| Cephalon Delivers Record Sales in the Second Quarter 2009 |
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Cephalon, Inc.
today reported second quarter 2009 sales of $539.0 million, an 11 percent increase compared to sales of $485.0 million for the second quarter 2008 and exceeding the company's sales guidance of $515 - $535 million. Basic income per common share for the quarter was $1.19. Excluding amortization expense and certain other items, basic adjusted income per common share for the quarter was $1.56, an increase of 25 percent over the comparable figure of $1.25 for the same period in 2008. Adjusted net income for the second quarter of 2009 was $110.7 million, a 31 percent increase over the comparable $84.5 million for the second quarter of 2008. This exceeded the company's adjusted net income guidance range of $96.6 to $103.5 million. Central nervous system (CNS) franchise sales were $290.6 million during the quarter, a 16 percent increase compared to the same period last year. Pain franchise reported sales of $123.6 million, an 8 percent decrease versus second quarter 2008, with growing sales of AMRIX (cyclobenzaprine hydrochloride extended-release capsules) largely offsetting the continued generic erosion of ACTIQ (oral transmucosal fentanyl citrate) [C-II]. Oncology franchise sales were $82.2 million, an 86 percent increase over the same period last year due to strong sales of TREANDA (bendamustine hydrochloride) of $55.8 million. During the quarter the company launched NUVIGIL (armodafinil) Tablets [C-IV]. A supplemental new drug application was filed with the FDA for NUVIGIL as a treatment of excessive sleepiness associated with jet lag disorder. If approved this would be the first acute indication for the franchise and further enhance the growth potential for NUVIGIL. "With our recent business development activities and our fourth product launch in four years, we continue to build Cephalon into a premier biotech company," said Frank Baldino, Jr., Ph.D., Chairman and CEO. "NUVIGIL, our most recent product launch, is off to a great start and in order to serve additional patients we continue to make meaningful progress with our clinical programs to further develop this product. In addition, TREANDA and AMRIX continue to experience tremendous year-over-year growth. We plan to continue to execute upon our strategy of diversification through both our internal discovery and business development activities while delivering solid financial performance." Also during the quarter, Cephalon continued to build its biotechnology platform by acquiring a controlling interest in the Australian biotechnology company Arana Therapeutics. Arana brings to Cephalon antibody humanization and optimization technology as well as a pipeline of biologics for inflammatory diseases and cancer. The company is updating its guidance for 2009. Total sales guidance remains $2.175-$2.225 billion. This includes CNS franchise sales of $1.16-$1.19 billion, pain franchise sales of $530-$555 million, oncology franchise sales which were increased to $315-$335 million, and other product sales of $150-$175 million. Full year R&D guidance decreased to $425-$445 million and SG&A remains $840-$860 million, respectively. Adjusted net income guidance was increased to $457-$464 million and basic adjusted income per common share guidance is $6.30-$6.40. For the third quarter 2009, Cephalon is introducing sales guidance of $540-$560 million, adjusted net income guidance of $108-$116 million and basic adjusted income per common share guidance of $1.45-$1.55. Basic adjusted income per common share guidance for both the third quarter 2009 and full-year 2009 is reconciled below and is subject to the assumptions set forth therein. Cephalon's management will discuss the company's second quarter 2009 performance in a conference call with investors beginning at 5:00 p.m. U.S. EDT today. To participate in the conference call, dial +1-913-312-0379 and refer to conference code number 1696714. Investors can listen to the call live by logging on to the company's website at www.cephalon.com and clicking on "Investors" then "Webcast." The conference call will be archived and available to investors for one week after the call. About Cephalon, Inc. Founded in 1987, Cephalon, Inc. is an international biopharmaceutical company dedicated to the discovery, development and commercialization of many unique products in four core therapeutic areas: central nervous system, inflammatory diseases, pain and oncology. A member of the Fortune 1000 and the S&P 500 Index, Cephalon currently employs approximately 3,000 people in the United States and Europe. U.S. sites include the company's headquarters in Frazer, Pennsylvania, and offices, laboratories or manufacturing facilities in West Chester, Pennsylvania, Salt Lake City, Utah, and suburban Minneapolis, Minnesota. Cephalon has a growing presence in Europe, the Middle East and Africa. The Cephalon European headquarters and pre-clinical development center are located in Maisons-Alfort, France, just outside of Paris. Key business units are located in England, Ireland, France, Germany, Italy, Spain, the Netherlands for the Benelux countries, and Poland for Eastern and Central European countries. Cephalon Europe markets more than 30 products in four areas: central nervous system, pain, primary care and oncology. The company's proprietary products in the United States include: AMRIX , TREANDA for Injection, FENTORA (fentanyl buccal tablet) [C-II], PROVIGIL (modafinil) Tablets [C-IV], TRISENOX (arsenic trioxide) injection, GABITRIL (tiagabine hydrochloride), NUVIGIL and ACTIQ . The company also markets numerous products internationally. Full prescribing information on its U.S. products is available at http://www.cephalon.com/ or by calling 1-800-896-5855. In addition to historical facts or statements of current condition, this press release may contain forward-looking statements. Forward-looking statements provide Cephalon's current expectations or forecasts of future events. These may include statements regarding anticipated scientific progress on its research programs; development of potential pharmaceutical products; interpretation of clinical results; prospects for regulatory approval; manufacturing development and capabilities; market prospects for its products, including the growth and acceptance of Nuvigil, Treanda and Amrix in the market; sales, adjusted net income and basic adjusted income per common share guidance for the third quarter and full-year 2009 and SG&A and R&D guidance for the full-year 2009; and other statements regarding matters that are not historical facts. You may identify some of these forward-looking statements by the use of words in the statements such as "anticipate," "estimate," "expect," "project," "intend," "plan," "believe" or other words and terms of similar meaning. Cephalon's performance and financial results could differ materially from those reflected in these forward-looking statements due to general financial, economic, regulatory and political conditions affecting the biotechnology and pharmaceutical industries as well as more specific risks and uncertainties facing Cephalon such as those set forth in its reports on Form 8-K, 10-Q and 10-K filed with the U.S. Securities and Exchange Commission. Given these risks and uncertainties, any or all of these forward-looking statements may prove to be incorrect. Therefore, you should not rely on any such factors or forward-looking statements. Furthermore, Cephalon does not intend to update publicly any forward-looking statement, except as required by law. The Private Securities Litigation Reform Act of 1995 permits this discussion. This press release and/or the financial results attached to this press release include "Adjusted Net Income," "Basic Adjusted Income per Common Share," "Adjusted Net Income Guidance," "Basic Adjusted Income per Common Share Guidance," and "Diluted Adjusted Income Per Common Share," amounts that are considered "non-GAAP financial measures" under SEC rules. As required, we have provided reconciliations of these measures. Additional required information is located in the Form 8-K furnished to the SEC in connection with this press release. Contacts:
Media: Investors:
Sheryl Williams Robert (Chip) Merritt
610-738-6493 610-738-6376
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CEPHALON, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(Unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
-------- --------
As As
adjusted adjusted
2009 2008* 2009 2008*
---- --------- ---- ---------
REVENUES:
Sales $539,021 $485,042 $1,053,387 $918,939
Other revenues 8,792 7,673 14,394 16,995
----- ----- ------ ------
547,813 492,715 1,067,781 935,934
------- ------- --------- -------
COSTS AND EXPENSES:
Cost of sales 105,407 101,318 203,177 191,234
Research and development 102,085 80,409 205,109 161,844
Selling, general and
administrative 223,656 209,900 424,246 408,888
Restructuring charges 1,245 1,565 2,882 5,476
Acquired in-process
research and development 9,368 - 40,118 10,000
----- --- ------ ------
441,761 393,192 875,532 777,442
------- ------- ------- -------
INCOME FROM OPERATIONS 106,052 99,523 192,249 158,492
------- ------ ------- -------
OTHER INCOME (EXPENSE):
Interest income 930 4,912 1,634 11,513
Interest expense (20,114) (20,789) (36,718) (43,067)
Other income (expense), net 32,104 (1,543) 38,643 3,776
------ ------ ------ -----
12,920 (17,420) 3,559 (27,778)
------ ------- ----- -------
INCOME BEFORE INCOME TAXES 118,972 82,103 195,808 130,714
INCOME TAX EXPENSE 46,932 30,212 79,986 48,381
------ ------ ------ ------
NET INCOME 72,040 51,891 115,822 82,333
NET LOSS ATTRIBUTABLE TO
NONCONTROLLING INTEREST 12,724 - 27,525 -
------ --- ------ ---
NET INCOME ATTRIBUTABLE TO
CEPHALON, INC. $84,764 $51,891 $143,347 $82,333
======= ======= ======== =======
BASIC INCOME PER COMMON SHARE
ATTRIBUTABLE TO CEPHALON,
INC. $1.19 $0.77 $2.05 $1.22
===== ===== ===== =====
DILUTED INCOME PER COMMON
SHARE ATTRIBUTABLE TO
CEPHALON, INC. $1.11 $0.69 $1.87 $1.10
===== ===== ===== =====
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING
ATTRIBUTABLE TO CEPHALON, INC. 71,119 67,777 69,962 67,721
====== ====== ====== ======
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING-
ASSUMING DILUTION ATTRIBUTABLE
TO CEPHALON, INC. 76,629 74,852 76,808 74,569
====== ====== ====== ======
* As adjusted for FASB Staff Position APB 14-1, "Accounting for
Convertible Debt Instruments That May Be Settled in Cash upon
Conversion (Including Partial Cash Settlement)" and SFAS No. 160,
"Noncontrolling Interests in Consolidated Financial Statements."
CEPHALON, INC. AND SUBSIDIARIES
Reconciliation of GAAP Net Income to Adjusted Net Income
Attributable to Cephalon, Inc.
(Unaudited)
Three Months Ended
June 30,
2009 2008
---- ----
GAAP NET INCOME ATTRIBUTABLE TO
CEPHALON, INC. $84,764 $51,891
======= =======
Cost of sales adjustments 30,470 (1) 28,892 (1)
Research and development adjustments 1,790 (2) -
Selling, general and administrative
adjustments 12,874 (3) -
Restructuring charges 1,245 (4) 1,565 (5)
Interest expense adjustment 12,965 (5) 16,667 (6)
Other (income) expense adjustment (32,608) (6) -
In-process research and development
adjustments 9,368 (7) -
Adjustment to noncontrolling interest (819) (8) -
Income tax adjustment (9,341) (9) (14,554) (9)
------ -------
25,944 32,570
ADJUSTED NET INCOME ATTRIBUTABLE TO
CEPHALON, INC. $110,708 $84,461
======== =======
BASIC ADJUSTED INCOME PER COMMON SHARE $1.56 $1.25
===== =====
DILUTED ADJUSTED INCOME PER COMMON SHARE $1.44 $1.13
===== =====
WEIGHTED AVERAGE NUMBER OF COMMON
SHARES OUTSTANDING 71,119 67,777
====== ======
WEIGHTED AVERAGE NUMBER OF COMMON
SHARES OUTSTANDING-ASSUMING DILUTION 76,629 74,852
====== ======
Notes to Reconciliation of GAAP Net Income to Adjusted Net Income
(1) To exclude the on-going amortization of acquired intangible assets
($23.0M in 2009; $26.8M in 2008), accelerated depreciation related to
restructuring ($4.5M in 2009; $2.1M in 2008) and the write-off of
purchase commitments in excess of estimated requirements ($3.0M in
2009).
(2) To exclude accelerated depreciation related to restructuring ($0.3M)
and charges related to our transaction with Arana Therapeutics Limited
($1.5M).
(3) To exclude charges related to the acquisition of Arana Therapeutics
Limited ($6.3M) and charges related to our settlement with Takeda
($6.5M) which resolves our remaining contractual arrangements.
(4) To exclude costs related to the CIMA restructuring.
(5) To exclude interest expense associated with the implementation of APB
14-1 ($13.0M in 2009; $13.0M in 2008) and accrued interest related to
the agreement in principle reached with the U.S. Attorney's Office in
Philadelphia ($3.7M in 2008).
(6) To exclude the following gains and losses related to the acquisition
of Arana Therapeutics Limited:
- $6.6M gain on pre-bid Arana holding;
- $2.8M loss on contingent consideration (90% ownership incentive
payment);
- $10.0M gain on excess of net assets over consideration;
- $13.7M gains on foreign exchange derivative instruments; and
- $5.1M foreign exchange gain on Australian Dollar acquisition funds.
(7) To exclude the impact of Acusphere deconsolidation.
(8) To exclude the portion of non-cash charges related to our acquisition
of Arana Therapeutics Limited that are reflected in adjustments (6)
above but do not affect net income because they are attributed to
noncontrolling interests.
(9) To reflect the tax effect of pre-tax adjustments at applicable tax
rates and certain other tax adjustments primarily related to; changes
in valuation allowances and other changes in tax assets and
liabilities ($11.9M in 2009; $9.8M in 2008), the applicable tax
impact related to the implementation of APB 14-1 ($4.6 in 2009; $4.7M
in 2008), and to exclude taxes on gains and costs related to the
acquisition of Arana Therapeutics ($10.1M in 2009).
CEPHALON, INC. AND SUBSIDIARIES
Reconciliation of GAAP Net Income to Adjusted Net Income
Attributable to Cephalon, Inc.
(Unaudited)
Six Months Ended
June 30,
2009 2008
---- ----
GAAP NET INCOME ATTRIBUTABLE TO
CEPHALON, INC. $143,347 $82,333
======== =======
Cost of sales adjustments 56,178 (1) 56,780 (1)
Research and development adjustments 3,086 (2) 7,754 (2)
Selling, general and administrative
adjustments 13,744 (3) 2,955 (3)
Restructuring charges 2,882 (4) 5,476 (5)
Interest expense adjustment 23,500 (5) 33,701 (6)
Other (income) expense adjustment (39,527) (6) -
In-process research and development
adjustments 40,118 (7) 10,000 (8)
Adjustment to noncontrolling interest (819) (8) -
Income tax adjustment (30,717) (9) (38,944) (9)
------- -------
68,445 77,722
ADJUSTED NET INCOME ATTRIBUTABLE TO
CEPHALON, INC. $211,792 $160,055
======== ========
BASIC ADJUSTED INCOME PER COMMON SHARE $3.03 $2.36
===== =====
DILUTED ADJUSTED INCOME PER COMMON SHARE $2.76 $2.17
===== =====
WEIGHTED AVERAGE NUMBER OF COMMON
SHARES OUTSTANDING 69,962 67,721
====== ======
WEIGHTED AVERAGE NUMBER OF COMMON
SHARES OUTSTANDING-ASSUMING DILUTION 76,808 74,569
====== ======
Notes to Reconciliation of GAAP Net Income to Adjusted Net Income
(1) To exclude the on-going amortization of acquired intangible assets
($44.2M in 2009; $53.0M in 2008) and accelerated depreciation related
to restructuring ($9.0M in 2009; $3.8M in 2008) and the write-off of
purchase commitments in excess of estimated requirements ($3.0M in
2009).
(2) To exclude accelerated depreciation related to restructuring ($0.6M in
2009), charges related to payments for several research and
development collaborations ($1.0M in 2009; $6.0M in 2008), charges
related to our transaction with Arana Therapeutics Limited ($1.5M in
2009) and other charges ($1.8M in 2008) related to employee severance
costs.
(3) In 2009, to exclude charges related to the acquisition of Arana
Therapeutics Limited ($7.2M) and charges related to our settlement
with Takeda ($6.5M) which resolves our remaining contractual
arrangements. In 2008, to exclude charges related to employee
severance costs.
(4) To exclude costs related to the CIMA restructuring.
(5) To exclude interest expense associated with the implementation of APB
14-1 ($23.5M in 2009; $26.3M in 2008) and accrued interest related to
the agreement in principle reached with the U.S. Attorney's Office in
Philadelphia ($7.5M in 2008).
(6) To exclude the following gains and losses related to the acquisition
of Arana Therapeutics Limited:
- $6.6M gain on pre-bid Arana holding;
- $2.8M loss on contingent consideration (90% ownership incentive
payment);
- $10.0M gain on excess of net assets over consideration;
- $19.0M gains on foreign exchange derivative instruments;
- $5.1M foreign exchange gain on Australian Dollar acquisition
funds; and
- $1.6M dividend income related to our initial purchase of Arana
shares.
(7) To exclude charges related to the deconsolidation of Acusphere
($9.3M), the acquisition of worldwide license rights related to
LUPUZOR from ImmuPharma ($30.0M) and license rights for bendamustine
hydrochloride in China and Hong Kong ($0.8M) in 2009 and the license
of Acusphere HDDS technology for use in oncology therapeutics in 2008.
(8) To exclude the portion of non-cash charges related to our acquisition
of Arana Therapeutics Limited that are reflected in adjustments (6)
above but do not affect net income because they are attributed to
noncontrolling interests.
(9) To reflect the tax effect of pre-tax adjustments at applicable tax
rates and certain other tax adjustments primarily related to; changes
in valuation allowances and other changes in tax assets and
liabilities ($31.8M in 2009; $29.3M in 2008), the applicable tax
impact related to the implementation of APB 14-1 ($8.3M in 2009; $9.6M
in 2008), and to exclude taxes on gains and costs related to the
acquisition of Arana Therapeutics ($8.0M in 2009).
CEPHALON, INC. AND SUBSIDIARIES
CONSOLIDATED SALES DETAIL
(In thousands)
(Unaudited)
Three Months Ended
June 30,
-----------------------------------------------------
2009 2008
---- ----
United United
States Europe Total States Europe Total
------- ------ ----- ------- ------ -----
Sales:
PROVIGIL $246,583 $15,485 $262,068 $218,942 $15,869 $234,811
NUVIGIL 16,786 - 16,786 - - -
GABITRIL 10,749 1,026 11,775 14,307 2,039 16,346
------ ----- ------ ------ ----- ------
CNS 274,118 16,511 290,629 233,249 17,908 251,157
ACTIQ 25,153 12,712 37,865 38,051 14,130 52,181
Generic
OTFC 23,390 - 23,390 28,958 - 28,958
FENTORA 30,617 814 31,431 36,374 - 36,374
AMRIX 30,867 - 30,867 17,119 - 17,119
------ --- ------ ------ --- ------
Pain 110,027 13,526 123,553 120,502 14,130 134,632
TREANDA 55,820 - 55,820 14,381 - 14,381
Other 4,193 22,168 26,361 4,380 25,372 29,752
----- ------ ------ ----- ------ ------
Oncology 60,013 22,168 82,181 18,761 25,372 44,133
Other 8,380 34,278 42,658 13,117 42,003 55,120
----- ------ ------ ------ ------ ------
$452,538 $86,483 $539,021 $385,629 $99,413 $485,042
======== ======= ======== ======== ======= ========
%
Increase
(Decrease)
----------
United
States Europe Total
------- ------ -----
Sales:
PROVIGIL 13% (2%) 12%
NUVIGIL - - -
GABITRIL (25) (50) (28)
CNS 18 (8) 16
ACTIQ (34) (10) (27)
Generic OTFC (19) - (19)
FENTORA (16) - (14)
AMRIX 80 - 80
Pain (9) (4) (8)
TREANDA 288 - 288
Other (4) (13) (11)
Oncology 220 (13) 86
Other (36) (18) (23)
17% (13%) 11%
Six Months Ended
June 30,
---------------------------------------------------------
2009 2008
---- ----
United United
States Europe Total States Europe Total
------- ------ ----- ------- ------ -----
Sales:
PROVIGIL $485,012 $30,418 $515,430 $417,411 $30,635 $448,046
NUVIGIL 16,786 - 16,786 - - -
GABITRIL 25,498 2,531 28,029 25,438 4,332 29,770
------ ----- ------ ------ ----- ------
CNS 527,296 32,949 560,245 442,849 34,967 477,816
ACTIQ 51,570 24,459 76,029 75,568 26,333 101,901
Generic
OTFC 47,502 - 47,502 56,276 - 56,276
FENTORA 63,907 1,237 65,144 75,307 - 75,307
AMRIX 57,104 - 57,104 26,887 - 26,887
------ --- ------ ------ --- ------
Pain 220,083 25,696 245,779 234,038 26,333 260,371
TREANDA 106,017 - 106,017 14,381 - 14,381
Other 9,519 43,200 52,719 9,568 47,642 57,210
----- ------ ------ ----- ------ ------
Oncology 115,536 43,200 158,736 23,949 47,642 71,591
Other 19,535 69,092 88,627 26,644 82,517 109,161
------ ------ ------ ------ ------ -------
$882,450 $170,937 $1,053,387 $727,480 $191,459 $918,939
======== ======== ========== ======== ======== ========
%
Increase
(Decrease)
----------
United
States Europe Total
------- ------ -----
Sales:
PROVIGIL 16% (1%) 15%
NUVIGIL - - -
GABITRIL - (42) (6)
CNS 19 (6) 17
ACTIQ (32) (7) (25)
Generic
OTFC (16) - (16)
FENTORA (15) - (13)
AMRIX 112 - 112
Pain (6) (2) (6)
TREANDA 637 - 637
Other (1) (9) (8)
Oncology 382 (9) 122
Other (27) (16) (19)
21% (11%) 15%
CEPHALON, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)
(Unaudited)
As adjusted
June 30 December 31,
2009 2008*
---- ----
CURRENT ASSETS:
Cash and cash equivalents $1,281,926 $524,459
Short term investments 122,701 -
Receivables, net 344,909 409,580
Inventory, net 239,785 117,297
Deferred tax assets, net 235,916 224,066
Other current assets 52,685 54,120
------ ------
Total current assets 2,277,922 1,329,522
INVESTMENTS 17,123 8,081
PROPERTY AND EQUIPMENT, net 462,207 467,449
GOODWILL 571,706 445,332
INTANGIBLE ASSETS, net 1,098,675 607,332
DEFERRED TAX ASSETS, net 2,605 46,074
DEBT ISSUANCE COSTS 21,351 11,838
OTHER ASSETS 30,143 167,314
------ -------
$4,481,732 $3,082,942
========== ==========
CURRENT LIABILITIES:
Current portion of long-term debt, net $799,832 $781,618
Accounts payable 91,187 87,079
Accrued expenses 314,737 304,415
------- -------
Total current liabilities 1,205,756 1,173,112
LONG-TERM DEBT 352,805 3,692
DEFERRED TAX LIABILITIES, net 219,396 77,932
OTHER LIABILITIES 168,314 163,123
------- -------
Total liabilities 1,946,271 1,417,859
--------- ---------
REDEEMABLE EQUITY 228,224 248,403
------- -------
EQUITY:
Cephalon Stockholders' Equity
Common stock, $0.01 par value 776 717
Additional paid-in capital 2,484,536 2,095,324
Treasury stock, at cost (201,734) (201,705)
Accumulated deficit (377,939) (521,286)
Accumulated other comprehensive income 91,948 43,630
------ ------
Total Cephalon stockholders' equity 1,997,587 1,416,680
Noncontrolling Interest 309,650 -
------- ---
Total equity 2,307,237 1,416,680
--------- ---------
$4,481,732 $3,082,942
========== ==========
* As adjusted for FASB Staff Position APB 14-1, "Accounting for
Convertible Debt Instruments That May Be Settled in Cash upon
Conversion (Including Partial Cash Settlement)" and SFAS No. 160,
"Noncontrolling Interests in Consolidated Financial Statements."
CEPHALON, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
Six Months Ended
June 30,
--------
As adjusted
2009 2008*
---- ------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $115,822 $82,333
Adjustments to reconcile net income to
net cash provided by operating activities:
Deferred income tax benefit (385) (12,218)
Depreciation and amortization 87,029 84,006
Stock-based compensation expense 24,840 21,894
Loss on disposals of property and
equipment - 1,031
Amortization of debt discount and
debt issuance costs 23,749 26,201
Gain on foreign exchange
contracts (26,754) -
Gain on acquisition of Arana (10,008) -
Acquired in-process research and
development from Acusphere
deconsolidation 8,366 -
Other (5,283) (418)
Changes in operating assets and
liabilities:
Receivables 74,211 (56,210)
Inventory (9,550) (7,933)
Other assets 31,479 (24,027)
Accounts payable, accrued
expenses and deferred revenues 1,493 (10,427)
Other liabilities (1,501) 16,418
------ ------
Net cash provided by operating
activities 313,508 120,650
------- -------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment (30,234) (42,898)
Acquisition of intangible assets - (25,575)
Cash balance from consolidation of variable
interest entity 52,563 -
Investment in Ception (75,000) -
Acquisition of Arana, net of cash
acquired (211,803) -
Purchases of investments (9,082) (6,242)
Proceeds from foreign exchange contract 26,754 -
Sales and maturities of available-for-sale
investments 4,456 7,596
----- -----
Net cash used for investing
activities (242,346) (67,119)
-------- -------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from sale of common stock 288,000 -
Proceeds from exercises of common stock
options 6,271 13,562
Windfall tax benefits from stock-based
compensation 197 480
Acquisition of treasury stock (29) (24)
Payments on and retirements of long-term
debt (9,131) (215,129)
Net proceeds from issuance of convertible
subordinated notes 484,738 -
Proceeds from sale of warrants 37,640 -
Purchase of convertible note hedge (121,040) -
-------- ---
Net cash provided by (used for)
financing activities 686,646 (201,111)
------- --------
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND
CASH EQUIVALENTS (341) 2,282
---- -----
NET INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS 757,467 (145,298)
CASH AND CASH EQUIVALENTS, BEGINNING OF
PERIOD 524,459 818,669
------- -------
CASH AND CASH EQUIVALENTS, END OF PERIOD $1,281,926 $673,371
========== ========
* As adjusted for FASB Staff Position APB 14-1, "Accounting for
Convertible Debt Instruments That May Be Settled in Cash upon
Conversion (Including Partial Cash Settlement)" and SFAS No. 160,
"Noncontrolling Interests in Consolidated Financial Statements."
CEPHALON, INC. AND SUBSIDIARIES
Reconciliation of Projected GAAP Basic Income per Common Share
to Basic Adjusted Income Per Common Share Guidance
(Unaudited)
Three Months Twelve Months
Ended Ended
September 30, December 31,
2009 2009
------------- -----------------
Projected GAAP basic income per
common share $1.01 - $1.11 $4.49 - $4.59
===== ===== ===== =====
Amortization of current intangibles $0.35 - $0.35 $1.33 - $1.33
Accelerated depreciation adjustment-
CIMA $0.02 - $0.02 $0.09 - $0.09
Accelerated depreciation adjustment-
Mitry-Mory $0.06 - $0.06 $0.21 - $0.21
Research and development
adjustments $- - $- $0.01 - $0.01
Selling, general and administrative
adjustments $- - $- $0.19 - $0.19
Cost of goods sold adjustments $- - $- $0.06 - $0.06
Restructuring adjustments $0.01 - $0.01 $0.07 - $0.07
Acquired in-process research and
development adjustments $- - $- $0.55 - $0.55
Other income (expense) adjustments $- - $- $(0.56) - $(0.56)
Interest expense adjustments $0.23 - $0.23 $0.80 - $0.80
Tax effect of pre-tax adjustments
at the applicable tax rates $(0.23) - $(0.23) $(0.94) - $(0.94)
------ ------ ------ ------
Basic adjusted income per common
share guidance $1.45 - $1.55 $6.30 - $6.40
===== ===== ===== =====
The company's guidance is being issued based on certain assumptions
including:
- Adjusted effective tax rate of approximately 34.0 percent in 2009; and
- Weighted average number of common shares outstanding of 74.9 and 72.5
million shares for the three months ended September 30, 2009 and the
twelve months ended December 31, 2009, respectively.
Source: Cephalon, Inc. |
