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Warner Chilcott Reports Operating Results for the Quarter Ended March 31, 2012
Revenue Growth in Several Key Promoted Products and Lower SG&A Drive Growth in Adjusted Cash Net Income
DUBLIN, Ireland, May 4, 2012 Warner Chilcott plc (NASDAQ: WCRX) today announced its results for the quarter ended March 31, 2012.
Total revenue in the quarter ended March 31, 2012 was $685 million, a decrease of $72 million, or 10%, compared to the quarter ended March 31, 2011. For the quarter ended March 31, 2012, the decrease in revenues as compared to the prior year quarter was primarily driven by a decrease in ACTONEL revenues of $86 million, due in large part to overall declines in the U.S. oral bisphosphonate market as well as the continued declines in ACTONEL rest of world (ROW) net sales following the 2010 loss of exclusivity in Western Europe. The decrease was offset, in part, by revenue growth in certain other products, primarily ASACOL, LO LOESTRIN FE, ESTRACE Cream and ATELVIA. Combined, net sales of these products increased $76 million, or 33%, compared to the prior year quarter.
We reported GAAP net income of $113 million, or $0.45 per diluted share, in the quarter ended March 31, 2012, compared with a net (loss) of $(24) million, or $(0.10) per diluted share, in the prior year quarter. Cash net income (or CNI, as defined below) for the quarter ended March 31, 2012 was $249 million, compared to $197 million in the prior year quarter. Adjusted CNI was $291 million in the quarter ended March 31, 2012, an increase of $25 million, or 9%, compared to adjusted CNI of $266 million in the prior year quarter. In computing adjusted CNI for the quarter ended March 31, 2012 we excluded $42 million of costs, net of tax, related to the restructuring of certain of our Western European operations. In computing adjusted CNI for the quarter ended March 31, 2011 we excluded $41 million of costs, net of tax, related to the restructuring of certain of our Western European operations and $28 million of charges in cost of sales related to the repurposing of our Manati manufacturing facility.
References in this press release to cash net income or CNI mean our net income adjusted for the after-tax effects of two non-cash items: amortization (including impairments, if any) of intangible assets and amortization (including write-offs, if any) of deferred loan costs related to our debt. Adjusted CNI represents CNI as further adjusted to exclude certain after-tax impacts from the Western European restructuring and the repurposing of our Manati facility. Reconciliations from our reported results in accordance with Generally Accepted Accounting Principles in the U.S. (GAAP) to CNI, adjusted CNI and adjusted earnings before interest, taxes, depreciation and amortization (Adjusted EBITDA) for all periods presented are included in the tables at the end of this press release.
Western European Restructuring and Repurposing of the Manati Facility
In April 2011, we announced a plan to restructure our operations to move to a wholesale distribution model and minimize our operational costs in Belgium, the Netherlands, France, Germany, Italy, Spain, Switzerland and the United Kingdom. The implementation of the restructuring plan impacts approximately 500 employees in total. In April 2011, we also announced a plan to repurpose our Manati manufacturing facility, which was completed in the year ended December 31, 2011.
In the quarters ended March 31, 2012 and 2011 we recorded costs of $50 million ($42 million, net of tax) and $43 million ($41 million, net of tax), respectively, as a result of the Western European restructuring, which were included as a component of restructuring costs in our condensed consolidated statement of operations. In addition, in the quarter ended March 31, 2011, we recorded $28 million of expenses related to the repurposing of our Manati facility ($28 million, net of tax), which were included as a component of cost of sales. In computing adjusted CNI for the quarters ended March 31, 2012 and 2011, we added back to CNI the after tax impact of the restructuring and repurposing costs. Although we do not expect to record any additional expenses relating to the Western European restructuring in future periods, as a result of the expected timing of the termination of employees, we anticipate recording approximately $10 million of pension-related curtailment gains as a component of restructuring costs throughout the remainder of 2012, which will be excluded in calculating adjusted CNI for the relevant periods.
The following information was filed by Warner Chilcott Plc (WCRX) on Friday, May 4, 2012 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-Q Quarterly Report statement of earnings and operation as management may choose to highlight particular information in the press release.
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