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Last updated on April 23, 2014 at 13:51 EDT

Jazz Pharmaceuticals Announces Third Quarter 2012 Results

November 8, 2012

DUBLIN, Nov. 8, 2012 /PRNewswire/ — Jazz Pharmaceuticals plc (Nasdaq: JAZZ) today announced financial results for the third quarter ended September 30, 2012. These results reflect the first full quarter of operations following completion of the EUSA Pharma acquisition in June. The company also reported the results of its women’s health business, which was sold in October, as discontinued operations.

“During the third quarter, we completed the integration of EUSA Pharma’s U.S. commercial business, and our R&D group is working to coordinate worldwide Erwinaze(®) and Asparec(®) development activities,” said Bruce Cozadd, chairman and chief executive officer of Jazz Pharmaceuticals. “I am very pleased that we have been able to complete two important acquisitions and a divestiture of our non-core women’s health business this year, while continuing to deliver solid results fueled by growing sales of key products.”

Third quarter 2012 adjusted income from continuing operations, which excluded contributions from the discontinued women’s health business, was $78.6 million, or $1.29 per diluted share. Adjusted income for the discontinued women’s health business was $3.0 million, or $0.05 per diluted share, for a total of $1.34 per share on a combined basis.

GAAP income from continuing operations for the third quarter of 2012 was $33.6 million, or $0.56 per diluted share, and GAAP loss from the discontinued women’s health business was $0.4 million, or $0.01 per diluted share. GAAP net income for the third quarter of 2012 was $33.2 million, or $0.55 per diluted share.

GAAP net income was impacted by various acquisition-related expenses, which included transaction, integration and restructuring expenses, as well as certain non-cash expenses. A reconciliation of certain GAAP to non-GAAP adjusted information is included with this press release.

Revenues and Product Sales

Total revenues for the quarter ended September 30, 2012 were $175.5 million, including net sales, royalties and contract revenues, but excluding the $8.1 million of net sales attributable to the divested women’s health business that were reported separately as discontinued operations.

A significant increase in total net sales for the third quarter of 2012 over the prior year third quarter resulted from the addition of net sales from the expanded product portfolio acquired in the Azur Pharma and EUSA Pharma transactions, as well as continued growth in net sales of Xyrem(®) (sodium oxybate) oral solution.

Net sales from continuing operations for the third quarter of 2012 included:

  • Xyrem: Net sales of Xyrem increased by 64% to $102.6 million for the third quarter of 2012, compared to net sales of $62.5 million in the third quarter of 2011. During the third quarter of 2012, the average number of active Xyrem patients was approximately 10,200.
  • Erwinaze/Erwinase: Worldwide net sales of Erwinaze(®)/Erwinase(®) (asparaginase Erwinia chrysanthemi) were $31.7 million. Erwinaze was approved by the U.S. FDA in November 2011.
  • Prialt: Third quarter 2012 net sales of Prialt(® )(ziconotide) intrathecal infusion were $5.4 million, compared to $5.0 million in the prior year quarter on a pro forma basis.
  • Psychiatry Products: Net sales of the company’s psychiatry products, including once-daily Luvox CR(®) (fluvoxamine maleate), FazaClo(®) (clozapine, USP) HD and FazaClo LD, were $21.0 million for the third quarter of 2012. Net sales of these products in the prior year quarter were $19.7 million on a pro forma basis.
  • Other: Net sales of other products for the third quarter of 2012 were $13.4 million. These products include other non-promoted products acquired in the EUSA Pharma and Azur Pharma transactions.

Other Financial Highlights

  • Cost of product sales increased by $28.7 million compared to the third quarter of 2011 due to higher net sales and $10.3 million of purchase accounting inventory fair value step-up.
  • Selling, general and administrative expenses increased by $30.4 million compared to the prior year quarter, primarily due to increased headcount and related expenses from the addition of the Azur Pharma and EUSA Pharma businesses.
  • Intangible asset amortization for the third quarter of 2012 was $19.7 million, related primarily to the company’s expanded product portfolio.
  • Interest expense increased by $7.6 million compared to the third quarter of 2011 due to inclusion of a full quarter’s interest under the company’s term loan which had a balance of $462.3 million as of September 30, 2012.

Recent Transaction and Balance Sheet Update

On October 15, 2012, Jazz Pharmaceuticals completed the sale of its women’s health business to Meda for $97.6 million in cash, including $2.6 million for certain purchased inventory. Following this transaction, Jazz Pharmaceuticals has approximately $300 million in cash and cash equivalents.

2012 Financial Guidance

Jazz Pharmaceuticals is providing 2012 guidance for continuing operations which reflects the sale of its women’s health business and the treatment of that business as a discontinued operation.

                                                             2012 Guidance for
                                                             Continuing Operations
                                                             ---------------------

    Revenues                                                             $575-585 million

    Total Net Product Sales                                              $570-580 million
         -Xyrem Net Sales                                                $375-380 million
         -Erwinaze/Erwinase Net Sales (partial year)(1)                    $65-69 million

    Adjusted Gross Margin %(2)                                                     88-91%

    Adjusted Combined SG&A and R&D Expenses(3)                           $200-205 million

    GAAP Income from Continuing Operations                               $140-151 million
    Adjusted Net Income4                                                 $280-286 million

    GAAP Income from Continuing Operations Per Diluted Share                  $2.34-$2.49
    Adjusted Net Income Per Diluted Share4                                    $4.65-$4.75

    1.           Expected sales from and after the
                 completion of the EUSA
                 acquisition on June 12, 2012.
    2.           Excludes $17?18 million of
                 purchase accounting inventory
                 fair value step-up and $1
                 million of share?based
                 compensation expense from
                 estimated GAAP Gross Margin of
                 85-88%.
    3.           Excludes $22?24 million of
                 transaction, integration and
                 restructuring costs, $22?23
                 million of share?based
                 compensation expense, and $2
                 million related to a change in
                 the fair value of contingent
                 consideration from estimated GAAP
                 Combined SG&A and R&D Expenses of
                 $245-250 million.
    4.           See "Non?GAAP Financial Measures"
                 below. A reconciliation of GAAP
                 to non?GAAP adjusted 2012
                 financial guidance is included
                 with this press release.

Conference Call Details

Jazz Pharmaceuticals will host an investor conference call and live audio webcast today at 4:30 p.m. EST (9:30 p.m. GMT) to provide a business and financial update and discuss 2012 third quarter results and 2012 guidance. The live webcast may be accessed from the Investors & Media section of the company’s website at www.jazzpharmaceuticals.com. Please connect to the website prior to the start of the conference call to ensure adequate time for any software downloads that may be necessary. Investors may participate in the conference call by dialing +1 866-783-2137 in the U.S., or +1 857-350-1596 outside the U.S., and entering passcode 22418849.

An archived version of the webcast will be available for at least one week in the Investors & Media section of the Jazz Pharmaceuticals website a www.jazzpharmaceuticals.com.

About Jazz Pharmaceuticals

Jazz Pharmaceuticals plc is a specialty biopharmaceutical company focused on improving patients’ lives by identifying, developing and commercializing innovative products that address unmet medical needs. The company has a diverse portfolio of products in the areas of narcolepsy, oncology, pain and psychiatry. The company’s U.S. marketed products in these areas include: Xyrem(®) (sodium oxybate) oral solution, Erwinaze(®) (asparaginase Erwinia chrysanthemi), Prialt(®) (ziconotide) intrathecal infusion, Luvox CR(®) (fluvoxamine maleate), FazaClo(®) (clozapine, USP) HD and FazaClo LD. Outside of the U.S., Jazz Pharmaceuticals also has a number of products marketed by its international division, EUSA Pharma.

Non-GAAP Financial Measures

To supplement Jazz Pharmaceuticals’ financial results and guidance presented on a GAAP basis, the company uses certain non-GAAP adjusted income and adjusted net income financial measures. The company believes that these non-GAAP financial measures are helpful in understanding its past financial performance and potential future results, particularly in light of the effect of various acquisition and divestiture transactions effected by the company during 2012. They are not meant to be considered in isolation or as a substitute for comparable GAAP measures, and should be read in conjunction with the consolidated financial statements prepared in accordance with GAAP. Jazz Pharmaceuticals’ management regularly uses these supplemental non-GAAP financial measures internally to understand, manage and evaluate its business and make operating decisions. Compensation of executives is based in part on the performance of the company’s business based on these non-GAAP measures. In addition, Jazz Pharmaceuticals believes that the use of these non-GAAP measures enhances the ability of investors to compare its results from period to period. Adjusted income and adjusted net income financial measures as used by Jazz Pharmaceuticals may be calculated differently from, and therefore may not be directly comparable to, similarly titled measures used by the company’s competitors and other companies. The adjusted income from continuing operations and adjusted net income measures used in this press release represent GAAP income from continuing operations excluding revenue related to upfront and milestone payments, amortization of intangible assets, share-based compensation expense, purchase accounting inventory fair value step-up adjustments, transaction and integration costs, restructuring charges, change in fair value of contingent consideration, loss on extinguishment of debt, other non-cash items, and the income tax effects of these adjustments and acquisition restructuring activities. The adjusted income from discontinued operations measures used in this press release represent GAAP loss from discontinued operations excluding amortization of intangible assets, share-based compensation expense and purchase accounting inventory fair value step-up adjustments.

This press release also includes, with respect to the company’s 2012 financial guidance, the non-GAAP financial measures “adjusted gross margin percentage” and “adjusted combined selling, general and administrative and research and development expenses”. As used in this press release, “adjusted gross margin percentage” and “adjusted combined selling, general and administrative and research and development expenses” exclude from GAAP gross margin percentage and GAAP combined selling, general and administrative and research and development expenses, respectively, as applicable, share-based compensation expense, purchase accounting inventory fair value step-up adjustments, transaction and integration costs, restructuring charges and change in fair value of contingent consideration. The company believes that, similar to the presentation of adjusted net income and adjusted net income per diluted share, these non-GAAP financial measures are also helpful in understanding the company’s 2012 financial guidance, particularly in light of the effect of various acquisition and divestiture transactions effected by the company during 2012. They are not meant to be considered in isolation or as a substitute for comparable GAAP measures, and should be read in conjunction with the consolidated financial statements prepared in accordance with GAAP.

“Safe Harbor” Statement under the Private Securities Litigation Reform Act of 1995

This press release contains forward-looking statements, including, but not limited to, statements related to Jazz Pharmaceuticals’ future financial results and growth potential, including 2012 financial guidance, future product development and other statements that are not historical facts. These forward-looking statements are based on Jazz Pharmaceuticals’ current expectations and inherently involve significant risks and uncertainties. Actual results and the timing of events could differ materially from those anticipated in such forward looking statements as a result of these risks and uncertainties, which include, without limitation, risks and uncertainties associated with maintaining and increasing sales of and revenue from Xyrem, such as the potential introduction of generic competition and changed or increased regulatory restrictions on Xyrem, as well as similar risks related to effectively commercializing the company’s other marketed products, including Erwinaze and Prialt; successfully integrating and growing Jazz Pharmaceuticals’ combined business operations after the Azur Pharma merger and EUSA Pharma acquisition, which may be more difficult, time-consuming or costly than expected, particularly in light of the company’s expanded international footprint; obtaining appropriate pricing and reimbursement for the company’s products in an increasingly challenging environment; ongoing regulation and oversight by U.S. and foreign regulatory agencies; dependence on key customers and sole source suppliers; the company’s ability to protect intellectual property rights with respect to its products; the difficulty and uncertainty of pharmaceutical product development and the uncertainty of clinical success and regulatory approval; and potential restrictions on the company’s ability and flexibility to pursue future opportunities as a result of its substantial outstanding debt obligations; as well as risks related to future opportunities and plans, including the uncertainty of expected future financial performance and results; and those risks detailed from time-to-time under the caption “Risk Factors” and elsewhere in Jazz Pharmaceuticals plc’s Securities and Exchange Commission filings and reports (Commission File No. 001-33500), including in the Quarterly Report on Form 10-Q for the quarter ended June 30, 2012 and future filings and reports by the company, including the Quarterly Report on Form 10-Q for the quarter ended September 30, 2012. Jazz Pharmaceuticals undertakes no duty or obligation to update any forward-looking statements contained in this release as a result of new information, future events or changes in its expectations.

                                                JAZZ PHARMACEUTICALS PLC
                                       CONDENSED CONSOLIDATED STATEMENTS OF INCOME
                                        (In thousands, except per share amounts)
                                                       (Unaudited)

                                                           Three Months Ended              Nine Months Ended
                                                              September 30,                  September 30,
                                                              -------------                  -------------
                                                                2012                 2011             2012       2011
                                                                ----                 ----             ----       ----
     Revenues:
     Product sales, net                                     $174,130              $72,216         $398,585   $185,583
     Royalties and contract
      revenues                                                 1,385                1,077            3,691      3,158
     Total revenues                                          175,515               73,293          402,276    188,741
     Operating expenses:
     Cost of product sales                                    32,629                3,901           52,662     10,080
     Selling, general and
      administrative                                          60,924               30,547          162,505     72,552
     Research and
      development                                              6,920                3,279           13,200     10,356
     Intangible asset
      amortization                                            19,742                1,862           43,444      5,586
     Total operating
      expenses                                               120,215               39,589          271,811     98,574
     Income from operations                                   55,300               33,704          130,465     90,167
     Interest expense, net                                    (7,750)                (125)          (9,199)    (1,559)
     Foreign exchange and
      other                                                   (1,099)                   -           (1,357)         -
     Loss on extinguishment
      of debt                                                      -               (1,097)               -     (1,097)
     Income from continuing
      operations before
      provision for income
      tax expense                                             46,451               32,482          119,909     87,511
     Provision for income
      tax expense                                             12,856                    -           24,966          -
     Income from continuing
      operations                                              33,595               32,482           94,943     87,511
     Loss from discontinued
      operations                                                (386)                   -           (6,908)         -
     Net income                                              $33,209              $32,482          $88,035    $87,511
                                                             =======              =======          =======    =======

    Basic income (loss) per share:
        Income from continuing
         operations                                            $0.59                $0.77            $1.69      $2.12
        Loss from discontinued
         operations                                            (0.01)                   -            (0.12)         -
                                                               -----                  ---            -----        ---
        Net income                                             $0.58                $0.77            $1.57      $2.12
                                                               =====                =====            =====      =====
    Diluted income (loss) per share:
        Income from continuing
         operations                                            $0.56                $0.69            $1.59      $1.88
        Loss from discontinued
         operations                                            (0.01)                   -            (0.12)         -
                                                               -----                  ---            -----        ---
        Net income                                             $0.55                $0.69            $1.47      $1.88
                                                               =====                =====            =====      =====

     Weighted-average ordinary shares used in per share
      computations:
     Basic                                                    57,703               42,028           56,198     41,206
                                                              ======               ======           ======     ======
     Diluted                                                  60,883               47,241           59,846     46,577
                                                              ======               ======           ======     ======
                            JAZZ PHARMACEUTICALS PLC
                          SUMMARY OF PRODUCT SALES, NET
                                 (In thousands)
                                   (Unaudited)

                                   Three Months Ended           Nine Months Ended
                                      September 30,               September 30,
                                      -------------               -------------
                                        2012               2011       2012            2011
                                        ----               ----       ----            ----
    Xyrem                           $102,615            $62,547   $265,149        $161,503
    Erwinaze/Erwinase (1)             31,652                  -     37,660               -
    Prialt (1)                         5,413                  -     20,491               -
    Psychiatry:
        Luvox CR                      11,605              9,669     31,634          24,080
        FazaClo LD (1)                 6,370                  -     17,905               -
        FazaClo HD (1)                 3,057                  -      8,979               -
    Other (1)                         13,418                  -     16,767               -
    Total                           $174,130            $72,216   $398,585        $185,583
                                    ========            =======   ========        ========
             (1)   Net sales for
                   the three and
                   nine months
                   ended
                   September 30,
                   2012 reported
                   by Jazz
                   Pharmaceuticals
                   plc include
                   net sales from
                   the historic
                   Azur Pharma
                   business for
                   the period
                   from July 1,
                   2012 through
                   September 30,
                   2012 and from
                   January 18,
                   2012 through
                   September 30,
                   2012,
                   respectively,
                   and net sales
                   from the
                   historic EUSA
                   Pharma
                   business for
                   the period
                   from July 1,
                   2012 through
                   September 30,
                   2012 and from
                   June 12, 2012
                   through
                   September 30,
                   2012,
                   respectively.
                    Net sales
                    from women's
                   health
                   products are
                   included in
                   discontinued
                   operations.

                   The following
                   unaudited pro
                   forma
                   information
                   represents the
                   combined net
                   product sales
                   for the three
                   and nine
                   months ended
                   September 30,
                   2012 and 2011,
                   respectively,
                   as if the
                   merger with
                   Azur Pharma,
                   the
                   acquisition of
                   EUSA Pharma
                   and
                   disposition of
                   the women's
                   health
                   business had
                   each been
                   completed on
                   January 1,
                   2011:
                                SUMMARY OF PRODUCT SALES, NET (PRO FORMA)
                                             (In thousands)
                                               (Unaudited)

                                                                               Three Months Ended               Nine Months Ended
                                                                                  September 30,                   September 30,
                                                                                  -------------                   -------------
                                                                                               2012                            2011                            2012                            2011
                                                                                               ----                            ----                            ----                            ----
                             Xyrem                                                         $102,615                         $62,547                        $265,149                        $161,503
                             Erwinaze/Erwinase                                               31,652                           9,638                          97,447                          25,686
                             Prialt                                                           5,413                           4,984                          20,830                          14,827
                             Psychiatry:
                                  Luvox CR                                                   11,605                           9,669                          31,634                          24,080
                                  FazaClo LD                                                  6,370                           7,713                          18,138                          22,015
                                  FazaClo HD                                                  3,057                           2,322                           9,109                           5,538
                             Other                                                           13,418                          12,322                          38,708                          39,935
                             Total pro forma net sales                                     $174,130                        $109,195                        $481,015                        $293,584
                                                                                           ========                        ========                        ========                        ========

                                               JAZZ PHARMACEUTICALS PLC
                                         CONDENSED CONSOLIDATED BALANCE SHEETS
                                                    (In thousands)
                                                      (Unaudited)

                                                      September 30,            December 31,
                                                                        2012                    2011
                                                                        ----                    ----
    ASSETS
    Current assets:
    Cash and
     cash
     equivalents                                                    $189,793                 $82,076
    Marketable
     securities                                                            -                  75,822
    Accounts
     receivable                                                       88,304                  34,374
    Inventories                                                       30,300                   3,909
    Prepaid
     expenses                                                          7,127                   1,690
    Other
     current
     assets                                                            9,942                   1,260
    Assets held
     for sale                                                         59,546                       -
    Total
     current
     assets                                                          385,012                 199,131
    Property
     and
     equipment,
     net                                                               6,671                   1,557
    Intangible
     assets,
     net                                                             876,959                  14,585
    Goodwill                                                         437,652                  38,213
    Other long-
     term
     assets                                                           20,405                      87
    Total
     assets                                                       $1,726,699                $253,573
                                                                  ==========                ========

    LIABILITIES AND SHAREHOLDERS' EQUITY
    Current liabilities:
    Accounts
     payable                                                         $20,535                  $5,129
    Accrued
     liabilities                                                     123,632                  34,783
    Current
     portion of
     long-term
     debt                                                             26,719                       -
    Purchased
     product
     rights
     liability                                                         5,743                   4,500
    Liability
     under
     government
     settlement                                                            -                   7,320
    Deferred
     revenue                                                           1,943                   1,138
    Total
     current
     liabilities                                                     178,572                  52,870
    Deferred
     revenue,
     non-
     current                                                           7,129                   7,915
    Long-term
     debt, less
     current
     portion                                                         435,631                       -
    Contingent
     consideration                                                    36,200                       -
    Deferred
     tax
     liability                                                       180,919                       -
    Other non-
     current
     liabilities                                                       2,161                       -
    Total
     shareholders'
     equity                                                          886,087                 192,788
    Total
     liabilities
     and
     shareholders'
     equity                                                       $1,726,699                $253,573
                                                                  ==========                ========
                                                                                                          JAZZ PHARMACEUTICALS PLC
                                                                                          RECONCILIATION OF GAAP TO NON-GAAP ADJUSTED INFORMATION
                                                                                                             CERTAIN LINE ITEMS
                                                                                                  (In thousands, except per share amounts)
                                                                                                                (Unaudited)

                                                        Three Months Ended
                                                        ------------------
                                     September 30, 2012                                                   September 30, 2011
                                     ------------------                                                   ------------------
                                       GAAP                             Adjustment                                 Non-GAAP                       GAAP         Adjustment             Non-GAAP
                                       ----                             ----------                                 --------                       ----         ----------             --------
    Total revenues                            $175,515                      $            -                                  $175,515                   $73,293             $(285) (g)          $73,008
    Cost of product sales                       32,629                             (10,771) (a)                               21,858                     3,901              (201) (c)            3,700
    Selling, general and
     administrative                             60,924                              (9,275) (b)                               51,649                    30,547            (8,130) (h)           22,417
    Research and
     development                                 6,920                                (681) (c)                                6,239                     3,279              (838) (c)            2,441
    Intangible asset
     amortization                               19,742                             (19,742)                                        -                     1,862            (1,862)                    -
    Interest expense, net                        7,750                              (1,261) (d)                                6,489                       125                 -                   125
    Loss on
     extinguishment of
     debt                                            -                                   -                                         -                     1,097            (1,097)                    -
    Provision for income
     tax expense                                12,856                              (3,263) (e)                                9,593                         -                 -                     -
    Income from
     continuing
     operations                                 33,595                              44,993                                    78,588                    32,482            11,843                44,325
    Income (loss) from
     discontinued
     operations                                   (386)                              3,372  (f)                                2,986                         -                 -                     -

    Diluted income (loss) per share:
    Income from
     continuing
     operations                                  $0.56                                                                         $1.29                     $0.69                                   $0.94
    Income (loss) from
     discontinued
     operations                                  (0.01)                                                                         0.05                         -                                       -
    Total                                         0.55                                                                          1.34                      0.69                                    0.94
    (a)            Purchase accounting inventory fair
                   value step-up of $10,336, share-
                   based compensation expense of
                   $344 and restructuring expense of
                   $91.
    (b)            Share-based compensation expense
                   of $5,330, restructuring charges
                   of $1,542, transaction and
                   integration costs of $1,503, and
                   change in fair value of
                   contingent consideration of $900.
    (c)           Share-based compensation expense.
    (d)            Non-cash interest expense
                   primarily associated with debt
                   discount and debt issuance costs.
    (e)            Tax related to acquisition
                   restructuring of $9,529 partially
                   offset by the tax effect of non-
                   GAAP pre-tax adjustments of
                   $6,266.
    (f)            Intangible asset amortization of
                   $2,009, purchase accounting
                   inventory fair value step-up of
                   $1,106 and share-based
                   compensation expense of $257.
    (g)            Revenue related to upfront and
                   milestone payments.
    (h)            Transaction and integration costs
                   of $5,974 and share-based
                   compensation expense of $2,156.

                                                                                                             JAZZ PHARMACEUTICALS PLC
                                                                                             RECONCILIATION OF GAAP TO NON-GAAP ADJUSTED INFORMATION
                                                                                                                CERTAIN LINE ITEMS
                                                                                                     (In thousands, except per share amounts)
                                                                                                                   (Unaudited)

                                                          Nine Months Ended
                                                          -----------------
                                     September 30, 2012                                               September 30, 2011
                                     ------------------                                               ------------------
                                         GAAP                            Adjustment                                 Non-GAAP                         GAAP          Adjustment              Non-GAAP
                                         ----                            ----------                                 --------                         ----          ----------              --------
    Total revenues                              $402,276                     $            -                                  $402,276                     $188,741              $(854) (g)          $187,887
    Cost of product sales                         52,662                            (15,766) (a)                               36,896                       10,080               (430) (c)             9,650
    Selling, general and
     administrative                              162,505                            (32,848) (b)                              129,657                       72,552            (12,960) (h)            59,592
    Research and
     development                                  13,200                             (1,718) (c)                               11,482                       10,356             (2,342) (c)             8,014
    Intangible asset
     amortization                                 43,444                            (43,444)                                        -                        5,586             (5,586)                     -
    Interest expense, net                          9,199                             (1,569) (d)                                7,630                        1,559               (394) (d)             1,165
    Loss on
     extinguishment of
     debt                                              -                                  -                                         -                        1,097             (1,097)                     -
    Provision for income
     tax expense                                  24,966                             (6,160) (e)                               18,806                            -                  -                      -
    Income from
     continuing
     operations                                   94,943                            101,505                                   196,448                       87,511             21,955                109,466
    Income (loss) from
     discontinued
     operations                                   (6,908)                            11,185  (f)                                4,277                            -                  -                      -

    Diluted income (loss) per share:
    Income from
     continuing
     operations                                    $1.59                                                                        $3.28                        $1.88                                     $2.35
    Income (loss) from
     discontinued
     operations                                    (0.12)                                                                        0.07                            -                                         -
    Total                                           1.47                                                                         3.35                         1.88                                      2.35
    (a)            Purchase accounting inventory fair
                   value step-up of $14,676, share-
                   based compensation expense of
                   $999 and restructuring expense of
                   $91.
    (b)            Transaction and integration costs
                   of $17,692, share-based
                   compensation expense of $11,967,
                   restructuring charges of $2,089
                   and change in fair value of
                   contingent consideration of
                   $1,100.
    (c)           Share-based compensation expense.
    (d)            Non-cash interest expense
                   primarily associated with debt
                   discount and debt issuance costs.
    (e)            Tax related to acquisition
                   restructuring of $15,379
                   partially offset by the tax
                   effect of non-GAAP pre-tax
                   adjustments of $9,219.
    (f)            Intangible asset amortization of
                   $7,571, purchase accounting
                   inventory fair value step-up of
                   $3,146 and share-based
                   compensation expense of $468.
    (g)            Revenue related to upfront and
                   milestone payments.
    (h)            Share-based compensation expense
                   of $6,986 and transaction and
                   integration costs of $5,974.

                                     JAZZ PHARMACEUTICALS PLC
                   CONDENSED CONSOLIDATED STATEMENTS OF DISCONTINUED OPERATIONS
                                          (In thousands)
                                            (Unaudited)

                                Three Months Ended                              Nine Months Ended
                                September 30, 2012                              September 30, 2012
                                ------------------                              ------------------

    Product sales,
     net                                               $8,086                                      $19,277
                                                       ======                                      =======

    Loss from
     discontinued
     operations                                         $(386)                                     $(6,908)
                                                        =====                                      =======
                     JAZZ PHARMACEUTICALS PLC
         RECONCILIATION OF GAAP TO NON-GAAP ADJUSTED 2012
                         FINANCIAL GUIDANCE
              (In millions, except per share amounts)

     GAAP income from continuing
      operations                                  $140 - 151
     Intangible asset amortization                        63
     Share-based compensation expense            23-24
     Purchase accounting inventory fair
      value step-up                             17 - 18
     Transaction, integration and
      restructuring costs                       22 - 24
     Change in fair value of contingent
      consideration                                        2
     Other non-cash expense                                3
     Income tax adjustments                       5-6
     Adjusted net income                          $280 - 286
                                                  ==========

     GAAP income from continuing
      operations per diluted share             $2.34 - $2.49
                                               =============
     Adjusted net income per diluted
      share                                    $4.65 - $4.75
                                               =============

     Shares used in computing per diluted
      share amounts                                       60

SOURCE Jazz Pharmaceuticals, Inc.


Source: PR Newswire