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|Contacts:||Vincent J. Milano|
|Vice President, COO, CFO and Treasurer|
|Phone (610) 321-6225|
|Director, Corporate Communications|
|Phone (610) 321-6288|
Reports 2005 Financial Results and Provides Guidance
Exton, PA, February 28, 2006 VIROPHARMA INCORPORATED (Nasdaq: VPHM) reported today its financial results for the fourth quarter and twelve months ended December 31, 2005.
Net sales of Vancocin® were a record $40.3 million for the fourth quarter of 2005 and $125.9 million for the twelve months of 2005. This compares to $8.3 million for the fourth quarter of 2004. Sales during the 2004 periods are not comparable to the 2005 periods as the Company acquired Vancocin from Eli Lilly and Company in November 2004. Unaudited net sales of Vancocin for twelve months of 2004 were $54.0 million.
Operating income in the fourth quarter and twelve months ended December 31, 2005 was $28.2 million and $88.1 million, respectively, compared to operating income in the fourth quarter of 2004 of $9.8 million and operating loss in the twelve months of 2004 of $12.0 million. The improvements in operating results from 2004 to 2005 were driven primarily by sales of Vancocin and the related cost of sales.
The Company recorded an income tax benefit of $47.8 million in the fourth quarter of December 31, 2005 to establish deferred tax assets. In addition, for the twelve months of 2005, the Company recorded $10.0 million in income tax expense. These two items resulted in a net income tax benefit for the year of $37.8 million.
Net income in the fourth quarter and year ended December 31, 2005 was $72.7 million and $113.7 million, respectively, compared to net income of $5.8 million and net loss of $19.5 million for the same periods in 2004. Net income per share for the quarter ended December 31, 2005 was $1.21 per share, basic, and $1.17 per share, diluted, compared to a net income of $0.22 per share, basic and diluted, for the same period in 2004. Net income per share for the year ended December 31, 2005 was $2.56 per share, basic, and $2.02 per share, diluted, compared to a net loss of $0.73 per share, basic and diluted, for the same period in 2004.
The primary drivers of the improved results were the effects of operating income and the income tax benefit of establishing deferred tax assets in 2005, partially offset by debt-related costs. The $47.8 million of income tax benefit that was recorded to establish net deferred tax assets increased net income for the fourth quarter of 2005 by $0.80 per share, basic, and $0.76 per share, diluted, and for the twelve months of 2005 by $1.08 per share, basic, and $0.83 per share, diluted. The Company currently does not anticipate income tax benefits of this magnitude in the foreseeable future. Due to the recognition of the deferred tax assets in 2005, the Company currently expects, for financial statement purposes, an effective income tax rate of 38 percent in 2006.
The following information was filed by Viropharma Inc (VPHM) on Tuesday, February 28, 2006 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-K Annual Report statement of earnings and operation as management may choose to highlight particular information in the press release.
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