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Par Pharmaceutical Files Form 10-Qs for First and Second Quarters of 2007
WOODCLIFF LAKE, N.J.
(Map)
-
First-Quarter Results
For the first quarter ended
First quarter 2007 reported, or GAAP, results included a
First-Quarter Review
For the first quarter ended
Par's first-quarter gross margin was 37.4 percent of sales, compared to 28.5 percent in 2006. The increase in the Company's gross margin resulted primarily from increased sales of higher-margin products, including Megace(R) ES and propranolol ER, royalties related to the sale of ondansetron orally disintegrating tablets and the co-promotion fee for AndroGel(R).
Research and development (R&D) expenses increased 1.3 percent for the first quarter 2007 compared with the first quarter 2006. The results reflect increased development costs in support of Par's generic product portfolio tempered by reduced clinical development costs following the termination of the megestrol acetate concentrated suspension oncology study in 2006 and the termination of Par's participation in the development of Par 101, as well as lower personnel costs following the restructuring of the R&D organization.
Selling, general and administrative (SG&A) expenses for the first quarter 2007 increased 14.9 percent from first quarter 2006. The increase is primarily due to an increase of the field sales force for Strativa, the Company's branded division, as well as the expansion of the finance and accounting functions and increased professional costs associated with the Company's restatement.
Second-Quarter and Six-Month Results
For the second quarter ended
Second-quarter 2007 reported, or GAAP, results included a
Net income for the first six months of 2007 was
Second-Quarter Review
For the second quarter ended
Par's second-quarter gross margin was 33.7 percent of sales, compared to 28.1 percent in 2006. The increase in the Company's gross margin resulted primarily from increased sales of higher-margin products, including Megace(R) ES and propranolol ER, royalties related to the sale of ondansetron orally disintegrating tablets and the co-promotion fee for AndroGel(R).
Research and development (R&D) expense decreased 18.7 percent to
Second-quarter selling, general and administrative (SG&A) expense
decreased 20.8 percent to
In the second quarter of 2007, Par recorded a
2007 Financial Outlook
Par has revised its previously announced guidance for full-year 2007
earnings per diluted share to
The Company's projections are based on its results for the first six months of 2007 and management's assumption of the impact of product competition on some of Par's key products and include the impact of certain one-time items and lower SG&A costs.
Total net revenue is expected to be between
Stock Repurchase Program
Since
Conference Call
Par has scheduled a conference call for
For a copy of Par's Form 10-Qs for the quarterly periods ended
Non-GAAP Measures
Par prepares its consolidated financial statements in conformity with
accounting principles generally accepted in the
About Par
Par Pharmaceutical Companies, Inc. develops, manufactures and markets generic drugs and innovative branded pharmaceuticals for specialty markets. For press release and other company information, visit www.parpharm.com.
Safe Harbor Statement
Certain statements in this press 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 risks and uncertainties, including the extent and impact of litigation arising out of the accounting issues described in the Company's filings with the Securities and Exchange Commission (SEC), the difficulty of predicting FDA filings and approvals, acceptance and demand for new pharmaceutical products, the impact of competitive products and pricing, new product development and launch, reliance on key strategic alliances, uncertainty of patent litigation filed against the Company, availability of raw materials, the regulatory environment, fluctuations in operating results and other risks and uncertainties detailed from time to time in the company's filings with the SEC, such as the Company's reports on Form 10-K, Form 10-Q and Form 8-K, and amendments thereto. Any forward-looking statements included in this press 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 Data)
(Unaudited)
June 30, March 31, December 31,
ASSETS 2007 2007 2006
Current assets:
Cash and cash equivalents $184,238 $141,477 $120,991
Available for sale debt and
marketable equity securities 169,243 119,754 92,120
Accounts receivable, net 47,123 147,030 99,043
Inventories 83,779 87,674 106,322
Prepaid expenses and other current
assets 22,225 23,215 15,833
Deferred income tax assets 72,104 72,104 72,105
Income taxes receivable 6,605 6,608 12,422
Total current assets 585,317 597,862 518,836
Property, plant and equipment, at
cost less accumulated depreciation
and amortization 85,012 86,354 89,155
Available for sale debt and
marketable equity securities 4,680 4,710 7,652
Investment in joint venture 5,387 5,304 5,292
Other investments - 4,588 16,588
Intangible assets, net 41,371 44,674 47,880
Goodwill 63,729 63,729 63,729
Deferred charges and other assets 3,027 6,917 16,000
Non-current deferred income tax
assets, net 49,714 49,278 49,545
Total assets $838,237 $863,416 $814,677
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Short-term and current portion of
long-term debt $200,824 $202,632 $204,469
Accounts payable 32,801 33,690 48,297
Payables due to distribution
agreement partners 73,754 89,635 89,585
Accrued salaries and employee
benefits 13,443 12,444 15,510
Accrued expenses and other current
liabilities 23,112 22,154 18,833
Income taxes payable 4,438 20,815 16,974
Total current liabilities 348,372 381,370 393,668
Long-term debt, less current
portion - - -
Other long-term liabilities 13,482 13,246 -
Commitments and contingencies - - -
Stockholders' equity:
Preferred Stock, par value $0.0001
per share, authorized
6,000,000 shares; none issued and
outstanding - - -
Common Stock, par value $0.01 per
share, authorized 90,000,000
shares, issued 36,345,466 and
36,335,215 and 35,901,276 shares 364 364 359
Additional paid-in-capital 263,446 257,394 254,013
Retained earnings 244,568 241,766 200,256
Accumulated other comprehensive
gain (loss) 2,526 3,209 (431)
Treasury stock, at cost 941,035 and
920,558 and 889,245 shares (34,521) (33,933) (33,188)
Total stockholders' equity 476,383 468,800 421,009
Total liabilities and stockholders'
equity $838,237 $863,416 $814,677
PAR PHARMACEUTICAL COMPANIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In Thousands, Except Per Share Data)
(Unaudited)
Three months ended
March 31, April 1,
2007 2006
Revenues:
Net product sales $222,589 $169,037
Other product related revenues 11,621 3,281
Total revenues 234,210 172,318
Cost of goods sold 146,521 123,150
Gross margin 87,689 49,168
Operating expenses:
Research and development 14,039 13,852
Selling, general and administrative 32,557 28,342
Settlements, net (578) -
Total operating expenses 46,018 42,194
Gain on sale of product rights (20,000) -
Operating income 61,671 6,974
Other expense, net (19) (39)
Equity in loss of joint venture (148) (253)
Realized gain on sale of marketable securities 1,397 -
Interest income 2,684 1,983
Interest expense (1,718) (1,694)
Income before provision for income taxes 63,867 6,971
Provision for income taxes 22,353 2,457
Net income $41,514 $4,514
Earnings per share of common stock:
Basic $1.20 $0.13
Diluted $1.19 $0.13
Weighted average number of
common shares outstanding:
Basic 34,618 34,259
Diluted 34,997 34,766
PAR PHARMACEUTICAL COMPANIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In Thousands, Except Per Share Data)
(Unaudited)
Three months ended Six months ended
June 30, July 1, June 30, July 1,
2007 2006 2007 2006
Revenues:
Net product sales $160,014 $190,583 $382,603 $359,620
Other product related
revenues 7,626 4,655 19,247 7,937
Total revenues 167,640 195,238 401,850 367,557
Cost of goods sold 111,085 140,471 257,606 263,621
Gross margin 56,555 54,767 144,244 103,936
Operating expenses:
Research and development 14,277 17,557 28,316 31,409
Selling, general and
administrative 33,999 42,941 66,556 71,283
Settlements, net - 1,250 (578) 1,250
Total operating expenses 48,276 61,748 94,294 103,942
Gain on sale of product
rights - - (20,000) -
Operating income (loss) 8,279 (6,981) 69,950 (6)
Other expense, net (30) 142 (49) 104
Equity in loss of joint venture (80) (225) (228) (479)
Loss on marketable securities,
net (6,040) (3,773) (4,643) (3,773)
Interest income 3,901 1,973 6,585 3,956
Interest expense (1,727) (1,693) (3,445) (3,388)
Income (loss) before provision
(benefit) for income taxes 4,303 (10,557) 68,170 (3,586)
Provision (benefit) for income
taxes 1,505 (3,352) 23,858 (896)
Net income (loss) $2,798 $(7,205) $44,312 $(2,690)
Earnings (loss) per share of
common stock:
Basic $0.08 $(0.21) $1.28 $(0.08)
Diluted $0.08 $(0.21) $1.27 $(0.08)
Weighted average number of
common shares outstanding:
Basic 34,676 34,454 34,647 34,368
Diluted 34,943 34,454 34,970 34,368
Reconciliation Between Reported (GAAP) and Adjusted Net Income (Loss)
(In thousands, except per share data)
(Unaudited)
Three Months Ended
March 31, April 1,
2007 2006
Reported Net Income $41,514 $4,514
Gain on Sale of Product Rights (20,000) -
Investment Gain (1,397) -
Net Settlements Gain (578) -
Estimated Tax on Adjustments 8,570 -
Adjusted Net Income (non-GAAP measure) $28,109 $4,514
Diluted Earnings Per Share:
Reported $1.19 $0.13
Adjusted (non-GAAP measure) $0.80 $0.13
Three Months Ended
June 30, July 1,
2007 2006
Reported Net Income (Loss) $2,798 $(7,205)
Net Investment Loss 6,040 3,773
License Fee 3,000 -
Severance Costs 1,643 -
Write-off of Accounts Receivable Relating to
Invalid Customer Deductions - 9,965
Arbitration Settlement - 1,502
Estimated Tax on Adjustments (4,166) (5,944)
Adjusted Net Income (non-GAAP measure) $9,315 $2,091
Diluted Earnings (Loss) Per Share:
Reported $0.08 $(0.21)
Adjusted (non-GAAP measure) $0.27 $0.06
Reconciliation Between Reported (GAAP) and Adjusted Net Income (Loss)
(In thousands, except per share data)
(Unaudited)
Six Months Ended
June 30, July 1,
2007 2006
Reported Net Income (Loss) $44,312 $(2,690)
Gain on Sales of Product Rights (20,000) -
Net Investment Loss 4,643 3,773
License Fee 3,000 -
Severance Costs 1,643 -
Net Settlements Gain (578) -
Write-off of Accounts Receivable Relating to
Invalid Customer Deductions - 9,965
Arbitration Settlement - 1,502
Estimated Tax on Adjustments 4,404 (5,944)
Adjusted Net Income (non-GAAP measure) $37,424 $6,606
Diluted Earnings (Loss) Per Share:
Reported $1.27 $(0.08)
Adjusted (non-GAAP measure) $1.07 $0.19
Estimated Operating Results for Full Year 2007
Total Revenue $760 - $780 million
SG&A $130 - $133 million
R&D $75 - $80 million
EPS (fully diluted) $1.35 - $1.50
Other supplemental information
Depreciation & amortization $24 - $26 million
Share-based compensation $18 - $20 million
IMPACT OF ONE-TIME ITEMS FY 2007
(in millions, except per share amounts)
Severance $2
Branded Milestone Payments 19
High Yield Investment Loss 6
PAR 101 (24)
Total One-Time Items $3
EPS Impact (fully diluted) $0.05
EPS (fully diluted)
adjusted for one-time items $1.40 - $1.55
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