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Warner Chilcott Reports Operating Results for the Quarter Ended June 30, 2012
Revenue Growth in Several Key Promoted Products and Lower SG&A Drive Growth in Adjusted Cash Net Income
DUBLIN, Ireland, August 3, 2012 Warner Chilcott plc (NASDAQ: WCRX) today announced its results for the quarter ended June 30, 2012.
Total revenue in the quarter ended June 30, 2012 was $638 million, a decrease of $32 million, or 5%, compared to the quarter ended June 30, 2011. For the quarter ended June 30, 2012, the decrease in revenues as compared to the prior year quarter was primarily driven by a decrease in ACTONEL revenues of $43 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. We reported net sales growth in certain promoted products, primarily LO LOESTRIN FE, ESTRACE Cream and ATELVIA. Combined, net sales of these three products increased $39 million, or 68%, compared to the prior year quarter.
We reported GAAP net income of $53 million, or $0.21 per diluted share, in the quarter ended June 30, 2012, compared with GAAP net income of $72 million, or $0.28 per diluted share, in the prior year quarter. Cash net income (or CNI, as defined below) for the quarter ended June 30, 2012 was $278 million, compared to $221 million in the prior year quarter. Adjusted CNI was $258 million in the quarter ended June 30, 2012, an increase of $19 million, or 8%, compared to adjusted CNI of $239 million in the prior year quarter. In computing adjusted CNI for the quarter ended June 30, 2012 we excluded a gain of $20 million, net of tax, relating to the reversal of the liability for contingent milestone payments to Novartis Pharmaceuticals Corporation (Novartis) in connection with our acquisition of the U.S. rights to ENABLEX in October 2010, based on the determination that it was no longer probable that we would be required to make such payments. In computing adjusted CNI for the quarter ended June 30, 2011 we excluded $15 million of costs, net of tax, relating to the restructuring of certain of our Western European operations and $3 million of charges, net of tax, in cost of sales relating to the repurposing of our Manati manufacturing facility.
References in this press release to cash net income or CNI mean our GAAP 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, the repurposing of our Manati facility and the impact of the gain relating to the reversal of the liability for contingent milestone payments. 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.
Events Impacting Our Results
Western European Restructuring and Repurposing of the Manati Facility
In April 2011, we announced a plan to restructure our operations in Belgium, the Netherlands, France, Germany, Italy, Spain, Switzerland and the United Kingdom. In connection with the restructuring, we have moved to a wholesale distribution model in the affected jurisdictions to minimize operational costs going forward. The implementation of the restructuring plan impacted 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 quarter ended June 30, 2012, pretax severance costs of $7 million resulting from the Western European restructuring were offset in full by pension-related curtailment gains of $7 million in the quarter ended June 30, 2012, and these amounts were included as a component of restructuring costs in our condensed consolidated statement of operations. In the quarter ended June 30, 2011, we recorded restructuring costs of $16 million ($15 million, net of tax) 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 June 30, 2011, we recorded $3 million ($3 million, net of tax) of expenses relating to the repurposing of our Manati facility, which were included as a component of cost of sales.
The following information was filed by Warner Chilcott Plc (WCRX) on Friday, August 3, 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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