BRISTOL, Tenn., Oct. 28 /PRNewswire-FirstCall/ -- King Pharmaceuticals,
Inc. (NYSE: KG) today announced the following preliminary financial results
for the third quarter ending September 30, 2004. Total revenues equaled $353.5
million during the third quarter ending September 30, 2004, a 28% increase in
comparison to $275.1 million during the second quarter ending June 30, 2004
and a 22% increase in comparison to $290.6 million during the first quarter
ending March 31, 2004.
Brian M. Markison, President and Chief Executive Officer of King, stated,
"We are very pleased with our preliminary financial results during the third
quarter of 2004. Net sales of our branded pharmaceutical products during the
third quarter ending September 30, 2004 increased significantly in comparison
to that which we reported during the first two quarters of 2004. Accordingly,
net sales of our branded pharmaceutical products during the third quarter of
2004 more closely reflect prescription demand. This improvement is a direct
result of the successful implementation of our inventory management agreements
with key customers earlier this year. As we go forward we believe our
inventory management agreements should enable us to achieve financial results
that even more closely reflect demand-based sales of our products and, as a
result, provide a higher degree of predictability for our shareholders."
As of September 30, 2004, four of King's key branded pharmaceutical
products, Altace(R) (ramipril), Skelaxin(R) (metaxalone), Levoxyl(R)
(levothyroxine sodium tablets, USP) and Sonata(R) (zaleplon), had an average
wholesale inventory level of approximately 2.1 months of prescription demand
based on data obtained through the Company's inventory management agreements
and IMS America prescription data, a decrease from an average level of
approximately 2.4 months of prescription demand as of the end of the second
quarter of 2004.
Mr. Markison also noted, "During the third quarter of 2004 we continued to
successfully execute our strategies for future long-term growth by expanding
our product pipeline through a strategic alliance with Palatin Technologies,
Inc. to jointly develop, obtain regulatory approvals for, and commercialize
Palatin's PT-141 for the treatment of male and potentially female sexual
dysfunction. We believe the unique mechanism of action of PT-141 may offer
important benefits over currently available products and satisfy the unmet
medical needs of patients in this vast market."
James R. Lattanzi, Chief Financial Officer of King, emphasized, "Our
financial results during the third quarter of 2004 produced impressive cash
flows from operations totaling approximately $140.0 million. Accordingly,
King's cash, cash equivalents, and marketable securities, which do not include
restricted cash, totaled $248.2 million as of September 30, 2004." Mr.
Lattanzi added, "In connection with the successful implementation of our
inventory management agreements, we have experienced a high level of product
returns. Considering this high level of returns, we have determined that a
thorough evaluation of our returns reserve is prudent before we formally close
the third quarter of 2004. Accordingly, the financial results that we are
reporting today are preliminary and subject to the results of the Company's
ongoing evaluation of its returns reserve. We plan to complete this process
promptly. Moreover, we believe the Company has established an acceptable level
of inventory for our products at this time, which has already led to a more
normal level of product returns. With these things in mind, we believe King is
fundamentally well positioned for growth with an acceptable level of inventory
in the channel and continued strong cash flow."
The Company is now considering whether any of its returns reserve accrued
during the first nine months of 2004 should have been recognized in years
prior to 2004 and, if so, the relevant amounts and the materiality of those
amounts. If material, such amounts would likely result in a restatement of
previously issued financial statements and revisions of the preliminary
financial results for the third quarter and first nine months of 2004
discussed herein. Under the Company's merger agreement with Mylan, it is a
condition to Mylan's obligation to consummate the merger that no restatement
of any of the Company's financial statements shall have occurred, and no
restatement of any of the Company's financial statements shall be reasonably
likely to occur. These issues involve the proper application of generally
accepted accounting principles to King's reserve estimates and are unrelated
to the ongoing investigations of the Company by the U.S. Securities and
Exchange Commission ("SEC") and the Office of the Inspector General ("OIG") of
the Department of Health and Human Services. Notwithstanding these issues,
King has a high degree of confidence that its ending returns reserve balance
as of September 30, 2004 is fairly stated based on the Company's ongoing
review and data provided by its customers pursuant to inventory management
agreements.
As stated above, total revenues equaled $353.5 million during the third
quarter ending September 30, 2004, a decrease of 16% from $423.1 million
during the third quarter of 2003. Net earnings during the third quarter ending
September 30, 2004, including special items, decreased 74% to $27.6 million
and diluted earnings per share decreased 75% to $0.11 per diluted share in
comparison to net earnings of $106.1 million and diluted earnings per share of
$0.44 in the same period of the prior year. Excluding special items, net
earnings during the third quarter ending September 30, 2004 totaled $47.7
million, or $0.20 per diluted share, decreasing 53% and 52%, respectively, in
comparison to net earnings of $101.7 million and diluted earnings per share of
$0.42 during the third quarter of 2003.
For the nine months ending September 30, 2004, total revenues decreased
19% to $919.2 million compared to $1,128.6 million during the first nine
months of 2003. During the nine months ending September 30, 2004, including
special items, King incurred a net loss of $147.0 million, or a loss of $0.61
per diluted share, in comparison to net earnings of $63.9 million and diluted
earnings per share of $0.26 in the same period of the prior year. Excluding
special items, net earnings decreased 68% to $85.1 million and diluted
earnings per share decreased 68% to $0.35 during the nine months ending
September 30, 2004, from net earnings of $266.6 million and diluted earnings
per share of $1.10 during the first nine months of 2003.
King recorded special items during the third quarter ending September 30,
2004, the net of which resulted in a charge totaling $28.5 million, or $20.0
million net of tax. More specifically, special items during the third quarter
of 2004 include i) a charge of $17.1 million for in-process research and
development associated with King's entry into a strategic alliance with
Palatin; ii) a charge of $4.7 million primarily associated with the Company's
decision to discontinue some relatively insignificant products associated with
the Company's Meridian Medical Technologies business; iii) a charge of $2.8
million for professional fees and expenses associated with the Company's
previously announced plan to merge with Mylan Laboratories Inc.; iv) a charge
of $2.2 million resulting from discontinued operations; v) a $2.3 million
charge primarily for professional fees associated with ongoing government
investigations of the Company; vi) a $3.6 million charge primarily related to
excess purchase commitments for Procanbid(R) (procainamide hydrochloride
extended-release tablets); and vii) income in the amount of $4.2 million
primarily due to a gain on the sale of all rights to Estrasorb(TM) and all
convertible notes of Novavax, Inc. previously held by the Company. King
recorded special items during the third quarter ending September 30, 2003, the
net of which resulted in income totaling $6.8 million, or $4.3 million net of
tax. Special items during the third quarter of 2003 were attributable
primarily to a gain on the sale of the Company's animal health products,
income resulting from a decrease in the valuation allowance for Novavax
convertible notes then held by the Company, and a charge for professional fees
associated with ongoing government investigations of the Company. During the
six month period ending June 30, 2004, King recorded special charges totaling
$294.7 million, or $212.0 million net of tax, primarily due to a loss from
discontinued operations that resulted from the Company's decision to divest
many of its women's health products, and a charge representing the Company's
current best estimate of the interest, costs, fines, penalties and all other
amounts in excess of the amount King previously accrued for purposes of
resolving the ongoing government investigations of the Company. During the six
month period ending June 30, 2003, King recorded special charges totaling
$310.5 million, or $207.0 million net of tax, primarily due to charges for
acquired in-process research and development, professional fees associated
with ongoing government investigations of the Company, a product recall, a
decrease in the valuation allowance for Novavax convertible notes then held by
the Company, and an intangible asset impairment charge.
Preliminary net revenue from branded pharmaceuticals, including royalty
income, totaled $313.9 million during the third quarter of 2004, a 17%
decrease from the third quarter of 2003. Meridian Medical Technologies, our
wholly owned subsidiary, contributed $33.9 million of net revenue in the third
quarter of 2004 compared to $38.4 million during the same period of the prior
year. Net revenue from contract manufacturing during the third quarter of
2004 equaled $5.7 million.
Altace(R) net sales equaled $133.3 million in the third quarter of 2004, a
6% increase from $125.4 million during the third quarter of 2003.
Net sales of Thrombin-JMI(R) totaled $53.4 million during the third
quarter ending September 30, 2004, an increase of 32% from $40.4 million
during third quarter of 2003.
Sonata(R) net sales equaled $25.8 million during the third quarter of
2004, a 26% increase compared to $20.5 million during the third quarter ending
September 30, 2003.
Net sales of Skelaxin(R) totaled $43.0 million during the third quarter of
2004, a 51% decrease compared to $87.9 million during the third quarter of
2003.
Levoxyl(R) net sales equaled $18.6 million during the third quarter ending
September 30, 2004, a 29% decrease compared to $26.3 million during the third
quarter of 2003.
Royalty revenues, derived primarily from Adenoscan(R) (adenosine), totaled
$20.3 million in the third quarter of 2004, a 25% increase from $16.3 million
during the same period of the prior year.
As part of King's continuing discussions with governmental agencies
pertaining to the previously announced ongoing investigations of the Company
by the SEC and the OIG, King has continued to discuss the possibility of
settling these matters. King has not yet reached any agreements or
understandings with respect to the terms of such a settlement and may not ever
be able to reach such an agreement. However, based on the status of the
discussions to date, the Company now believes that it is reasonably likely
that it will be able to achieve a comprehensive settlement with all relevant
governmental parties on the following terms:
* As of June 30, 2004, King had accrued $130.4 million in respect of the
Company's estimated underpayments to Medicaid and other government
pricing programs, and estimated settlement costs with all relevant
governmental parties. King's current expectation is that the aggregate
cost to settle with the governmental authorities should not materially
exceed the amounts already accrued.
* With respect to the matters being investigated by the staff of the SEC,
King currently anticipates that the Company would settle, without
admitting or denying, one or more charges that the Company failed to
maintain adequate books and records and internal controls. King
anticipates that the action to be settled would not include charges that
the Company's past or present public filings contained material
misstatements or omissions, and the Company does not anticipate being
required to restate any past or present financial statements as a result
of the pending investigation.
* King expects that the Company will be required to enter into a Corporate
Integrity Agreement with the Department of Health and Human Services,
which would require the Company to submit to audits relating to its
Medicaid rebate calculations over a five year period. King does not
expect that the resolution of the pending investigations will result in
any prohibitions on the Company's sales to Medicaid or any related state
or Federal program, nor does King expect any other material restriction
on the Company's ability to conduct its business, although the Company
would be required to incur consultant fees and other expenses in order
to comply with the Corporate Integrity Agreement.
* King does not expect that any criminal charges will be asserted against
the Company or against any present or former director, officer or
employee in connection with the matters being investigated.
King's ability to achieve a settlement on these or other terms is subject
to substantial uncertainties. The Company's discussions to date have been
conducted with the staffs of various agencies and other governmental
authorities. King does not yet have any agreements or understandings with any
of them. Even if the Company were to reach such an agreement or understanding
with staff personnel, it would be subject to the approval of numerous more
senior representatives of the governmental parties, including the members of
the Securities and Exchange Commission, the United States Attorney for the
Eastern District of Pennsylvania, senior officials in the Departments of
Justice, Health and Human Services and Veterans Affairs, and senior officials
in most or all of the States. King expects that the Company's agreements with
the various governmental parties would also require that those governmental
parties reach numerous agreements among themselves, and that the consummation
of the Company's agreement with each governmental party would be dependent on
consummation of the Company's agreements with other governmental parties.
King also expects that some aspects of a comprehensive settlement would
require court approval.
In light of these uncertainties, King stresses that the Company may not be
able to reach a settlement with the governmental parties, whether on the terms
described above or at all. As a result, the ultimate amount that the Company
will actually have to pay to resolve these matters could be materially more
than the amount accrued to date, and the terms could otherwise be materially
less favorable than those described above. Because of these uncertainties and
the complexity of completing a comprehensive resolution, King is not yet able
to estimate with reasonable confidence the amount of time that will be
required to enter into and consummate comprehensive settlement agreements.
The possible settlement described above would not apply to the related pending
class actions and derivative suits or any other claims by private plaintiffs.
While King denies any liability, the Company is unable to predict the outcome
of the class actions and derivative suits or reasonably estimate the range of
loss, if any.
Conference Call
King will provide a live webcast of its conference call scheduled for
today at 9:00 a.m., E.D.T., pertaining to the matters addressed in this press
release, including King's preliminary financial results for the third quarter
of 2004, at http://phx.corporate-ir.net/playerlink.zhtml?c=93939&s=wm&e=958718
or by dialing 800-223-9488 (US only) or 785-832-0201 (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 800-934-5786
(US only) or 402-220-1439 (international).
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. As previously
reported, Mylan Laboratories Inc. and King have signed a definitive agreement
under which Mylan will acquire King in a stock-for-stock transaction, creating
a leading diversified specialty pharmaceutical company. The transaction is
subject to customary closing conditions and shareholder approvals.
About GAAP
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, 2004 excluding special items. These non-GAAP financial
measures exclude special items which King considers to be those items that do
not relate to the Company's ongoing, underlying business, are non-recurring,
or are not generally predictable. These 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; revenues and expenses associated with discontinued operations; 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.
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 Company's future financial results
and their predictability; statements pertaining to the potential benefits of
PT-141; statements pertaining to the future level of anticipated product
returns; statements pertaining to the Company's anticipated final financial
results for the third quarter of 2004; statements pertaining to the future
growth and cash flows of King; statements pertaining to the potential
settlement of ongoing government investigations of the Company; statements
pertaining to the anticipated completion and results of the Company's ongoing
evaluation of its returns reserve; and statements pertaining to Mylan's
anticipated acquisition of King. 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 growth of future net sales of King's key
branded pharmaceutical products, particularly Altace(R), Skelaxin(R),
Thrombin-JMI(R), and Sonata(R); dependence on royalty revenues from
Adenoscan(R); dependence on King's and Wyeth Pharmaceuticals' ability to
successfully market Altace(R) under the co-promotion agreement between King
and Wyeth; dependence on King's ability to successfully market Skelaxin(R),
Thrombin-JMI(R), and Sonata(R); dependence on the availability and cost of raw
materials; dependence on the accuracy of King's estimate of wholesale
inventory levels of its products; dependence on no material interruptions in
supply by contract manufacturers of King's products; dependence on the affect
of generic substitution for Levoxyl(R); dependence on the potential effect on
sales of King's 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 whether King's
customers order pharmaceutical products in excess of normal quantities during
any quarter which could cause sales of King's branded pharmaceutical products
to be lower in a subsequent quarter than they would otherwise have been;
dependence on the successful development and commercial acceptance of PT-141;
dependence on King's ability to successfully market PT-141 once approved;
dependence on the actual outcome of the ongoing government investigations of
the Company, including but not limited to the uncertainties related thereto
that are set forth above; dependence on the results of the Company's ongoing
evaluation of its returns reserve and whether it results in any restatement;
dependence on the extent to which Inventory Management Agreements facilitate
enhanced management of wholesale channel inventories of our products going
forward; dependence on the occurrence of all contingencies necessary to
complete the closing of Mylan's acquisition of King; dependence on the
potential effect of future acquisitions and other transactions pursuant to
King's growth strategies; dependence on management of King's growth and
integration of its acquisitions; dependence on the extent to which OIG and
other governmental agencies 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 investigations of the Company by the SEC and OIG;
dependence on whether King is able to prevail in pending shareholder
securities litigation; dependence on the extent to which any governmental
sanctions are imposed due to King's underpayment of amounts due under Medicaid
and other governmental pricing programs; 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, dependence on the
unpredictability of the duration and results of the U. S. Food and Drug
Administration's ("FDA") review of Investigational New Drug Applications
("IND"), New Drug Applications ("NDA"), supplemental New Drug Applications
("sNDA"), and Abbreviated New Drug Applications ("ANDA") and/or the review of
other regulatory agencies worldwide; dependence on King's ability to maintain
effective patent protection for Altace(R) and Skelaxin(R); dependence on the
ability of the Company's dedicated field sales force representatives to
successfully market King's branded pharmaceutical products; 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, 2003 and Form 10-
Q for the second quarter ended June 30, 2004 which are on file with the
Securities and Exchange Commission. 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.
PRELIMINARY CONSOLIDATED STATEMENT OF OPERATIONS
(in thousands, except per share data)
Three Months Ended Nine Months Ended
September 30, September 30,
2004 2003 2004 2003
(Unaudited) (Unaudited)
REVENUES:
Total revenues $353,454 $423,137 $919,238 $1,128,573
OPERATING COSTS AND
EXPENSES:
Cost of revenues 85,513 89,182 249,876 254,470
Excess purchase
commitment 3,621 - 7,797 -
Writeoff of acquisition
related inventory step-
up/recall - 663 4,586 6,459
Total cost of
revenues 89,134 89,845 262,259 260,929
Selling, general and
administrative 95,709 79,170 275,751 181,940
Special legal and
professional fees 2,266 7,912 12,951 22,208
Co-promotion fees 47,532 46,109 95,859 163,049
Total selling,
general, and
administrative 145,507 133,191 384,561 367,197
Depreciation and
amortization 38,843 36,926 116,627 75,199
Research and development 16,280 8,758 49,781 29,487
Research and development
- In-process upon
acquisition 17,145 - 17,145 193,000
Medicaid related charge - - 65,000 -
Merger related costs 2,787 - 5,913 -
Intangible asset
impairment - - 34,936 110,970
Restructuring charges 4,674 - 10,827 -
Special gains on
disposition (4,202) (10,312) (8,481) (10,312)
Total operating costs
and expenses 310,168 258,408 938,568 1,026,470
OPERATING INCOME (LOSS) 43,286 164,729 (19,330) 102,103
OTHER (EXPENSES) INCOME:
Interest expense (3,147) (3,669) (9,518) (10,137)
Interest income 1,124 1,037 3,259 5,729
Valuation (charge)
benefit - convertible
notes receivable - 9,338 (2,487) 24,952
Other expenses (776) (36) (311) (134)
Total other
(expenses) income (2,799) 6,670 (9,057) 20,410
INCOME(LOSS) FROM
CONTINUING OPERATIONS
BEFORE INCOME TAXES 40,487 171,399 (28,387) 122,513
Income tax expense 11,149 62,630 10,253 54,654
INCOME (LOSS) FROM
CONTINUING OPERATIONS 29,338 108,769 (38,640) 67,859
DISCONTINUED OPERATIONS
Loss from discontinued
operations, including
expected loss on
disposal (2,216) (4,323) (170,126) (6,367)
Income tax benefit (473) (1,641) (61,762) (2,387)
Total loss from
discontinued
operations (1,743) (2,682) (108,364) (3,980)
NET INCOME (LOSS) $27,595 $106,087 $(147,004) $63,879
Basic income (loss) per
common share $0.11 $0.44 $(0.61) $0.27
Diluted income (loss) per
common share $0.11 $0.44 $(0.61) $0.26
Shares used in basic net
income (loss) per share 241,551 241,066 241,411 240,932
Shares used in diluted net
income (loss) per share 241,759 241,583 241,411 241,499
Preliminary: subject to resolution of the Company's ongoing return's
reserve analysis.
KING PHARMACEUTICALS, INC.
PRELIMINARY CONSOLIDATED STATEMENT OF OPERATIONS
EXCLUDING SPECIAL ITEMS
(in thousands, except per share data)
Three Months Ended Nine Months Ended
September 30, September 30,
2004 2003 2004 2003
(Unaudited) (Unaudited)
REVENUES:
Total revenues $353,454 $423,137 $919,238 $1,128,573
OPERATING COSTS AND
EXPENSES:
Cost of revenues 85,513 89,182 249,876 254,470
Selling, general and
administrative 95,709 79,170 275,751 181,940
Co-promotion fees 47,532 46,109 95,859 163,049
Total selling,
general, and
administrative 143,241 125,279 371,610 344,989
Depreciation and
amortization 38,843 36,926 116,627 75,199
Research and
development 16,280 8,758 49,781 29,487
Total operating
costs and expenses 283,877 260,145 787,894 704,145
OPERATING INCOME 69,577 162,992 131,344 424,428
OTHER (EXPENSES) INCOME:
Interest expense (3,147) (3,669) (9,518) (10,137)
Interest income 1,124 1,037 3,259 5,729
Other expenses (776) (36) (311) (134)
Total other expenses (2,799) (2,668) (6,570) (4,542)
INCOME BEFORE INCOME
TAXES 66,778 160,324 124,774 419,886
Income tax expense 19,129 58,581 39,718 153,321
NET INCOME $47,649 $101,743 $85,056 $266,565
Basic income per common
share $0.20 $0.42 $0.35 $1.11
Diluted income per
common share $0.20 $0.42 $0.35 $1.10
Shares used in basic net
income per share 241,551 241,066 241,411 240,932
Shares used in diluted
net income per share 241,759 241,583 241,756 241,499
Preliminary: subject to resolution of the Company's ongoing return's
reserve analysis.
KING PHARMACEUTICALS, INC.
PRELIMINARY RECONCILIATION OF NON-GAAP MEASURES
(in thousands, except per share data)
The following tables reconcile Non-GAAP measures to amounts reported under
GAAP:
Three Months Ending Nine Months Ending
September 30, 2004 September 30, 2004
EPS EPS
Net income, excluding special
charges $47,649 $85,056
Diluted income per common share,
excluding special items $0.20 $0.35
SPECIAL ITEMS:
Excess purchase commitment (cost
of goods sold) (3,621) (0.02) (7,797) (0.03)
Writeoff of acquisition related
inventory step-up/recall (cost
of goods sold) - - (4,586) (0.02)
Special legal and professional
fees (selling, general, and
administrative) (2,266) (0.01) (12,951) (0.06)
In-process research and
development (other operating
costs and expenses) (17,145) (0.07) (17,145) (0.07)
Medicaid related charge(other
operating costs and expenses) - - (65,000) (0.27)
Merger related costs (other
operating costs and expenses) (2,787) (0.01) (5,913) (0.03)
Intangible asset impairment
(other operating costs and
expenses) - - (34,936) (0.14)
Restructuring charges (other
operating costs and expenses) (4,674) (0.02) (10,827) (0.04)
Special gains on disposition
(other operating costs and
expenses) 4,202 0.02 8,481 0.03
Valuation charge - convertible
notes receivable (other
expenses) - - (2,487) (0.01)
Loss from discontinued
operations (2,216) (0.01) (170,126) (0.71)
Income tax benefit 8,453 0.03 91,227 0.38
Net income (loss) $27,595 $(147,004)
Diluted loss per common share, as
reported under GAAP $0.11 $(0.61)
Three Months Ending Nine Months Ending
September 30, 2003 September 30, 2003
EPS EPS
Net income, excluding special
charges $101,743 $266,565
Diluted income per common share,
excluding special items $0.42 $1.10
SPECIAL ITEMS:
Writeoff of acquisition related
inventory step-up/recall (cost
of goods sold) (663) (0.00) (6,459) (0.03)
Special legal and professional
fees (selling, general, and
administrative) (7,912) (0.03) (22,208) (0.09)
In-process research and
development (other operating
costs and expenses) - - (193,000) (0.80)
Intangible asset impairment
(other operating costs and
expenses) - - (110,970) (0.46)
Special gains on disposition
(other operating costs and
expenses) 10,312 0.04 10,312 0.04
Valuation benefit - convertible
notes receivable (other income) 9,338 0.04 24,952 0.10
Loss from discontinued
operations (4,323) (0.02) (6,367) (0.02)
Income tax (expense) benefit (2,408) (0.01) 101,054 0.42
Net income $106,087 $63,879
Diluted income per common share,
as reported under GAAP $0.44 $0.26
Preliminary: subject to resolution of the Company's ongoing return's
reserve analysis.
KING PHARMACEUTICALS, INC.
PRELIMINARY CONSOLIDATED BALANCE SHEET
(in thousands, except share data)
(unaudited)
September 30, December 31,
ASSETS 2004 2003
Current assets:
Cash, cash equivalents and
marketable securities $248,151 $146,053
Restricted cash 113,685 133,969
Accounts receivable, net 245,982 246,417
Inventory 246,777 260,886
Deferred income taxes 172,297 124,930
Prepaid expenses and other assets 52,582 30,036
Assets related to discontinued
operations 717 4,012
Total current assets 1,080,191 946,303
Property, plant and equipment, net 279,223 257,659
Intangible assets, net 1,415,937 1,552,492
Goodwill 134,892 121,355
Deferred income tax assets 47,798 19,307
Other assets 29,943 76,117
Assets related to discontinued
operations 25,400 204,501
Total assets $3,013,384 $3,177,734
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Current portion of long term debt $- $97
Accounts payable 56,220 83,078
Accrued expenses 621,913 506,033
Income taxes payable 16,227 79,641
Total current liabilities 694,360 668,849
Long-term debt:
Convertible Debentures 345,000 345,000
Other long-term liabilities 78,992 121,705
Total liabilities 1,118,352 1,135,554
Shareholders' equity:
Common shares no par value,
300,000,000 shares authorized,
241,645,606 and 241,190,852
shares issued and outstanding,
respectively 1,210,190 1,205,970
Retained earnings 688,093 835,097
Other comprehensive income (3,251) 1,113
Total shareholders' equity 1,895,032 2,042,180
Total liabilities and
shareholders' equity $3,013,384 $3,177,734
Preliminary: subject to resolution of the Company's ongoing return's
reserve analysis.
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, King Pharmaceuticals, Inc., +1-423-989-8125
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