Alpharma reports third quarter and nine month results.FORT LEE, N.J.--(BUSINESS WIRE)--Nov. 4, 1996--Alpharma Inc. (NYSE NYSE See: New York Stock Exchange : ALO) today reported that earnings per share from operations, on a fully 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. basis for the nine months ended September September: see month. 30, 1996 were $.40 compared to $.52 in 1995. Revenue for nine months in 1996 was $371.5 million compared to $382.3 million in 1995. Earnings per share from operations on a fully diluted basis for the quarter ended September 30, 1996 were $.00 compared to $.20 in 1995. Revenue for the three months in 1996 was $122.4 million compared to $132.4 million in 1995. Operating results for the nine months and third quarter of 1996 include a loss of approximately $.06 per share resulting from the bankruptcy bankruptcy, in law, settlement of the liabilities of a person or organization wholly or partially unable to meet financial obligations. The purposes are to distribute, through a court-appointed receiver, the bankrupt's assets equitably among creditors and, in most of a major pharmaceutical wholesaler 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. . The nine and three month earnings per share from operations reported above in both 1996 and 1995 exclude the net benefits and charges, which are not considered by the Company as part of operating results, resulting primarily from major rationalizations of production capabilities, reorganizations in sales and marketing and the sale of certain non strategic assets. Including all these amounts, earnings per share for the nine months in 1996 were $.01 compared to $.60 in 1995 and $.00 for the third quarter of 1996 compared to $.28 in 1995. Commenting on the release, Einar W. Sissener, Chief Executive Officer of Alpharma Inc. said, "As we have previously discussed, the drop in third quarter revenue and profit for Alpharma is attributable to a number of factors. Our U.S. Pharmaceutical and Animal Health operations have been heavily influenced by industry related factors. At the same time, there has been some weakness in our other businesses. "Our U.S. Pharmaceuticals results have been negatively affected by the loss suffered from the bankruptcy of a major wholesaler in the third quarter and a rapidly emerging fundamental shift in industry distribution, purchasing and stocking patterns in the U.S. pharmaceutical industry. In the third quarter alone, this shift has resulted in a drop in our overall sales volume in this Division of approximately 20%, and a volume drop of over 50% to generic drug generic drug, a drug sold or prescribed under the nonproprietary name of its active ingredients or under a generally descriptive name rather than under a brand or trade name. distributors which have represented an important but declining part of our base business. Programs recently initiated by national wholesalers in the U.S. have accelerated these shifts and have also fueled a trend of lower prices. As the industry adjusts to these changes, we anticipate our volume may continue to decline, at least in the near term, and we have adjusted our production accordingly resulting in higher per unit costs. These fundamental market changes should accelerate industry consolidation and we are aggressively reevaluating all our practices in order to best position ourselves to benefit from these changes over time. "Our Animal Health Division has been negatively impacted by the difficult conditions in the U.S. market directly and indirectly related to historically high grain prices. Grain prices have come down since the second quarter although they remain relatively high. High grain prices and related industry trends have put pressure on pricing. In response, we are also actively reevaluating all of our business practices in this segment of our business. "In addition to the above factors, our International Pharmaceuticals and Fine Chemicals Divisions have experienced small sales declines in the third quarter and may not achieve operating results for the fourth quarter in excess of last year. "Accordingly, considering all of the factors that are affecting the Company, we currently estimate that fourth quarter net income from operations for Alpharma may be break even or a loss. We also expect some additional charges, which we do not consider part of operating results, in the fourth quarter from the reevaluation Noun 1. reevaluation - the evaluation of something a second time (or more) rating, valuation, evaluation - an appraisal of the value of something; "he set a high valuation on friendship" of business practices and production rationalization rationalization, in psychology: see defense mechanism. activities in progress. "While in the short term the cumulative impact of these factors on our results is severe, I continue to be encouraged by the progress of the aggressive actions we have taken this year to strengthen the overall competitive position of Alpharma. We are on schedule in the important rationalization of production in our U.S. Pharmaceuticals Division that will significantly improve our cost structure beginning in the first quarter of 1997. A similar rationalization in our International Pharmaceuticals Division is well underway which will bring further cost improvements beginning in 1998. We have also reorganized re·or·gan·ize v. re·or·gan·ized, re·or·gan·iz·ing, re·or·gan·iz·es v.tr. To organize again or anew. v.intr. To undergo or effect changes in organization. sales and marketing in some divisions and are aggressively continuing these and other reorganization related efforts. "As we work our way through significant changes in the industries we serve, I am confident that the leadership positions we have built and actions we are taking to strengthen the Company place Alpharma in an excellent position to succeed." Alpharma has approximately 2800 employees worldwide and is a multinational pharmaceutical company developing, manufacturing and marketing specialty generic and proprietary human pharmaceutical and animal health products. Alpharma is the largest manufacturer of generic liquid and 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. pharmaceuticals in the U.S., has an established and growing market position in finished pharmaceuticals in Europe Europe (y  r`əp), 6th largest continent, c.4,000,000 sq mi (10,360,000 sq km) including adjacent islands (1992 est. pop. 512,000,000). and the
Far East, is a basic manufacturer of important specialty antibiotics Antibiotics DefinitionAntibiotics may be informally defined as the subgroup of anti-infectives that are derived from bacterial sources and are used to treat bacterial infections. , and is recognized worldwide as a leading provider of animal health feed additives for poultry poultry, domesticated fowl kept primarily for meat and eggs; including birds of the order Galliformes, e.g., the chicken, turkey, guinea fowl, pheasant, quail, and peacock; and natatorial (swimming) birds, e.g., the duck and goose. and livestock livestock Farm animals, with the exception of poultry. In Western countries the category encompasses primarily cattle, sheep, pigs, goats, horses, donkeys, and mules; other animals (e.g., buffalo, oxen, or camels) may predominate in other areas. , and vaccines for farmed fish. -0- Note: Statements made in this press release include 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. made pursuant to the safe harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. provisions of the Securities Litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. Reform Act of 1995. Such statements involve certain risks and uncertainties that could cause actual results to differ materially from those in the forward looking statements. Among other things, expectations for the 1996 fourth quarter are based on assumptions which management believes to be reasonable at this time including assumptions concerning the price and number of competitors for Alpharma's products and the volume and product mix of sales. Information on other significant potential risks and uncertainties not discussed herein may be found in the Company's filings with the Securities and Exchange Commission including its Form 10Q for the quarter ended June June: see month. 30, 1996 and September 30, 1996 ( which will be filed by November November: see month. 14, 1996 ) and Form 10K for the year ended December December: see month. 31, 1995. -0-
ALPHARMA INC.
CONSOLIDATED STATEMENT OF INCOME
(Unaudited)
(In thousands, except per share data)
Three Months Ended Nine Months Ended
September 30, September 30,
1996 1995(b) 1996(a) 1995(b)
Total revenue $122,438 $132,375 $371,467 $382,272
Cost of sales 74,050 80,252 218,803 225,056
Gross profit 48,388 52,123 152,664 157,216
Selling, general and
administrative
expenses 42,980 37,061 137,104 118,931
Operating income 5,408 15,062 15,560 38,285
Interest expense (4,920) (5,605) (14,930) (16,864)
Other income (expense),
net (184) 366 120 (215)
Income before provision for
income taxes 304 9,823 750 21,206
Provision for income
taxes 275 3,654 446 8,058
Net income $ 29 $ 6,169 $ 304 $ 13,148
Average common shares outstanding:
Primary 21,852 21,799 21,772 21,783
Fully diluted 21,852 22,012 21,772 21,996
Earnings per common share:
Primary $ .00 $ .28 $ .01 $ .60
Fully diluted $ .00 $ .28 $ .01 $ .60
Dividends per
common share $ .045 $ .045 $ .135 $ .135
(a) 1996 nine months selling, general and administrative expenses
include pre-tax charges and expenses of approximately $14,000 (after
tax $8,700 or ($.39) loss per share) for severance and major
production rationalization actions
(b) 1995 three and nine months include net income of $1,800 (.08
per share) resulting from post combination management actions.
-0-
ALPHARMA INC.
FINANCIAL POSITION
(In thousands)
September 30, 1996 December 31, 1995
(unaudited) (audited)
Current assets $261,876 $282,886
Non-current assets 337,838 351,967
Total assets $599,714 $634,853
Current liabilities $157,020 $169,283
Long-term debt 209,527 219,451
Deferred taxes and
other liabilities 34,633 40,929
Stockholders' equity 198,534 205,190
Total liabilities and
stockholders' equity $599,714 $634,853
CONTACT: Alpharma Inc., Fort Lee Iris D. Daniels, 201/947-7774 or Morgen-Walke, New York New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of Donna N. Stein Stein , William Howard 1911-1980. American biochemist. He shared a 1972 Nobel Prize for pioneering studies of ribonuclease. , 212/850-5600 |
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