BRISTOL, Tenn., Oct. 28 /PRNewswire-FirstCall/ -- King Pharmaceuticals,
Inc. (NYSE: KG) announced today that total revenues increased 34% to
$424.2 million during the third quarter ending September 30, 2003, compared to
$315.7 million during the third quarter of 2002. Net earnings during the
third quarter ending September 30, 2003, including special items, totaled
$106.1 million, or $0.44 per diluted share, each increasing 26% in comparison
to net earnings of $84.2 million and diluted earnings per share of $0.35 in
the same period of the prior year. Excluding special items, net earnings
increased 17% to $99.1 million and diluted earnings per share grew 17% to
$0.41 during the third quarter ending September 30, 2003, from net earnings of
$84.7 million and diluted earnings per share of $0.35 during the third quarter
of 2002.
For the nine months ending September 30, 2003, total revenues increased
33% to $1,138.8 million compared to $856.3 million during the first nine
months of 2002. During the nine months ending September 30, 2003, including
special items, net earnings equaled $63.9 million, or $0.26 per diluted share,
each decreasing 70% in comparison to net earnings of $214.0 million and
diluted earnings per share of $0.87 in the same period of the prior year.
Excluding special items, net earnings increased 13% to $262.6 million and
diluted earnings per share increased 16% to $1.09 during the nine months
ending September 30, 2003, from net earnings of $233.1 million and diluted
earnings per share of $0.94 during the first nine months of 2002.
King recorded special items during the third quarter ending September 30,
2003, the net of which resulted in income totaling $11.1 million, or
$7.0 million net of tax. More specifically, special items during the third
quarter of 2003 include income in the amount of $10.3 million due to a gain on
the sale of the Company's animal health products; income in the amount of
$9.3 million due to a decrease in the valuation allowance for Novavax, Inc.
convertible notes held by the Company resulting from an increase in the share
price of Novavax common stock during the third quarter of 2003; and charges
totaling $8.6 million, primarily related to professional fees associated with
the ongoing Securities and Exchange Commission ("SEC") investigation of the
Company and the completed internal review conducted by the Audit Committee of
King's Board of Directors. King recorded special items totaling $0.7 million,
or $0.5 million net of tax, during the third quarter ending September 30,
2002, primarily due to a charge related to an increase in the reserve for
King's voluntary recall during 2001 of products manufactured for the Company
by a contract manufacturer, offset by income resulting from a decrease in the
valuation allowance for Novavax convertible notes held by the Company. During
the first six months of 2003, King recorded special items totaling $308.4
million, or $205.7 million net of tax, primarily due to charges for acquired
in-process research and development, professional fees associated with the
previously mentioned SEC investigation and completed internal review, a
product recall, and a decrease in the valuation allowance for Novavax
convertible notes held by the Company; and an intangible asset impairment
charge. During the six month period ending June 30, 2002, King recorded
special charges totaling $29.8 million, or $18.7 million net of tax, that
primarily related to an increase in the valuation allowance for Novavax
convertible notes held by King and the Company's voluntary recall of two of
its smaller products.
Under Generally Accepted Accounting Principles ("GAAP"), "net earnings"
and "diluted earnings per share" include special items. In addition to the
results determined in accordance with GAAP, King provides its net earnings and
diluted earnings per share results for the third quarter and nine months
ending September 30, 2003, excluding special items. King also provides below
the Company's diluted earnings per share for the fourth quarter and year
ending December 31, 2002, excluding special items. These non-GAAP financial
measures exclude special items which are those particular material income or
expense items that King considers to be unrelated to the Company's ongoing,
underlying business, non-recurring, or not generally predictable. Such items
include, but are not limited to, merger and restructuring expenses; non-
capitalized expenses associated with acquisitions, such as in-process research
and development charges and one-time inventory valuation adjustment charges;
charges resulting from the early extinguishment of debt; asset impairment
charges; expenses of drug recalls; and gains and losses resulting from the
divestiture of assets. King believes the identification of special items
enhances an analysis of the Company's ongoing, underlying business and an
analysis of the Company's financial results when comparing those results to
that of a previous or subsequent like period. However, it should be noted
that the determination of whether to classify an item as a special item
involves judgments by King's management. A reconciliation of non-GAAP
financial measures referenced herein and King's financial results determined
in accordance with GAAP is provided below.
The 34% increase in King's revenues during the third-quarter ending
September 30, 2003 in comparison to the same period of the prior year is
attributable primarily to the acquisition of Sonata(R) and Skelaxin(R)
(metaxolone) from Elan Corporation, plc on June 12, 2003, the acquisition of
Meridian on January 8, 2003, and increased net sales of certain branded
pharmaceutical products, in particular Thrombin-JMI(R) (thrombin, topical,
bovine, USP).
Net revenue from branded pharmaceuticals, including royalty income,
totaled $380.2 million for the third quarter of 2003, a 23% increase over the
third quarter of 2002. Meridian, our wholly-owned subsidiary, contributed
$38.4 million of net revenue in the third quarter of 2003. Net revenue from
contract manufacturing during the third quarter of 2003 equaled $5.7 million.
Altace(R) (ramipril) net sales equaled $125.4 million in the third quarter
of 2003, a 4% decrease from $130.5 million during the third quarter of 2002.
Altace(R) new prescriptions totaled approximately 980,995 and total
prescriptions equaled approximately 3,200,986 during the third quarter of
2003, increases of 9% and 15%, respectively, over the same period of the prior
year, according to IMS America monthly prescription data. Moreover, Altace is
now positioned as the leader in total prescription market share among branded
ACE inhibitors according to IMS America weekly prescription data.
Net sales of Skelaxin(R) totaled $87.9 million and Sonata(R) net sales
equaled $20.5 million during the third quarter ending September 30, 2003.
Net sales of Thrombin-JMI(R) totaled $40.4 million during the third
quarter ending September 30, 2003, a 73% increase from $23.3 million during
the third quarter of the prior year.
Levoxyl(R) net sales equaled $26.3 million in the third quarter of 2003,
down 45% from $47.8 million during the third quarter of 2002, while total
prescriptions for the product were down 2% during the third quarter ending
September 30, 2003, compared to the same period of the prior year according to
IMS America monthly prescription data.
Royalty revenues from Adenoscan(R) (adenosine) and Adenocard(R)
(adenosine) totaled $16.3 million in the third quarter of 2003, a 9% increase
over $15.0 million during the same period of the prior year.
Jefferson J. Gregory, Chairman and Chief Executive Officer of King,
stated, "We are pleased to report King's positive financial results for the
third quarter ending September 30, 2003. Revenues, which exceed $1.1 billion
during the first nine months of this year, grew strongly during the third
quarter of 2003, increasing 34% in comparison to the same period of the prior
year. This strong growth is attributable to greater net sales produced by our
diversified portfolio of branded pharmaceutical products."
Mr. Gregory added, "Net sales of Skelaxin(R) were impressive, benefiting
from continued prescription growth, the ongoing launch of the new 800mg dose
of Skelaxin(R), and the sustained, rapid shift from the long-established 400mg
dose to the recently introduced 800mg dose of Skelaxin(R). Total prescriptions
for Skelaxin(R) 800mg during the third quarter of 2003 increased 21% over the
second quarter ending June 30, 2003 and now account for approximately 46% of
all Skelaxin(R) prescriptions combined. Likewise, taking into account the
average number of tablets per prescription, our revenue and profitability
associated with each Skelaxin(R) 800 mg prescription is enhanced in comparison
to each 400mg prescription of the product."
Mr. Gregory emphasized, "Our growing product pipeline continues to achieve
key milestones. Earlier this month, the U.S. Food and Drug Administration
('FDA') approved Estrasorb(TM) (estradiol topical emulsion), the first
prescription topical emulsion estrogen therapy. Through our co-marketing
arrangement with Novavax, we expect to launch Estrasorb(TM) in the United
States and Puerto Rico in early 2004 utilizing a combined sales force of King
and Novavax which together should consist of over 120 individuals. Also,
before the end of this year, King anticipates the FDA may approve our
diazepam-filled auto-injector for the treatment of status epilepticus and
severe recurrent convulsive seizures associated with epilepsy."
Mr. Gregory continued, "Another important recent achievement for research
and development at King includes yesterday's announcement that the Company's
Investigational New Drug ('IND') Application for T-62, an investigational drug
for the treatment of neuropathic pain, has been allowed by the FDA. Although
currently available treatments for neuropathic pain are of limited efficacy,
the neuropathic pain market exceeds $1.7 billion annually and is growing
according to a published report of Datamonitor. We believe that T-62 should
represent a significant advancement in the treatment of this debilitating
condition. A Phase I trial to determine the safety of T-62, a new chemical
entity, is now planned to begin during the fourth quarter of 2003."
Mr. Gregory also noted, "We expect the first of two pivotal phase III
trials for another of our leading pipeline products, binodenoson, to begin
before the end of this year. FDA approval of this A2A receptor agonist should
position the product as a second generation cardiac pharmacologic stress
imaging agent to the currently marketed product adenosine which was previously
developed by King." Mr. Gregory further underscored, "King is focusing more
on the strategic acquisition and in-licensing of products in late-stage
development as we continue to enhance our product pipeline. This should
leverage our experienced and expanding research and development and sales and
marketing capabilities."
James R. Lattanzi, Chief Financial Officer of King, commented, "Our
earnings during the third quarter of 2003 produced cash flows from operations
totaling $159.0 million. For the nine-month period ending September 30, 2003,
cash flows from operations equaled $365.1 million. King's cash, cash
equivalents, and marketable securities totaled $166.6 million, as of September
30, 2003, which includes approximately $46.5 million of cash that was placed
in an interest-bearing escrow account last July for estimated underpayments to
Medicaid and other governmental pricing programs. The Company repaid all
outstanding borrowings in the amount of $125 million under our senior secured
revolving credit facility during the third quarter of 2003."
King is adjusting the Company's projected ranges for estimated total
revenue, Altace(R) net sales, and diluted earnings per share, excluding
special items, for the fourth quarter of 2003 based on a combination of
current net sales and prescription trends and is revising such projections for
the full year ending 2003 to reflect the Company's revised estimates for the
fourth quarter and actual results for the first nine months of 2003. King's
actual total revenue, Altace(R) net sales, and diluted earnings per share,
excluding special items, for the fourth quarter of 2002, which are provided
for purposes of comparison, and projected ranges for estimated total revenue,
estimated net sales of Altace(R), and estimated diluted earnings per share,
excluding special items, for the fourth quarter of 2003 are as follows
(dollars in millions, except EPS):
Actual Results for the Projected Ranges for the
Fourth Quarter Ending Fourth Quarter Ending
12/31/02 12/31/03
Revenue $272.0 $395 - 425
Altace(R) Net Sales $109.5 $125 - 145
Diluted EPS,
excluding special
items $0.28 $0.31 - 0.34
King's actual total revenue, Altace(R) net sales, and diluted earnings per
share, excluding special items, for year-end 2002, which are also provided for
purposes of comparison, and projected ranges for estimated total revenue,
estimated net sales of Altace(R), and estimated diluted earnings per share,
excluding special items, for year-end 2003 are as follows (dollars in
millions, except EPS):
Actual Results for Projected Ranges for
Full Year Full Year
2002 2003
Revenue $1128 $1534 - 1564
Altace(R) Net Sales $450.0 $544 - 564
Diluted EPS,
excluding special items $1.23 $1.40 - 1.43
King is also providing for the first time the Company's projected ranges
for estimated total net revenue, and diluted earnings per share, excluding
special items, for year-end 2004. King's projected ranges for estimated total
net revenue and estimated diluted earnings per share, excluding special items,
for year-end 2004 are as follows (dollars in millions, except EPS):
Projected Ranges for Full Year
2004
Net Revenue $1750 - 1850
Diluted EPS,
excluding special items $1.50 - 1.60
Since King generally does not predict the future impact of special items,
King cannot reconcile the Company's fourth-quarter and year-end 2003 and year-
end 2004 earnings guidance, excluding special items, to GAAP. Also,
considering King's more diversified revenue base and the current relative
contribution of Altace(R), the Company does not plan to provide future net
sales guidance for Altace(R).
King will provide a live webcast of its conference call scheduled for
today at 11:00 a.m., E.S.T., pertaining to the matters addressed in this press
release, including King's financial results for the third quarter of 2003, at
http://www.firstcallevents.com/service/ajwz391462151gf12.html or by dialing
800-867-2186 (US only) or 785-832-2422 (international), passcode KG. If you
are unable to participate during the live webcast, the call will be archived
on King's web site http://www.kingpharm.com for not less than 30 days following the
call. A replay of the conference call will also be available for not less
than 30 days following the call by dialing 800-938-1602 (US only) or
402-220-1548 (international).
King, headquartered in Bristol, Tennessee, is a vertically integrated
pharmaceutical company that develops, manufactures, markets, and sells branded
prescription pharmaceutical products. 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.
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 launch of Estrasorb(R);
statements pertaining to the anticipated FDA approval of King's
diazepam-filled auto-injector; statements pertaining to the planned Phase I
trial involving T-62; statements pertaining to the development of T-62 as an
effective treatment for neuropathic pain; statements pertaining to the growth
potential of the neuropathic pain market; statements pertaining to the
Company's plan to focus more on the acquisition and in-licensing of products
in late-stage development, leveraging King's research and development and
sales and marketing capability; statements pertaining to management's
estimated net sales of Altace(R), estimated net revenue, and estimated diluted
earnings per share, excluding special items, for the fourth-quarter and year-
end 2003; and statements pertaining to management's estimated net revenue and
estimated diluted earnings per share, excluding special items, for year-end
2004. 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 results to differ
include: dependence on King's and Wyeth Pharmaceuticals' ability to
successfully market Altace(R) under the co-promotion agreement between King
and Wyeth; dependence on the development and implementation of successful
marketing strategies for Altace(R) by King and Wyeth; dependence on the
potential negative effect on sales of Levoxyl(R) as a result of the potential
development and approval of a generic substitute for Levoxyl(R); dependence on
growth of net sales of King's branded pharmaceutical products, in particular,
Altace(R), Skelaxin(R), Levoxyl(R), Sonata(R), and Thrombin-JMI(R), as well as
revenue and diluted earnings per share, excluding special items, at a rate
equal to or in excess of management's projections; dependence on share count
projections used in computing projected diluted earnings per share on a
quarterly basis and year-end basis for 2003 and year-end basis for 2004;
dependence on the successful marketing and sales of King's products,
including, but not limited to, Altace(R), Skelaxin(R), Levoxyl(R), Sonata(R),
and Thrombin-JMI(R); dependence on royalty revenues from Adenoscan(R) and
Adenocard(R); dependence on whether sales of Lorabid(R) continue to decline,
King terminates the Company's supply agreement with Eli Lilly for Lorabid(R),
or King is unable to secure adequate Lorabid(R) inventory purchase commitments
from a buyer of the Lorabid(R) rights; dependence on management of King's
growth and integration of its acquisitions, specifically including, but not
limited to, King's acquisition of Elan's primary care business in the United
States and Puerto Rico, King's acquisition of Meridian, and King's acquisition
of Intal(R), Tilade(R) and Synercid(R); dependence on the extent to which
Centers for the Medicare and Medicaid Services, the Office of Inspector
General at the Department of Health and Human Services, and the Department of
Justice concur with King's best estimate of the extent to which it underpaid
amounts due under Medicaid and other governmental pricing programs and King's
determination of the reasons for such underpayments; dependence on any
determination or final outcome arising out of the previously announced
investigation of the Company by the SEC; dependence on whether King is able
to prevail in pending shareholder securities litigation; dependence on
whether any governmental sanctions are imposed due to King's underpayment of
amounts due under Medicaid and other governmental pricing programs; dependence
on the possibility that regulatory authorities may initiate proceedings
against King and/or our officers and directors; dependence on King's ability
to continue to acquire branded products, including products in development;
dependence on the high cost and uncertainty of research, clinical trials, and
other development activities involving pharmaceutical products, including, but
not limited to, King Pharmaceuticals Research and Development's pre-clinical
and clinical pharmaceutical product development projects, including
binodenoson and T-62; dependence on FDA approval of King's Abbreviated New
Drug Application ("ANDA") now pending on the Company's diazepam-filled auto
injector and the supplemental New Drug Application ("NDA") for Intal(R) HFA;
dependence on Novavax's ability to successfully manufacture Estrasorb(TM);
dependence on King's and Novavax's ability to successfully launch and market
Estrasorb(TM) as planned; dependence on King's and Elan's ability to
successfully develop new formulations of Sonata(R) and Skelaxin(R); dependence
on King's ability to timely initiate the Phase I trial involving T-62
scheduled to begin during the fourth quarter of 2003; dependence on the
continued successful development of T-62, including the results of the planned
clinical trials involving the compound that are intended to demonstrate its
safety and efficacy as a treatment for neuropathic pain; dependence on the
unpredictability of the duration and results of the FDA's review of INDs,
NDAs, and ANDAs and/or the review of other regulatory agencies worldwide;
dependence on King's ability to maintain effective patent protection for
Altace(R) through October 2008, and successfully defend against any attempt to
challenge the enforceability of patents relating to the product; dependence on
King's ability to successfully defend against any potential attempt to
challenge the enforceability of the patent related to Levoxyl(R), including
the challenges by Mylan Pharmaceutical and KV Pharmaceutical; dependence on
King's ability to timely obtain and, if issued, maintain additional effective
patent protection for Levoxyl(R); dependence on King's ability to successfully
defend against any potential attempt to challenge the enforceability of U.S.
Patent No. 6,407,128 related to Skelaxin(R), including the challenges by Eon
Labs, Inc. and Corepharma LLC; dependence on King's ability to maintain
effective patent protection for Sonata(R) and Skelaxin(R), including new
formulations of such products, and successfully defend against any attempt to
challenge the enforceability of patents relating to the products, including
any motion for summary judgment or other similar legal action; dependence on
the ability of the Company's dedicated field sales force representatives to
successfully market King's branded pharmaceutical products; dependence on
whether our customers order pharmaceutical products in excess of normal
quantities during any quarter which could cause our sales of branded
pharmaceutical products to be lower in a subsequent quarter than they would
otherwise have been; dependence on changes in the share price of Novavax
common stock which is the underlying collateral for the Novavax convertible
notes held by the Company; dependence on King's ability to continue to
successfully execute the Company's proven growth strategies and to continue to
capitalize on strategic opportunities in the future for sustained long-term
growth; dependence on the availability and cost of raw materials; dependence
on no material interruptions in supply by contract manufacturers of King's
products; dependence on the potential effect on sales of our existing branded
pharmaceutical products as a result of the potential development and approval
of a generic substitute for any such product or other new competitive
products; dependence on the potential effect of future acquisitions and other
transactions pursuant to our growth strategies on King's financial and other
projections; dependence on the continued successful implementation of our new
information technology system; dependence on our compliance with FDA and other
government regulations that relate to our business; and dependence on changes
in general economic and business conditions; changes in current pricing
levels; changes in federal and state laws and regulations; and manufacturing
capacity constraints. 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, 2002 and Form 10-Q for the second quarter ended June 30,
2003, 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 STATEMENT OF OPERATIONS
(in thousands, except per share data)
Three Months Ended Nine Months Ended
September 30 September 30
2003 2002 2003 2002
(Unaudited) (Unaudited)
REVENUES:
Total revenues $424,204 $315,705 $1,138,757 $856,303
OPERATING COSTS AND
EXPENSES:
Cost of revenues 89,758 62,356 256,110 163,865
Write off of
acquisition
related inventory
step-up/recall 663 1,206 6,459 3,033
Total cost of
revenues 90,421 63,562 262,569 166,898
Selling, general
and administrative 81,212 46,473 188,727 132,484
Special legal and
professional fees 7,912 -- 22,208 --
Co-promotion fees 46,109 53,652 163,049 134,747
Gain on sale of
product lines (10,312) -- (10,312) --
Depreciation and
amortization 39,698 15,603 83,323 43,743
Research and
development 8,758 6,448 29,487 18,779
Research and
development -
In-process upon
acquisition -- -- 193,000 --
Intangible asset
impairment -- -- 110,970 --
Total
operating
costs and
expenses 263,798 185,738 1,043,021 496,651
OPERATING INCOME 160,406 129,967 95,736 359,652
OTHER (EXPENSES)
INCOME:
Interest expense (3,669) (3,143) (10,137) (9,028)
Interest income 1,037 5,952 5,729 17,410
Valuation charge -
convertible notes
receivable 9,338 548 24,952 (27,378)
Other income
(expense) (36) 87 (134) (994)
Total other
income (expenses) 6,670 3,444 20,410 (19,990)
INCOME BEFORE
INCOME TAXES 167,076 133,411 116,146 339,662
Income tax
expense 60,989 49,166 52,267 125,699
NET INCOME $106,087 $84,245 $63,879 $213,963
Basic income per
common share $0.44 $0.35 $0.27 $0.87
Diluted income per
common share $0.44 $0.35 $0.26 $0.87
Shares used in
basic net income
per share 241,066 241,840 240,932 245,535
Shares used in
diluted net income
per share 241,583 242,873 241,499 247,007
KING PHARMACEUTICALS, INC.
CONSOLIDATED STATEMENT OF OPERATIONS
EXCLUDING SPECIAL ITEMS
(in thousands, except per share data)
Three Months Ended Nine Months Ended
September 30 September 30
2003 2002 2003 2002
(Unaudited) (Unaudited)
REVENUES:
Total revenues $424,204 $315,705 $1,138,757 $856,303
OPERATING COSTS AND
EXPENSES:
Cost of revenues 89,758 62,356 256,110 163,865
Selling, general
and administrative 81,212 46,473 188,727 132,484
Co-promotion fees 46,109 53,652 163,049 134,747
Depreciation and
amortization 39,698 15,603 83,323 43,743
Research and
development 8,758 6,448 29,487 18,779
Total
operating
costs and
expenses 265,535 184,532 720,696 493,618
OPERATING INCOME 158,669 131,173 418,061 362,685
OTHER (EXPENSES)
INCOME:
Interest expense (3,669) (3,143) (10,137) (9,028)
Interest income 1,037 5,952 5,729 17,410
Other income
(expense) (36) 87 (134) (994)
Total other
income (expenses) (2,668) 2,896 (4,542) 7,388
INCOME BEFORE
INCOME TAXES 156,001 134,069 413,519 370,073
Income tax
expense 56,940 49,355 150,934 136,927
NET INCOME $99,061 $84,714 $262,585 $233,146
Basic income per
common share $0.41 $0.35 $1.09 $0.95
Diluted income per
common share $0.41 $0.35 $1.09 $0.94
Shares used in
basic net income
per share 241,066 241,840 240,932 245,535
Shares used in
diluted net income
per share 241,583 242,873 241,499 247,007
KING PHARMACEUTICALS, INC.
RECONCILIATION OF NON-GAAP MEASURES
(in thousands, except per share data)
The following table reconciles Non-GAAP measures to amounts reported under
GAAP:
Three Months Ending Three Months Ending
September 30, 2003 September 30, 2002
Pretax Amount EPS Pretax Amount EPS
Net income,
excluding special
items $99,061 $84,714
Diluted income per
common share,
excluding special
items $0.41 $0.35
SPECIAL ITEMS:
Write-off of
acquisition
related inventory
step-up/recall (663) (0.00) (1,206) (0.00)
Special legal and
professional fees (7,912) (0.03) -- --
Gain on sale of
product lines 10,312 0.04 -- --
Valuation charge -
convertible notes
receivable 9,338 0.04 548 0.00
Income tax expense (4,049) (0.02) 189 0.00
Net income $106,087 $84,245
Diluted income per
common share, as
reported under GAAP $0.44 $0.35
Nine Months Ending Nine Months Ending
September 30, 2003 September 30, 2002
Pretax Amount EPS Pretax Amount EPS
Net income,
excluding special
items $262,585 $233,146
Diluted income per
common share,
excluding special
items $1.09 $0.94
SPECIAL ITEMS:
Write-off of
acquisition
related inventory
step-up/recall (6,459) (0.03) (3,033) (0.01)
Special legal and
professional fees (22,208) (0.09)
Intangible asset
impairment (110,970) (0.46) -- --
Gain on sale of
product lines 10,312 0.04 -- --
In-process research
and development (193,000) (0.80) -- --
Valuation charge -
convertible notes
receivable 24,952 0.10 (27,378) (0.11)
Income tax expense 98,667 0.41 11,228 0.05
Net income $63,879 $213,963
Diluted income per
common share, as
reported under GAAP $0.26 $0.87
KING PHARMACEUTICALS, INC.
RECONCILIATION OF NON-GAAP MEASURES
(in thousands, except per share data)
The following table reconciles Non-GAAP measures to amounts reported under
GAAP:
Three Months Ending December 31, 2002
Pretax Amount EPS
Net income, excluding special
charges $67,244
Diluted income per common share,
excluding special items $0.28
SPECIAL ITEMS:
Excess purchase commitment (49,877) (0.21)
Inventory contributions/write off (15,152) (0.06)
In-process research and
development (12,000) (0.05)
Intangible asset impairment (66,844) (0.28)
Merger and restructuring costs (5,281) (0.02)
Valuation charge - convertible
notes receivable (8,251) (0.03)
Income tax benefit 58,718 0.24
Net income $(31,443)
Diluted income per common share, as
reported under GAAP $(0.13)
Twelve Months Ending December 31, 2002
Pretax Amount EPS
Net income, excluding special
charges $301,020
Diluted income per common share,
excluding special items $1.23
SPECIAL ITEMS:
Excess purchase commitment (49,877) (0.20)
Inventory contributions/write off (15,152) (0.06)
Inventory recall (3,033) (0.01)
In-process research and
development (12,000) (0.05)
Intangible asset impairment (66,844) (0.27)
Merger and restructuring costs (5,911) (0.03)
Valuation charge - convertible
notes receivable (35,629) (0.15)
Income tax benefit 69,946 0.28
Net income $182,520
Diluted income per common share, as
reported under GAAP $0.74
KING PHARMACEUTICALS, INC.
CONSOLIDATED BALANCE SHEET
(in thousands, except share data)
(Unaudited)
September 30, December 31,
ASSETS 2003 2002
Current assets:
Cash, cash equivalents and
marketable securities $166,587 $815,488
Accounts receivable, net 229,305 159,987
Inventory 251,728 167,153
Deferred income taxes 101,516 106,168
Prepaid expenses and other assets 88,303 12,906
Total current assets 837,439 1,261,702
Property, plant and equipment, net 247,155 217,114
Intangible assets, net 1,785,838 1,219,571
Goodwill 126,616 12,742
Other assets 103,470 39,531
Deferred income tax assets 9,287 --
Total assets $3,109,805 $2,750,660
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Current portion of long term debt $1,176 $1,300
Accounts payable 55,729 49,889
Accrued expenses 493,030 297,528
Income taxes payable 62,255 21,247
Total current liabilities 612,190 369,964
Long-term debt:
Convertible Debentures 345,000 345,000
Senior Subordinated Notes 93 93
Other long-term liabilities 152,400 70,824
Deferred income tax liabilities -- 33,596
Total liabilities 1,109,683 819,477
Shareholders' equity:
Common shares no par value,
300,000,000 shares
authorized, 241,137,227
and 240,624,751 shares issued
and outstanding, respectively 1,205,472 1,201,897
Retained earnings 793,120 729,241
Other comprehensive income 1,530 45
Total shareholders' equity 2,000,122 1,931,183
Total liabilities and
shareholders' equity $3,109,805 $2,750,660
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 King Pharmaceuticals, +1-423-989-8125
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