Allergan Reports Third Quarter Operating Results and Increases Full Year Earnings Guidance
Posted on: Tuesday, 1 November 2005, 09:00 CST
Allergan, Inc. (NYSE:AGN) today announced operating results for the third quarter ended September 30, 2005. Allergan also announced that its Board of Directors has declared a third quarter dividend of $0.10 per share, payable on December 12, 2005 to stockholders of record on November 16, 2005.
Operating Results
For the quarter ended September 30, 2005:
-- Allergan's net sales were $606.1 million, including $0.2
million of non-pharmaceutical product sales.
-- Pharmaceutical sales increased 25.0 percent, or 23.6 percent
at constant currency, compared to pharmaceutical sales in the
third quarter of 2004.
-- Allergan reported $1.12 diluted earnings per share compared to
the $0.69 diluted earnings per share reported for the third
quarter of 2004. The reported $1.12 diluted earnings per share
includes:
-- the incurrence of restructuring charges related to the scheduled termination of Allergan's manufacturing and supply agreement with Advanced Medical Optics (AMO); -- the incurrence of restructuring charges and transition and duplicate operating expenses related to the streamlining of Allergan's research and development and select commercial activities throughout Europe; -- a decrease in the amount of taxes previously estimated in connection with the repatriation of foreign earnings that had been permanently re-invested outside the United States; -- the recognition of a gain from the sale of a third party equity investment; -- a charge associated with the buy-out of a licensing agreement with Johns Hopkins University; -- the recognition of a gain on the sale of assets primarily used for contract manufacturing and the former distribution of AMO related products; -- the recognition of a gain associated with the sale of Allergan's contact lens care product (CLCP) and surgical product distribution business in India; -- the recognition of an additional amount of income tax benefit for previously paid state income taxes and interest income related to the total income tax benefit; -- the resolution of several significant income tax audit issues, including transfer prices, related to tax years currently under examination or not yet settled through expiration of the statute of limitations and a related reversal of previously accrued statutory interest expense associated with these previously uncertain tax positions; and -- the effect of an unrealized gain on the mark-to-market adjustment to foreign currency derivative instruments.The items above included in diluted earnings per share total $38.4 million, which consists of $18.5 million pre-tax, $23.0 million related to the provision for income taxes and $3.1 million related to minority interest.
-- Allergan's adjusted diluted earnings per share were $0.83,
representing a 23.9 percent increase compared to adjusted
diluted earnings per share of $0.67 reported for the third
quarter of 2004. Adjusted diluted earnings per share for the
third quarter of 2005 exclude the items outlined above and a
reconciliation of the adjustments made from reported earnings
per share to adjusted diluted earnings per share is contained
in the financial tables of this document.
"We are extremely pleased with our results and performance in the third quarter and as a result have increased our full year financial guidance," said David E.I. Pyott, Allergan's Chairman of the Board, President and Chief Executive Officer. "Moreover, we recently entered into a strategic agreement with GlaxoSmithKline which we expect will help us to continue to maximize the value of our assets globally and strengthen our strategic position; and further demonstrates our intent to continually adapt our business model to realize greater sales, greater productivity and increase stockholder value."
Product and Pipeline Update
During the third quarter of 2005:
-- On August 19, 2005, Allergan announced that it received a
written approval from the United States Food and Drug
Administration (FDA) to market Alphagan(R) P (brimonidine
tartrate ophthalmic solution) 0.1%, indicated for the lowering
of intraocular pressure in patients with open-angle glaucoma
or ocular hypertension.
-- On September 28, 2005, Allergan announced that it received
positive opinions for Combigan(TM), Allergan's
Alphagan(R)/timolol combination product for glaucoma
(brimonidine tartrate/timolol ophthalmic solution), from all
twenty-one Concerned Member States included in the
Combigan(TM) Mutual Recognition Procedure for the European
Union.
-- On September 29, 2005, Allergan entered into a multi-year
alliance with Sirna Therapeutics, Inc. to develop Sirna-027, a
novel RNAi-based therapeutic currently in Phase I for
age-related macular degeneration, and to discover and develop
other novel RNAi-based therapeutics against select gene
targets in ophthalmic diseases.
Following the end of the third quarter of 2005:
-- On October 3, 2005, Allergan announced that it entered into a
long-term agreement with GlaxoSmithKline (GSK) to develop and
promote Allergan's Botox(R) (botulinum toxin type A) in Japan
and China and to co-promote GSK's products Imitrex STATdose
System(R) (sumatriptan succinate) and Amerge(R) (naratriptan
hydrochloride) in the United States.
-- On October 3, 2005, Acadia Pharmaceuticals announced that it
received a milestone payment from Allergan in connection with
the advancement of a clinical program directed at novel
treatment for neuropathic pain.
-- On October 24, 2005, NPS Pharmaceuticals announced that it
entered into an agreement with Allergan to promote Restasis(R)
(cyclosporine ophthalmic emulsion 0.05%) to rheumatologists in
the United States.
Other Events
-- Allergan recently made the decision to terminate its clinical
program for oral tazarotene for the treatment of moderate to
very severe psoriasis based on a comprehensive cost benefit
and net present value analysis which demonstrated that
research and development resources should be directed to more
valuable opportunities in the pipeline. Allergan will continue
to investigate the use of tazarotene for the treatment of
retinal disease.
Outlook
For the fourth quarter of 2005, Allergan estimates:
-- Total sales between $565 million and $580 million.
-- Adjusted diluted earnings per share in the range of $0.88 and
$0.89.
For the full year of 2005:
-- Allergan is increasing total pharmaceutical sales guidance to
between $2,240 million and $2,260 million.
-- Allergan is increasing the expected range of Restasis(R) sales
to between $180 million and $200 million and is also
increasing the expected range of the Alphagan(R) franchise
sales to between $255 million and $275 million. All other
individual product sales guidance provided in July 2005
remains unchanged.
-- Pharmaceutical only income statement ratio guidance provided
in July 2005 has changed to:
-- Gross Profit of approximately 83.0% to 84.0%. -- SG&A of approximately 40.0%.-- Research and development pharmaceutical only income statement
ratio guidance provided in July 2005 remains unchanged.
-- Diluted shares outstanding guidance and the effective tax rate
on adjusted earnings guidance provided in July 2005 remain
unchanged.
-- Allergan is increasing adjusted diluted earnings per share
guidance to approximately $3.26 to $3.27, which is
approximately a $0.05 per share increase from guidance
provided in July 2005. Adjusted diluted earnings per share
guidance anticipates non-GAAP adjustments to diluted earnings
per share including the following items discussed above and in
previous earnings releases:
-- the recognition of income associated with the termination of Allergan's Vitrase(R) collaboration agreement with ISTA Pharmaceuticals, Inc.; -- restructuring activities; -- taxes on the repatriation of foreign earnings; -- the gain on the equity investment sale; -- the licensing agreement termination charge; -- the gain on the sale of AMO assets; -- the gain on the sale of India's distribution business related to CLCP & Surgical; -- the income tax benefit for previously paid state income taxes and interest income related to the total income tax benefit; and -- the resolution of several significant tax audit issues and related reversal of previously accrued statutory interest expense.A reconciliation of the adjustments made from diluted earnings per share guidance to adjusted diluted earnings per share guidance is contained in the financial tables of this document. Adjusted diluted earnings per share guidance for 2005 excludes the effect of expensing stock options. Consistent with the Securities and Exchange Commission's announcement amending the compliance dates for Financial Accounting Standards Board Statement No. 123R (FAS 123R), Allergan will begin implementing FAS 123R when it becomes effective, which is currently anticipated to be the first fiscal quarter of 2006.
Forward-Looking Statements
In this press release, the statements regarding new product development, market potential, expected growth, efficiencies, costs and savings, as well as the outlook for Allergan's earnings per share and revenue forecasts, 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 except through public announcement. 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 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 reforms; technological advances and patents obtained by competitors; 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 or future litigations, investigations or claims; the uncertainty associated with the identification of and successful consummation 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; 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 except as required to do so by law.
Additional information concerning the above-referenced risk factors 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 2004 Form 10-K and Allergan's Form 10-Q for the quarter ended June 24, 2005. Copies of Allergan's press releases and additional information about Allergan is available at www.allergan.com or you can contact the Allergan Investor Relations Department by calling 714-246-4636.
About Allergan, Inc.
Allergan, Inc., with headquarters in Irvine, California, is a technology-driven, global health care company providing specialty pharmaceutical products worldwide. Allergan develops and commercializes products in the eye care, neuromodulator, skin care and other specialty markets that deliver value to its customers, satisfy unmet 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 September 30, 2005 amounts ----------------------------------- ---------------------------------- Non-GAAP GAAP Adjustments Adjusted ------- ----------- -------- Product sales Net sales $606.1 $-- $606.1 Cost of sales 98.5 (0.1)(a) 98.4 ------- ----------- -------- Product gross margin 507.6 0.1 507.7 Selling, general and administrative 237.7 12.8 (a)(j) 250.5 Research and development 110.2 (3.5)(a)(b) 106.7 Special charges (0.1) 0.1 (c) -- ------- ----------- -------- Operating income 159.8 (9.3) 150.5 Interest income 11.4 (2.1)(d) 9.3 Interest expense 1.6 (6.5)(d) (4.9) Unrealized gain (loss) on derivative instruments, net (0.2) 0.2 (e) -- Gain on investments 0.8 (0.8)(f) -- Other, net (0.8) -- (0.8) ------- ----------- -------- 12.8 (9.2) 3.6 ------- ----------- -------- Earnings before income taxes and minority interest 172.6 (18.5) 154.1 Provision for income taxes 19.9 23.0 (g) 42.9 Minority interest 2.2 (3.1)(k) (0.9) ------- ----------- -------- Net earnings $150.5 $(38.4) $112.1 ======= =========== ======== Net earnings per share: Basic $1.15 $0.86 Diluted $1.12 $0.83 ======= ======== Weighted average number of common shares outstanding: Basic 131.0 131.0 Diluted 134.7 134.7 Selected ratios as a percentage of net sales ----------------------------------- Gross profit 83.7% 83.8% Selling, general and administrative 39.2% 41.3% Research and development 18.2% 17.6% Three months ended ---------------------------------- in millions, except per share September 24, 2004 amounts ----------------------------------- ---------------------------------- 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 Selling, general and administrative 195.5 -- 195.5 Research and development 83.0 -- 83.0 Special charges -- -- -- ---------- ----------- -------- 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 (e) -- Gain on investments -- -- -- Other, net 3.6 (5.0)(h) (1.4) ---------- ----------- -------- (0.7) (4.9) (5.6) ---------- ----------- -------- Earnings before income taxes and minority interest 132.5 (4.9) 127.6 Provision for income taxes 40.3 (1.9)(i) 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 $0.69 $0.67 ========== ======== Weighted average number of common shares outstanding: Basic 131.5 131.5 Diluted 132.8 132.8 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% (a) Transition/duplicate operating expenses, consisting of Cost of sales of $0.1 million; Selling, general and administrative expense of $0.9 million and Research and development expense of $0.5 million (b) Buy-out of license agreement with Johns Hopkins (c) Restructuring charge reversal (d) Interest income related to previously paid state income taxes and reversal of interest expense related to tax settlements (e) Unrealized loss on the mark-to-market adjustment to derivative instruments (f) Gain on sale of third party equity investment (g) Total tax effect for non-GAAP pre-tax adjustments and other income tax adjustments, consisting of the following amounts (in millions): Tax effect Non-GAAP pre-tax adjustments of $18.5 million $4.1 Additional benefit for state income taxes (1.4) Resolution of uncertain tax positions (19.5) Change in estimated income taxes on additional dividends repatriated above the base and extraordinary dividends amount (6.2) ------- $(23.0) ======= (h) Technology transfer fee (i) Income tax benefit for previously paid state income taxes and tax effect for non-GAAP adjustments (j) Gain on sale of assets primarily used for AMO contract manufacturing ($5.8 million) and gain on sale of distribution business in India ($7.9 million) (k) Minority interest related to gain on sale of distribution business in India "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 30, 2005 and September 24, 2004. 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 September 30, 2005 amounts -------------------------------- ------------------------------------- Non-GAAP GAAP Adjustments Adjusted --------- ----------- --------- Product sales Net sales $1,724.3 $-- $1,724.3 Cost of sales 304.3 (0.4)(a)(c) 303.9 --------- ----------- --------- Product gross margin 1,420.0 0.4 1,420.4 Selling, general and administrative 689.5 11.7 (a)(j) 701.2 Research and development 283.5 (4.0)(a)(b) 279.5 Special charges 37.6 (37.6)(c) -- --------- ----------- --------- Operating income 409.4 30.3 439.7 Interest income 23.0 (2.2)(d)(f) 20.8 Interest expense (7.5) (6.5)(d) (14.0) Unrealized gain (loss) on derivative instruments, net 1.0 (1.0)(e) -- Gain on investments 0.8 (0.8)(l) -- Other, net 3.0 (3.5)(f) (0.5) --------- ----------- --------- 20.3 (14.0) 6.3 --------- ----------- --------- Earnings before income taxes and minority interest 429.7 16.3 446.0 Provision for income taxes 163.2 (34.0)(g) 129.2 Minority interest 2.7 (3.1)(m) (0.4) --------- ----------- --------- Net earnings $263.8 $53.4 $317.2 ========= =========== ========= Net earnings per share: Basic $2.02 $2.43 Diluted $1.98 $2.38 ========= ========= Weighted average number of common shares outstanding: Basic 130.8 130.8 Diluted 133.2 133.2 Selected ratios as a percentage of net sales -------------------------------- Gross profit 82.4% 82.4% Selling, general and administrative 40.0% 40.7% Research and development 16.4% 16.2% Nine months ended ---------------------------------- in millions, except per share September 24, 2004 amounts ----------------------------------- ---------------------------------- 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 Selling, general and administrative 572.8 2.4 (h) 575.2 Research and development 257.6 -- 257.6 Special charges -- -- -- --------- ----------- --------- 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)(e) -- Gain on investments -- -- -- Other, net 2.3 (5.0)(k) (2.7) --------- ----------- --------- (5.0) (5.1) (10.1) --------- ----------- --------- Earnings before income taxes and minority interest 371.1 (7.5) 363.6 Provision for income taxes 105.8 3.2 (i) 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 $1.97 $1.89 ========= ========= Weighted average number of common shares outstanding: Basic 131.3 131.3 Diluted 134.1 134.1 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% (a) Transition/duplicate operating expenses, consisting of Cost of sales of $0.1 million; Selling, general and administrative expense of $2.0 million and Research and development expense of $1.0 million (b) Buy-out of license agreement with Johns Hopkins (c) Restructuring charge of $37.6 million and related inventory write-offs of $0.3 million (d) Interest income related to previously paid state income taxes and reversal of interest expense related to tax settlements (e) Unrealized gain on the mark-to-market adjustment to derivative instruments (f) Termination of ISTA Vitrase collaboration agreement (including interest income of $0.1 million) (g) Total tax effect for non-GAAP pre-tax adjustments and other income tax adjustments, consisting of the following amounts (in millions): Tax effect Non-GAAP pre-tax adjustments of $16.3 million $0.7 Additional benefit for state income taxes (1.4) Resolution of uncertain tax positions (19.5) Extraordinary dividends of $674 million under the American Jobs Creation Act of 2004 32.8 Additional repatriation of foreign earnings of $85.8 million above extraordinary dividends amount 21.4 ------- $34.0 ======= (h) Patent infringement settlement (i) Income tax benefit for previously paid state income taxes and tax effect for non-GAAP adjustments (j) Gain on sale of assets primarily used for AMO contract manufacturing ($5.8 million) and gain on sale of distribution business in India ($7.9 million) (k) Technology transfer fee (l) Gain on sale of third party equity investment (m) Minority interest related to gain on sale of distribution business in India "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 page. ALLERGAN, INC. Condensed Consolidated Balance Sheets (Unaudited) September 30, December 31, in millions 2005 2004 ------------------------------------------- ------------- ------------ Assets Cash and equivalents $1,110.6 $894.8 Trade receivables, net 252.3 243.5 Inventories 90.5 89.9 Other current assets 173.3 147.8 ------------- ------------ Total current assets 1,626.7 1,376.0 Property, plant and equipment, net 466.9 468.5 Other noncurrent assets 539.8 412.5 ------------- ------------ Total assets $2,633.4 $2,257.0 ============= ============ Liabilities and stockholders' equity Notes payable $126.0 $13.1 Accounts payable 114.4 97.9 Accrued expenses and income taxes 359.0 348.6 ------------- ------------ Total current liabilities 599.4 459.6 Long-term debt 575.6 570.1 Other liabilities 118.8 111.1 Stockholders' equity 1,339.6 1,116.2 ------------- ------------ Total liabilities and stockholders' equity $2,633.4 $2,257.0 ============= ============ Days on Hand (DOH) 84 79 Days Sales Outstanding (DSO) 38 40 Cash, net of debt $409.0 $311.6 Debt-to-capital percentage 34.4% 34.3% ALLERGAN, INC. Reconciliation of Diluted Earnings Per Share (Unaudited) in millions, except per share amounts Three months ended Nine months ended ------------------------------ ------------------- ------------------- September September September September 30, 24, 30, 24, 2005 2004 2005 2004 --------- --------- --------- --------- Net earnings, as reported $150.5 $92.0 $263.8 $264.6 Non-GAAP earnings per share adjustments: Restructuring charge (a) (0.1) -- 37.9 -- Transition/duplicate operating expense 1.5 -- 3.1 -- Buy-out of license agreement with Johns Hopkins 3.0 -- 3.0 -- Gain on sale of distribution business in India (7.9) -- (7.9) -- Gain on sale of assets primarily used for AMO contract manufacturing (5.8) -- (5.8) -- Termination of ISTA Vitrase collaboration agreement -- -- (3.6) -- Gain on sale of equity investment (0.8) -- (0.8) -- Interest related to previously paid state income taxes and income tax settlements (8.6) -- (8.6) -- Technology transfer fee -- (5.0) -- (5.0) Patent infringement settlement -- -- -- (2.4) Unrealized (gain) loss on derivative instruments 0.2 0.1 (1.0) (0.1) --------- --------- --------- --------- 132.0 87.1 280.1 257.1 Tax effect for above items 4.1 1.9 0.7 2.9 Resolution of uncertain tax positions (19.5) -- (19.5) -- Tax effect of dividend repatriation (6.2) -- 54.2 -- State income tax recovery (1.4) -- (1.4) (6.1) Minority interest effect of sale of distribution business in India 3.1 -- 3.1 -- --------- --------- --------- --------- Adjusted diluted earnings $112.1 $89.0 $317.2 $253.9 ========= ========= ========= ========= Weighted average number of shares issued 131.0 131.5 130.8 131.3 Net shares assumed issued using the treasury stock method for options outstanding during each period based on average market price 2.1 0.7 1.5 1.7 Dilutive effect of assumed conversion of convertible subordinated notes outstanding 1.6 0.6 0.9 1.1 --------- --------- --------- --------- 134.7 132.8 133.2 134.1 ========= ========= ========= ========= Diluted earnings per share, as reported $1.12 $0.69 $1.98 $1.97 Non-GAAP earnings per share adjustments: Restructuring charge (a) -- -- 0.25 -- Transition/duplicate operating expense 0.01 -- 0.02 -- Buy-out of license agreement with Johns Hopkins 0.02 -- 0.02 -- Gain on sale of distribution business in India (0.05) -- (0.05) -- Gain on sale of assets primarily used for AMO contract manufacturing (0.04) -- (0.04) -- Termination of ISTA Vitrase collaboration agreement -- -- (0.02) -- Gain on sale of equity investment (0.01) -- (0.01) -- Interest related to previously paid state income taxes and income tax settlements (0.04) -- (0.04) -- Technology transfer fee -- (0.02) -- (0.02) Patent infringement settlement -- -- -- (0.01) Unrealized (gain) loss on derivative instruments 0.01 -- -- -- Resolution of uncertain tax positions (0.15) -- (0.15) -- Tax effect of dividend repatriation (0.05) -- 0.41 -- State income tax recovery (0.01) -- (0.01) (0.05) Minority interest effect of sale of distribution business in India 0.02 -- 0.02 -- --------- --------- --------- --------- Adjusted diluted earnings per share $0.83 $0.67 $2.38 $1.89 ========= ========= ========= ========= Year over year change 23.9% 25.9% =================== =================== (a) Including inventory write-offs of $0.3 million for the nine month period ending September 30, 2005. ALLERGAN, INC. Supplemental Non-GAAP Information (Unaudited) Three months ended ------------------- September September $ change in net sales 30, 24, --------------------------- 2005 2004 Total Performance Currency --------- --------- ------ ----------- -------- in millions ---------------------- Eye Care Pharmaceuticals $358.1 $285.4 $72.7 $68.7 $4.0 Botox/Neuromodulator 214.8 174.6 40.2 37.7 2.5 Skin Care 33.0 24.8 8.2 8.2 -- --------- --------- ------ ----------- -------- Total 605.9 484.8 121.1 114.6 6.5 Other (primarily contract sales) 0.2 26.0 (25.8) (25.8) -- --------- --------- ------ ----------- -------- Net sales, as reported $606.1 $510.8 $95.3 $88.8 $6.5 ========= ========= ====== =========== ======== Alphagan P, Alphagan and Combigan $75.1 $73.2 $1.9 $1.3 $0.6 Lumigan 72.8 60.3 12.5 11.9 0.6 Other Glaucoma 4.7 4.6 0.1 (0.1) 0.2 Restasis 54.0 24.1 29.9 29.8 0.1 Domestic 69.0% 69.2% International 31.0% 30.8% Percent change in net sales ---------------------------- Total Performance Currency ------- ----------- -------- Eye Care Pharmaceuticals 25.5% 24.1% 1.4% Botox/Neuromodulator 23.0% 21.6% 1.4% Skin Care 33.1% 33.1% --% Total 25.0% 23.6% 1.4% Other (primarily contract sales) (99.2)% (99.2)% --% Net sales, as reported 18.7% 17.4% 1.3% Alphagan P, Alphagan and Combigan 2.6% 1.8% 0.8% Lumigan 20.7% 19.8% 0.9% Other Glaucoma 2.0% (1.0)% 3.0% Restasis 123.8% 123.6% 0.2% Nine months ended ------------------- September September $ change in net sales 30, 24, ---------------------------- 2005 2004 Total Performance Currency --------- --------- ------- ----------- -------- in millions --------------------- Eye Care Pharmaceuticals $981.1 $835.1 $146.0 $131.1 $14.9 Botox/Neuromodulator 603.6 502.2 101.4 92.3 9.1 Skin Care 93.2 73.9 19.3 19.2 0.1 --------- --------- ------- ----------- -------- Total 1,677.9 1,411.2 266.7 242.6 24.1 Other (primarily contract sales) 46.4 78.2 (31.8) (32.0) 0.2 --------- --------- ------- ----------- -------- Net sales, as reported $1,724.3 $1,489.4 $234.9 $210.6 $24.3 ========= ========= ======= =========== ======== Alphagan P, Alphagan and Combigan $206.1 $204.9 $1.2 $(1.5) $2.7 Lumigan 196.3 171.1 25.2 22.4 2.8 Other Glaucoma 13.7 14.8 (1.1) (1.7) 0.6 Restasis 137.6 65.5 72.1 72.0 0.1 Domestic 67.7% 69.4% International 32.3% 30.6% Percent change in net sales ---------------------------- Total Performance Currency ------- ----------- -------- Eye Care Pharmaceuticals 17.5% 15.7% 1.8% Botox/Neuromodulator 20.2% 18.4% 1.8% Skin Care 26.1% 26.0% 0.1% Total 18.9% 17.2% 1.7% Other (primarily contract sales) (40.7)% (40.9)% 0.2% Net sales, as reported 15.8% 14.1% 1.7% Alphagan P, Alphagan and Combigan 0.6% (0.7)% 1.3% Lumigan 14.7% 13.1% 1.6% Other Glaucoma (7.7)% (11.3)% 3.6% Restasis 110.1% 109.9% 0.2% 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 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. ALLERGAN, INC. Reconciliation of GAAP Diluted Earnings Per Share Guidance To Adjusted Diluted Earnings Per Share Guidance (Unaudited) Fiscal 2005 -------------- Low High ------ ------ GAAP diluted Earnings Per Share Guidance (a) $2.86 $2.87 Restructuring charge (a) 0.25 0.25 Transition/duplicate operating expense 0.02 0.02 Buy-out of license agreement with Johns Hopkins 0.02 0.02 Gain on sale of distribution business in India (0.05) (0.05) Gain on sale of assets primarily used for AMO contract manufacturing (0.04) (0.04) Termination of ISTA Vitrase collaboration agreement (0.02) (0.02) Gain on sale of equity investment (0.01) (0.01) Interest related to previously paid state income taxes and income tax settlements (0.04) (0.04) Resolution of uncertain tax positions (0.15) (0.15) State income tax recovery (0.01) (0.01) Tax effect of dividend repatriation 0.41 0.41 Minority interest effect of sale of distribution business in India 0.02 0.02 ------ ------ Adjusted diluted Earnings Per Share Guidance $3.26 $3.27 ====== ====== (a) GAAP diluted earnings per share guidance excludes any potential impact of future unrealized gains or losses on derivative instruments and future restructuring charges and transition/duplicate operating expenses associated with the Company's planned restructuring and streamlining of its European operations and the termination of the manufacturing and supply agreement with Advanced Medical Optics.Source: Business Wire
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- Apache's 12-Percent Production Growth, Higher Oil and Gas Prices Propel Record 2007 Earnings of $2.8 Billion or $8.39 Per Share
- Wausau Paper Announces Improved Second-Quarter Earnings, Record Sales and Shipments
- Cities See Sales Tax Increases: Harlingen, San Benito Continue to Post Gains
- Berry Petroleum's 2005 Earnings Climb 62% to $5.00 Per Share; Production, Reserves Also Reach Record Highs
- Earned Income Credit Tax Help Free: Volunteers in Akron to Calculate Refunds
- SYSCO Reports 8.7 Percent Sales Growth in Second Quarter and Diluted EPS of $0.33
- Dell Lowers 3Q Sales Outlook; Shares Fall
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