Schering-Plough Reports Financial Results for Second Quarter of 2007 |
Company Continues Strong Performance in Second Quarter of 2007, Prepares
for Integration of Organon BioSciences
KENILWORTH, N.J., July 23 /PRNewswire-FirstCall/ -- Schering-Plough
Corporation (NYSE: SGP) today reported financial results for the second
quarter of 2007 and commented on its planned acquisition of Organon
BioSciences N.V. (OBS), including its Organon human health business and
Intervet animal health business, as announced March 12, 2007.
"Schering-Plough's second quarter performance shows clearly that we
have sustained our momentum," said Fred Hassan, chairman and CEO. "Our
strategy to grow the top line is succeeding - we have now recorded our 11th
consecutive quarter of double-digit adjusted sales growth. Our strong
top-line growth combined with financial discipline have produced superior
EPS growth. We are advancing and expanding our research pipeline. And we
look forward to adding Organon BioSciences to our company."
For the 2007 second quarter, Schering-Plough reported net income
available to common shareholders of $517 million or 34 cents per common
share on a GAAP basis. The results include charges of $106 million or 7
cents per share related to a $60 million upfront licensing payment and $46
million in items related to the planned OBS acquisition. Excluding those
charges, earnings per share for the 2007 second quarter would have been 41
cents (see table below). For the 2006 second quarter, Schering-Plough
reported net income of $237 million or 16 cents per common share on a GAAP
basis. Excluding charges of $138 million or 9 cents per share related to
actions to streamline Schering- Plough's manufacturing operations as
announced June 1, 2006 (see table below), Schering-Plough's income in the
2006 second quarter would have been $375 million or 25 cents per share.
GAAP net sales for the 2007 second quarter totaled $3.2 billion, up 13
percent versus the 2006 second quarter. Including an adjustment of an
assumed 50 percent of global cholesterol joint venture net sales (see table
below), Schering-Plough's adjusted net sales (hereinafter referred to as
"adjusted sales") for the 2007 second quarter would have totaled $3.8
billion, a 15 percent increase compared to $3.3 billion on a similar
adjusted basis in the 2006 second quarter. Schering-Plough does not record
sales of its cholesterol joint venture with Merck & Co., Inc. (Merck), as
the venture is accounted for under the equity method.
On the planned OBS acquisition, the company noted that the transaction
remains subject to certain closing conditions, including regulatory
approvals. Hassan said, "We are making steady progress and continue to
expect to close by year-end. We are moving carefully and deliberately to
ensure that we execute this transaction the right way - to build strength
and value for the long term."
He added, "We are excited about the opportunities created by Organon in
gynecology, fertility, anesthesia and neuroscience. In animal health, we
see great potential in bringing together our product lines with those of
Intervet." Schering-Plough's late-stage research pipeline will also be
significantly strengthened with the addition of five Phase III compounds
from Organon.
"Overall, this combination offers a strong strategic fit, a strong
scientific fit, and a strong financial fit. It's about becoming a company
with greater balance in our businesses and an exciting and productive
pipeline. As we prepare to complete this transaction, we are also being
careful not to get distracted, knowing that sustaining the momentum in our
business and research operations continues to be a top priority."
Reviewing second quarter results, Hassan emphasized, "We're growing
across a broad front. Seven out of our 10 largest-selling products,
including VYTORIN and ZETIA, posted double-digit sales growth for the
quarter," he said. "And even with the recent arrival of multi-source U.S.
generic competition, our cholesterol franchise continues to be dynamic. In
fact, VYTORIN and ZETIA are the only major cholesterol-lowering brands to
have grown U.S. market share in 2007." The strategy to expand
Schering-Plough's geographic presence is paying off, with higher sales in
emerging markets. Also contributing to second quarter results were solid
performances from the company's Animal Health and Consumer Health Care
businesses.
R&D remains a critical investment area for Schering-Plough as a
research- based pharmaceutical company. "We are investing in internal
innovation," said Hassan, "and we are bringing in external innovation.
Together, they will be the engine that drives our future growth."
Internally generated compounds include four that have been designated
"fast-track" by the U.S. Food and Drug Administration, a status granted to
compounds with the potential to address serious unmet medical needs.
Foremost among external initiatives is the planned acquisition of
Organon and Intervet. In addition, the company recently entered into three
agreements, including two for Phase III compounds, with:
- Novacea, Inc., to develop and commercialize Asentar, a Phase III
compound in development for treating androgen-independent prostate
cancer;
- PeriCor Pharmaceuticals, for worldwide rights to acadesine, a Phase III
development project for preventing ischemia-reperfusion injury, a
life-threatening cardiac surgery complication; and
- AVEO Pharmaceuticals, to develop and commercialize AV-299, a highly
potent antagonist of hepatocyte growth factor/scatter factor, which has
demonstrated efficacy in preclinical models of human cancer.
Commenting on Schering-Plough, Hassan said: "Today, we are at an
exciting time for our company, for the colleagues with us now and those who
will be joining us. The OBS acquisition will be an important step in the
Build the Base phase of our Action Agenda. Our company has stayed the
course with its six- to eight-year road map, and our employees remain
focused and engaged in shaping our future. Together with Organon and
Intervet, we will become a stronger company, able to do more - for our
customers, for our stakeholders and for the patients who are counting on
us. Together, we will work to sustain the momentum of our businesses and
deliver high performance for the long term."
Second Quarter 2007 Results
For the 2007 second quarter, Schering-Plough reported net income
available to common shareholders of $517 million or 34 cents per common
share on a GAAP basis. The results include charges of $106 million or 7
cents per share related to a $60 million upfront licensing payment and $46
million in acquisition-related costs (consisting of a $35 million
mark-to-market loss on a Euro-denominated currency option and integration
planning costs of $11 million). Excluding those charges, earnings per share
for the 2007 second quarter would have been 41 cents. For the 2006 second
quarter, Schering- Plough reported net income of $237 million or 16 cents
per common share on a GAAP basis. Excluding charges of $138 million or 9
cents per share related to actions to streamline Schering-Plough's
manufacturing operations, Schering- Plough's income in the 2006 second
quarter would have been $375 million or 25 cents per share.
GAAP net sales for the 2007 second quarter totaled $3.2 billion, up 13
percent as compared to the second quarter of 2006. The sales growth versus
2006 reflects a 3 percent favorable impact from foreign exchange.
Global cholesterol joint venture net sales, which include VYTORIN and
ZETIA, totaled $1.2 billion in the 2007 second quarter, a 30 percent
increase compared to net sales of $958 million in the comparable 2006
period. Schering-Plough does not record sales of its cholesterol joint
venture with Merck as the venture is accounted for under the equity method.
Including an adjustment of an assumed 50 percent of the global cholesterol
joint venture net sales, Schering-Plough's adjusted sales for the 2007
second quarter would have been $3.8 billion, a 15 percent increase,
compared to $3.3 billion on a similar adjusted basis in the 2006 second
quarter.
Overall, Schering-Plough shares in approximately 50 percent of the
profits of the joint venture with Merck, although there are different
profit-sharing arrangements for the cholesterol products in countries
around the world. Schering-Plough records its share of the income from
operations in "Equity income from cholesterol joint venture," which totaled
$490 million in the 2007 second quarter versus $355 million in the second
quarter of 2006. Schering- Plough noted that it incurs substantial costs
such as selling, general and administrative costs that are not reflected in
"Equity income from cholesterol joint venture" and are borne by its overall
cost structure. There is a separate co-marketing agreement with Bayer for
ZETIA in Japan, where the product was launched in June 2007.
Sales of REMICADE increased 28 percent to $394 million in the second
quarter of 2007 due to continued market growth and expanded use across
indications. REMICADE is a treatment for immune-mediated inflammatory
disorders that Schering-Plough markets in countries outside the United
States (except in Japan and certain other Asian markets) for rheumatoid
arthritis, early rheumatoid arthritis, ankylosing spondylitis, psoriatic
arthritis, plaque psoriasis, Crohn's disease, pediatric Crohn's disease and
ulcerative colitis.
Global sales of NASONEX, an inhaled nasal corticosteroid for allergies,
rose 22 percent to $295 million versus the 2006 period, with increased
sales in the United States and international markets.
Sales of PEGINTRON for hepatitis C increased 3 percent to $234 million
in the 2007 second quarter due to higher sales in Latin America and Europe,
and tempered by lower sales in the United States and Japan.
Global sales of CLARINEX, a nonsedating antihistamine, in the second
quarter of 2007 were $250 million compared to $226 million in the prior
period. International sales of prescription CLARITIN were $102 million in
the second quarter compared to 2006 sales of $104 million.
Sales of TEMODAR, a treatment for certain types of brain tumors, grew
26 percent to $216 million due primarily to increased sales in
international markets. The growth rate for TEMODAR is expected to moderate
as significant penetration in U.S. and EU markets has already been achieved
for this product. Also reporting higher sales in the quarter was CAELYX, up
23 percent to $65 million.
Among other prescription products posting higher sales in the 2007
second quarter was the antibiotic AVELOX, up 30 percent to $75 million,
primarily as a result of increased market share.
Consumer Health Care sales were $394 million in the 2007 second
quarter, up 13 percent versus the 2006 period. The increase was primarily
due to higher sales of OTC CLARITIN and MiraLAX, which was launched in
February 2007 as the first Rx-to-OTC switch in the laxative category in
more than 30 years.
Animal Health sales increased 10 percent to $264 million, reflecting
solid growth internationally, led by the poultry, companion animal,
aquaculture and swine product lines, coupled with a positive impact from
foreign currency exchange rates.
Schering-Plough incurs substantial costs such as selling, general and
administrative costs that are not reflected in "Equity income from
cholesterol joint venture" and are borne by the overall cost structure of
Schering-Plough. As a result, Schering-Plough's gross margin and ratios of
selling, general and administrative (SG&A) expenses and R&D expenses as a
percentage of sales do not reflect the benefit of the impact of the
cholesterol joint venture's operating results.
Schering-Plough's gross margin was 69.3 percent for the 2007 second
quarter as compared to 64.4 percent in the 2006 period on a GAAP basis.
Gross margin in the 2006 second quarter would have been 66.4 percent when
excluding $58 million in charges related to actions to streamline
Schering-Plough's manufacturing operations. The gross margin improvement
was due primarily to improved product mix and cost savings from the 2006
manufacturing streamlining actions. Additionally, Schering-Plough continues
to achieve greater production efficiencies and process improvements through
its "Right First Time" initiative.
SG&A expenses were $1.4 billion in the second quarter of 2007, up 11
percent versus $1.2 billion in the prior year period. SG&A in the second
quarter of 2007 increased primarily due to increased promotional spending.
Research and development spending for the 2007 second quarter increased
to $696 million compared to $539 million in the second quarter of 2006.
Included in R&D spending in the second quarter of 2007 was $60 million
related to an upfront payment made for a licensing transaction (Novacea)
that closed in the second quarter. The increase in R&D expenses was also
due to higher spending for clinical trials and related activities, and
investments to build greater breadth and capacity to support
Schering-Plough's progressing pipeline.
Recent Developments
The company also offered the following summary of recent significant
developments that have previously been announced, including:
- Entered into an exclusive worldwide agreement with AVEO Pharmaceuticals
to develop and commercialize AV-299, a highly potent antagonist of
hepatocyte growth factor/scatter factor in early development.
(Announced by AVEO April 4)
- Received a Request for Additional Information from the Federal Trade
Commission (FTC) regarding Schering-Plough's planned acquisition of
Organon BioSciences. (Announced May 4)
- Entered into an exclusive worldwide license agreement with Novacea, Inc.
for the development and commercialization of Asentar (DN-101). Asentar
is a novel, proprietary, high-dose oral formulation of calcitriol.
(Announced May 30)
- Reported results from a Phase III study that showed maintenance
chemotherapy with CAELYX (pegylated liposomal doxorubicin hydrochloride)
significantly prolonged time-to-progression in patients with metastatic
breast cancer after first-line chemotherapy. (Announced June 3)
- Announced European Commission approval of a new indication for REMICADE
(infliximab) allowing for the treatment of severe, active Crohn's
disease in pediatric patients aged 6 to 17 years, who have not responded
to conventional therapy or have contraindications for such therapies.
(Announced June 7)
- Announced that ZETIA (ezetimibe), a novel cholesterol-lowering agent
that inhibits the absorption of cholesterol in the intestine, was
available in Japan for use in patients with hypercholesterolemia,
familial hypercholesterolemia or homozygous sitosterolemia.
(Announced June 8)
- Reported on data showing that patients with ankylosing spondylitis who
received REMICADE over two years experienced significant improvement in
spinal mobility and sustained reductions in spinal inflammation.
(Announced June 15)
- Reported on favorable rulings by the U.S. District Court for the
District of Massachusetts, which dismissed all claims relating to
Schering-Plough's branded pharmaceutical products in a class action
lawsuit involving several pharmaceutical companies and the setting of
average wholesale prices for prescription products. (Announced June 21)
- Gained European Commission approval for combination therapy with
PEGINTRON (peginterferon alfa-2b) and REBETOL (ribavirin) for the
treatment of previously untreated adult patients with chronic hepatitis
C who are coinfected with clinically stable HIV. (Announced June 25)
- Metabasis Therapeutics, Inc. announced Schering-Plough's intention to
terminate the agreements it had entered into with Metabasis and Valeant
Pharmaceuticals International for the development and commercialization
of pradefovir to treat chronic hepatitis B and to return all rights to
the product back to Metabasis. (Announced July 17)
- Announced the worldwide licensing of acadesine from PeriCor
Pharmaceuticals. Acadesine is in Phase III clinical development for the
prevention of ischemia-reperfusion injury, a life-threatening cardiac
surgery complication. (Announced July 19)
Second Quarter 2007 Conference Call and Webcast
Schering-Plough will conduct a conference call today at 8 a.m. (EDT) to
review the 2007 second quarter results. To listen live to the call, dial 1-
877-565-9664 or 1-706-634-5003 and enter conference ID #3320866. A replay
of the call will be available beginning later on July 23 through 5 p.m. on
Aug. 20. To listen to the replay, dial 1-800-642-1687 or 1-706-645-9291 and
enter the conference ID #3320866. A live audio webcast of the conference
call also will be available by going to the Investor Relations section of
the Schering- Plough corporate Web site, http://www.schering-plough.com, and
clicking on the "Presentations/Webcasts" link. A replay of the webcast will
be available starting on July 23 through 5 p.m. on Aug. 20.
DISCLOSURE NOTICE: The information in this press release, the comments
of Schering-Plough officers during the earnings teleconference/webcast on
July 23, 2007, beginning at 8 a.m. (EDT), and other written reports and
oral statements made from time to time by the company may contain
"forward-looking statements" within the meaning of the Private Securities
Litigation Reform Act of 1995. Forward-looking statements do not relate
strictly to historical or current facts and are based on current
expectations or forecasts of future events. You can identify these
forward-looking statements by their use of words such as "anticipate,"
"believe," "could," "estimate," "expect," "forecast," "project," "intend,"
"plan," "potential," "will," and other similar words and terms. In
particular, forward-looking statements include statements relating to the
company's plans; its strategies; its progress under the Action Agenda and
anticipated timing regarding future performance of the Action Agenda;
business prospects; anticipated growth; timing and conditions of regulatory
approvals and expected synergies related to the Organon BioSciences
acquisition; ability to access the capital markets on optimal terms;
prospective products or product approvals; trends in performance;
anticipated timing of clinical trials and its impact on R&D spending;
anticipated exclusivity periods; actions to enhance clinical, R&D,
manufacturing and post-marketing systems; and the potential of certain
products including VYTORIN and ZETIA. Actual results may vary materially
from the company's forward-looking statements, and there are no guarantees
about the performance of Schering-Plough stock or Schering-Plough's
business. Schering-Plough does not assume the obligation to update any
forward-looking statement. A number of risks and uncertainties could cause
results to differ materially from forward-looking statements, including,
among other uncertainties market forces; economic factors such as interest
rate and exchange rate fluctuations; obtaining regulatory approvals and
satisfaction of other customary closing conditions for the Organon
BioSciences acquisition; the outcome of contingencies such as litigation
and investigations; product availability; patent and other intellectual
property protection; current and future branded, generic or
over-the-counter competition; the regulatory process (including product
approvals, labeling and post-marketing actions); and scientific
developments relating to marketed products or pipeline projects. For
further details of these and other risks and uncertainties that may impact
forward-looking statements, see Schering-Plough's Securities and Exchange
Commission filings, including Part II, Item 1A, "Risk Factors" in the
company's first quarter 2007 10-Q.
Schering-Plough is a global science-based health care company with
leading prescription, consumer and animal health products. Through internal
research and collaborations with partners, Schering-Plough discovers,
develops, manufactures and markets advanced drug therapies to meet
important medical needs. Schering-Plough's vision is to earn the trust of
the physicians, patients and customers served by its approximately 33,500
people around the world. The company is based in Kenilworth, N.J., and its
Web site is http://www.schering-plough.com.
SCHERING-PLOUGH CORPORATION
Report for the second quarter ended June 30 (unaudited):
(Amounts in millions, except per share figures)
Second Quarter Six Months
2007 2006 2007 2006
Net sales $3,178 $2,818 $6,153 $5,369
Cost of sales 977 1,004 1,913 1,897
Selling, general and administrative 1,358 1,224 2,572 2,310
Research and development 1/ 696 539 1,403 1,020
Other income, net 2/ (16) (19) (62) (52)
Special and acquisition related
charges 3/ 11 80 12 80
Equity income from cholesterol
joint venture (490) (355) (978) (666)
Income before income taxes 642 345 1,293 780
Income tax expense 103 86 190 172
Net income before cumulative
effect of a change in accounting
principle $539 $259 $1,103 $608
Cumulative effect of a change
in accounting principle, net of tax - - - (22)
Net income $539 $259 $1,103 $630
Preferred stock dividends 22 22 43 43
Net income available to common
shareholders $517 $237 $1,060 $587
Diluted earnings per common share:
Earnings available to common
shareholders before
cumulative effect of a
change in accounting principle 4/ $0.34 $0.16 $0.70 $0.38
Cumulative effect of a change
in accounting principle, net of tax - - - 0.02
Diluted earnings per common
share 4/ $0.34 $0.16 $0.70 $0.40
Average common shares
outstanding - diluted 1,587 1,489 1,579 1,487
The company incurs substantial costs related to the cholesterol joint
venture, such as selling, general and administrative costs, that are not
reflected in the "Equity income from cholesterol joint venture" and are
borne by the overall cost structure of Schering-Plough.
1/ Included in research and development for the three months ended June
30, 2007 is $60 million related to an upfront payment made for licensing of
a product. Research and development for the six months ended June 30, 2007
includes $156 million related to upfront payments made for licensing of
products.
2/ Included in other income, net for the three and six months ended
June 30, 2007 are mark-to-market losses of $35 million and $31 million,
respectively, related to a Euro denominated currency option related to the
planned acquisition of Organon BioSciences.
3/ Included in special and acquisition related charges for the three
and six months ended June 30, 2007 is $11 million and $12 million,
respectively, related to the planned acquisition of Organon BioSciences.
4/ Diluted earnings per common share for the three month period ended
June 30, 2007 is calculated based on net income of $539 million and average
diluted shares outstanding of 1,587. Diluted earnings per common share for
the six month period ended June 30, 2007 is calculated based on net income
of $1.103 billion and average diluted shares outstanding of 1,579. The
increase in average diluted shares outstanding in the three and six months
ended June 30, 2007 is due to the preferred shares being dilutive under
accounting rules. The preferred shares were not dilutive for the three and
six months ended June 30, 2006.
SCHERING-PLOUGH CORPORATION
Report for the period ended June 30 (unaudited):
GAAP Net Sales by Key Product
(Dollars in millions) Second Quarter Six Months
2007 2006 % 2007 2006 %
GLOBAL PHARMACEUTICALS $2,520 $2,230 13% $4,918 $4,263 15%
REMICADE 394 307 28% 767 585 31%
NASONEX 295 242 22% 579 471 23%
CLARINEX/AERIUS 250 226 11% 455 386 18%
PEGINTRON 234 226 3% 451 423 7%
TEMODAR 216 171 26% 412 334 23%
CLARITIN RX 102 104 (1%) 214 205 5%
INTEGRILIN 78 82 (5%) 163 162 -
AVELOX 75 58 30% 191 138 38%
REBETOL 74 86 (14%) 146 164 (11%)
CAELYX 65 53 23% 127 104 22%
PROVENTIL/ALBUTEROL CFC 61 63 (4%) 114 104 10%
INTRON A 55 64 (13%) 115 124 (7%)
SUBUTEX/SUBOXONE 52 53 (2%) 108 101 7%
ELOCON 43 38 12% 79 72 8%
ASMANEX 42 20 108% 85 40 112%
FORADIL 26 23 10% 52 44 17%
NOXAFIL 20 3 N/M 36 4 N/M
Other Pharmaceuticals 438 411 7% 824 802 3%
CONSUMER HEALTH CARE 394 349 13% 739 659 12%
OTC 182 149 22% 359 302 19%
OTC CLARITIN 137 111 23% 264 222 19%
Foot Care 102 96 7% 180 179 1%
Sun Care 110 104 6% 200 178 12%
ANIMAL HEALTH 264 239 10% 496 447 11%
CONSOLIDATED GAAP NET SALES $3,178 $2,818 13% $6,153 $5,369 15%
NOTE: Additional information about U.S. and international sales for
specific products is available by calling the company or visiting the
Investor Relations Web site at http://ir.schering-plough.com.
SCHERING-PLOUGH CORPORATION
Reconciliation of Non-U.S. GAAP Financial Measures
Adjusted net sales, defined as net sales plus an assumed 50 percent of
global cholesterol joint venture net sales.
Three months ended June 30
(Dollars in millions) (unaudited)
2007 2006 %
Net sales, as reported $3,178 $2,818 13%
50 percent of cholesterol joint
venture net sales a/ 624 479
Adjusted net sales $3,802 $3,297 15%
Six months ended June 30
(Dollars in millions) (unaudited)
2007 2006 %
Net sales, as reported $6,153 $5,369 15%
50 percent of cholesterol joint
venture net sales a/ 1,199 868
Adjusted net sales $7,352 $6,237 18%
a/ Total net sales of the cholesterol joint venture for the three
months ended June 30, 2007 and 2006 were $1.2 billion and $958 million,
respectively. Total net sales of the cholesterol joint venture for the six
months ended June 30, 2007 and 2006 were $2.4 billion and $1.7 billion,
respectively.
NOTE: Adjusted net sales, defined as net sales plus an assumed 50
percent of global cholesterol joint venture net sales, is a non-U.S. GAAP
measure used by management in evaluating the performance of the
Schering-Plough's overall business. Schering-Plough believes that this
performance measure contributes to a more complete understanding by
investors of the overall results of the company. Schering-Plough provides
this information to supplement the reader's understanding of the importance
to the company of its share of results from the operations of the
cholesterol joint venture. Net sales (excluding the cholesterol joint
venture net sales) is required to be presented under U.S. GAAP. The
cholesterol joint venture's net sales are included as a component of income
from operations in the calculation of Schering-Plough's "Equity income from
cholesterol joint venture." Net sales of the cholesterol joint venture do
not include net sales of cholesterol products in non-joint venture
territories.
SCHERING-PLOUGH CORPORATION
Reconciliation of Non-U.S. GAAP Financial Measures
Net income available to common shareholders and diluted earnings per
common share, excluding specified items
Three months ended
June 30, 2007 (unaudited)
Net income
available Diluted
to common earnings per
(Dollars in millions) shareholders common share
As reported $517 $0.34
Specified items
- Upfront R&D payments 60 0.04
- Acquisition related
Integration planning ($11)
Loss on currency option ($35)
Total acquisition related 46 0.03
Total specified items 106 0.07
Excluding specified items $623 $0.41
NOTE: Net income available to common shareholders and diluted earnings
per common share, excluding specified items are non-U.S. GAAP measures used
by management in evaluating the performance of Schering-Plough's overall
business. Upfront licensing payments and acquisition related costs have
been excluded from net income available to common shareholders as
Schering-Plough does not consider these charges to be indicative of
continuing operating results. Schering-Plough believes that these
performance measures contribute to a more complete understanding by
investors of the overall results of the company. Net income available to
common shareholders and diluted earnings per common share, as reported, are
required to be presented under U.S. GAAP.
SCHERING-PLOUGH CORPORATION
Reconciliation of Non-U.S. GAAP Financial Measures
Specified items related to manufacturing changes
Three months ended June 30, 2006 (unaudited)
(Dollars in millions)
Cost of Special
Specified items sales charges Total
Accelerated depreciation $13 $ - $13
Severance - 25 25
Asset impairments and other - 55 55
Inventory write-offs 45 - 45
Total specified items related to
manufacturing changes $58 $80 $138
Reconciliation of Non-U.S. GAAP Financial Measures
Three months ended June 30, 2006 (unaudited)
(Dollars in millions, except per share figures)
Net income
available to Diluted
Gross common earnings
margin % shareholders per share
As reported 64.4% $237 $ 0.16
Specified Items related to
manufacturing changes 2.0% 138 0.09
Excluding specified items
related to manufacturing
changes 66.4% $375 $ 0.25
NOTE: Gross margin, net income available to common shareholders and
diluted earnings per share excluding specified items related to
manufacturing changes are non-U.S. GAAP measures used by management in
evaluating the performance of Schering-Plough's overall business. These
specified items have been excluded as Schering-Plough does not consider
these charges to be indicative of continuing operating results.
Schering-Plough believes that these performance measures contribute to a
more complete understanding by investors of the overall results of the
company. Gross margin, net income available to common shareholders and
diluted earnings per share, as reported, are required to be presented under
U.S. GAAP.
SOURCE Schering-Plough Corporation
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