Cephalon Reports Record Sales and Earnings in Second Quarter 2010
--Quarterly Sales of $712 Million Increased 32 Percent --Quarterly Basic Adjusted EPS of $2.20 Increased 41 Percent --Ex-US Sales Exceed 25 Percent of Worldwide Sales for the First Time
FRAZER, Pa., July 27, 2010 /PRNewswire via COMTEX/ -- Cephalon, Inc. today reported second quarter 2010 sales of $712.4 million, a 32 percent increase compared to sales of $539.0 million for the second quarter 2009. Basic income per common share for the quarter was $1.18. Excluding amortization expense and certain other items, basic adjusted income per common share for the quarter was $2.20, an increase of 41 percent over the comparable figure of $1.56 for the same period in 2009. Adjusted net income for the second quarter of 2010 was $165.3 million, a 49 percent increase over the comparable $110.7 million for the second quarter of 2009.
Central nervous system (CNS) franchise sales were $337.9 million during the quarter, a 16 percent increase compared to the same period last year. Pain franchise reported sales were $113.1 million, an 8 percent decrease versus second quarter 2009. Oncology franchise sales were $129.9 million, a 58 percent increase over the same period last year due to strong sales of TREANDA(R) (bendamustine hydrochloride). Other product sales were $131.4 million dollars, an increase of 208 percent versus second quarter of 2009 due to the expansion of our European business.
"This was a momentous quarter as we significantly expanded our global capabilities with the addition of Mepha, continued to execute on our product life cycle strategies in the U.S. and advanced the most promising pipeline in our history," said Frank Baldino, Jr., Ph.D., Chairman and CEO.
The company is updating its guidance for 2010. Total sales guidance is $2.630-$2.710 billion. This includes CNS franchise sales of $1.25-$1.29 billion, pain franchise sales of $440-$475 million, oncology franchise sales of $485-$515 million, and other product sales of $440-$460 million. Full year R&D and SG&A guidance is $450-$470 million and $910-$930 million, respectively. Adjusted net income guidance is increased to $562-$577 million and basic adjusted income per common share guidance is increased to $7.45-$7.65 assuming 75.4 million basic shares outstanding.
For the third quarter 2010, Cephalon is introducing sales guidance of $670-$700 million, adjusted net income guidance of $135.9-$143.5 million and basic adjusted income per common share guidance of $1.80-$1.90.
Basic adjusted income per common share guidance for both the third quarter 2010 and full-year 2010 is reconciled below and is subject to the assumptions set forth therein. References in this press release to basic income per common share, basic adjusted income per common share, basic adjusted income per common share guidance, adjusted net income, adjusted net income guidance, adjusted net income per common share, adjusted net income per common share guidance refers to those metrics on an "attributable to Cephalon" basis and does not include any income or losses attributable to noncontrolling interests.
Cephalon's management will discuss the company's second quarter 2010 performance in a conference call with investors beginning at 5:00 p.m. U.S. EDT today. To participate in the conference call, dial +913-312-1497 and refer to conference code 3249552. Investors can listen to the call live by logging on to the company's website at www.cephalon.com and clicking on "Investor Information," then "Webcast." The conference call will be archived and available to investors for one week after the call.
About Cephalon, Inc.
Cephalon is a global biopharmaceutical company dedicated to discovering, developing and bringing to market medications to improve the quality of life of individuals around the world. Since its inception in 1987, Cephalon has brought first-in-class and best-in-class medicines to patients in several therapeutic areas. Cephalon has the distinction of being one of the world's fastest-growing biopharmaceutical companies, now among the Fortune 1000 and a member of the S&P 500 Index, employing approximately 4,000 people worldwide. The company sells numerous branded and generic products around the world. In total, Cephalon sells more than 150 products in nearly 100 countries. More information on Cephalon and its products is available at http://www.cephalon.com
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; sales, adjusted net income and basic adjusted income per common share guidance for the third quarter 2010 and full-year 2010 and SG&A and R&D guidance for the full-year 2010; 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:
Candace Steele Flippin Robert (Chip) Merritt
610-727-6231 610-738-6376
[email protected] [email protected]
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,
-------- --------
2010 2009 2010 2009
---- ---- ---- ----
REVENUES:
Net sales $712,435 $539,021 $1,289,116 $1,053,387
Other revenues 14,475 8,792 34,379 14,394
726,910 547,813 1,323,495 1,067,781
------- ------- --------- ---------
COSTS AND
EXPENSES:
Cost of sales 170,739 105,407 275,782 203,177
Research and
development 101,261 102,085 206,638 205,109
Selling, general
and
administrative 258,468 223,656 463,109 424,246
Restructuring
charges 4,581 1,245 5,325 2,882
Acquired in-
process research
and development - 9,368 - 40,118
535,049 441,761 950,854 875,532
------- ------- ------- -------
INCOME FROM
OPERATIONS 191,861 106,052 372,641 192,249
------- ------- ------- -------
OTHER INCOME
(EXPENSE):
Interest income 1,300 930 3,230 1,634
Interest expense (28,182) (20,114) (54,973) (36,718)
Other income
(expense), net (9,332) 32,104 (16,603) 38,643
------ ------ ------- ------
(36,214) 12,920 (68,346) 3,559
------- ------ ------- -----
INCOME BEFORE
INCOME TAXES 155,647 118,972 304,295 195,808
INCOME TAX
EXPENSE 63,254 46,932 111,565 79,986
------ ------ ------- ------
NET INCOME 92,393 72,040 192,730 115,822
NET LOSS (INCOME)
ATTRIBUTABLE TO
NONCONTROLLING
INTEREST (3,329) 12,724 6,899 27,525
------ ------ ----- ------
NET INCOME
ATTRIBUTABLE TO
CEPHALON, INC. $89,064 $84,764 $199,629 $143,347
======= ======= ======== ========
BASIC INCOME PER
COMMON SHARE
ATTRIBUTABLE TO
CEPHALON, INC. $1.18 $1.19 $2.66 $2.05
===== ===== ===== =====
DILUTED INCOME
PER COMMON SHARE
ATTRIBUTABLE TO
CEPHALON, INC. $1.11 $1.11 $2.46 $1.87
===== ===== ===== =====
WEIGHTED AVERAGE
NUMBER OF COMMON
SHARES
OUTSTANDING
ATTRIBUTABLE TO
CEPHALON, INC. 75,192 71,119 75,092 69,962
====== ====== ====== ======
WEIGHTED AVERAGE
NUMBER OF COMMON
SHARES
OUTSTANDING-
ASSUMING
DILUTION
ATTRIBUTABLE TO
CEPHALON, INC. 80,507 76,629 81,223 76,808
====== ====== ====== ======
CEPHALON, INC. AND SUBSIDIARIES
Reconciliation of GAAP Net Income to Adjusted Net Income Attributable
to Cephalon, Inc.
(Unaudited)
Three Months
Ended
June 30,
--------
2010 2009
---- ----
GAAP NET INCOME ATTRIBUTABLE TO
CEPHALON, INC. $89,064 $84,764
======= =======
Cost of sales adjustments 52,209 (1) 30,470 (1)
Research and development adjustments 317 (2) 1,790 (2)
Selling, general and administrative
adjustments 9,225 (3) 12,874 (3)
Restructuring charges 4,581 (4) 1,245 (4)
Interest expense adjustment 18,476 (5) 12,965 (5)
Other (income) expense adjustment 5,398 (6) (32,608) (6)
In-process research and development
adjustments - 9,368 (7)
Arana noncontrolling interest
adjustments - (819) (8)
Income tax adjustment (14,017) (9) (9,341) (9)
*Noncontrolling Interest adjustments:
Other revenues - (75)
Research and development (2,018) 9,993
Selling, general and administrative 200 1,795
Other income (expense) 1 (99)
Interest income - (73)
Interest expense (3) 221
Income taxes (2,658) 24
Less amount attributable to
noncontrolling interest 4,478 (11,786)
----- -------
76,189 25,944
ADJUSTED NET INCOME ATTRIBUTABLE TO
CEPHALON, INC. $165,253 $110,708
======== ========
BASIC ADJUSTED INCOME PER COMMON SHARE $2.20 $1.56
===== =====
DILUTED ADJUSTED INCOME PER COMMON
SHARE $2.05 $1.44
===== =====
WEIGHTED AVERAGE NUMBER OF COMMON
SHARES OUTSTANDING 75,192 71,119
====== ======
WEIGHTED AVERAGE NUMBER OF COMMON
SHARES OUTSTANDING-ASSUMING DILUTION 80,507 76,629
====== ======
* Amounts recorded by our Variable Interest Entities that have been
excluded from net income attributable to
Cephalon, Inc.
Notes to Reconciliation of GAAP Net Income to Adjusted Net Income
(1) To exclude the on-going amortization of acquired intangible
assets ($32.2M in 2010; $23.0M in 2009),
accelerated depreciation related to restructuring ($5.5M in 2010;
$4.5M in 2009), amortization of inventory
revaluation related to Mepha ($5.0M in 2010) and the write-off of
modafinil purchase commitments in excess of
estimated requirements ($9.4M in 2010; $3.0M in 2009).
(2) To exclude accelerated depreciation related to restructuring
($0.3M in 2010 and 2009) and charges related
to our transaction with Arana Therapeutics Limited ($1.5M in 2009).
(3) In 2010, to exclude charges related to the acquisition of Mepha
($7.9M) and the acquisition of Ception
noncontrolling interest ($1.4M). In 2009, to exclude charges related
to the acquisition of Arana Therapeutics
Limited ($6.3M) and charges related to our settlement with Takeda
($6.5M) to resolve our remaining
contractual arrangements.
(4) To exclude costs related to restructurings.
(5) To exclude imputed interest expense associated with convertible
debt.
(6) In 2010, to exclude the following losses related to the
acquisition of Mepha AG:
- $2.9M loss on foreign exchange derivative instruments; and
- $2.5M loss on foreign exchange of Swiss Franc acquisition funds.
In 2009, 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 gain on foreign exchange of 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 (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.
CEPHALON, INC. AND SUBSIDIARIES
Reconciliation of GAAP Net Income to Adjusted Net Income Attributable
to Cephalon, Inc.
(Unaudited)
Six Months Ended
June 30,
--------
2010 2009
---- ----
GAAP NET INCOME ATTRIBUTABLE TO
CEPHALON, INC. $199,629 $143,347
======== ========
Cost of sales adjustments 83,175 (1) 56,178 (1)
Research and development adjustments 676 (2) 3,086 (2)
Selling, general and administrative
adjustments 11,502 (3) 13,744 (3)
Restructuring charges 5,325 (4) 2,882 (4)
Interest expense adjustment 36,055 (5) 23,500 (5)
Other (income) expense adjustment 11,567 (6) (39,527) (6)
In-process research and development
adjustments - 40,118 (7)
Arana noncontrolling interest
adjustments - (819) (8)
Income tax adjustment (38,690) (9) (30,717) (9)
*Noncontrolling Interest adjustments:
Other revenues (31) 33
Research and development 6,094 19,224
Selling, general and administrative 3,222 6,546
Other income (expense) 166 (95)
Interest income (7) (145)
Interest expense 154 1,000
Income taxes (3,848) 24
Less amount attributable to
noncontrolling interest (5,750) (26,587)
------ -------
109,610 68,445
ADJUSTED NET INCOME ATTRIBUTABLE TO
CEPHALON, INC. $309,239 $211,792
======== ========
BASIC ADJUSTED INCOME PER COMMON
SHARE $4.12 $3.03
===== =====
DILUTED ADJUSTED INCOME PER COMMON
SHARE $3.81 $2.76
===== =====
WEIGHTED AVERAGE NUMBER OF COMMON
SHARES OUTSTANDING 75,092 69,962
====== ======
WEIGHTED AVERAGE NUMBER OF COMMON
SHARES OUTSTANDING-ASSUMING DILUTION 81,223 76,808
====== ======
* Amounts recorded by our Variable Interest Entities that have been
excluded from net income attributable
to Cephalon, Inc.
Notes to Reconciliation of GAAP Net Income to Adjusted Net Income
(1) To exclude the on-going amortization of acquired intangible
assets ($58.0M in 2010; $44.2M in 2009),
accelerated depreciation related to restructuring ($10.7M in 2010;
$9.0M in 2009), amortization of inventory
revaluation related to Mepha ($5.0M in 2010) and the write-off of
modafinil purchase commitments in
excess of estimated requirements ($9.4M in 2010; $3.0M in 2009).
(2) To exclude accelerated depreciation related to restructuring
($0.7M in 2010; $0.6M in 2009), charges
related to payments for several research and development
collaborations ($1.0M in 2009) and charges
related to our transaction with Arana Therapeutics Limited ($1.5M in
2009).
(3) In 2010, to exclude charges related to the acquisition of Mepha
($10.1M) and the acquisition of Ception
noncontrolling interest ($1.4M). 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) to resolve our remaining
contractual arrangements.
(4) To exclude costs related to restructurings.
(5) To exclude imputed interest expense associated with convertible
debt.
(6) In 2010, to exclude the following losses related to the
acquisition of Mepha AG:
- $9.1M loss on foreign exchange derivative instruments; and
-$2.5M loss on foreign exchange of Swiss Franc acquisition funds.
In 2009, 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 gain on foreign exchange of 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.
(8) To exclude the portion of non-cash charges related to our
acquisition of Arana Therapeutics Limited that
are reflected in (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.
CEPHALON, INC. AND SUBSIDIARIES
CONSOLIDATED SALES DETAIL
(In thousands)
(Unaudited)
Three Months Ended
June 30,
--------
2010
----
United
States Europe Total
------- ------ -----
Net Sales:
PROVIGIL $268,550 $16,280 $284,830
NUVIGIL 40,968 - 40,968
GABITRIL 11,118 1,024 12,142
------ ----- ------
CNS 320,636 17,304 337,940
ACTIQ 14,471 14,067 28,538
Generic OTFC 11,535 - 11,535
FENTORA 38,861 5,661 44,522
AMRIX 28,548 - 28,548
------ --- ------
Pain 93,415 19,728 113,143
TREANDA 99,732 - 99,732
Other 6,253 23,926 30,179
----- ------ ------
Oncology 105,985 23,926 129,911
Other 5,941 125,500 131,441
----- ------- -------
$525,977 $186,458 $712,435
======== ======== ========
Three Months Ended
June 30,
--------
2009
----
United
States Europe Total
------- ------ -----
Net Sales:
PROVIGIL $246,583 $15,485 $262,068
NUVIGIL 16,786 - 16,786
GABITRIL 10,749 1,026 11,775
------ ----- ------
CNS 274,118 16,511 290,629
ACTIQ 18,759 19,106 37,865
Generic OTFC 23,390 - 23,390
FENTORA 30,617 814 31,431
AMRIX 30,867 - 30,867
------ --- ------
Pain 103,633 19,920 123,553
TREANDA 55,820 - 55,820
Other 4,193 22,168 26,361
----- ------ ------
Oncology 60,013 22,168 82,181
Other 8,380 34,278 42,658
----- ------ ------
$446,144 $92,877 $539,021
======== ======= ========
%
Increase
(Decrease)
----------
United
States Europe Total
------- ------ -----
Net Sales:
PROVIGIL 9% 5% 9%
NUVIGIL 144 - 144
GABITRIL 3 - 3
CNS 17 5 16
ACTIQ (23) (26) (25)
Generic OTFC (51) - (51)
FENTORA 27 595 42
AMRIX (8) - (8)
Pain (10) (1) (8)
TREANDA 79 - 79
Other 49 8 14
Oncology 77 8 58
Other (29) 266 208
18% 101% 32%
Six Months Ended
June 30,
--------
2010
----
United
States Europe Total
------- ------ -----
Net Sales:
PROVIGIL $513,151 $34,130 $547,281
NUVIGIL 75,890 - 75,890
GABITRIL 19,417 2,486 21,903
------ ----- ------
CNS 608,458 36,616 645,074
ACTIQ 29,411 32,558 61,969
Generic OTFC 24,314 - 24,314
FENTORA 77,341 9,390 86,731
AMRIX 53,683 - 53,683
------ --- ------
Pain 184,749 41,948 226,697
TREANDA 180,989 - 180,989
Other 10,808 48,124 58,932
------ ------ ------
Oncology 191,797 48,124 239,921
Other 15,401 162,023 177,424
------ ------- -------
$1,000,405 $288,711 $1,289,116
========== ======== ==========
Six Months Ended
June 30,
--------
2009
----
United
States Europe Total
------- ------ -----
Net Sales:
PROVIGIL $485,012 $30,418 $515,430
NUVIGIL 16,786 - 16,786
GABITRIL 25,498 2,531 28,029
------ ----- ------
CNS 527,296 32,949 560,245
ACTIQ 40,171 35,858 76,029
Generic OTFC 47,502 - 47,502
FENTORA 63,907 1,237 65,144
AMRIX 57,104 - 57,104
------ --- ------
Pain 208,684 37,095 245,779
TREANDA 106,017 - 106,017
Other 9,519 43,200 52,719
----- ------ ------
Oncology 115,536 43,200 158,736
Other 19,535 69,092 88,627
------ ------ ------
$871,051 $182,336 $1,053,387
======== ======== ==========
%
Increase
(Decrease)
----------
United
States Europe Total
------- ------ -----
Net Sales:
PROVIGIL 6% 12% 6%
NUVIGIL 352 - 352
GABITRIL (24) (2) (22)
CNS 15 11 15
ACTIQ (27) (9) (18)
Generic OTFC (49) - (49)
FENTORA 21 659 33
AMRIX (6) - (6)
Pain (11) 13 (8)
TREANDA 71 - 71
Other 14 11 12
Oncology 66 11 51
Other (21) 135 100
15% 58% 22%
CEPHALON, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)
(Unaudited)
December
June 30 31,
2010 2009
---- ----
CURRENT ASSETS:
Cash and cash equivalents $927,446 $1,647,635
Receivables, net 460,265 376,076
Inventory, net 293,679 240,576
Deferred tax assets, net 224,651 243,246
Other current assets 62,724 58,423
------ ------
Total current assets 1,968,765 2,565,956
INVESTMENTS 12,583 12,427
PROPERTY AND EQUIPMENT, net 499,578 451,879
GOODWILL 802,551 590,284
INTANGIBLE ASSETS, net 1,210,810 981,857
DEBT ISSUANCE COSTS 16,529 18,862
OTHER ASSETS 35,078 36,830
$4,545,894 $4,658,095
========== ==========
CURRENT LIABILITIES:
Current portion of long-term
debt, net $635,932 $818,925
Accounts payable 99,674 88,829
Accrued expenses 467,200 430,209
------- -------
Total current liabilities 1,202,806 1,337,963
LONG-TERM DEBT 378,116 363,696
DEFERRED TAX LIABILITIES, net 206,855 159,328
OTHER LIABILITIES 268,472 111,728
------- -------
Total liabilities 2,056,249 1,972,715
--------- ---------
REDEEMABLE EQUITY 186,155 207,307
------- -------
EQUITY:
Cephalon Stockholders' Equity
Common stock, $0.01 par value 784 780
Additional paid-in capital 2,388,730 2,534,070
Treasury stock, at cost (216,597) (208,427)
Accumulated earnings (deficit) 20,970 (178,659)
Accumulated other comprehensive
income 46,159 114,194
Total Cephalon stockholders'
equity 2,240,046 2,261,958
Noncontrolling Interest 63,444 216,115
------ -------
Total equity 2,303,490 2,478,073
$4,545,894 $4,658,095
========== ==========
CEPHALON, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
Six Months Ended
June 30,
--------
2010 2009
---- ----
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $192,730 $115,822
Adjustments to reconcile net income
to net cash provided by operating
activities:
Deferred income tax benefit (18,059) (385)
Depreciation and
amortization 106,724 87,029
Stock-based compensation
expense 21,630 24,840
Amortization of debt
discount and debt issuance
costs 35,692 23,749
Loss (gain) on foreign
exchange contracts 9,499 (26,754)
Gain on acquisition of Arana - (10,008)
IPR&D from Acusphere
deconsolidation - 8,366
Other 3,193 (5,283)
Changes in operating assets and
liabilities:
Receivables (25,581) 74,211
Inventory 18,985 (9,550)
Other assets 9,474 31,479
Accounts payable, accrued
expenses and deferred
revenues 23,955 1,493
Other liabilities (189) (1,501)
---- ------
Net cash provided by
operating activities 378,053 313,508
------- -------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and
equipment (22,997) (30,234)
Cash balance from
consolidation of variable
interest entity - 52,563
Investment in Ception - (75,000)
Acquisition of Arana, net of
cash acquired - (211,803)
Acquisition of Mepha, net of
cash acquired (549,463) -
Purchases of investments (60) (9,082)
(Cash settlements of)
proceeds from foreign
exchange contracts (9,499) 26,754
Sales and maturities of
available-for-sale
investments - 4,456
--- -----
Net cash used for investing
activities (582,019) (242,346)
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from sale of common
stock - 288,000
Proceeds from exercises of
common stock options 14,370 6,271
Windfall tax benefits from
stock-based compensation - 197
Acquisition of treasury
stock (33) (29)
Acquisition of Ception NCI (299,289) -
Payments on and retirements
of long-term debt (221,478) (9,131)
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 (used for) provided
by financing activities (506,430) 686,646
-------- -------
EFFECT OF EXCHANGE RATE
CHANGES ON CASH AND CASH
EQUIVALENTS (9,793) (341)
------ ----
NET (DECREASE) INCREASE IN
CASH AND CASH EQUIVALENTS (720,189) 757,467
CASH AND CASH EQUIVALENTS,
BEGINNING OF PERIOD 1,647,635 524,459
--------- -------
CASH AND CASH EQUIVALENTS,
END OF PERIOD $927,446 $1,281,926
======== ==========
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,
2010 2010
-------------- -------------
Projected GAAP basic
income per common share $1.33 - $1.43 $5.31 - $5.51
===== ===== ===== =====
Amortization of current
intangibles $0.41 - $0.41 $1.55 - $1.55
Accelerated depreciation
adjustment- CIMA $0.02 - $0.02 $0.09 - $0.09
Accelerated depreciation
adjustment- Mitry-
Mory $- - $- $0.10 - $0.10
Cost of sales
adjustments $0.07 - $0.07 $0.26 - $0.26
Selling, general and
administrative
adjustments $- - $- $0.15 - $0.15
Restructuring
adjustments $0.01 - $0.01 $0.04 - $0.04
Other income (expense)
adjustments $- - $- $0.15 - $0.15
Interest expense
adjustments $0.20 - $0.20 $0.88 - $0.88
Tax effect of pre-tax
adjustments at the
applicable tax rates $(0.24) - $(0.24) $(1.08) - $(1.08)
------ ------ ------ ------
Basic adjusted income
per common share
guidance $1.80 - $1.90 $7.45 - $7.65
The company's guidance is being issued based on certain assumptions
including:
-Adjusted effective tax rate of approximately 33.3 percent in 2010;
and
-Weighted average number of common shares outstanding of 75.5 and
75.4 million shares for
the three months ended September 30, 2010 and the twelve months ended
December 31, 2010,
respectively.