Hospira Reports Second-Quarter 2010 Results
Maintains sales and adjusted* earnings projections for 2010 --
LAKE FOREST, Ill., July 28, 2010 /PRNewswire via COMTEX/ --
Hospira, Inc. (NYSE: HSP), a leading global specialty pharmaceutical and medication delivery company, today reported results for the second quarter ended June 30, 2010. Net sales for the quarter were $968 million, and adjusted* diluted earnings per share were $0.86. (Adjusted* measures exclude certain specified items as described later in this press release and the attached schedules.)
"Hospira delivered another solid quarter, driven by strong performance in our Specialty Injectable Pharmaceuticals business and by continued momentum of our Project Fuel optimization initiatives," said Christopher B. Begley, chairman and chief executive officer. "We made significant progress in advancing our business during the quarter, launching our first product from Hospira India, commercializing our second biosimilar product in Europe and strengthening our position in acute-care proprietary pharmaceuticals. We are highly focused on executing our strategy of investing for growth and improving margins and cash flow, as well as on driving quality improvements across our global manufacturing organization. We remain on track to achieve our full-year earnings projections."
Second-Quarter 2010 Results
The following table highlights selected financial results for the second quarter of 2010 compared to the same period in 2009:
In $ millions, GAAP Adjusted*
except per Three Months Ended Three Months Ended
share amounts June 30, June 30,
------------------ % ------------------ %
2010 2009 Change 2010 2009 Change
------- ------- ------ ------- ------- ------
Net Sales $968.2 $956.9 1.2% n/a n/a n/a
Gross Profit
(Net Sales
less Cost of
Products Sold) $369.2 $346.2 6.6% $416.8 $365.8 13.9%
Income from
Operations $116.3 $91.1 27.7% $213.1 $176.7 20.6%
Diluted EPS $0.49 $0.16 206.3% $0.86 $0.73 17.8%
Statistics (as a % of Net Sales)
--------------------------------
Gross Profit
(Net Sales
less Cost of
Products Sold) 38.1% 36.2% 43.0% 38.2%
Operating
Income 12.0% 9.5% 22.0% 18.5%
Results under U.S. Generally Accepted Accounting Principles (GAAP) include items as detailed in the schedules attached to this press release.
Net sales increased 1.2 percent to $968 million in the second quarter of 2010, compared to $957 million in the second quarter of 2009. Strong sales in Specialty Injectable Pharmaceuticals, resulting from the U.S. sales of the generic oncolytic oxaliplatin and Precedex(TM), Hospira's proprietary sedation agent, were primarily offset by a decline in Medication Management Systems as a result of the company's voluntary hold on shipments of its Symbiq(TM) Infusion System to new customers.
Adjusted* income from operations increased 20.6 percent to $213 million in the second quarter of 2010, compared to $177 million in the second quarter of 2009. Driving the majority of the increase were more favorable product mix and improved manufacturing efficiency from the company's Project Fuel optimization initiatives, offset by charges associated with certain quality and product-related matters.
The effective tax rate on an adjusted basis* in the quarter was 23.8 percent, up from the second-quarter 2009 rate of 21.5 percent. The increase is primarily related to the expiration of certain U.S. tax credits in 2010 as well as a shift in earnings mix to higher tax jurisdictions relative to the second quarter of 2009.
Cash Flow
Cash flow from operations for the first six months of 2010 was $144 million, compared to the $236 million generated for the same period in 2009. The decrease primarily reflects the timing of chargeback payments associated with the U.S. sales of oxaliplatin, increased inventory levels and higher U.S. income tax payments.
Capital expenditures were $79 million for the first six months of 2010, compared to $78 million for the first six months of 2009.
2010 Projections
Hospira is maintaining guidance for net sales growth of approximately 3 to 5 percent on a constant-currency basis. Including the impact of foreign exchange, the company currently expects net sales growth to also be 3 to 5 percent.
Hospira is maintaining its adjusted* diluted earnings per share projection for full-year 2010, which is expected to range between $3.35 and $3.45 per share.
The reconciliation between the projected 2010 adjusted* diluted earnings per share and GAAP diluted earnings per share follows:
Diluted earnings per share -- adjusted* $3.35 - $3.45
-------------
Estimated charges related to Project Fuel
initiatives (mid-point of an estimated range of
$0.06 to $0.08 per diluted share) ($0.07)
Estimated charges related to facilities optimization
initiatives (mid-point of an estimated range of
$0.04 to $0.06 per diluted share) ($0.05)
Estimated $67 million for the amortization of
intangibles related to the acquisitions of
Mayne Pharma, the specialty injectable business
of Orchid Chemicals & Pharmaceuticals
and Javelin Pharmaceuticals ($0.25)
Estimated acquisition and integration-related charges
associated with the Orchid and Javelin acquisitions
(mid-point of an estimated range of $0.06 to
$0.08 per diluted share) ($0.07)
Certain quality and product-related charges
(mid-point of an estimated range of
$0.18 to $0.24 per diluted share) ($0.21)
Litigation settlement and related charges ($0.05)
Initial research and development milestone charge
associated with a partnered proprietary
pharmaceutical product ($0.10)
-------------
Diluted earnings per share -- GAAP $2.55 - $2.65
=============
The adjusting items are shown net of tax in aggregate of $83 million, which is calculated for the specified adjustments stated above, based on the statutory tax rate in the various tax jurisdictions in which the items are expected to occur.
The company now expects cash flow from operations to range between $525 million and $575 million. The projected range for depreciation and amortization remains unchanged at $250 million to $260 million, as does the projected range for capital expenditures, at $195 million to $215 million.
*Use of Non-GAAP Financial Measures
Adjusted measures used in this press release are reconciled to the most comparable measures calculated in accordance with GAAP in the schedules attached to this release. For more information regarding these non-GAAP financial measures, please see Hospira's Current Report on Form 8-K furnished to the Securities and Exchange Commission on the date of this press release.
Webcast/Complementary Material
Hospira will hold a conference call for investors and media at 8 a.m. Central time on Wednesday, July 28, 2010. A live webcast of the conference call will be available on Hospira's Web site at www.hospirainvestor.com. Listeners should log on approximately 10 minutes in advance to ensure proper setup for receiving the webcast. In addition, complementary information will be available on the presentations page of the Investor Relations Web site at the beginning of the conference call. A replay will be available on the Hospira Web site for 30 days following the call.
About Hospira
Hospira, Inc. is a global specialty pharmaceutical and medication delivery company dedicated to Advancing Wellness(TM). As the world leader in specialty generic injectable pharmaceuticals, Hospira offers one of the broadest portfolios of generic acute-care and oncology injectables, as well as integrated infusion therapy and medication management solutions. Through its products, Hospira helps improve the safety, cost and productivity of patient care. The company is headquartered in Lake Forest, Ill., and has approximately 13,500 employees. Learn more at www.hospira.com.
Private Securities Litigation Reform Act of 1995 --
A Caution Concerning Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including projections of certain measures of Hospira's results of operations, projections of certain charges and expenses, and other statements regarding Hospira's goals and strategy. Hospira cautions that these forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from those indicated in the forward-looking statements. Economic, competitive, governmental, regulatory, legal, technological and other factors that may affect Hospira's operations and may cause actual results to be materially different from expectations include the risks, uncertainties and factors discussed under the headings "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" in Hospira's latest Annual Report on Form 10-K and subsequent Forms 10-Q, filed with the Securities and Exchange Commission, which are incorporated by reference. Hospira undertakes no obligation to release publicly any revisions to forward-looking statements as the result of subsequent events or developments.
Hospira, Inc.
Condensed Consolidated Statements of Income
(Unaudited)
(dollars and shares in millions, except for per share amounts)
Three Months Ended
June 30,
-------------- %
2010 2009 Change
------ ------ -------
Net sales $968.2 $956.9 1.2 %
------ ------
Cost of products sold 599.0 610.7 (1.9)%
Restructuring, impairment and (gain)
on disposition of assets, net 2.6 55.9 (95.3)%
Research and development 80.4 52.9 52.0 %
Selling, general and administrative 169.9 146.3 16.1 %
------ ------
Total operating costs and expenses 851.9 865.8 (1.6)%
------ ------
Income From Operations 116.3 91.1 27.7 %
Interest expense 24.2 28.2 (14.2)%
Other (income) expense, net (0.8) 14.5 (105.5)%
------ ------
Income Before Income Taxes 92.9 48.4 91.9 %
Income tax expense 9.4 22.9 (59.0)%
------ ------
Net Income $83.5 $25.5 227.5 %
====== ======
Earnings Per Common Share:
Basic $0.50 $0.16 212.5 %
====== ======
Diluted $0.49 $0.16 206.3 %
====== ======
Weighted Average Common Shares Outstanding:
Basic 165.8 160.5 3.3 %
====== ======
Diluted 169.1 162.4 4.1 %
====== ======
Adjusted Gross Profit (1)(2) $416.8 $365.8 13.9 %
Adjusted Income From Operations (1) $213.1 $176.7 20.6 %
Adjusted Net Income (1) $144.7 $118.2 22.4 %
Adjusted Diluted Earnings Per Share (1) $0.86 $0.73 17.8 %
Statistics (as a % of net sales,
except for income tax rate):
GAAP Adjusted (1)
Three Months Ended Three Months Ended
June 30, June 30,
------------------ ------------------
2010 2009 2010 2009
-------- -------- -------- --------
Gross Profit (2) 38.1 % 36.2 % 43.0 % 38.2 %
Income From Operations 12.0 % 9.5 % 22.0 % 18.5 %
Net Income 8.6 % 2.7 % 14.9 % 12.4 %
Income Tax Rate 10.1 % 47.3 % 23.8 % 21.5 %
(1) Adjusted financial measures exclude certain specified items as
described and reconciled to comparable GAAP financial measures in the
Reconciliation of GAAP to Non-GAAP Financial Measures contained in
this press release.
(2) Gross profit is defined as Net sales less Cost of products sold.
Adjusted gross profit excludes certain specified items, as indicated
in the previous footnote.
Hospira, Inc.
Condensed Consolidated Statements of Income
(Unaudited)
(dollars and shares in millions, except for per share amounts)
Six Months Ended
June 30,
------------------ %
2010 2009 Change
-------- -------- -------
Net sales $1,975.8 $1,816.6 8.8 %
-------- --------
Cost of products sold 1,176.3 1,150.8 2.2 %
Restructuring, impairment and (gain)
on disposition of assets, net (5.0) 65.3 (107.7)%
Research and development 132.1 102.9 28.4 %
Selling, general and administrative 348.5 291.8 19.4 %
-------- --------
Total operating costs and expenses 1,651.9 1,610.8 2.6 %
-------- --------
Income From Operations 323.9 205.8 57.4 %
Interest expense 47.6 55.1 (13.6)%
Other (income) expense, net (2.5) 14.2 (117.6)%
-------- --------
Income Before Income Taxes 278.8 136.5 104.2 %
Income tax expense (benefit) 53.6 (54.5) (198.3)%
-------- --------
Net Income $225.2 $191.0 17.9 %
======== ========
Earnings Per Common Share:
Basic $1.36 $1.19 14.3 %
======== ========
Diluted $1.34 $1.18 13.6 %
======== ========
Weighted Average Common Shares Outstanding:
Basic 165.0 160.0 3.1 %
======== ========
Diluted 168.5 161.5 4.3 %
======== ========
Adjusted Gross Profit (1)(2) $871.5 $705.4 23.5 %
Adjusted Income From Operations (1) $453.0 $326.6 38.7 %
Adjusted Net Income (1) $304.1 $215.0 41.4 %
Adjusted Diluted Earnings Per Share (1) $1.80 $1.33 35.3 %
Statistics (as a % of net sales,
except for income tax rate):
GAAP Adjusted (1)
Six Months Ended Six Months Ended
June 30, June 30,
------------------ ------------------
2010 2009 2010 2009
-------- -------- -------- --------
Gross Profit (2) 40.5 % 36.7 % 44.1 % 38.8 %
Income From Operations 16.4 % 11.3 % 22.9 % 18.0 %
Net Income 11.4 % 10.5 % 15.4 % 11.8 %
Income Tax Rate 19.2 % (39.9)% 25.5 % 21.5 %
(1) Adjusted financial measures exclude certain specified items as
described and reconciled to comparable GAAP financial measures in the
Reconciliation of GAAP to Non-GAAP Financial Measures contained in
this press release.
(2) Gross profit is defined as Net sales less Cost of products sold.
Adjusted gross profit excludes certain specified items, as indicated
in the previous footnote.
Hospira, Inc.
Reconciliation of GAAP to Non-GAAP Financial Measures
(Unaudited)
(dollars and shares in millions, except for per share amounts)
Three months ended June 30, 2010 Reconciliation of GAAP to Non-GAAP
Financial Measures:
-------------------------------------------------------------------
Income
Gross From Net Diluted
Profit(1) Operations Income(2) EPS
-------- ---------- -------- -------
GAAP financial measures $369.2 $116.3 $83.5 $0.49
Specified items:
Project Fuel and related
charges (A) 4.0 11.1 7.4 0.05
Facilities Optimization
charges (B) 2.1 2.5 1.8 0.01
Amortization of certain
intangible assets (C) 15.7 15.7 9.6 0.06
Certain quality and product
related charges (D) 25.8 25.8 16.6 0.10
Acquisition and integration-
related charges (E) - 0.2 0.1 -
Litigation settlement and
related charges (F) - 14.0 8.5 0.05
Research and development
charge (G) - 27.5 17.2 0.10
-------- ---------- -------- -------
Adjusted financial measures (3) $416.8 $213.1 $144.7 $0.86
======== ========== ======== =======
GAAP results for the three months ended June 30, 2010 include:
A -- Project Fuel and related charges: $4.0 million reported in Cost of
products sold, $2.2 million reported in Restructuring, impairment and
(gain) on disposition of assets, net, $0.1 million reported in
Research and development and $4.8 million reported in Selling,
general and administrative. Project Fuel initiatives include costs
for process optimization implementation, severance and other employee
benefits, exit costs and other asset charges.
B -- Facilities Optimization charges: $2.1 million reported in Cost of
products sold and $0.4 million reported in Restructuring, impairment
and (gain) on disposition of assets, net. These charges relate to
facilities optimization from the closure or departure from certain
manufacturing and research and development ("R&D") facilities and
include costs for severance and other employee benefits, accelerated
depreciation and relocation of production and R&D operations.
C -- Amortization of certain intangible assets reported in Cost of
products sold resulting from acquisitions including Mayne Pharma
Limited ("Mayne Pharma") and a generic injectable business by Hospira
Healthcare India Private Limited ("Hospira India").
D -- Certain quality and product related charges reported in Cost of
products sold primarily include third party oversight and consulting
costs and penalties for failure to supply certain product to
customers. These charges are directly associated with Hospira's
response to the United States Food and Drug Administration ("FDA")
Warning Letter received in April 2010.
E -- Acquisition and integration-related charges: $1.2 million reported in
Research and development and $(1.0) million reported in Selling,
general and administrative. These charges include acquisition and
integration costs resulting from acquisitions including Javelin
Pharmaceuticals, Inc. ("Javelin Pharma") and a generic injectable
business by Hospira India.
F -- Retractable Technologies, Inc. ("RTI") litigation settlement and
related charges reported in Selling, general and administrative.
G -- Research and development charge resulting from an initial payment
related to an agreement with DURECT and corresponding milestone
reached for development of a long-acting local anesthetic product
that has not yet achieved regulatory approval.
Three months ended June 30, 2009 Reconciliation of GAAP to Non-GAAP
Financial Measures:
-------------------------------------------------------------------
Income
Gross From Net Diluted
Profit(1) Operations Income(2) EPS
-------- ---------- -------- -------
GAAP financial measures $346.2 $91.1 $25.5 $0.16
Specified items:
Project Fuel and related
charges (A) 4.8 67.6 64.0 0.40
Facilities Optimization
charges (B) 0.4 3.6 2.4 0.01
Amortization of certain
intangible assets (C) 14.4 14.4 9.7 0.06
Impairment of marketable
equity securities (D) - - 16.6 0.10
-------- ---------- -------- -------
Adjusted financial measures (3) $365.8 $176.7 $118.2 $0.73
======== ========== ======== =======
GAAP results for the three months ended June 30, 2009 include:
A -- Project Fuel and related charges: $4.8 million reported in Cost of
products sold, $52.7 million reported in Restructuring, impairment
and (gain) on disposition of assets, net, $0.9 million reported in
Research and development and $9.2 million reported in Selling,
general and administrative. Project Fuel initiatives include costs
for severance and other employee benefits, process optimization
implementation, other asset charges, exit costs and charges
associated with certain non-strategic businesses and underlying
assets committed for disposal and the related inventory, property and
equipment, allocated goodwill and intangible assets.
B -- Facilities Optimization charges: $0.4 million reported in Cost of
products sold and $3.2 million reported in Restructuring, impairment
and (gain) on disposition of assets, net. These charges relate to
facilities optimization from the closure or departure from certain
manufacturing and R&D facilities and include costs for severance and
other employee benefits, accelerated depreciation and relocation of
production and R&D operations.
C -- Amortization of certain intangible assets resulting from the
acquisition of Mayne Pharma reported in Cost of products sold.
D -- Impairment of marketable equity securities is reported in Other
(income) expense, net.
(1) Gross profit is defined as Net sales less Cost of products sold.
(2) Specified items are shown net of tax of $35.7 million and $9.5 million
for the three months ended June 30, 2010 and 2009, respectively, based
on the statutory tax rate in the various tax jurisdictions in which
the items occurred.
(3) The Non-GAAP financial measures contained in this press release
(including adjusted gross profit, adjusted income from operations,
adjusted net income and adjusted diluted Earnings Per Share) adjust
for certain specified items. All Non-GAAP financial measures are
intended to supplement the applicable GAAP measures and should not be
considered in isolation from, or a replacement for, financial measures
prepared in accordance with GAAP. Refer to Hospira's filing on Form
8-K filed on July 28, 2010 for additional information.
Hospira, Inc.
Reconciliation of GAAP to Non-GAAP Financial Measures
(Unaudited)
(dollars and shares in millions, except for per share amounts)
Six months ended June 30, 2010 Reconciliation of GAAP to Non-GAAP
Financial Measures:
-----------------------------------------------------------------
Income
Gross From Net Diluted
Profit(1) Operations Income(2) EPS
-------- ---------- -------- -------
GAAP financial measures $799.5 $323.9 $225.2 $1.34
Specified items:
Project Fuel and related
charges (A) 7.7 9.7 2.8 0.02
Facilities Optimization
charges (B) 4.1 5.5 3.9 0.02
Amortization of certain
intangible assets (C) 34.4 34.4 22.2 0.13
Certain quality and product
related charges (D) 25.8 25.8 16.6 0.10
Acquisition and integration-
related charges (E) - 12.2 7.7 0.04
Litigation settlement and
related charges (F) - 14.0 8.5 0.05
Research and development
charge (G) - 27.5 17.2 0.10
-------- ---------- -------- -------
Adjusted financial measures (3) $871.5 $453.0 $304.1 $1.80
======== ========== ======== =======
GAAP results for the six months ended June 30, 2010 include:
A -- Project Fuel and related charges: $7.7 million reported in Cost of
products sold, $5.0 million reported in Restructuring, impairment and
(gain) on disposition of assets, net, $0.3 million reported in
Research and development and $8.1 million reported in Selling,
general and administrative. Project Fuel initiatives include costs
for process optimization implementation, severance and other employee
benefits, exit costs and other asset charges. These charges are
offset by a $11.4 million gain reported in Restructuring, impairment
and (gain) on disposition of assets, net related to the disposal of
the non-strategic net assets associated with the Wasserburg, Germany,
facility.
B -- Facilities Optimization charges: $4.1 million reported in Cost of
products sold and $1.4 million reported in Restructuring, impairment
and (gain) on disposition of assets, net. These charges relate to
facilities optimization from the closure or departure from certain
manufacturing and R&D facilities and include costs for severance and
other employee benefits, accelerated depreciation and relocation of
production and R&D operations.
C -- Amortization of certain intangible assets reported in Cost of
products sold resulting from acquisitions including Mayne Pharma and
a generic injectable business by Hospira India.
D -- Certain quality and product related charges reported in Cost of
products sold primarily include third party oversight and consulting
costs and penalties for failure to supply certain product to
customers. These charges are directly associated with Hospira's
response to the FDA Warning Letter received in April 2010.
E -- Acquisition and integration-related charges: $2.2 million reported in
Research and development and $10.0 million reported in Selling,
general and administrative. These charges include acquisition and
integration costs resulting from acquisitions including Javelin
Pharma and a generic injectable business by Hospira India.
F -- RTI litigation settlement and related charges reported in Selling,
general and administrative.
G -- Research and development charge resulting from an initial payment
related to an agreement with DURECT and corresponding milestone
reached for development of a long-acting local anesthetic product
that has not yet achieved regulatory approval.
Six months ended June 30, 2009 Reconciliation of GAAP to Non-GAAP
Financial Measures:
-----------------------------------------------------------------
Income
Gross From Net Diluted
Profit(1) Operations Income(2) EPS
-------- ---------- -------- -------
GAAP financial measures $665.8 $205.8 $191.0 $1.18
Specified items:
Project Fuel and related
charges (A) 4.8 78.1 70.5 0.44
Facilities Optimization
charges (B) 7.4 15.3 10.1 0.06
Amortization of certain
intangible assets (C) 27.4 27.4 18.7 0.12
Impairment of marketable
equity securities (D) - - 16.6 0.10
Resolution of IRS tax
audit benefit (E) - - (91.9) (0.57)
-------- ---------- -------- -------
Adjusted financial measures (3) $705.4 $326.6 $215.0 $1.33
======== ========== ======== =======
GAAP results for the six months ended June 30, 2009 include:
A -- Project Fuel and related charges: $4.8 million reported in Cost of
products sold, $57.4 million reported in Restructuring, impairment
and (gain) on disposition of assets, $1.3 million reported in
Research and development and $14.6 million reported in Selling,
general and administrative. Project Fuel initiatives include costs
for severance and other employee benefits, process optimization
implementation, other asset charges, exit costs and charges
associated with certain non-strategic businesses and underlying
assets committed for disposal and the related inventory, property and
equipment, allocated goodwill and intangible assets.
B -- Facilities Optimization charges: $7.4 million reported in Cost of
products sold and $7.9 million reported in Restructuring, impairment
and (gain) on disposition of assets, net. These charges relate to
facilities optimization from the closure or departure from certain
manufacturing and R&D facilities and include costs for severance and
other employee benefits, accelerated depreciation and relocation of
production and R&D operations.
C -- Amortization of certain intangible assets resulting from the
acquisition of Mayne Pharma reported in Cost of products sold.
D -- Impairment of marketable equity securities is reported in Other
(income) expense, net.
E -- Resolution of IRS tax audit benefit of $91.9 million reported in
Income tax expense (benefit). This discrete income tax benefit is
related to the completion and effective settlement of U.S. tax return
audits.
(1) Gross profit is defined as Net sales less Cost of products sold.
(2) Specified items are shown net of tax of $50.5 million and $113.4
million for the six months ended June 30, 2010 and 2009, respectively,
based on the statutory tax rate in the various tax jurisdictions in
which the items occurred.
(3) The Non-GAAP financial measures contained in this press release
(including adjusted gross profit, adjusted income from operations,
adjusted net income and adjusted diluted Earnings Per Share) adjust
for certain specified items. All Non-GAAP financial measures are
intended to supplement the applicable GAAP measures and should not be
considered in isolation from, or a replacement for, financial measures
prepared in accordance with GAAP. Refer to Hospira's filing on Form
8-K filed on July 28, 2010 for additional information.
Hospira, Inc.
Condensed Consolidated Balance Sheets
(Unaudited)
(dollars in millions)
June 30, December 31,
Assets 2010 2009
-------- --------
Current Assets:
Cash and cash equivalents $783.3 $946.0
Trade receivables, less allowances of
$9.1 in 2010 and $6.2 in 2009 613.0 498.1
Inventories 794.2 755.4
Deferred income taxes 171.2 185.9
Prepaid expenses 44.4 34.3
Other receivables 105.0 41.5
Assets held for sale - 65.0
-------- --------
Total Current Assets 2,511.1 2,526.2
-------- --------
Property and equipment, net 1,211.5 1,147.8
Intangible assets, net 469.8 406.5
Goodwill 1,366.1 1,243.4
Deferred income taxes 56.2 54.5
Investments 50.5 49.3
Other assets 65.9 75.2
-------- --------
Total Assets $5,731.1 $5,502.9
======== ========
Liabilities and Shareholders' Equity
Current Liabilities:
Short-term borrowings $23.8 $23.6
Trade accounts payable 253.0 229.5
Salaries, wages and commissions 115.6 176.5
Other accrued liabilities 447.2 438.4
Liabilities related to assets held for sale - 13.9
-------- --------
Total Current Liabilities 839.6 881.9
-------- --------
Long-term debt 1,717.4 1,707.3
Deferred income taxes 16.3 18.6
Post-retirement obligations and other
long-term liabilities 277.2 271.4
Commitments and Contingencies
-------- --------
Total Shareholders' Equity 2,880.6 2,623.7
-------- --------
Total Liabilities and Shareholders' Equity $5,731.1 $5,502.9
======== ========
Hospira, Inc.
Condensed Consolidated Statements of Cash Flows
(Unaudited)
(dollars in millions)
Six Months Ended
June 30,
---------------
2010 2009
------ ------
Cash Flow From Operating Activities:
Net income $225.2 $191.0
Adjustments to reconcile net income to net cash from
operating activities-
Depreciation 79.9 83.2
Amortization of intangible assets 40.2 30.7
Stock-based compensation expense 27.8 22.7
Deferred income tax and other tax adjustments 12.1 (98.3)
Impairment and other asset (benefits) charges (5.9) 69.7
Gain on disposition of assets (11.4) -
Changes in assets and liabilities-
Trade receivables (126.7) (2.8)
Inventories (41.9) (6.3)
Prepaid expenses and other assets (12.6) (11.4)
Trade accounts payable 34.0 (32.8)
Other liabilities (94.7) (18.2)
Other, net 17.8 8.5
------ ------
Net Cash Provided by Operating Activities 143.8 236.0
------ ------
Cash Flow From Investing Activities:
Capital expenditures (including instruments placed
with or leased to customers) (79.4) (77.8)
Acquisitions, net of cash acquired, and payments for
contingent consideration (397.7) (14.2)
Purchases of intangibles and other investments (11.2) (3.2)
Proceeds on disposition of assets 62.6 -
------ ------
Net Cash Used in Investing Activities (425.7) (95.2)
------ ------
Cash Flow From Financing Activities:
Issuance of long-term debt, net of fees paid - 246.7
Repayment of long-term debt - (306.1)
Other borrowings, net (3.5) 0.7
Excess tax benefit from stock-based compensation
arrangements 16.3 0.2
Proceeds from stock options exercised 112.4 35.4
------ ------
Net Cash Provided by (Used in) Financing
Activities 125.2 (23.1)
------ ------
Effect of exchange rate changes on cash and cash
equivalents (6.0) 7.0
------ ------
Net change in cash and cash equivalents (162.7) 124.7
Cash and cash equivalents at beginning of period 946.0 483.8
------ ------
Cash and cash equivalents at end of period $783.3 $608.5
====== ======
Supplemental Cash Flow Information:
Cash paid during the period-
Interest $50.3 $54.8
Income taxes, net of refunds $70.9 $18.7
Hospira, Inc.
Net Sales by Product Line
(Unaudited)
(dollars in millions)
Three Months Ended June 30,
----------------------------------
% Change % Change
at at
Actual Constant
Currency Currency
2010 2009 Rates Rates (1)
------ ------ -------- --------
Americas--
Pharmaceuticals
Specialty Injectables $453.0 $368.5 22.9 % 21.6 %
Other Pharma 122.9 139.4 (11.8)% (12.3)%
------ ------
575.9 507.9 13.4 % 12.3 %
Devices
Medication Management Systems 120.4 152.2 (20.9)% (21.9)%
Other Devices 84.8 91.6 (7.4)% (8.8)%
------ ------
205.2 243.8 (15.8)% (17.0)%
Total Americas 781.1 751.7 3.9 % 2.8 %
Europe, Middle East & Africa--
Pharmaceuticals
Specialty Injectables 67.3 68.1 (1.2)% 4.3 %
Other Pharma 24.9 35.4 (29.7)% (27.1)%
------ ------
92.2 103.5 (10.9)% (6.5)%
Devices
Medication Management Systems 16.5 17.5 (5.7)% 0.6 %
Other Devices 12.1 17.4 (30.5)% (24.7)%
------ ------
28.6 34.9 (18.1)% (12.0)%
Total Europe, Middle East & Africa 120.8 138.4 (12.7)% (7.9)%
Asia Pacific--
Pharmaceuticals
Specialty Injectables 54.1 53.0 2.1 % (7.9)%
Other Pharma 1.8 2.7 (33.3)% (44.4)%
------ ------
55.9 55.7 0.4 % (9.7)%
Devices
Medication Management Systems 5.5 4.9 12.2 % 4.1 %
Other Devices 4.9 6.2 (21.0)% (27.4)%
------ ------
10.4 11.1 (6.3)% (13.5)%
Total Asia Pacific 66.3 66.8 (0.7)% (10.3)%
------ ------
Net Sales $968.2 $956.9 1.2 % 0.3 %
====== ======
Global--
Pharmaceuticals
Specialty Injectables $574.4 $489.6 17.3 % 16.0 %
Other Pharma 149.6 177.5 (15.7)% (15.8)%
------- ------
724.0 667.1 8.5 % 7.5 %
Devices
Medication Management Systems 142.4 174.6 (18.4)% (19.0)%
Other Devices 101.8 115.2 (11.6)% (12.2)%
------- ------
244.2 289.8 (15.7)% (16.3)%
------- ------
Net Sales $968.2 $956.9 1.2 % 0.3 %
======= ======
Six Months Ended June 30,
------------------------------------
% Change % Change
at at
Actual Constant
Currency Currency
2010 2009 Rates Rates (1)
-------- -------- -------- --------
Americas--
Pharmaceuticals
Specialty Injectables $936.9 $701.6 33.5 % 31.8 %
Other Pharma 248.3 277.2 (10.4)% (10.9)%
-------- --------
1,185.2 978.8 21.1 % 19.7 %
Devices
Medication Management Systems 246.8 273.6 (9.8)% (11.5)%
Other Devices 164.9 184.0 (10.4)% (11.8)%
-------- --------
411.7 457.6 (10.0)% (11.6)%
Total Americas 1,596.9 1,436.4 11.2 % 9.7 %
Europe, Middle East & Africa--
Pharmaceuticals
Specialty Injectables 137.2 125.7 9.1 % 8.3 %
Other Pharma 43.5 63.1 (31.1)% (31.4)%
-------- --------
180.7 188.8 (4.3)% (5.0)%
Devices
Medication Management Systems 35.6 36.6 (2.7)% (2.5)%
Other Devices 27.0 34.2 (21.1)% (21.3)%
-------- --------
62.6 70.8 (11.6)% (11.6)%
Total Europe, Middle East & Africa 243.3 259.6 (6.3)% (6.8)%
Asia Pacific--
Pharmaceuticals
Specialty Injectables 111.7 92.0 21.4 % 3.5 %
Other Pharma 3.9 6.3 (38.1)% (49.2)%
-------- --------
115.6 98.3 17.6 % 0.1 %
Devices
Medication Management Systems 10.8 9.6 12.5 % 2.1 %
Other Devices 9.2 12.7 (27.6)% (36.2)%
-------- --------
20.0 22.3 (10.3)% (19.7)%
Total Asia Pacific 135.6 120.6 12.4 % (3.6)%
-------- --------
Net Sales $1,975.8 $1,816.6 8.8 % 6.5 %
======== ========
Global--
Pharmaceuticals
Specialty Injectables $1,185.8 $919.3 29.0 % 25.8 %
Other Pharma 295.7 346.6 (14.7)% (15.3)%
-------- --------
1,481.5 1,265.9 17.0 % 14.5 %
Devices
Medication Management Systems 293.2 319.8 (8.3)% (10.0)%
Other Devices 201.1 230.9 (12.9)% (14.6)%
-------- --------
494.3 550.7 (10.2)% (11.9)%
-------- --------
Net Sales $1,975.8 $1,816.6 8.8 % 6.5 %
======== ========
(1) The Non-GAAP financial measures contained in this press release
include comparisons at constant currency rates (reflecting comparative
local currency balances at prior period foreign exchange rates), which
we define as current period net sales excluding the impact of the
change in foreign exchange rates less prior period reported net sales
divided by prior period reported net sales. This financial measure
provides information on the change in net sales assuming that foreign
currency exchange rates have not changed between the prior and the
current period. Management believes the use of this financial measure
aids in the understanding of our change in net sales without the
impact of foreign currency. All Non-GAAP financial measures are
intended to supplement the applicable GAAP measures and should not be
considered in isolation from, or a replacement for, financial measures
prepared in accordance with GAAP.
SOURCE Hospira, Inc.