Valeant Pharmaceuticals Reports 2009 Fourth Quarter and Full Year Financial Results
- Fourth quarter revenue $240.5 million; Full year 2009 revenue $830.5 million
- Fourth quarter GAAP EPS $1.89, Adjusted Non-GAAP (Cash) EPS $0.67; Full year 2009 GAAP EPS $3.07, Adjusted Non-GAAP (Cash) EPS $2.21
- Full year 2009 GAAP Cash Flow from Operations $188 million, Adjusted Cash Flow from Operations $226 million
ALISO VIEJO, Calif., Feb. 22 /PRNewswire-FirstCall/ -- Valeant Pharmaceuticals International (NYSE: VRX) today announced fourth quarter and full year financial results for 2009.
"Across the organization, Valeant delivered on its commitments in 2009," stated J. Michael Pearson, chairman and chief executive officer. "We intend to continue our strong performance in 2010, with a focus on growth through market-driven innovation, improvements in our operating leverage, and the progression of our pipeline products."
Fourth Quarter 2009 Discussion:
Total revenue was $240.5 million in the fourth quarter of 2009 as compared to $183.0 million in the fourth quarter of 2008, an increase of 31%.
Product sales in the Specialty Pharmaceuticals segment were $119.3 million in the fourth quarter of 2009, as compared to $89.2 million in the fourth quarter of 2008, an increase of 34%. At constant exchange rates, Specialty Pharmaceuticals product sales increased 27%. Within the Specialty Pharmaceuticals segment, alliance and service revenue was $23.3 million in the fourth quarter of 2009 as compared to $4.4 million in the fourth quarter of 2008. Since the company acquired Dow in December 2008 and the 1% clindamycin and 5% benzoyl peroxide product (IDP-111) was launched in August 2009, no service revenue or profit share income was recorded in the fourth quarter of 2008.
Product sales in Branded Generics - Latin America were $47.2 million in the fourth quarter of 2009 as compared to $36.9 million in the same period in 2008, an increase of 28%. At constant exchange rates, product sales in Latin America in the fourth quarter of 2009 increased 25% as compared to the fourth quarter of 2008.
Product sales in Branded Generics - Europe were $42.0 million in the fourth quarter of 2009 as compared to $35.9 million in the same period in 2008, an increase of 17%. At constant exchange rates, product sales in Europe in the fourth quarter of 2009 increased 14% as compared to the fourth quarter of 2008.
Ribavirin royalties were $8.7 million in the fourth quarter of 2009 as compared to $16.6 million in the fourth quarter of 2008, a decrease of 48%. This expected decrease is primarily attributable to the expiration of royalty terms in most European countries.
The company's cost of goods sold was 28% of product sales for the fourth quarter of 2009 as compared to 26% for the fourth quarter of 2008. This increase is primarily due to the impact of our Tecnofarma and EMO-FARM acquisitions.
Selling, general and administrative expenses were essentially flat in the fourth quarter of 2009 at $65.5 million as compared to $66.4 million in the fourth quarter of 2008.
Research and development costs increased 25% to $14.8 million in the fourth quarter of 2009 as compared to $11.9 million in the same period of 2008.
Net interest expense increased to $12.4 million in the fourth quarter of 2009 as compared to $4.5 million in the fourth quarter of 2008. The increase primarily reflects interest expense related to $365 million aggregate principal amount of senior notes issued in June 2009.
Income tax in the fourth quarter of 2009 was a tax benefit of $97.8 million as compared to a tax expense of $1.0 million in the fourth quarter of 2008. The tax benefit amount is primarily related to the release of the valuation allowance recorded previously against the net deferred tax assets, primarily comprised of net operating losses in the U.S.
Income from continuing operations was $156.2 million for the fourth quarter of 2009, or $1.89 per diluted share, as compared to a loss from continuing operations of $150.6 million, or a loss of $1.82 per diluted share, for the fourth quarter of 2008. On an adjusted non-GAAP (Cash) EPS basis, adjusted income from continuing operations was $55.4 million, or $0.67 per diluted share, in the fourth quarter of 2009 as compared to adjusted income from continuing operations of $43.2 million, or $0.52 per diluted share, in the fourth quarter of 2008.
GAAP cashflow from operations for the fourth quarter of 2009 was $52 million, which includes the effect of the accreted discount on convertible debt from the newly implemented accounting requirements and acquisition transaction fees. Adjusted cash flow from operations for the fourth quarter of 2009 was $55 million. Interest on our senior notes is paid in June and December. GAAP cash flow from operations and adjusted cash flow from operations for the fourth quarter included $15.8 million of interest expense related to our senior notes, an expense that we did not have prior to the fourth quarter.
Full Year 2009 Discussion:
Total revenue in 2009 was $830.5 million as compared to $657.0 million in 2008, an increase of 26%.
Product sales in the Specialty Pharmaceuticals segment were $403.9 million in 2009, as compared to $303.7 million in 2008, an increase of 33%. At constant exchange rates, Specialty Pharmaceuticals product sales increased 35%.
Product sales in Branded Generics - Latin America were $155.2 million in 2009 as compared to $136.6 million in 2008, an increase of 14%. At constant exchange rates, product sales in Latin America in 2009 increased 34% as compared to those in 2008.
Product sales in Branded Generics - Europe were $151.7 million in 2009 as compared to $152.8 million in 2008, a decrease of 1%. At constant exchange rates, product sales in Europe in 2009 increased 25% as compared to those in 2008.
Ribavirin royalties were $46.7 million in 2009 as compared to $59.4 million in 2008, a decrease of 21%. This expected decrease is primarily attributable to the expiration of royalty terms of most European countries on the ten-year anniversary of product launches in the respective countries.
The company's cost of goods sold was 27% of product sales for 2009 as compared to 28% for 2008.
Selling, general and administrative expenses were $255.8 million in 2009 as compared to $278.0 million in 2008, a decrease of 8%.
Research and development costs decreased 49% to $44.0 million in 2009 as compared to $87.0 million in 2008.
Net interest expense increased to $39.3 million in 2009 as compared to $28.3 million in 2008, primarily reflecting additional interest expense related to $365 million aggregate principal amount of senior notes issued in June 2009.
Income tax for 2009 was a tax benefit of $58.3 million compared to a tax expense of $34.7 million for 2008. The 2009 tax benefit amount is primarily related to the release of the valuation allowance recorded as of December 31, 2008 against our net deferred tax assets, primarily comprised of net operating losses in the U.S.
Income from continuing operations was $257.6 million for 2009, or $3.07 per diluted share, as compared to a loss from continuing operations of $207.4 million, or a loss of $2.37 per diluted share, for 2008. On an adjusted non-GAAP (Cash) EPS basis, adjusted income from continuing operations was $185.2 million, or $2.21 per diluted share, in 2009 as compared to adjusted income from continuing operations of $71.7 million, or $0.81 per diluted share, in 2008.
GAAP cash flow from operations for 2009 was $186 million, which includes the effect of accreted discount on convertible debt from the newly implemented accounting requirements and acquisition transaction fees. Adjusted cash flow from operations for 2009 was $226 million.
2010 Guidance
The company reaffirms its adjusted non-GAAP (Cash) EPS guidance of $2.45 – $2.70 in 2010.
Conference Call and Webcast Information:
Valeant will host a conference call and a live Internet webcast along with a slide presentation today at 10:00 a.m. EST (7:00 a.m. PST) to discuss its fourth quarter and full year financial results for 2009. The dial-in number to participate on this call is (877) 295-5743, confirmation code 53708100. International callers should dial (973) 200-3961, confirmation code 53708100. A replay will be available approximately two hours following the conclusion of the conference call through March 1, 2010 and can be accessed by dialing (800) 642-1687, or (706) 645-9291, confirmation code 53708100. The live webcast of the conference call may be accessed through the investor relations section of Valeant's corporate Web site at www.valeant.com.
About Valeant:
Valeant Pharmaceuticals International (NYSE:VRX) is a multinational specialty pharmaceutical company that develops and markets a broad range of pharmaceutical products primarily in the areas of neurology and dermatology. More information about Valeant can be found at www.valeant.com.
Forward-looking Statements
This press release may contain forward-looking statements, including, but not limited to, statements regarding our ability to continue our performance and growth in 2010 and guidance with respect to expected adjusted non-GAAP (cash) earnings per share. Forward-looking statements may be identified by the use of the words "anticipates," "expects," "intends," "plans," "should," "could," "would," "may," "will," "believes," "estimates," "potential," or "continue" and variations or similar expressions. These statements are based upon the current expectations and beliefs of management and are subject to certain risks and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. These risks and uncertainties include, but are not limited to, risks and uncertainties discussed in the company's most recent annual or quarterly report filed with the Securities and Exchange Commission, which factors are incorporated herein by reference. Readers are cautioned not to place undue reliance on any of these forward-looking statements. Valeant undertakes no obligation to update any of these forward-looking statements to reflect events or circumstances after the date of this press release or to reflect actual outcomes.
Non-GAAP Information:
To supplement the consolidated financial results prepared in accordance with generally accepted accounting principles (GAAP), the company uses non-GAAP financial measures that exclude certain items, such as acquisition transaction fees, special charges and credits including acquired IPR&D, restructuring, asset impairments and dispositions, amortization expense, gain on early extinguishment of debt, the new non-cash accounting charge for interest on the convertible debt related to ASC 470-20 (FSP APB 14-1), which the company adopted on January 1, 2009, and the non-GAAP tax effect of such charges. Management does not consider the excluded items part of day-to-day business or reflective of the core operational activities of the company as they result from transactions outside the ordinary course of business. Management uses non-GAAP financial measures internally for strategic decision making, forecasting future results and evaluating current performance. By disclosing non-GAAP financial measures, management intends to provide investors with a more meaningful, consistent comparison of the company's core operating results and trends for the periods presented. Non-GAAP financial measures are not prepared in accordance with GAAP; therefore, the information is not necessarily comparable to other companies and should be considered as a supplement to, not a substitute for, or superior to, the corresponding measures calculated in accordance with GAAP. A reconciliation of GAAP to non-GAAP measures can be found in the tables below. The company has provided guidance with respect to cash earnings per share, which is a non-GAAP financial measure that represents earnings per share, excluding certain items, such as acquisition transaction fees included within SG&A, special charges and credits including acquired IPR&D, restructuring, asset impairments and dispositions, amortization expense, gain on early extinguishment of debt, the non-cash accounting charge for interest on the company's convertible debt related to ASC 470-20 (FSP APB 14-1) and the tax effect of such charges. The company has not provided a reconciliation of this forward-looking non-GAAP financial measure due to the difficulty in forecasting and quantifying the exact amount of the items excluded from the non-GAAP financial measure that will be included in the comparable GAAP financial measure.
Financial Tables, including a reconciliation of GAAP to non-GAAP financial measures, follow.
Contact: |
|
Laurie W. Little |
|
Valeant Pharmaceuticals |
|
949-461-6002 |
|
Valeant Pharmaceuticals International Table 1
Statement of Income
For the Three and Twelve Months Ended December 31, 2009 and 2008
Three Months Ended Twelve Months Ended
December 31, December 31,
------------ ------------
(In thousands, except % %
per share data) 2009 2008 Change 2009 2008 Change
---- ---- ------ ---- ---- ------
Product sales $208,534 $162,023 29% $710,761 $593,165 20%
Service revenue 5,010 - 22,389 -
Alliance revenue 26,978 20,991 29% 97,311 63,812 52%
------ ------ ------ ------
Total revenues 240,522 183,014 31% 830,461 656,977 26%
------- ------- ------- -------
Cost of goods sold 58,232 41,589 40% 192,974 167,916 15%
Cost of services 4,126 - 17,836 -
Selling, general and
administrative
("SG&A") 65,542 66,350 -1% 255,782 278,019 -8%
Research and
development costs,
net 14,801 11,867 25% 43,977 86,967 -49%
Special charges and
credits including
acquired in-
process research and
development 4,377 186,300 6,351 186,300
Restructuring, asset
impairments,
dispositions
and acquisition-
related costs 3,115 17,001 10,068 21,295
Amortization expense 18,915 12,357 53% 70,640 49,973 41%
------ ------ ------ ------
169,108 335,464 -50% 597,628 790,470 -24%
------- ------- ------- -------
Income (loss) from
operations 71,414 (152,450) 232,833 (133,493)
Interest expense, net (12,403) (4,520) (39,250) (28,256)
Gain (loss) on early
extinguishment of debt - 1,888 7,221 (12,994)
Other income
(expense), net
including translation
and exchange (672) 5,445 (1,458) 2,056
---- ----- ------ -----
Income (loss) from
continuing
operations before
income taxes 58,339 (149,637) 199,346 (172,687)
Provision (benefit) for
income taxes (97,811) 962 (58,270) 34,688
------- --- ------- ------
Income (loss) from
continuing
operations 156,150 (150,599) 257,616 (207,375)
Income (loss) from
discontinued
operations, net 6,256 (20,586) 6,125 166,548
----- ------- ----- -------
Net income (loss) $162,406 $(171,185) $263,741 $(40,827)
======== ========= ======== ========
Earnings per share:
Basic:
Income (loss) from
continuing
operations $1.95 $(1.82) $3.15 $(2.37)
Discontinued
operations 0.08 (0.25) 0.07 1.90
---- ----- ---- ----
Basic earnings
(loss) per share $2.03 $(2.07) $3.22 $(0.47)
===== ====== ===== ======
Shares used in per
share computation 79,925 82,585 81,781 87,480
====== ====== ====== ======
Diluted:
Income (loss) from
continuing
operations $1.89 $(1.82) $3.07 $(2.37)
Discontinued
operations 0.07 (0.25) 0.07 1.90
---- ----- ---- ----
Diluted earnings
(loss) per share $1.96 $(2.07) $3.14 $(0.47)
===== ====== ===== ======
Shares used in per
share computation 82,729 82,585 83,970 87,480
====== ====== ====== ======
Valeant Pharmaceuticals International Table 2
Reconciliation of GAAP EPS to Cash EPS
For the Three and Twelve Months Ended December 31, 2009 and 2008
Three Months Ended Twelve Months Ended
December 31, December 31,
------------ ------------
(In thousands, except per
share data) 2009 2008 2009 2008
---- ---- ---- ----
Income (loss) from
continuing operations $156,150 $(150,599) $257,616 $(207,375)
Non-GAAP adjustments (a):
Special charges and
credits including
acquired in-process
research and development (b) 4,377 186,300 6,351 186,300
Restructuring, asset
impairments,
dispositions and
acquisition-related
costs (c) 3,115 17,001 10,068 21,295
Amortization expense 18,915 12,357 70,640 49,973
------ ------ ------ ------
26,407 215,658 87,059 257,568
ASC 470-20 (FSP APB 14-1)
interest 1,892 3,723 10,242 14,899
(Gain) loss on early
extinguishment of debt - (1,888) (7,221) 12,994
Tax (129,000) (23,738) (162,463) (6,362)
-------- ------- -------- ------
Total adjustments (100,701) 193,755 (72,383) 279,099
Adjusted income from
continuing operations $55,449 $43,156 $185,233 $71,724
======= ======= ======== =======
GAAP earnings (loss) per
share - diluted $1.89 $(1.82) $3.07 $(2.37)
===== ====== ===== ======
Cash earnings per share -
diluted $0.67 $0.52 $2.21 $0.81
===== ===== ===== =====
Shares used in diluted
per share calculation -
GAAP earnings (loss)
per share 82,729 82,585 83,970 87,480
====== ====== ====== ======
Shares used in adjusted
diluted per share
calculation - Cash
earnings per share 82,729 83,738 83,970 88,467
====== ====== ====== ======
(a) To supplement the financial measures prepared in accordance with
generally accepted accounting principles (GAAP), the company uses non-GAAP
financial measures that exclude certain items, such as special charges and
credits including acquired in-process research and development,
restructuring, asset impairments and dispositions and acquisition-related
costs, amortization expense, ASC 470-20 (FSP APB 14-1) interest, gain
(loss) on early extinguishment of debt and the non-GAAP tax effect of such
charges. Management uses non-GAAP financial measures internally for
strategic decision making, forecasting future results and evaluating
current performance. By disclosing non-GAAP financial measures, management
intends to provide investors with a more meaningful, consistent comparison
of the company's core operating results and trends for the periods
presented. Non-GAAP financial measures are not prepared in accordance with
GAAP; therefore, the information is not necessarily comparable to other
companies and should be considered as a supplement to, not a substitute
for, or superior to, the corresponding measures calculated in accordance
with GAAP.
(b) Special charges and credits including acquired in-process research and
development of $4.4 million and $6.4 million for the three and twelve
months ended December 31, 2009 relates to $4.4 million and $4.4 million
primarily related to settlements involving Spear Pharmaceuticals, Inc. and
$0 and $2.0 million for the acquisition of product rights to market Opana
in Canada, Australia and New Zealand, respectively. In the three and
twelve months ended December 31, 2008 the $186.3 million relates to
acquired in-process research and development from the Dow Pharmaceuticals
acquisition.
(c) Restructuring, asset impairments, dispositions and acquisition-related
costs for the three and twelve months ended December 31, 2009 include
acquisition-related costs of $2.7 million and $6.5 million and
restructuring costs of $ 0.4 million and $3.6 million, respectively. In
the three and twelve months ended December 31, 2008, restructuring, asset
dispositions and acquisition-related costs include $16.5 million and $55.8
million related to restructuring and $0.5 million and ($34.5) million
related to the sale of our operations in Asia, respectively.
This table includes Cash Earnings Per Share, which is a non-GAAP financial
measure that represents earnings per share, excluding special charges and
credits including acquired in-process research and development,
restructuring, asset impairments and dispositions and acquisition-related
costs, amortization expense, ASC 470-20 (FSP APB 14-1) interest, gain
(loss) on early extinguishment of debt and the non-GAAP tax effect of such
charges.
Valeant Pharmaceuticals International Table 3
Statement of Revenue - by Segment
For the Three and Twelve Months Ended December 31, 2009 and 2008
(In thousands)
Three Months Ended Twelve Months Ended
3.1 Revenue December 31, December 31,
------------ ------------
% %
2009 2008 Change 2009 2008 Change
---- ---- ------ ---- ---- ------
Specialty
pharmaceuticals
U.S.
Dermatology $35,827 $31,599 13% $123,475 $91,708 35%
Neurology &
Other 49,453 39,854 24% 175,467 127,641 37%
------ ------ ------- -------
Total U.S. 85,280 71,453 19% 298,942 219,349 36%
Canada 18,711 14,161 32% 64,861 56,988 14%
Australia 15,312 3,558 330% 40,062 21,602 85%
------ ----- ------ ------
119,303 89,172 34% 403,865 297,939 36%
Divested business - - - 5,784
--- --- --- -----
Specialty
pharmaceuticals
product sales 119,303 89,172 34% 403,865 303,723 33%
Alliance 18,288 4,374 50,639 4,374
Service 5,010 - 22,389 -
Total specialty
pharmaceuticals
revenue 142,601 93,546 52% 476,893 308,097 55%
Branded generics -
Latin America
product sales 47,185 36,930 28% 155,246 136,638 14%
Branded
generics -
Europe product
sales 42,046 35,921 17% 151,650 152,804 -1%
Alliances
(ribavirin
royalties only) 8,690 16,617 -48% 46,672 59,438 -21%
----- ------ ------ ------
Total revenue $240,522 $183,014 31% $830,461 $656,977 26%
======== ======== ======== ========
Total product
sales
included above $208,534 $162,023 29% $710,761 $593,165 20%
3.2 Currency impact and revenue excluding currency impact (a)(b)
Three Months Ended
December 31,
------------
2009
2009 excluding
currency currency
impact impact 2008 % Change
------ ------ ---- --------
Specialty pharmaceuticals
U.S. $(40) $85,240 $71,453 19%
Canada (2,344) 16,367 14,161 16%
Australia (3,939) 11,373 3,558 220%
------ ------ -----
(6,323) 112,980 89,172 27%
Divested business - - -
--- --- ---
Specialty pharmaceuticals
product sales (6,323) 112,980 89,172 27%
Alliance - 18,288 4,374
Service (240) 4,770 -
Total specialty
pharmaceuticals revenue (6,563) 136,038 93,546 45%
Branded generics -
Latin America product
sales (1,127) 46,058 36,930 25%
Branded generics -
Europe product sales (1,199) 40,847 35,921 14%
Alliances (ribavirin
royalties only) - 8,690 16,617 -48%
--- ----- ------
Total revenue $(8,889) $231,633 $183,014 27%
======= ======== ========
Total product sales
included above $(8,649) $199,885 $162,023 23%
Twelve Months Ended
December 31,
------------
2009
2009 excluding
currency currency
impact impact 2008 % Change
------ ------ ---- --------
Specialty pharmaceuticals
U.S. $(40) $298,902 $219,349 36%
Canada 4,536 69,397 56,988 22%
Australia 827 40,889 21,602 89%
--- ------ ------
5,323 409,188 297,939 37%
Divested business - - 5,784
--- --- -----
Specialty pharmaceuticals
product sales 5,323 409,188 303,723 35%
Alliance - 50,639 4,374
Service 395 22,784 -
Total specialty
pharmaceuticals revenue 5,718 482,611 308,097 57%
Branded generics -
Latin America product
sales 28,341 183,587 136,638 34%
Branded generics -
Europe product sales 39,838 191,488 152,804 25%
Alliances (ribavirin
royalties only) - 46,672 59,438 -21%
--- ------ ------
Total revenue $73,897 $904,358 $656,977 38%
======= ======== ========
Total product sales
included above $73,502 $784,263 $593,165 32%
Three Months Twelve Months
Ended Ended
December 31, December 31,
------------ ------------
2009 2008 2009 2008
---- ---- ---- ----
3.3 Alliance Revenue Segment
-------------------- -------
Ribavirin royalty Alliances $8,690 $16,617 $46,672 $59,438
1% clindamycin and 5%
benzoyl peroxide (IDP
111) profit share Specialty 9,538 - 18,073 -
Other royalties Specialty 3,310 - 11,230 -
License payments Specialty 817 - 6,817 -
GSK collaboration Specialty 4,623 4,374 14,519 4,374
----- ----- ------ -----
Total alliance revenue $26,978 $20,991 $97,311 $63,812
======= ======= ======= =======
(a) Note: Currency effect for constant currency sales is determined by
comparing 2009 reported amounts adjusted to exclude currency impact,
calculated using 2008 monthly average exchange rates, to the actual 2008
reported amounts. Constant currency sales is not a GAAP-defined measure of
revenue growth. Constant currency sales as defined and presented by us may
not be comparable to similar measures reported by other companies.
(b) See footnote (a) to Table 2.
Valeant Pharmaceuticals International Table 4
Statement of Cost of Goods Sold and Non-GAAP Operating Income - by Segment
For the Three and Twelve Months Ended December 31, 2009 and 2008
(In thousands)
Three Months Ended Twelve Months Ended
4.1 Cost of goods sold December 31, December 31,
------------ ------------
% of % of % of % of
product product product product
2009 sales 2008 sales 2009 sales 2008 sales
---- ----- ---- ----- ---- ----- ---- ------
Specialty
pharmaceuticals $23,068 19% $18,442 21% $78,858 20% $64,027 21%
Branded
generics -
Latin America 15,549 33% 9,193 25% 46,186 30% 46,338 34%
Branded generics
- Europe 19,545 46% 13,919 39% 67,798 45% 58,408 38%
Corporate 70 35 132 (857)
--- --- --- ----
$58,232 28% $41,589 26% $192,974 27% $167,916 28%
======= ======= ======== ========
4.2 Non-GAAP operating income excluding currency impact (a)(b)
Three Months Ended
December 31,
------------
2009
2009 excluding
% of currency currency % of % of
2009 revenue impact impact revenue 2008 revenue
---- ------- ------ ------ ------- ---- -------
Specialty
pharmaceuticals $72,172 51% $(558) $71,614 53% $39,143 42%
Branded
generics - Latin
America 18,236 39% 3,161 21,397 46% 13,623 37%
Branded generics
- Europe 10,574 25% 3,692 14,266 35% 10,641 30%
------ ----- ------ ------
100,982 44% 6,295 107,277 48% 63,407 38%
Alliances &
Corporate (3,161) - (3,161) (199)
------ --- ------ ----
$97,821 41% $6,295 $104,116 45% $63,208 35%
======= ====== ======== =======
Twelve Months Ended
December 31,
------------
2009
2009 excluding
% of currency currency % of % of
2009 revenue impact impact revenue 2008 revenue
---- ------- ------ ------ ------- ---- -------
Specialty
pharmaceuticals $230,705 48% $3,378 $234,083 49% $48,674 16%
Branded
generics - Latin
America 58,928 38% 11,427 70,355 38% 29,670 22%
Branded generics
- Europe 39,877 26% 10,213 50,090 26% 46,420 30%
------ ------ ------ ------
329,510 42% 25,018 354,528 41% 124,764 21%
Alliances &
Corporate (9,618) - (9,618) (689)
------ --- ------ ----
$319,892 39% $25,018 $344,910 38% $124,075 19%
======== ======= ======== ========
(a) See footnote (a) to Table 2 and footnote (b) to Table 3.
(b) Non-GAAP operating income of $97.8 million and $319.9 million for the
three and twelve months ended December 30, 2009 excludes the following
GAAP items from GAAP operating income of $71.4 million and $232.8 million:
special charges and credits including acquired in-process research and
development of $4.4 million and $6.4 million, restructuring, asset
impairments, dispositions and acquisition-related costs of $3.1 million
and $10.1 million and amortization expense of $18.9 million and $70.6
million, respectively. Non-GAAP operating income of $63.2 million and
$124.1 million for the three and twelve months ended December 30, 2008
excludes the following GAAP items from GAAP operating income of ($152.5)
million and ($133.5) million: special charges and credits including
acquired in-process research and development of $186.3 million and $186.3
million, restructuring, asset impairments, dispositions and acquisition-
related costs of $17.0 million and $21.3 million and amortization expense
of $12.4 million and $50.0 million, respectively.
Valeant Pharmaceuticals International Table 5
Consolidated Balance Sheet and Other Data
(In thousands)
As of
December 31,
5.1 Cash 2009 2008
---- ----
Cash and cash equivalents $68,080 $199,582
Marketable securities 13,785 19,193
------ ------
Total cash and marketable securities $81,865 $218,775
======= ========
5.2 Summary of Cashflow Statement
Three Months Ended Twelve Months Ended
December 31, December 31,
------------ ------------
2009 2008 2009 2008
---- ---- ---- ----
Cash flow provided by (used in):
Operating activities,
continuing operations
(GAAP) $52,458 $142,009 $186,321 $200,655
Effect of ASC 470-
20 (FSP APB 14-1) (a)(b) - 6,115 35,338 6,115
Acquisition transaction
fees (a)(b) 2,866 - 4,593 -
----- --- ----- ---
Operating activities,
continuing operations
(Non-GAAP) (a)(b) 55,324 148,124 226,252 206,770
Operating activities,
discontinued operations 92 127 (2,768) 9,759
Investing activities
(GAAP) (c) (106,729) (342,366) (342,480) 169,918
Acquisition transaction
fees (a)(b) (2,866) - (4,593) -
------ --- ------ ---
Investing activities (Non-
GAAP) (a)(b)(c) (109,595) (342,366) (347,073) 169,918
Financing activities
(GAAP) (c) (141,465) (95,426) 29,909 (468,889)
Effect of ASC 470-
20 (FSP APB 14-1) (a)(b) - (6,115) (35,338) (6,115)
--- ------ ------- ------
Financing activities (Non-
GAAP) (a)(b)(c) (141,465) (101,541) (5,429) (475,004)
Effect of exchange rate
changes on cash and cash
equivalents (c) 2,165 (26,025) (2,484) (21,226)
----- ------- ------ -------
Net decrease in cash
and cash equivalents (c) (193,479) (321,681) (131,502) (109,783)
Net decrease in
marketable securities (c) (110,565) (30,556) (5,408) (32,929)
-------- ------- ------ -------
Net decrease in cash
and marketable
securities (c) $(304,044) $(352,237) $(136,910) $(142,712)
========= ========= ========= =========
(a) See footnote (a) to Table 2.
(b) Cash flow for the three and twelve months ended December 31, 2009
includes $0 and $35.3 million relating to payments of accreted interest on
long-term debt and notes payable made during these periods as determined
by and pursuant to ASC 470-20 (FSP APB 14-1), $0 and $0.9 million for
acquisition transaction fees related to the purchase of Emo-Farm in
Poland, $0.3 million and $1.0 million for acquisition fees related to the
purchase of Tecnofarma in Mexico, $1.7 million and $1.7 million for
acquisition fees related to the purchase of Dow in the U.S. and $0.9
million and $1.0 million for acquisition fees related to the purchase of
PFI in Australia, respectively.
(c) Includes results from discontinued operations.
Three Months Ended
5.3 GSK Collaboration - Retagibine December 31, 2009
-----------------
Valeant SG&A $14
Valeant R&D 10,311
------
10,325
GSK incurred cost 10,543
------
$20,868
=======
Equalization (difference between
individual partner costs and 50% of total) $(109)
=====
Three Months Ended December 31, 2009
------------------------------------
Alliance
Balance sheet revenue SG&A R&D
------------- ------- ----- ---
Accounting impact
Upfront payment
from GSK $125,000 $- $- $-
Release from upfront
payment in prior
quarters (43,000) - - -
Incurred cost in
current quarter - - 14 10,311
Release from upfront
payment in current
quarter (15,058) (4,624) (582) (9,852)
-------
Remaining upfront
payment from GSK $66,942 - - -
=======
Equalization
payable to GSK $(109) - 568 (459)
===== --- --- ----
$(4,624) $- $-
======= === ===
Valeant Pharmaceuticals International Supplemental Table
Reconciliation of Product Sales Excluding Acquisitions, Divestitures,
Estimated Wholesaler Inventory Reductions and Currency Impact
For the Three and Twelve Months Ended December 31, 2009 and 2008
(In thousands)
Three Months Ended
December 31, 2009
-----------------
2009
2009 excluding
acquisition 2009 currency &
2009 impact at currency acquisition
as reported 2009 rates (a) impact impact
----------- -------------- ------ ------
Specialty
pharmaceuticals
U.S. 85,280 $(2,396) $- $82,884
Canada 18,711 (230) (2,311) 16,170
Australia 15,312 (9,964) (1,398) 3,950
------ ------ ------ -----
Specialty
pharmaceuticals
product sales 119,303 (12,590) (3,709) 103,004
Branded generics
- Latin America
product sales 47,185 (7,469) (1,130) 38,586
Branded
generics -
Europe
product sales 42,046 (2,090) (1,175) 38,781
------ ------ ------ ------
Total product
sales $208,534 $(22,149) $(6,014) $180,371
======== ======== ======= ========
Three Months Ended
December 31, 2008
-----------------
2008 Q4 2009
2008 excluding growth at
estimated divestiture constant
wholesaler & currency,
2008 as 2008 inventory wholesaler net of
reported divestitures reductions impact acquisitions
-------- ------------ ---------- ------ ------------
Specialty
pharmaceuticals
U.S. $71,453 $- $- $71,453 16%
Canada 14,161 - - 14,161 14%
Australia 3,558 - - 3,558 11%
----- --- --- -----
Specialty
pharmaceuticals
product sales 89,172 - - 89,172 16%
Branded generics
- Latin America
product sales 36,930 - - 36,930 4%
Branded
generics -
Europe
product sales 35,921 - - 35,921 8%
------ --- --- ------
Total product
sales $162,023 $- $- $162,023 11%
======== === === ========
Twelve Months Ended
December 31, 2009
-----------------
2009
2009 excluding
acquisition 2009 currency &
2009 impact at currency acquisition
as reported 2009 rates (a) impact impact
----------- -------------- ------ ------
Specialty
pharmaceuticals
U.S. $298,942 $(32,351) $- $266,591
Canada 64,861 (230) 4,569 69,200
Australia 40,062 (19,010) 1,933 22,985
------ ------- ----- ------
403,865 (51,591) 6,502 358,776
Divested business - - - -
--- --- --- ---
Specialty
pharmaceuticals
product sales 403,865 (51,591) 6,502 358,776
Branded generics
- Latin America
product sales 155,246 (12,142) 27,063 170,167
Branded generics -
Europe
product sales 151,650 (7,659) 37,661 181,652
------- ------ ------ -------
Total product sales $710,761 $(71,392) $71,226 $710,595
======== ======== ======= ========
Twelve Months Ended
December 31, 2008
-----------------
12mths
2009 growth
at constant
currency,
net of
acquisitions,
2008
2008 divestitures,
2008 excluding &
estimated divestiture estimated
wholesaler & wholesaler
2008 as 2008 inventory wholesaler inventory
reported divestitures reductions impact reductions
-------- ------------ ---------- ------ ----------
Specialty
pharmaceuticals
U.S. $219,349 $- $15,033 $234,382 14%
Canada 56,988 - 1,950 58,938 17%
Australia 21,602 - - 21,602 6%
------ --- --- ------
297,939 - 16,983 314,922 14%
Divested business 5,784 (5,784) - -
----- ------ --- ---
Specialty
pharmaceuticals
product sales 303,723 (5,784) 16,983 314,922
Branded generics
- Latin America
product sales 136,638 - 3,000 139,638 22%
Branded generics
- Europe product
sales 152,804 - - 152,804 19%
------- --- --- -------
Total product
sales $593,165 $(5,784) $19,983 $607,364 17%
======== ======= ======= ========
(a) Acquisitions excluded from 2009 product sales include Coria in the
U.S., PFI in the U.S. and Australia, Dr. Renaud in the U.S. and Canada,
DermaTech and other acquired products in Australia, Tecnofarma S.A. de
C.V. in Branded generics-Latin America and EMO-Farm in Branded generics-
Europe.
See footnote (a) to Table 2 and Table 3.
(Logo: http://www.newscom.com/cgi-bin/prnh/20081125/VALEANTLOGO)
SOURCE Valeant Pharmaceuticals International
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