WOODCLIFF LAKE, N.J., May 8, 2012 /PRNewswire/ -- Par Pharmaceutical Companies, Inc. (NYSE: PRX) today reported results for the first quarter ended March 31, 2012.
For the first quarter ended March 31, 2012, the Company reported total revenues of $271.5 million and a loss from continuing operations of $28.7 million, or $0.79 per diluted share, which includes a $45 million charge related to the Company's best estimate of loss related to the potential settlement of the on-going Department of Justice investigation of Strativa's marketing of Megace® ES. On an adjusted cash basis (non-GAAP measure), which excludes the $45 million charge, a milestone payment, amortization expenses, other transaction-related costs and the impairment of an IPR&D asset, income from continuing operations was $29.8 million, or $0.80 per diluted share for the first quarter 2012. (Refer to attached reconciliation table between GAAP and adjusted non-GAAP amounts.)
First Quarter Highlights Key Product Sales (Net sales comparisons at the product level are to fourth quarter 2011.)
Revenues and adjusted gross margin for the first quarter 2012 were $271.5 million and $110.7 million, respectively, compared to $253.6 million in net sales and $103.8 million in adjusted gross margin during the prior quarter (Q4 2011). The adjusted gross margin rate on the Company's consolidated product portfolio remained essentially flat at 40.8% versus 40.9% in the fourth quarter 2011. (Par is now presenting non-GAAP gross margin on an adjusted basis. See detailed reconciliation table at the end of this press release.) 1Q 20124Q 2011$%$%Key Par (Generic)
Products (1)$ 46.4
26.2%All Other (Generic)47.8
50.5%Total Par Generics$ 94.2
36.0%Strativa (Branded) Products(2)$ 16.5
82.4%Total (All Products) $ 110.7
40.9%(1) Q1 2012 Key Par Products include metoprolol, sumatriptan, budesonide, propafenone, bupropion,
zolpidem, fentanyl lozenges. (2) Strativa products consist primarily of Megace ES and Nascobal.
On a GAAP basis, total operating expenses increased during the first quarter of 2012 as compared to the prior quarter as follows:
Cash and cash equivalents and marketable securities aggregate balance as of March 31, 2012 was $186.5 million, which included a payment of $25.0 million in conjunction with the Edict acquisition and a one-time upfront development payment.
Product and Pipeline Update In February 2012, Par Pharmaceutical, Inc. completed its acquisition of privately-held Edict Pharmaceuticals Private Limited, an India-based developer and manufacturer of generic pharmaceuticals. Edict has been renamed Par Formulations Private Limited.
In April 2012, Par Pharmaceutical, Inc. announced that it had entered into an exclusive acquisition and license agreement with Handa Pharmaceuticals LLC to acquire Handa's ANDA for dexlansoprazole capsules, the generic version of Takeda's Dexilant®. Under the terms of the agreement, Par has the exclusive rights to market, sell and distribute dexlansoprazole capsules in the U.S. under the ANDA, subject to final FDA approval. Par will receive a percentage of profits from the sales of the product. Handa believes it is the first to file an ANDA containing a paragraph IV certification for the 60 mg strength of the product, which would potentially provide 180 days of marketing exclusivity. According to IMS Health data, annual sales in the U.S. for the 60 mg strength of Dexilant are approximately $517 million.
Par Pharmaceutical, along with third-party partners, currently has approximately 71 ANDAs pending with the FDA, 21 of which it believes to be first-to-file opportunities.
Conference Call Par Pharmaceutical Companies, Inc. will host a conference call and live webcast on Tuesday, May 8, 2012 at 9:00 AM EDT to review results for the first quarter 2012.
Access to the live webcast can be made via the Company's website at www.parpharm.com.Dial-in InformationDomestic:800-510-0146International:617-614-3449Passcode:
72245227A replay of the conference call will be available for two weeks approximately one hour after the call. Replay InformationDomestic:888-286-8010International:617-801-6888Passcode:42736584Non-GAAP MeasuresPar Pharmaceutical Companies, Inc. ("the Company") believes it prepared its consolidated financial statements in conformity with accounting principles generally accepted in the United States of America (U.S. GAAP) and pursuant to accounting requirements of the Securities and Exchange Commission. In an effort to provide investors with additional information regarding the Company's results and to provide a meaningful period-over-period comparison of the Company's financial performance, the Company sometimes uses non-GAAP financial measures as defined by the Securities and Exchange Commission. The differences between the U.S. GAAP and non-GAAP financial measures are reconciled in attached schedules. In presenting comparable results, the Company discloses non-GAAP financial measures when it believes such measures will be useful to investors in evaluating the Company's underlying business performance. Management uses the non-GAAP financial measures to evaluate the Company's financial performance against internal budgets and targets. In addition, management internally reviews the Company's results excluding the impact of certain items, as it believes that these non-GAAP financial measures are useful for evaluating the Company's core operating results and facilitating comparison across reporting periods. Importantly, the Company believes non-GAAP financial measures should be considered in addition to, and not in lieu of, U.S. GAAP financial measures. The Company's non-GAAP financial measures may be different from non-GAAP financial measures used by other companies.
About Par Pharmaceutical Companies, Inc.Par Pharmaceutical Companies, Inc. is a US-based specialty pharmaceutical company. Through its wholly-owned subsidiary's two operating divisions, Par Pharmaceutical and Strativa Pharmaceuticals, it develops, acquires, manufactures and markets higher-barrier-to-entry generic drugs and niche, innovative proprietary pharmaceuticals. For press release and other company information, visit www.parpharm.com.
Safe Harbor StatementCertain statements in this news release constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. To the extent any statements made in this news release contain information that is not historical, these statements are essentially forward-looking and, as such, are subject to known and unknown risks, uncertainties and contingencies, many of which are beyond the control of the Company, which could cause actual results and outcomes to differ materially from those expressed herein. Risk factors that might affect such forward-looking statements include those set forth in Item 1A of the Company's most recent Annual Report on Form 10-K, in other of the Company's filings with the SEC from time to time, including Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, and on general industry and economic conditions. Any forward-looking statements included in this news release are made as of the date hereof only, based on information available to the Company as of the date hereof, and, subject to any applicable law to the contrary, the Company assumes no obligation to update any forward-looking statements.
PAR PHARMACEUTICAL COMPANIES, INC.CONDENSED CONSOLIDATED BALANCE SHEETS (In Thousands, Except Share and Per Share Data)(Unaudited)March 31,December 31,20122011ASSETSCurrent assets:Cash and cash equivalents$156,876$162,516Available for sale marketable debt securities29,63025,709Accounts receivable, net 135,200125,940Inventories92,796106,250Prepaid expenses and other current assets26,20820,475Deferred income tax assets50,44555,966Income taxes receivable31,14627,049Total current assets522,301523,905Property, plant and equipment, net102,03997,790Intangible assets, net302,317311,669Goodwill313,337283,432Other assets14,28614,657Total assets$1,254,280$1,231,453LIABILITIES AND STOCKHOLDERS' EQUITYCurrent liabilities:Current portion of long-term debt$26,250$21,875Accounts payable31,53633,000Payables due to distribution agreement partners73,20369,359Accrued salaries and employee benefits 13,27016,174Accrued government pricing liabilities27,98939,614Accrued legal fees6,6454,150Accrued legal settlements82,80037,800Payable to former Anchen securityholders20,59820,620Accrued expenses and other current liabilities18,8069,604Total current liabilities301,097252,196Long-term liabilities23,48119,952Non-current deferred tax liabilities26,93925,974Long-term debt, less current portion315,000323,750Commitments and contingencies--Stockholders' equity:Common stock, par value $0.01 per share, authorized 90,000,000 shares; issued39,919,972 and 39,677,291 shares399397Additional paid-in capital398,085389,166Retained earnings274,261302,984Accumulated other comprehensive income4813Treasury stock, at cost 3,247,206 and 3,201,858 shares(85,030)(82,979)Total stockholders' equity587,763609,581Total liabilities and stockholders' equity$1,254,280$1,231,453
PAR PHARMACEUTICAL COMPANIES, INC.CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (In Thousands, Except Per Share Data)(Unaudited)Three months endedMarch 31,March 31,20122011Revenues:Net product sales
$264,123$220,789Other product related revenues
271,472232,952Cost of goods sold, excluding amortization expense
8,8222,761Total cost of goods sold
97,846109,652Operating expenses:Research and development
29,90010,710Selling, general and administrative
42,15946,945Intangible assets impairment
2,000-Settlements and loss contingencies, net
45,000190,560Total operating expenses
(3,094)(150)Loss from continuing operations before
provision (benefit) for income taxes
(24,171)(138,290)Provision (benefit) for income taxes
4,525(29,446)Loss from continuing operations
(28,696)(108,844)Discontinued operations:Provision for income taxes
27127Loss from discontinued operations
($28,723)($108,971)Basic loss per share of common stock:Loss from continuing operations
($0.79)($3.07)Loss from discontinued operations
($0.79)($3.07)Diluted loss per share of common stock:Loss from continuing operations
($0.79)($3.07)Loss from discontinued operations
($0.79)($3.07)Weighted average number of common shares
36,30535,500 Reconciliation Between Reported (GAAP); Adjusted Income (Loss) from Continuing Operations and "Cash EPS"(In Thousands, Except Per Share Data)(Unaudited)
Three Months EndedMarch 31, 2012
CONSOLIDATEDADJUSTMENTSNON-GAAPRevenues:Net product sales
Three Months EndedMarch 31, 2012GAAP 10-Q P&L
$264,123$264,123Other product related revenues
271,472271,472Cost of goods sold, excluding amortization expense
-Total cost of goods sold
Gross margin %
36%41%Operating expenses:Research and development
19,900Selling, general and administrative
39,857Intangible assets impairment
-Settlements and loss contingencies, net
-Total operating expenses
119,059(59,302)59,757Operating (loss) income
(3,094)(3,094)(Loss) income from continuing operations before
provision for income taxes
(24,171)72,17248,001Provision for income taxes
18,222(Loss) income from continuing operations(28,696)58,47529,779Discontinued operations:Provision (benefit) for income taxes27(27)-(Loss) income from discontinued operations(27)27-Net (loss) income($28,723)$58,502$29,779Basic earnings per share of common stock:(Loss) income from continuing operations($0.79)$0.82(Loss) income from discontinued operations(0.00)0.00Net (loss) income($0.79)$0.82Diluted earnings per share of common stock:(Loss) income from continuing operations($0.79)$0.80(Loss) income from discontinued operations(0.00)0.00Net (loss) income($0.79)$0.80Weighted average number of common shares
outstanding: Basic36,30536,305 Diluted36,30537,051
a - Amortization of inventory step up established with Anchen purchase accounting ($4,048)b - Amortization expense ($8,822)c - Upfront and development milestone paymentsd - Transaction costs on Anchen ($772)/Edict ($676), amortization expense for Megace ($380), and Anchen-related severance costs ($474)e - Impairment of Anchen IPR&D intangible assetsf - Contingent lossg - Estimated tax on adjustments ($13,697)
|SOURCE Par Pharmaceutical Companies, Inc.|
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