent of net sales for the full year of 1994 was 41.4 percent, down from 44.0 percent for the full year in 1990," continued Shepherd. SG&A expenses for the fourth quarter of 1994 were $110.6, an increase of $19 million. "The increase in SG&A spending during the fourth quarter of 1994 includes significant spending on product launch and promotional expenses associated with Complete(R) brand solution."

Following the passage of the Omnibus Budget Reconciliation Act of 1993, the company's effective tax rate (ETR) was anticipated to increase from the 1993 level of 26%. Proactive management efforts to reduce the effect of this estimated increase were successful with a 29% ETR reported for 1994.

Cash flow from operations continued strong throughout the year and was used to fund projects such as the acquisitions of Ioptex Research, Inc. and Argentine-based Lorsen SA.

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

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

                      ALLERGAN, INC.
        Condensed Consolidated Statements of Income

   in millions,   Three Months            Years
   except      Ended December 31,    Ended December 31,
   per share
                               pct Inc              pct Inc
                 1994    1993  (Dec)    1994   1993  (Dec)

   Net Sales   $270.2  $231.3   17pct $947.2 $858.9   10pct
   Costs and
   expenses
     Cost of
      sales      80.8    67.9          286.6  249.6
     Selling,
      general
      and
      adminis-
      trative   110.6    91.6          392.5  362.2
     Research &
      develop-
      ment       31.5    29.6          111.5  102.5
     Operating
      Income     47.3    42.2   12pct  156.6  144.6    8pct
     Interest and
      other, net  0.9     0.2            2.3   (1.0)
   Total costs
    and
    expenses    222.0   188.9          788.3  715.3
   Earnings
    from
    continuing
    operations
    before
    income taxes
    and minority
    interest     48.2    42.4          158.9  143.6
   Provision for
    income taxes 13.3    11.1           46.2   36.5
   Minority
    interest      0.1     0.8            2.0    2.6
   Earnings
    from
    continuing
    operations   34.8    30.5   14pct  110.7  104.5    6pct
   Discontinued
    operations
     Earnings
     from
     operations,
     net of
     income
     taxes         -       -              -     4.0
     Gain on
     disposal,
     net of
     income
     taxes         -       -              -     0.4
   Net
   Earnings    $ 34.8    30.5          110.7  108.9
   Net earnings
    per common
    share:
   Continuing
    oper-
    ations     $  0.54 $   0.47 15pct $  1.73 $ 1.58  9pct
   Discontin-
   ued
   oper-
   ations
     Earnings
     from
     operations    -        -             -     0.06
     Gain on
     disposal      -        -             -     0.01
   Total       $  0.54 $   0.47       $  1.73 $ 1.65
   Weighted
    average
    number of
    common shares
    outstanding  64.2     65.2          63.9   66.2

-0-

                      ALLERGAN, INC.
         Condensed Consolidated Balance Sheets

   in millions                    December 31, December 31,
                                      1994         1993

   Assets
   Cash and equivalents             $ 130.7       $141.8
   Trade receivables, net             179.7        146.8
   Inventories                         96.8         90.2
   Other current assets                78.3         65.1
   Total current assets               485.5        443.9
   Property, plant and equipment,
    net                               314.8        288.1
   Other noncurrent assets            259.5        207.8
   Total assets                     $1059.8       $939.8
   Liabilities and stockholders'
    equity
   Notes payable                    $  48.6       $ 38.0
   Accounts payable                    59.9         59.1
   Accrued expenses and income taxes  215.2        179.3
   Total current liabilities          323.7        276.4
   Long-term debt                      83.7        104.6
   Other liabilities                   38.5         29.6
   Minority interest                   10.6         14.7
   Stockholders' equity               603.3        514.5
   Total liabilities and
    stockholders' equity            $1059.8       $939.8

                      ALLERGAN, INC.
                   Net Sales by Division

                           Three Months        Years
  in millions          Ended December 31, Ended December 31,

                          1994     1993     1994     1993

   Eye Care
     Pharmaceuticals     $108.9   $ 98.2   $390.7   $360.9
     Surgical              47.7     34.1    144.3    115.3
     Optical               90.6     82.4    339.4    325.0
      Total Eye Care      247.2    214.7    874.4    801.2
   Skin Care               12.6      9.9     37.3     32.4
   Botox                   10.4      6.7     35.5     25.3
      Total Net Sales     270.2    231.3    947.2    858.9
   Domestic              47 pct   48 pct   47 pct   47 pct
   International         53 pct   52 pct   53 pct   53 pct

CONTACT: Allergan, Inc., Irvine

Jeff D'Eliscu, 714/752-4636 (work)

714/675-9475 (home)