BRISTOL, Tenn., Feb. 22 /PRNewswire-FirstCall/ -- King Pharmaceuticals,
Inc. (NYSE: KG) reported today that it has completed its previously announced
review of its reserve for product returns. King has concluded that it will
not restate its financial results for periods prior to 2002.
As previously announced on December 8, 2004, the Company will restate its
previously reported financial results for 2002, 2003 and the first six months
of 2004 due to methodological flaws concerning the timing of expense
recognition for product returns. Specifically, King determined that its
methodology for reserving for product returns from the first quarter of 2000
through the second quarter of 2004 contained errors, with the result that
estimated product returns were or would have been recorded in later periods
than required under Generally Accepted Accounting Principles. The errors in
King's reserve for product returns resulted from policies adopted in good
faith and after discussion with King's independent auditors, and are unrelated
to the ongoing investigations of King by the U.S. Securities and Exchange
Commission ("SEC") and the Office of the Inspector General of the Department
of Health and Human Services.
Restated financial data for 2002 and 2003, including interim periods in
2003, and the first two quarters of 2004 and other related financial data are
provided below. King plans to file with the SEC on or before March 16, 2005
its Annual Report on Form 10-K for the year ended December 31, 2004 together
with its Quarterly Report on Form 10-Q for the quarter ended September 30,
2004. The primary effect of the restatement is to shift to periods prior to
2004 the recognition of product returns and other immaterial expense items
that were, or would have been, recognized during the first three quarters of
2004.
The restatement will increase King's previously reported net sales for the
first six months of 2004 by approximately $1.3 million, and preliminary net
income for the first six months of 2004 by approximately $7.6 million, or
$0.03 per share. The restatement will also decrease previously reported net
sales, net income, and earnings per share in 2003 by approximately $16.5
million, $13.9 million, and $0.06, respectively; decrease previously reported
net sales and net income in 2002 by approximately $0.5 million and $0.1
million, respectively, and have no effect on earnings per share; and result in
approximately a $23.7 million charge to retained earnings as of January 1,
2002. The charge to retained earnings includes a $13.4 million adjustment
relating to immaterial Medicaid errors that arose between 1998 and 2001 that
were previously recorded in 2002 as a reduction of revenues and net income.
The effect of errors that arose in periods prior to 2002 is not material.
As a result of the restatement of prior periods, King's previously
announced preliminary net sales, net income, and earnings per share for the
third quarter of 2004 increased by approximately $53.0 million, $28.9 million,
and $0.12, respectively. However, events that have arisen subsequent to the
release of King's preliminary results for the third quarter of 2004 will
result in additional net charges in the third quarter of 2004. More
specifically, subsequent events affecting the third quarter of 2004 are
expected to primarily include (i) an unanticipated product return discussed
below, (ii) an impairment of intangible assets and write-off of excess
purchase commitments associated with Lorabid(R) (loracarbef), and, as
previously disclosed, (iii) an impairment of intangible assets associated with
Tapazole(R) (methimazole tablets, USP) and Procanbid(R) (procainamide
hydrochloride extended-release tablets). The Company currently believes that
the increases in its preliminary results for the third quarter of 2004 arising
from the restatement of prior periods for product returns will be
substantially offset by the net charges resulting from these subsequent
events. Additional subsequent events affecting the third quarter of 2004 may
arise between now and the date the Company files its financial statements for
the third quarter.
In early January 2005, a major wholesale customer informed King that the
customer had incorrectly omitted information it was contractually obligated to
provide to King under the Company's inventory management agreements. The
omitted information regarded inventory the customer was likely to return. As a
result, King received an unanticipated product return which is a subsequent
event affecting the Company's previously announced preliminary results for the
third quarter of 2004. With the exception of this unanticipated return, King's
level of product returns since the conclusion of the third quarter of 2004 has
remained within the Company's expected rate.
During the fourth quarter of 2004 the Company began working to amend its
inventory management agreements with its key wholesale customers with the
objective of further reducing their inventory of King's products. As a result,
the average wholesale inventory level of King's key products was reduced
during the fourth quarter of 2004. King anticipates that it should achieve an
average wholesale inventory level for its key products that is no higher than
approximately 1.5 months of end-user demand by March 31, 2005. Accordingly,
the Company anticipates that wholesale channel inventory reductions of King's
products should be substantially complete by the end of the first quarter of
2005.
As a result of Section 404 of the Sarbanes-Oxley Act of 2002 and the rules
issued thereunder, the Company will be required to include in its Annual
Report on Form 10-K for the year ended December 31, 2004 a report on
management's assessment of the effectiveness of the Company's internal control
over financial reporting. The Company's independent auditor will also be
required to attest to and report on management's assessment. Current auditing
standards provide that a restatement is a strong indicator of a material
weakness in the Company's internal control over financial reporting.
Considering this guidance, the Company has evaluated these methodological
errors and has concluded that the restatement resulted from a material
weakness in the Company's internal control, which the Company believes it has
since remediated. In the course of its ongoing evaluation, the Company has
also identified certain deficiencies which King is currently addressing. The
Company may identify additional deficiencies in the course of completing its
Section 404 testing and evaluation. Management will consider all of these
matters when assessing the effectiveness of the Company's internal control
over financial reporting as of December 31, 2004.
The Company believes that it has taken remedial steps to address the
material weakness identified above, including the adoption by the Company of
revised methodologies for estimating its product returns. The Company cannot
assure that the steps it has taken or is taking to address the material
weakness and other identified deficiencies will be adequate, that the other
identified deficiencies will not ultimately result in material weaknesses,
that additional material weaknesses or control deficiencies will not be
identified, and/or that management will be able to conclude on the basis of
its evaluation that its internal control over financial reporting was
effective as of December 31, 2004. Moreover, the Company cannot assure that
management will complete its assessment of internal control over financial
reporting in a timely fashion.
As previously reported, Mylan Laboratories Inc. and King are parties to a
merger agreement pursuant to which Mylan agreed to acquire King in a stock-
for-stock merger transaction. Pursuant to its terms, either King or Mylan may
terminate the merger agreement at any time on or after March 1, 2005. The
King board of directors has not yet determined whether to proceed with a
transaction with Mylan on or after March 1, 2005 and, if so, on what terms.
The King board expects to evaluate its options in connection with the merger
agreement, and in that context will give appropriate consideration to any
proposals it may receive from Mylan. King intends to make a definitive
decision regarding the outcome of the merger with Mylan as promptly as
practicable, but there can be no assurance as to whether a decision will be
reached by February 28. King does not intend to make any further comment
regarding Mylan until a definitive decision regarding the merger is reached.
About King Pharmaceuticals
King, headquartered in Bristol, Tennessee, is a vertically integrated
branded pharmaceutical company. King, an S&P 500 Index company, seeks to
capitalize on opportunities in the pharmaceutical industry through the
development, including through in-licensing arrangements and acquisitions, of
novel branded prescription pharmaceutical products in attractive markets and
the strategic acquisition of branded products that can benefit from focused
promotion and marketing and product life-cycle management.
About Forward-looking Statements
This release contains forward-looking statements which reflect
management's current views of future events and operations, including, but not
limited to, statements pertaining to the anticipated filing date of King's
Annual Report on Form 10-K for the year ended December 31, 2004 and its
Quarterly Report on Form 10-Q for the quarter ended September 30, 2004;
statements pertaining to the effect of subsequent events on King's preliminary
financial results for the third quarter ended September 30, 2004; statements
pertaining to the reduction in wholesale inventory levels of its products;
statements pertaining to the Company's ongoing review relating to Section 404
of the Sarbanes-Oxley Act of 2002; and statements pertaining to Mylan. These
forward-looking statements involve certain significant risks and
uncertainties, and actual results may differ materially from the forward-
looking statements. Some important factors which may cause actual results to
differ materially from the forward-looking statements include: dependence on
the Company's ability to file the Company's Form 10-K for the year ended
December 31, 2004 and Form 10-Q for the quarter ended September 30, 2004 as
planned; dependence on King's identification of events arising subsequent to
the release of preliminary financial results for the third quarter of 2004 and
the effect of such events; dependence on the actual level of wholesale
inventories of King's products on March 31, 2005; and dependence on the
Company's timely completion and the outcome of its review pursuant to Section
404 of the Sarbanes-Oxley Act of 2002. Other important factors that may cause
actual results to differ materially from the forward-looking statements are
discussed in the "Risk Factors" section and other sections of King's Form 10-K
for the year ended December 31, 2003 and Form 10-Q for the second quarter
ended June 30, 2004 which are on file with the SEC. King does not undertake
to publicly update or revise any of its forward-looking statements even if
experience or future changes show that the indicated results or events will
not be realized.
KING PHARMACEUTICALS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
(unaudited)
Twelve Months Ending
December 31, 2002
As Originally As
Reported Restated
Revenues:
Net Sales $1,030,119 $1,029,649
Royalty revenue 58,375 58,375
Total revenues 1,088,494 1,088,024
Operating costs and expenses:
Cost of revenues, exclusive of
depreciation, amortization and
impairments shown below 291,098 291,257
Selling, general and
administrative, exclusive of co-
promotion fees 174,666 174,236
Co-promotion fees 186,657 183,172
Total selling, general and
administrative expense 361,323 357,408
Research and development 28,184 28,184
Research and development-in process
upon acquisition 12,000 12,000
Total research and development 40,184 40,184
Depreciation and amortization 51,377 51,377
Intangible asset impairment 66,844 66,844
Medicaid related charge - -
Merger, restructuring and other
nonrecurring charges 5,911 5,911
Merger relating to Mylan - -
Gain on sale of products - -
Total operating costs and
expenses 816,737 812,981
Operating income (loss) 271,757 275,043
Other income (expense):
Interest income 22,395 22,395
Interest expense (12,419) (12,419)
Valuation (charge) benefit -
convertible notes receivable (35,629) (35,629)
Other, net (884) (884)
Total other (expense) income (26,537) (26,537)
Income (loss) from continuing
operations before income taxes 245,220 248,506
Income tax expense (benefit) 76,774 78,033
Income (loss) from continuing
operations 168,446 170,473
Discontinued operations:
Income (loss) from discontinued
operations, including expected
loss on disposal 22,443 18,965
Income tax expense (benefit) 8,369 7,037
Total income (loss) from
discontinued operations 14,074 11,928
Net income (loss) $182,520 $182,401
Basic income (loss) per common
share $0.75 $0.75
Diluted income (loss) per common
share $0.74 $0.74
Shares used in basic income
(loss) per share 244,376 244,376
Shares used in diluted income
(loss) per share 245,699 245,699
KING PHARMACEUTICALS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
(unaudited)
Twelve Months Ending
December 31, 2003
As Originally As
Reported Restated
Revenues:
Net Sales $1,440,888 $1,424,424
Royalty revenue 68,365 68,365
Total revenues 1,509,253 1,492,789
Operating costs and expenses:
Cost of revenues, exclusive of
depreciation, amortization and
impairments shown below 381,794 385,841
Selling, general and
administrative, exclusive of co-
promotion fees 293,834 292,084
Co-promotion fees 193,350 198,498
Total selling, general and
administrative expense 487,184 490,582
Research and development 44,078 44,078
Research and development-in process
upon acquisition 194,000 194,000
Total research and development 238,078 238,078
Depreciation and amortization 113,745 113,745
Intangible asset impairment 124,616 124,616
Medicaid related charge - -
Merger, restructuring and other
nonrecurring charges - -
Merger relating to Mylan - -
Gain on sale of products (12,025) (12,025)
Total operating costs and
expenses 1,333,392 1,340,837
Operating income (loss) 175,861 151,952
Other income (expense):
Interest income 6,849 6,849
Interest expense (13,396) (13,396)
Valuation (charge) benefit -
convertible notes receivable 18,151 18,551
Other, net (629) (629)
Total other (expense) income 10,975 11,375
Income (loss) from continuing
operations before income taxes 186,836 163,327
Income tax expense (benefit) 74,889 65,884
Income (loss) from continuing
operations 111,947 97,443
Discontinued operations:
Income (loss) from discontinued
operations, including expected
loss on disposal (9,747) (8,771)
Income tax expense (benefit) (3,656) (3,282)
Total income (loss) from
discontinued operations (6,091) (5,489)
Net income (loss) $105,856 $91,954
Basic income (loss) per common
share $0.44 $0.38
Diluted income (loss) per common
share $0.44 $0.38
Shares used in basic income
(loss) per share 240,989 240,989
Shares used in diluted income
(loss) per share 241,527 241,527
KING PHARMACEUTICALS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
(unaudited)
Six Months Ending
June 30, 2004
As Originally As
Reported Restated
Revenues:
Net Sales $527,909 $529,186
Royalty revenue 37,875 37,875
Total revenues 565,784 567,061
Operating costs and expenses:
Cost of revenues, exclusive of
depreciation, amortization and
impairments shown below 173,125 168,665
Selling, general and
administrative, exclusive of co-
promotion fees 190,727 191,727
Co-promotion fees 48,327 42,946
Total selling, general and
administrative expense 239,054 234,673
Research and development 33,501 33,501
Research and development-in process
upon acquisition - -
Total research and development 33,501 33,501
Depreciation and amortization 77,784 77,784
Intangible asset impairment 34,936 34,936
Medicaid related charge 65,000 65,000
Merger, restructuring and other
nonrecurring charges 6,153 6,153
Merger relating to Mylan 3,126 3,126
Gain on sale of products (4,279) (4,279)
Total operating costs and
expenses 628,400 619,559
Operating income (loss) (62,616) (52,498)
Other income (expense):
Interest income 2,135 2,135
Interest expense (6,371) (6,371)
Valuation (charge) benefit -
convertible notes receivable (2,487) (2,887)
Other, net 465 465
Total other (expense) income (6,258) (6,658)
Income (loss) from continuing
operations before income taxes (68,874) (59,156)
Income tax expense (benefit) (896) 2,825
Income (loss) from continuing
operations (67,978) (61,981)
Discontinued operations:
Income (loss) from discontinued
operations, including expected
loss on disposal (167,910) (165,314)
Income tax expense (benefit) (61,289) (60,295)
Total income (loss) from
discontinued operations (106,621) (105,019)
Net income (loss) $(174,599) $(167,000)
Basic income (loss) per common
share $(0.72) $(0.69)
Diluted income (loss) per common
share $(0.72) $(0.69)
Shares used in basic income
(loss) per share 241,341 241,341
Shares used in diluted income
(loss) per share 241,341 241,341
KING PHARMACEUTICALS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
(unaudited)
Three Months Ending Three Months Ending
March 31, 2003 June 30, 2003
As As
Originally As Originally As
Reported Restated Reported Restated
Revenues:
Net Sales $322,997 $328,165 $350,839 $342,226
Royalty revenue 15,424 15,424 16,176 16,176
Total revenues 338,421 343,589 367,015 358,402
Operating costs and expenses:
Cost of revenues, exclusive of
depreciation, amortization and
impairments shown below 79,441 79,567 91,644 91,486
Selling, general and
administrative, exclusive of
co-promotion fees 44,115 44,115 72,949 72,449
Co-promotion fees 61,700 63,702 55,241 53,479
Total selling, general and
administrative expense 105,815 107,817 128,190 125,928
Research and development 9,636 9,636 11,093 11,093
Research and development-in
process upon acquisition 18,000 18,000 175,000 175,000
Total research and development 27,636 27,636 186,093 186,093
Depreciation and amortization 17,637 17,637 20,637 20,637
Intangible asset impairment 110,970 110,970 - -
Gain on sale of products - - - -
Total operating costs and
expenses 341,499 343,627 426,564 424,144
Operating (loss) income (3,078) (38) (59,549) (65,742)
Other income (expense):
Interest income 2,494 2,494 2,199 2,199
Interest expense (3,034) (3,034) (3,435) (3,435)
Valuation benefit (charge) -
convertible notes receivable 7,967 7,967 7,647 7,647
Other, net (83) (83) (15) (15)
Total other income (expense) 7,344 7,344 6,396 6,396
Income (loss) from continuing
operations before income taxes 4,266 7,306 (53,153) (59,346)
Income tax expense (benefit) 8,676 9,840 (16,653) (19,026)
(Loss) income from continuing
operations (4,410) (2,534) (36,500) (40,320)
Discontinued operations:
(Loss) income from discontinued
operations, including expected
loss on disposal (4,382) (3,638) 2,338 2,286
Income tax (benefit) expense (1,599) (1,314) 853 833
Total (loss) income from
discontinued operations (2,783) (2,324) 1,485 1,453
Net (loss) income $(7,193) $(4,858) $(35,015) $(38,867)
Basic (loss) income per common
share $(0.03) $(0.02) $(0.15) $(0.16)
Diluted (loss) income per
common share $(0.03) $(0.02) $(0.15) $(0.16)
Shares used in basic (loss)
income per share 240,777 240,777 240,954 240,954
Shares used in diluted (loss)
income per share 240,777 240,777 240,954 240,954
Quarterly amounts may not total to the annual amounts due to the
effect of rounding on a quarterly basis.
KING PHARMACEUTICALS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
(unaudited)
Three Months Ending Three Months Ending
September 30, 2003 December 31, 2003
As As
Originally As Originally As
Reported Restated Reported Restated
Revenues:
Net Sales $406,862 $408,538 $360,190 $345,495
Royalty revenue 16,275 16,275 20,490 20,490
Total revenues 423,137 424,813 380,680 365,985
Operating costs and expenses:
Cost of revenues, exclusive of
depreciation, amortization and
impairments shown below 89,845 89,990 120,865 124,799
Selling, general and
administrative, exclusive of
co-promotion fees 87,082 86,832 89,687 88,687
Co-promotion fees 46,109 46,741 30,301 34,577
Total selling, general and
administrative expense 133,191 133,573 119,988 123,264
Research and development 8,758 8,758 14,591 14,591
Research and development-in
process upon acquisition - - 1,000 1,000
Total research and development 8,758 8,758 15,591 15,591
Depreciation and amortization 36,926 36,926 38,544 38,544
Intangible asset impairment - - 13,646 13,646
Gain on sale of products (10,312) (10,312) (1,713) (1,713)
Total operating costs and
expenses 258,408 258,935 306,921 314,131
Operating (loss) income 164,729 165,878 73,759 51,854
Other income (expense):
Interest income 1,037 1,037 1,120 1,120
Interest expense (3,669) (3,669) (3,259) (3,259)
Valuation benefit (charge) -
convertible notes receivable 9,338 9,338 (6,801) (6,401)
Other, net (36) (36) (495) (495)
Total other income (expense) 6,670 6,670 (9,435) (9,035)
Income (loss) from continuing
operations before income taxes 171,399 172,548 64,324 42,819
Income tax expense (benefit) 62,630 63,070 20,235 11,999
(Loss) income from continuing
operations 108,769 109,478 44,089 30,820
Discontinued operations:
(Loss) income from discontinued
operations, including expected
loss on disposal (4,323) (5,021) (3,381) (2,399)
Income tax (benefit) expense (1,641) (1,908) (1,269) (893)
Total (loss) income from
discontinued operations (2,682) (3,113) (2,112) (1,506)
Net (loss) income $106,087 $106,365 $41,977 $29,314
Basic (loss) income per common
share $0.44 $0.44 $0.17 $0.12
Diluted (loss) income per
common share $0.44 $0.44 $0.17 $0.12
Shares used in basic (loss)
income per share 241,066 241,066 241,154 241,154
Shares used in diluted (loss)
income per share 241,583 241,583 241,608 241,608
Quarterly amounts may not total to the annual amounts due to the
effect of rounding on a quarterly basis.
KING PHARMACEUTICALS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
(unaudited)
Three Months Ending Three Months Ending
March 31, 2004 June 30, 2004
As As
Originally As Originally As
Reported Restated Reported Restated
Revenues:
Net Sales $273,887 $274,693 $254,021 $254,492
Royalty revenue 16,757 16,757 21,119 21,119
Total revenues 290,644 291,450 275,140 275,611
Operating costs and expenses:
Cost of revenues, exclusive of
depreciation, amortization
and impairments shown below 87,714 83,541 85,411 85,124
Selling, general and
administrative, exclusive of
co-promotion fees 86,602 87,602 104,125 104,125
Co-promotion fees 27,504 23,544 20,823 19,402
Total selling, general and
administrative expense 114,106 111,146 124,948 123,527
Research and development 16,023 16,023 17,478 17,478
Depreciation and amortization 39,318 39,318 38,466 38,466
Intangible asset impairment 34,936 34,936 - -
Medicaid related charge - - 65,000 65,000
Restructuring charges - - 6,153 6,153
Merger related costs - - 3,126 3,126
Gain on sale of products (858) (858) (3,421) (3,421)
Total operating costs and
expenses 291,239 284,106 337,161 335,453
Operating (loss) income (595) 7,344 (62,021) (59,842)
Other income (expense):
Interest income 1,054 1,054 1,081 1,081
Interest expense (3,105) (3,105) (3,266) (3,266)
Valuation charge - convertible
notes receivable (49) (449) (2,438) (2,438)
Other, net (703) (703) 1,168 1,168
Total other expense (2,803) (3,203) (3,455) (3,455)
(Loss) income from continuing
operations before income taxes (3,398) 4,141 (65,476) (63,297)
Income tax (benefit) expense (1,048) 1,839 152 986
(Loss) income from continuing
operations (2,350) 2,302 (65,628) (64,283)
Discontinued operations:
(Loss) income from
discontinued operations,
including expected loss on
disposal (171,242) (167,462) 3,332 2,148
Income tax (benefit) expense (62,532) (61,084) 1,243 789
Total (loss) income from
discontinued operations (108,710) (106,378) 2,089 1,359
Net loss $(111,060) $(104,076) $(63,539) $(62,924)
Basic loss per common share $(0.46) $(0.43) $(0.26) $(0.26)
Diluted loss per common
share $(0.46) $(0.43) $(0.26) $(0.26)
Shares used in basic loss
per share 241,300 241,300 241,383 241,383
Shares used in diluted loss
per share 241,300 241,300 241,383 241,383
Quarterly amounts may not total to the annual amounts due to the
effect of rounding on a quarterly basis.
KING PHARMACEUTICALS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
EXCLUDING SPECIAL ITEMS - NON GAAP
(in thousands, except per share data)
(unaudited)
Twelve Months Ending
December 31, 2002
As Originally As
Reported Restated
Revenues:
Net Sales $1,030,119 $1,029,649
Royalty revenue 58,375 58,375
Total revenues 1,088,494 1,088,024
Operating costs and expenses:
Cost of revenues, exclusive of
depreciation, amortization and
impairments shown below 223,036 223,195
Selling, general and
administrative, exclusive of co-
promotion fees 174,666 174,236
Co-promotion fees 186,657 183,172
Total selling, general and
administrative expense 361,323 357,408
Research and development 28,184 28,184
Depreciation and amortization 51,377 51,377
Total operating costs and
expenses 663,920 660,164
Operating income 424,574 427,860
Other income (expense):
Interest income 22,395 22,395
Interest expense (12,419) (12,419)
Other (loss) income, net (884) (884)
Total other income (expense) 9,092 9,092
Income before income taxes 433,666 436,952
Income tax expense 146,720 147,979
Net income $286,946 $288,973
Basic income per common share $1.17 $1.18
Diluted income per common share $1.17 $1.18
Shares used in basic income per
share 244,376 244,376
Shares used in diluted income per
share 245,699 245,699
KING PHARMACEUTICALS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
EXCLUDING SPECIAL ITEMS - NON GAAP
(in thousands, except per share data)
(unaudited)
Twelve Months Ending
December 31, 2003
As Originally As
Reported Restated
Revenues:
Net Sales $1,440,888 $1,424,424
Royalty revenue 68,365 68,365
Total revenues 1,509,253 1,492,789
Operating costs and expenses:
Cost of revenues, exclusive of
depreciation, amortization and
impairments shown below 345,376 345,423
Selling, general and
administrative, exclusive of co-
promotion fees 264,917 263,167
Co-promotion fees 193,350 198,498
Total selling, general and
administrative expense 458,267 461,665
Research and development 44,078 44,078
Depreciation and amortization 113,745 113,745
Total operating costs and
expenses 961,466 964,911
Operating income 547,787 527,878
Other income (expense):
Interest income 6,849 6,849
Interest expense (13,396) (13,396)
Other (loss) income, net (629) (629)
Total other income (expense) (7,176) (7,176)
Income before income taxes 540,611 520,702
Income tax expense 195,224 187,598
Net income $345,387 $333,104
Basic income per common share $1.43 $1.38
Diluted income per common share $1.43 $1.38
Shares used in basic income per
share 240,989 240,989
Shares used in diluted income per
share 241,527 241,527
KING PHARMACEUTICALS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
EXCLUDING SPECIAL ITEMS - NON GAAP
(in thousands, except per share data)
(unaudited)
Six Months Ending
June 30, 2004
As Originally As
Reported Restated
Revenues:
Net Sales $527,909 $529,186
Royalty revenue 37,875 37,875
Total revenues 565,784 567,061
Operating costs and expenses:
Cost of revenues, exclusive of
depreciation, amortization and
impairments shown below 164,363 163,903
Selling, general and
administrative, exclusive of co-
promotion fees 180,042 181,042
Co-promotion fees 48,327 42,946
Total selling, general and
administrative expense 228,369 223,988
Research and development 33,501 33,501
Depreciation and amortization 77,784 77,784
Total operating costs and
expenses 504,017 499,176
Operating income 61,767 67,885
Other income (expense):
Interest income 2,135 2,135
Interest expense (6,371) (6,371)
Other (loss) income, net 465 465
Total other income (expense) (3,771) (3,771)
Income before income taxes 57,996 64,114
Income tax expense 20,589 22,931
Net income $37,407 $41,183
Basic income per common share $0.15 $0.17
Diluted income per common share $0.15 $0.17
Shares used in basic income per
share 241,341 241,341
Shares used in diluted income
per share 241,754 241,754
KING PHARMACEUTICALS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
EXCLUDING SPECIAL ITEMS - NON GAAP
(in thousands, except per share data)
(unaudited)
Three Months Ending Three Months Ending
March 31, 2003 June 30, 2003
As As
Originally As Originally As
Reported Restated Reported Restated
Revenues:
Net Sales $322,997 $328,165 $350,839 $342,226
Royalty revenue 15,424 15,424 16,176 16,176
Total revenues 338,421 343,589 367,015 358,402
Operating costs and expenses:
Cost of revenues, exclusive of
depreciation, amortization and
impairments shown below 75,180 75,306 90,108 89,950
Selling, general and
administrative, exclusive of co-
promotion fees 44,115 44,115 58,653 58,153
Co-promotion fees 61,700 63,702 55,241 53,479
Total selling, general and
administrative expense 105,815 107,817 113,894 111,632
Research and development 9,636 9,636 11,093 11,093
Depreciation and amortization 17,637 17,637 20,637 20,637
Total operating costs and
expenses 208,268 210,396 235,732 233,312
Operating income 130,153 133,193 131,283 125,090
Other income (expense):
Interest income 2,494 2,494 2,199 2,199
Interest expense (3,034) (3,034) (3,435) (3,435)
Other, net (83) (83) (15) (15)
Total other expense (623) (623) (1,251) (1,251)
Income before income taxes 129,530 132,570 130,032 123,839
Income tax expense 47,278 48,442 47,462 45,089
Net income $82,252 $84,128 $82,570 $78,750
Basic income per common share $0.34 $0.35 $0.34 $0.33
Diluted income per common share $0.34 $0.35 $0.34 $0.33
Shares used in basic income per
share 240,777 240,777 240,954 240,954
Shares used in diluted income
per share 241,461 241,461 241,452 241,452
Quarterly amounts may not total to the annual amounts due to the effect
of rounding on a quarterly basis.
KING PHARMACEUTICALS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
EXCLUDING SPECIAL ITEMS - NON GAAP
(in thousands, except per share data)
(unaudited)
Three Months Ending Three Months Ending
September 30, 2003 December 31, 2003
As As
Originally As Originally As
Reported Restated Reported Restated
Revenues:
Net Sales $406,862 $408,538 $360,190 $345,495
Royalty revenue 16,275 16,275 20,490 20,490
Total revenues 423,137 424,813 380,680 365,985
Operating costs and expenses:
Cost of revenues, exclusive of
depreciation, amortization and
impairments shown below 89,182 89,327 90,906 90,840
Selling, general and
administrative, exclusive of co-
promotion fees 79,170 78,920 82,978 81,978
Co-promotion fees 46,109 46,741 30,301 34,577
Total selling, general and
administrative expense 125,279 125,661 113,279 116,555
Research and development 8,758 8,758 14,591 14,591
Depreciation and amortization 36,926 36,926 38,544 38,544
Total operating costs and
expenses 260,145 260,672 257,320 260,530
Operating income 162,992 164,141 123,360 105,455
Other income (expense):
Interest income 1,037 1,037 1,120 1,120
Interest expense (3,669) (3,669) (3,259) (3,259)
Other, net (36) (36) (495) (495)
Total other expense (2,668) (2,668) (2,634) (2,634)
Income before income taxes 160,324 161,473 120,726 102,821
Income tax expense 58,581 59,021 41,903 35,046
Net income $101,743 $102,452 $78,823 $67,775
Basic income per common share $0.42 $0.42 $0.33 $0.28
Diluted income per common share $0.42 $0.42 $0.33 $0.28
Shares used in basic income per
share 241,066 241,066 241,154 241,154
Shares used in diluted income
per share 241,583 241,583 241,608 241,608
Quarterly amounts may not total to the annual amounts due to the effect
of rounding on a quarterly basis.
KING PHARMACEUTICALS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
EXCLUDING SPECIAL ITEMS - NON GAAP
(in thousands, except per share data)
(unaudited)
Three Months Ending Three Months Ending
March 31, 2004 June 30, 2004
As As
Originally As Originally As
Reported Restated Reported Restated
Revenues:
Net Sales $273,887 $274,693 $254,021 $254,492
Royalty revenue 16,757 16,757 21,119 21,119
Total revenues 290,644 291,450 275,140 275,611
Operating costs and expenses:
Cost of revenues, exclusive of
depreciation, amortization and
impairments shown below 83,538 83,365 80,825 80,538
Selling, general and
administrative, exclusive of
co-promotion fees 80,910 81,910 99,132 99,132
Co-promotion fees 27,504 23,544 20,823 19,402
Total selling, general and
administrative expense 108,414 105,454 119,955 118,534
Research and development 16,023 16,023 17,478 17,478
Depreciation and amortization 39,318 39,318 38,466 38,466
Total operating costs and
expenses 247,293 244,160 256,724 255,016
Operating income 43,351 47,290 18,416 20,595
Other income (expense):
Interest income 1,054 1,054 1,081 1,081
Interest expense (3,105) (3,105) (3,266) (3,266)
Other, net (703) (703) 1,168 1,168
Total other expense (2,754) (2,754) (1,017) (1,017)
Income before income taxes 40,597 44,536 17,399 19,578
Income tax expense 14,657 16,165 5,932 6,766
Net income $25,940 $28,371 $11,467 $12,812
Basic income per common share $0.11 $0.12 $0.05 $0.05
Diluted income per common
share $0.11 $0.12 $0.05 $0.05
Shares used in basic income
per share 241,300 241,300 241,383 241,383
Shares used in diluted income
per share 241,745 241,745 241,745 241,745
Quarterly amounts may not total to the annual amounts due to the
effect of rounding on a quarterly basis.
KING PHARMACEUTICALS, INC.
RECONCILIATION OF NON-GAAP MEASURES
(in thousands, except share data)
(unaudited)
The following tables reconcile Non-GAAP measures to amounts reported
under GAAP:
Twelve Months Ending December 31, 2002
As Originally
Reported As Restated
EPS EPS
Net income, excluding special items $286,946 $288,973
Diluted income per common share,
excluding special items $1.17 $1.18
SPECIAL ITEMS:
Excess purchase commitment (cost of
goods sold) (49,877) (0.20) (49,877) (0.20)
Writeoff of acquisition related
inventory step-up/recall (cost of
goods sold) (3,033) (0.01) (3,033) (0.01)
Inventory contributions/write off
(cost of goods sold) (15,152) (0.06) (15,152) (0.06)
Special legal and professional fees
(selling, general, and
administrative) - - - -
Legal settlement fees (selling,
general, and administrative) - - - -
In-process research and development
(other operating costs and
expenses) (12,000) (0.05) (12,000) (0.05)
Intangible asset impairment (other
operating costs and expenses) (66,844) (0.27) (66,844) (0.27)
Merger and restructuring charges
(other operating costs and
expenses) (5,911) (0.03) (5,911) (0.03)
Special gains on disposition (other
operating costs and expenses) - - - -
Valuation charge - convertible
notes receivable (other expenses) (35,629) (0.15) (35,629) (0.15)
Income (loss) from discontinued
operations 22,443 0.09 18,965 0.08
Income tax benefit 61,577 0.25 62,909 0.25
Net income $182,520 $182,401
Diluted income per common share, as
reported under GAAP $0.74 $0.74
Twelve Months Ending December 31, 2003
As Originally
Reported As Restated
EPS EPS
Net income, excluding special items $345,387 $333,104
Diluted income per common share,
excluding special items $1.43 $1.38
SPECIAL ITEMS:
Excess purchase commitment (cost of
goods sold) (29,959) (0.12) (33,959) (0.14)
Writeoff of acquisition related
inventory step-up/recall (cost of
goods sold) (6,459) (0.03) (6,459) (0.03)
Inventory contributions/write off
(cost of goods sold) - - - -
Special legal and professional fees
(selling, general, and
administrative) (25,986) (0.11) (25,986) (0.11)
Legal settlement fees (selling,
general, and administrative) (2,931) (0.01) (2,931) (0.01)
In-process research and development
(other operating costs and
expenses) (194,000) (0.80) (194,000) (0.80)
Intangible asset impairment (other
operating costs and expenses) (124,616) (0.52) (124,616) (0.52)
Merger and restructuring charges
(other operating costs and
expenses) - - - -
Special gains on disposition (other
operating costs and expenses) 12,025 0.05 12,025 0.05
Valuation charge - convertible
notes receivable (other expenses) 18,151 0.08 18,551 0.08
Income (loss) from discontinued
operations (9,747) (0.04) (8,771) (0.04)
Income tax benefit 123,991 0.51 124,996 0.52
Net income $105,856 $91,954
Diluted income per common share, as
reported under GAAP $0.44 $0.38
Six Months Ending June 30, 2004
As Originally
Reported As Restated
EPS EPS
Net income, excluding special items $37,407 $41,183
Diluted income per common share,
excluding special items $0.15 $0.17
SPECIAL ITEMS:
Excess purchase commitment (cost
of goods sold) (4,176) (0.02) (176) -
Writeoff of acquisition related
inventory step-up/recall (cost of
goods sold) (4,586) (0.02) (4,586) (0.02)
Special legal and professional
fees (selling, general, and
administrative) (10,685) (0.04) (10,685) (0.04)
Medicaid related charge (other
operating costs and expenses) (65,000) (0.27) (65,000) (0.27)
Merger related costs (other
operating costs and expenses) (3,126) (0.01) (3,126) (0.01)
Intangible asset impairment (other
operating costs and expenses) (34,936) (0.14) (34,936) (0.14)
Restructuring charges (other
operating costs and expenses) (6,153) (0.03) (6,153) (0.03)
Special gains on disposition
(other operating costs and
expenses) 4,279 0.02 4,279 0.02
Valuation charge - convertible
notes receivable (other expenses) (2,487) (0.01) (2,887) (0.01)
Loss from discontinued operations (167,910) (0.69) (165,314) (0.69)
Income tax benefit 82,774 0.34 80,401 0.33
Net loss $(174,599) $(167,000)
Diluted loss per common share, as
reported under GAAP $(0.72) $(0.69)
KING PHARMACEUTICALS, INC.
RECONCILIATION OF NON-GAAP MEASURES
(in thousands, except share data)
(unaudited)
The following tables reconcile Non-GAAP measures to amounts reported
under GAAP:
Three Months Ending March 31, 2003
As Originally Reported As Restated
EPS EPS
Net income, excluding
special items $82,252 $84,128
Diluted income per
common share, excluding
special items $0.34 $0.35
SPECIAL ITEMS:
Writeoff of acquisition
related inventory
step-up/recall
(cost of goods sold) (4,261) (0.02) (4,261) (0.02)
Special legal and professional
fees (selling, general,
and administrative)
- - - -
In-process research and
development (other
operating costs and
expenses) (18,000) (0.07) (18,000) (0.07)
Intangible asset impairment
(other operating costs
and expenses) (110,970) (0.46) (110,970) (0.46)
Valuation charge -
convertible notes
receivable (other expenses) 7,967 0.03 7,967 0.03
(Loss) income from discontinued
operations (4,382) (0.02) (3,638) (0.02)
Income tax benefit 40,201 0.17 39,916 0.17
Net loss $(7,193) $(4,858)
Diluted loss per common share,
as reported under GAAP $(0.03) $(0.02)
Three Months Ending June 30, 2003
As Originally Reported As Restated
EPS EPS
Net income, excluding special
items $82,570 $78,750
Diluted income per common share,
excluding special items $0.34 $0.33
SPECIAL ITEMS:
Writeoff of acquisition
related inventory step-up/recall
(cost of goods sold) (1,536) (0.01) (1,536) (0.01)
Special legal and professional
fees (selling, general,
and administrative) (14,296) (0.06) (14,296) (0.06)
In-process research and
development (other operating
costs and expenses) (175,000) (0.72) (175,000) (0.72)
Intangible asset
impairment (other
operating costs and expenses) - - - -
Valuation charge -
convertible notes receivable
(other expenses) 7,647 0.03 7,647 0.03
(Loss) income from
discountinued operations 2,338 0.01 2,286 0.01
Income tax benefit 63,262 0.26 63,282 0.26
Net loss $(35,015) $(38,867)
Diluted loss per common share,
as reported under GAAP $(0.15) $(0.16)
Three Months Ending September 30, 2003
As Originally Reported As Restated
EPS EPS
Net income, excluding
special items $101,743 $102,452
Diluted income per common share,
excluding special items $0.42 $0.42
SPECIAL ITEMS:
Excess purchase commitment
(cost of goods sold) - - - -
Writeoff of acquisition
related inventory step-up/recall
(cost of goods sold) (663) (0.00) (663) (0.00)
Special legal and professional
fees (selling, general,
and administrative) (7,912) (0.03) (7,912) (0.03)
Legal settlement fees
(selling, general, and
administrative) - - - -
In-process research and
development (other operating
costs and expenses) - - - -
Intangible asset impairment
(other operating costs
and expenses) - - - -
Special gains on disposition
(other operating costs and
expenses) 10,312 0.04 10,312 0.04
Valuation charge - convertible
notes receivable
(other expenses) 9,338 0.04 9,338 0.04
Loss from discontinued
operations (4,323) (0.02) (5,021) (0.02)
Income tax (expense) benefit (2,408) (0.01) (2,141) (0.01)
Net income $106,087 $106,365
Diluted income per common share,
as reported under GAAP $0.44 $0.44
Three Months Ending December 31, 2003
As Originally Reported As Restated
EPS EPS
Net income, excluding
special items $78,823 $67,775
Diluted income per common
share, excluding special items $0.33 $0.28
SPECIAL ITEMS:
Excess purchase commitment
(cost of goods sold) (29,959) (0.12) (33,959) (0.14)
Writeoff of acquisition
related inventory step-up/recall
(cost of goods sold) - - - -
Special legal and professional fees (selling, general, and
administrative) (3,778) (0.03) (3,778) (0.03)
Legal settlement fees
(selling, general, and
administrative) (2,931) (0.01) (2,931) (0.01)
In-process research and
development (other operating
costs and expenses) (1,000) (0.00) (1,000) (0.00)
Intangible asset impairment
(other operating costs and
expenses) (13,646) (0.06) (13,646) (0.06)
Special gains on disposition
(other operating costs and
expenses) 1,713 0.01 1,713 0.01
Valuation charge - convertible
notes receivable
(other expenses) (6,801) (0.03) (6,401) (0.02)
Loss from discontinued
operations (3,381) (0.01) (2,399) (0.01)
Income tax (expense) benefit 22,937 0.09 23,940 0.10
Net income $41,977 $29,314
Diluted income per common
share, as reported under GAAP $0.17 $0.12
KING PHARMACEUTICALS, INC.
RECONCILIATION OF NON-GAAP MEASURES
(in thousands, except share data)
(unaudited)
The following tables reconcile Non-GAAP measures to amounts reported
under GAAP:
Three Months Ending March 31, 2004
As Originally Reported As Restated
EPS EPS
Net income, excluding
special items $25,940 $28,371
Diluted income per common share,
excluding special items $0.11 $0.12
SPECIAL ITEMS:
Excess purchase commitment
(cost of goods sold) (4,176) (0.02) (176) (0.00)
Writeoff of acquisition
related inventory step-up/recall
(cost of goods sold) - - - -
Special legal and professional
fees (selling, general, and
administrative) (5,692) (0.02) (5,692) (0.02)
Medicaid related charge
(other operating costs and
expenses) - - - -
Merger related costs (other
operating costs and expenses) - - - -
Intangible asset impairment
(other operating costs and
expenses) (34,936) (0.14) (34,936) (0.14)
Restructuring charges
(other operating costs
and expenses) - - - -
Special gains on disposition
(other operating costs and
expenses) 858 0.00 858 0.00
Valuation charge - convertible
notes receivable
(other expenses) (49) (0.00) (449) (0.00)
(Loss) income from discontinued
operations (171,242) (0.71) (167,462) (0.70)
Income tax benefit 78,237 0.32 75,410 0.31
Net loss $(111,060) $(104,076)
Diluted loss per common
share, as reported under
GAAP $(0.46) $(0.43)
Three Months Ending June 30, 2004
As Originally Reported As Restated
EPS EPS
Net income, excluding
special items $11,467 $12,812
Diluted income per common
share, excluding special items $0.05 $0.05
SPECIAL ITEMS:
Excess purchase commitment
(cost of goods sold) - - - -
Writeoff of acquisition
related inventory step-up/recall
(cost of goods sold) (4,586) (0.02) (4,586) (0.02)
Special legal and professional
fees (selling, general,
and administrative) (4,993) (0.02) (4,993) (0.02)
Medicaid related charge
(other operating costs
and expenses) (65,000) (0.27) (65,000) (0.27)
Merger related costs (other
operating costs and
expenses) (3,126) (0.01) (3,126) (0.01)
Intangible asset impairment
(other operating costs and
expenses) - - - -
Restructuring charges
(other operating costs and
expenses) (6,153) (0.03) (6,153) (0.03)
Special gains on disposition
(other operating costs and
expenses) 3,421 0.02 3,421 0.02
Valuation charge - convertible
notes receivable
(other expenses) (2,438) (0.01) (2,438) (0.01)
(Loss) income from
discontinued operations 3,332 0.01 2,148 0.01
Income tax benefit 4,537 0.02 4,991 0.02
Net loss $(63,539) $(62,924)
Diluted loss per common share,
as reported under GAAP $(0.26) $(0.26)
King Pharmaceuticals, Inc.
Consolidated Balance Sheets
(in thousands, except share data)
(unaudited)
December 31, 2002
As Originally As
Reported Restated
Assets
Current Assets:
Cash and cash equivalents $588,225 $588,225
Restricted Cash - -
Marketable Securities 227,263 227,263
Accounts Receivable, net 159,987 159,987
Inventories 162,606 162,606
Deferred income tax assets 106,168 122,919
Prepaid expenses and other current
assets 12,906 12,906
Assets related to discontinued
operations 4,547 4,547
Total current assets 1,261,702 1,278,453
Property, plant and equipment, net 217,114 217,114
Goodwill 12,742 12,742
Intangible assets, net 1,011,240 1,011,240
Other assets 39,531 39,531
Deferred income tax assets - -
Assets related to discontinued
operations 208,331 208,331
Total assets $2,750,660 $2,767,411
Liabilities and Shareholders' Equity
Current liabilities:
Accounts Payable $49,889 $49,209
Accrued expenses 297,528 336,760
Income taxes payable 21,247 21,247
Current portion of long term debt 1,300 1,300
Total current liabilities 369,964 408,516
Long-term debt 345,093 345,093
Deferred income tax liabilities 33,596 35,582
Other liabilities 70,824 70,824
Total liabilities 819,477 860,015
Commitments and contingencies
Shareholders' equity:
Preferred stock - -
Common stock 1,201,897 1,201,897
Retained earnings 729,241 705,454
Accumulated other comprehensive
income 45 45
Total shareholders' equity 1,931,183 1,907,396
Total liabilities and
shareholders' equity $2,750,660 $2,767,411
King Pharmaceuticals, Inc.
Consolidated Balance Sheets
(in thousands, except share data)
(unaudited)
December 31, 2003
As Originally As
Reported Restated
Assets
Current Assets:
Cash and cash equivalents $146,053 $146,053
Restricted Cash 133,969 133,969
Marketable Securities - -
Accounts Receivable, net 246,417 246,417
Inventories 260,886 260,886
Deferred income tax assets 124,930 148,479
Prepaid expenses and other current
assets 30,036 30,036
Assets related to discontinued
operations 4,012 4,012
Total current assets 946,303 969,852
Property, plant and equipment, net 257,659 257,659
Goodwill 121,355 121,355
Intangible assets, net 1,552,492 1,552,492
Other assets 76,117 76,517
Deferred income tax assets 19,307 19,154
Assets related to discontinued
operations 204,501 204,501
Total assets $3,177,734 $3,201,530
Liabilities and Shareholders' Equity
Current liabilities:
Accounts Payable $83,078 $81,648
Accrued expenses 506,033 566,704
Income taxes payable 79,641 79,641
Current portion of long term debt 97 97
Total current liabilities 668,849 728,090
Long-term debt 345,000 345,000
Deferred income tax liabilities - -
Other liabilities 121,705 123,949
Total liabilities 1,135,554 1,197,039
Commitments and contingencies
Shareholders' equity:
Preferred stock - -
Common stock 1,205,970 1,205,970
Retained earnings 835,097 797,408
Accumulated other comprehensive
income 1,113 1,113
Total shareholders' equity 2,042,180 2,004,491
Total liabilities and
shareholders' equity $3,177,734 $3,201,530
King Pharmaceuticals, Inc.
Consolidated Balance Sheets
(in thousands, except share data)
(unaudited)
June 30, 2004
As Originally As
Reported Restated
Assets
Current Assets:
Cash and cash equivalents $106,807 $106,807
Restricted Cash 129,738 129,738
Marketable Securities - -
Accounts Receivable, net 255,697 255,697
Inventories 236,855 236,855
Deferred income tax assets 179,283 197,962
Prepaid expenses and other current
assets 64,534 64,534
Assets related to discontinued
operations 1,031 1,031
Total current assets 973,945 992,624
Property, plant and equipment, net 273,468 273,468
Goodwill 134,892 134,892
Intangible assets, net 1,447,109 1,447,109
Other assets 45,926 45,926
Deferred income tax assets 57,585 57,585
Assets related to discontinued
operations 30,469 30,469
Total assets $2,963,394 $2,982,073
Liabilities and Shareholders' Equity
Current liabilities:
Accounts Payable $61,125 $59,695
Accrued expenses 580,155 630,356
Income taxes payable 26,182 26,182
Current portion of long term debt - -
Total current liabilities 667,462 716,233
Long-term debt 345,000 345,000
Deferred income tax liabilities - -
Other liabilities 81,032 81,032
Total liabilities 1,093,494 1,142,265
Commitments and contingencies
Shareholders' equity:
Preferred stock - -
Common stock 1,208,294 1,208,294
Retained earnings 660,498 630,406
Accumulated other comprehensive
income 1,108 1,108
Total shareholders' equity 1,869,900 1,839,808
Total liabilities and
shareholders' equity $2,963,394 $2,982,073
King Pharmaceuticals, Inc.
Summary of Immaterial Errors Not Recorded
for the years ended 2001, 2000 and 1999 and prior
(in thousands)
(unaudited)
The Company's financial statements for 2001, 2000, 1999 and prior have
not been restated since the effect of the returns, medicaid errors,
and other immaterial errors were not material. Summarized below are the
immaterial errors not recorded.
December Years Ended
1999 and December December
prior 2000 2001
Net Sales
As reported n/a $560,282 $802,380
Immaterial returns reserve errors $(686) $(5,048) $(9,785)
Immaterial medicaid errors $(8,942) $(5,641) $(7,071)
Other immaterial errors $- $- $-
Operating income (loss)
As reported n/a $171,823 $351,379
Immaterial returns reserve errors $(681) $(4,987) $(10,625)
Immaterial medicaid errors $(8,828) $(5,512) $(6,964)
Other immaterial errors $- $2,826 $(2,576)
Net income (loss) from continuing
operations
As reported n/a $65,803 $209,251
Immaterial returns reserve errors $(420) $(3,077) $(6,556)
Immaterial medicaid errors $(5,446) $(3,401) $(4,297)
Other immaterial errors $- $1,693 $(1,538)
Net income (loss)
As reported n/a $64,509 $217,936
Immaterial returns reserve errors $(420) $(3,235) $(6,740)
Immaterial medicaid errors $(5,446) $(3,544) $(4,437)
Other immaterial errors $- $1,693 $(1,538)
Diluted earnings (loss) per share
As reported n/a $0.29 $0.93
Immaterial returns reserve errors n/a $(0.02) $(0.03)
Immaterial medicaid errors n/a $(0.02) $(0.02)
Other immaterial errors n/a $0.01 $(0.01)
King Pharmaceuticals, Inc.
Reconciliation of amounts "originally reported" to the amounts "as
restated"
for the years ended December 31, 2002, 2003 and six months ended June 30,
2004
(in thousands)
(unaudited)
The table below sets forth the impact of the adjustments for each of the
years 2002 and 2003 and the first six months of 2004 on net sales,
operating income, net income from continuing operations, net income and
diluted income per common share
Six Months
Year Ended Year Ended Ended
December 31, December 31, June 30,
2002 2003 2004
Net Sales
As originally reported $1,030,119 $1,440,888 $527,909
Returns reserve $(12,851) $(17,401) $8,195
Immaterial medicaid errors $21,654 $- $-
Other immaterial items $(9,273) $937 $(6,918)
As restated $1,029,649 $1,424,424 $529,186
Operating income (loss)
As originally reported $271,757 $175,861 $(62,616)
Returns reserve $(12,224) $(19,905) $11,366
Immaterial medicaid errors $21,304 $- $-
Other immaterial items $(5,794) $(4,004) $(1,248)
As restated $275,043 $151,952 $(52,498)
Net income (loss) from continuing
operations
As originally reported $168,446 $111,947 $(67,978)
Returns reserve $(7,543) $(12,281) $7,014
Immaterial medicaid errors $13,145 $- $-
Other immaterial items $(3,575) $(2,223) $(1,017)
As restated $170,473 $97,443 $(61,981)
Net income (loss)
As originally reported $182,520 $105,856 $(174,599)
Returns reserve $(9,070) $(12,536) $8,915
Immaterial medicaid errors $13,428 $- $-
Other immaterial items $(4,477) $(1,366) $(1,316)
As restated $182,401 $91,954 $(167,000)
Diluted earnings (loss) per share
As originally reported $0.74 $0.44 $(0.72)
Returns reserve $(0.03) $(0.05) $0.03
Immaterial medicaid errors $0.05 $- $-
Other immaterial items $(0.02) $(0.01) $-
As restated $0.74 $0.38 $(0.69)
SOURCE King Pharmaceuticals, Inc.
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Related links:
http://www.kingpharm.com
Company News On-Call:
http://www.prnewswire.com/comp/120319.html
CONTACT:
James E. Green, Executive Vice President,
Corporate Affairs - of Pharmaceuticals, Inc., +1-423-989-8125
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