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SYNTEX REPORTS FIRST QUARTER FISCAL 1993 SALES DECLINE FROM PRIOR YEAR; RESTRUCTURING, OTHER CHARGES RESULT IN NET LOSS FOR QUARTER

 PALO ALTO, Calif., Nov. 25, ~PRNewswire~ -- Syntex Corporation (NYSE: SYN) today reported that restructuring and other charges and lower operating income resulted in a net loss of $6 million (or $0.03 per share) in the first quarter of fiscal 1993, compared with net income of $132 million or $0.59 per share in the first quarter of fiscal 1992.
 The $180 million charge for restructuring includes estimated costs resulting from a decision to completely or partially close several of the company's chemicals and pharmaceuticals manufacturing plants and estimated severance costs for employees whose positions were eliminated in November 1992. The restructuring charge and other nonoperating charges including the recording of additional provisions related to environmental and other contingencies, were partially offset by the reduction of certain tax reserves.
 ABBREVIATED FIRST QUARTER RESULTS
 ($ in millions, except per share data)
 Percent
 1Q FY93 1Q FY92 Change
 Net Sales $492.2 $501.7 (2)
 Operating Expenses, excluding
 restructuring charge $404.6 $355.2 14
 Restructuring Charge $180.0 -- N.A.
 Operating Income (Loss) $(92.4) $146.5 N.A.
 Net Income (Loss) $(6.1) $132.3 N.A.
 Earnings (Loss) per share $(0.03) $0.59 N.A.
 Operating income in the first quarter of fiscal 1993 without the restructuring charge would have been $87.6 million, a 40-percent decrease from the prior year first quarter.
 The cost reduction and restructuring program includes the recent elimination of approximately 1,000 positions in marketing, administration and research. Approximately 500 of these positions were eliminated through a combination of terminations, early retirements and resignations. This reduction is estimated to yield annual savings of approximately $30 million. The remaining 500 positions eliminated were budgeted but will not be filled. In addition, the decision to completely or partially close several plants over the next two to three years is estimated to result in the elimination of approximately another 600 positions. These closings are expected to generate further substantial savings in the mid-1990s and beyond.
 The restructuring charge resulted in a reduction of approximately $0.64 in earnings per share in the first quarter of fiscal 1993.
 The decline in worldwide sales in the first quarter of fiscal 1993 was primarily due to lower sales of human pharmaceutical products in the United States, partially offset by stronger sales outside the United States. United States sales of the company's more-mature pharmaceutical products in the first quarter of fiscal 1993 were affected by significant reductions in wholesaler inventory levels, which the company believes stabilized in November. Another factor in the sales of Naprosyn (naproxen) and Anaprox (naproxen sodium) was competition from new products that were not on the market in the United States in the first quarter of fiscal 1992.
 WORLDWIDE HUMAN PHARMACEUTICAL SALES
 ($ in millions)
 Percent
 1Q FY93 1Q FY92 Change
 U.S. Sales $275.2 $312.1 (12)
 Non-U.S. Sales 139.8 118.7 18.
 Total $415.0 $430.8 (4)
 NAPROXEN~NAPROXEN SODIUM SALES
 ($ in millions)
 Percent
 1Q FY93 1Q FY92 Change
 U.S. Sales $147.0 $203.9 (28)
 Non-U.S. Sales 65.3 57.5 14
 Total $212.3 $261.4 (19)
 Worldwide sales of Toradol (ketorolac tromethamine) intramuscular injectable and tablets almost tripled to $67.8 million in the first quarter of fiscal 1993, compared with sales of $23.7 million in the same quarter a year ago. Toradol oral tablets were first introduced in the United States in March 1992.
 "Toradol is currently our number one marketing priority," Paul E. Freiman, Syntex chairman and chief executive officer, said. "We have assigned our entire United States sales force to this important product, and we're beginning to see the results of that extra effort."
 According to independent audit data, new prescriptions for Toradol oral in the United States increased to 248,000 in October 1992 in the United States, compared with 204,000 new prescriptions in September and 190,000 new prescriptions in August. Toradol sales in the United States in both the tablet and injectable formulations were $52.4 million in the first quarter of fiscal 1993, compared with sales of $17.7 million in the first quarter of fiscal 1992, when only the injectable formulation was available.
 "Toradol has now been used by more than 8 million patients in 25 countries," Freiman said.
 In the first quarter of fiscal 1993, Syntex's non-United States sales were $7.1 million higher than they would have been had currency exchange rates that were in effect in the first quarter of fiscal 1992 remained constant. However, this positive impact on sales was approximately offset by the effect of currency exchange rate changes which increased operating expenses outside the United States.
 The company's gross margin percentage was 78.9 percent in the first quarter of fiscal 1993, compared with 81.8 percent in the first quarter of fiscal 1992. The decrease was primarily due to inventory adjustments and changes in the product and geographic mix. The company currently expects the gross margin for the 1993 fiscal year to be higher than the margin in the first quarter.
 Total selling, general and administrative (SGandA) expenses, including costs to market newer products, increased 14 percent to $203.1 million in the first quarter of fiscal 1993 compared with the year-ago period. SGandA expenses in the first quarter of fiscal 1993 were virtually flat compared with SGandA spending in the fourth quarter of fiscal 1992.
 "We are committed to reducing SGandA as a percent of sales," Freiman said. "Although we did not make progress toward achieving that goal in the quarter, the cost-reductions and restructuring program that we have initiated are designed to help us achieve that objective over time."
 Research and development spending increased 14 percent in the first quarter of fiscal 1993, to $97.4 million. The company's research spending in fiscal 1993 is expected to be approximately $425 million, compared with $374 million in the prior fiscal year.
 During the quarter, the company put additional resources behind development projects that seem to have the greatest chance of future success and eliminated other projects that appear less likely to succeed.
 Nonoperating items in the first quarter of fiscal 1993 included $42.1 million of additions to reserves related to environmental matters, representing costs relating to dioxin contamination in Missouri, including costs of litigation with insurance companies on dioxin coverage issues, and remediation at other environmental sites. A number of developments principally in November, affected the estimated costs of the Missouri dioxin remediation project. These include receipt of bids on major portions of the project and developments in the design engineering phase of the project. Nonoperating items also included a charge of $10.0 million for reserves related to other contingencies.
 The 1993 fiscal first quarter provision for taxes on income is a benefit of $137.9 million, resulting principally from the tax benefits of $36.9 million derived from the restructuring charge and a one-time benefit of $102.5 million from the reduction of certain tax reserves. This change in the accounting estimate relating to certain reserves was based upon a recent study by an outside advisor which supports the company's intercompany pricing.
 The company anticipates the use of a 4 percent tax rate for the remainder of fiscal 1993 compared with a tax rate of 13 percent in fiscal 1992. The lower tax rate for fiscal 1993 reflects the impact of the environmental and other reserves and the adoption of FAS109. The tax rate in fiscal 1994 is expected to be comparable to the rates in recent years.
 Also included in the fiscal 1993 first quarter is a $0.9 million charge from the cumulative effect on prior years of the adoption of two new accounting standards. The adoption of FAS 109, the new standard regarding income taxes, resulted in a benefit of $63.7 million. This was more than offset by an after-tax charge of $64.6 million ($93.7 million pre-tax) related to the adoption of FAS 106, for post-retirement healthcare benefits. The annual effect of the adoption of FAS 106 is expected to reduce Syntex's pretax earnings by $9.5 million in fiscal 1993.
 SYNTEX CORPORATION AND SUBSIDIARY COMPANIES
 Consolidated Statements of Income
 ($ in millions, except per share amounts)
 First Fiscal Quarter
 FY1993 FY1992
 Net sales $492.2 $501.7
 Costs and expenses:
 Cost of goods sold 104.1 91.5
 Selling, general and administrative 203.1 178.5
 Research & development 97.4 85.2
 Restructuring charge 180.0 --
 Total operating expenses 584.6 355.2
 Operating income (loss) (92.4) 146.5
 Non-operating income (expense):
 Interest income 11.6 14.4
 Interest expense (6.3) (7.6)
 Other--net (56.0) (1.2)
 Total (50.7) 5.6
 Income (loss) before taxes on income (143.1) 152.1
 Provision (benefit) for taxes on income(137.9) 19.8
 Income (loss) before accounting changes (5.2) 132.3
 Cumulative effect of accounting changes,
 net of tax (0.9) --
 Net income (loss) $(6.1) $132.3
 Shares of common stock 225.3 225.1
 Earnings (loss) per share $(0.03) $0.59
 Certain data for the period ended October 31, 1991, have been restated to reflect a reclassification of cash discounts as a reduction of net sales rather than as selling, general and administrative expense, as previously recorded. All current and future periods will report sales net of cash discounts.
 The results of operations for the period ended October 31, 1992, are not necessarily indicative of the results which ultimately might be achieved for the current year.
 The provision (benefit) for taxes on income for the period ended October 31, 1992, includes the recognition of a change in accounting estimate related to certain tax reserves and the tax benefit from the restructuring charge. These items resulted in tax benefits of $102.5 million and $36.9 million, respectively.
 SYNTEX CORPORATION AND SUBSIDIARY COMPANIES
 Sales by Location and Business Segment
 ($ in millions)
 First Fiscal Quarter Percent
 FY1993 FY1992 Change
 Location
 U.S. sales $328.2 $362.7 (10)
 Non-U.S. sales 164.0 139.0 18
 Total $492.2 $501.7 (2)
 Business Segment
 PHARMACEUTICALS:
 Pain and Inflammation:
 Naprosyn~Anaprox (naproxen~naproxen sodium)
 U.S. sales $147.0 $203.9 (28)
 Non-U.S. sales 65.3 57.5 14
 Total Naprosyn~Anaprox 212.3 261.4 (19)
 Toradol (ketorolac tromethamine)
 U.S. sales
 Oral 24.2 --- 100 plus
 Intramuscular 28.2 17.7 59
 Non-U.S. sales 15.4 6.0 100 plus
 Total Toradol 67.8 23.7 100 plus
 Total Pain and Inflammation 280.1 285.1 (2)
 Reproductive and Endocrinology:
 Oral contraceptives 20.5 28.3 (28)
 Synarel (nafarelin acetate) 6.6 7.1 (7)
 Other 2.5 3.2 (22)
 Total Reproductive and Endocrinology 29.6 38.6 (23)
 Cardio- and Cerebrovascular:
 Cardene (nicardipine hydrochloride) 15.9 20.5 (22)
 Ticlid (ticlopidine hydrochloride) 8.1 .8 100 plus
 Total Cardio- and Cerebrovascular 24.0 21.3 13
 Dermatological 22.6 28.0 (19)
 Cytovene (ganciclovir sodium) 19.1 17.1 12
 Other Human Pharmaceuticals 39.6 40.7 (3)
 Animal Health 22.5 19.8 14
 Total pharmaceuticals 437.5 450.6 (3)
 DIAGNOSTICS 54.7 51.1 7
 TOTAL $492.2 $501.7 (2)
 Worldwide Human Pharmaceutical Sales
 U.S. Sales $275.2 $312.1 (12)
 Non-U.S. Sales 139.8 118.7 18
 Total $415.0 $430.8 (4)
 -0- 11~25~92 R
 ~CONTACT: Nancy Peterson, 415-855-5567, Kathleen Gary, 415-855-5924, or Linda Thomas, 415-852-1321, all of Syntex~
 (SYN)


CO: Syntex Corp. ST: California IN: MTC SU: ERN

TM -- SJ001 -- 1397 11~25~92 09:20 EST
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