Alpharma Announces First Quarter 2001 Results

Revenue Increases 26% / Net Income Increases 6.5%



Apr 30, 2001, 01:00 ET from Alpharma Inc.

    FORT LEE, N.J., April 30 /PRNewswire/ -- Alpharma Inc. (NYSE:   ALO), a
 growing specialty pharmaceutical company with expanding global leadership
 positions in products for humans and animals, today announced financial
 results for the first quarter ended March 31, 2001.
     For the first quarter, revenue increased 26% to $234.8 million from
 $186.1 million in 2000.  The May 2000 Roche Medicated Feed Additive
 acquisition contributed revenue of approximately $48 million for the quarter
 and the negative impact of foreign currency translation lowered revenue for
 the first quarter of 2001 by approximately $7 million.  Net income for the
 first quarter of 2001 increased 6.5% to $11.0 million compared to
 $10.4 million in 2000.  Diluted earnings per share in 2001 were $.27 per share
 compared to $.33 per share for last year.  Diluted shares used for calculating
 earnings per share were 47.3 million in 2001 compared to 36.7 million in 2000.
     The Company has previously disclosed that it expected earnings per share
 to be lower in the first quarter of 2001 compared to 2000 due primarily to the
 negative impact of lower U.K. pricing and related volume declines in the
 Company's International Human Pharmaceuticals business, softness in U.S.
 poultry and some international livestock markets and lower than estimated
 earnings from new animal pharmaceutical products.
     Overall, Human Pharmaceuticals revenue increased 5% and operating income
 declined 17%.  In the Company's U.S. Human Pharmaceutical business, revenue
 increased 50% and operating income increased 64%.  Higher volume and new
 products drove the strong U.S. performance.  The higher operating income was
 achieved despite an almost doubling in R&D expense for the quarter.  In the
 Company's Fine Chemicals business, revenue increased 7% and operating income
 increased 34%.  The Fine Chemicals operating income increase was primarily
 attributable to higher volume, improved fermentation yields and leveraging of
 operating expenses.  In International Human Pharmaceuticals, revenues and
 operating income were lower in 2001 compared to 2000 by 18% and 58%
 respectively.  Unfavorable currency translation accounted for about 40% of the
 $15 million revenue decrease.  Lower U.K. pricing and related lower volume
 account for the remainder of the revenue decline and virtually the entire
 decline in operating income.
     Overall, Animal Pharmaceuticals revenue increased 97% and operating income
 increased 87%.  Excluding Roche, revenue declined 20% or about $8 million.
 Unfavorable market conditions in the U.S. poultry and some international
 livestock markets, which based upon the Company's view of the market are
 temporary, were the major cause of the decline.
     Commenting on the announcement, Ingrid Wiik, President and Chief Executive
 Officer of Alpharma said, "The quarter was obviously disappointing with
 respect to the areas we have highlighted.  We should, however, not lose sight
 of the positive developments which include strong performance by U.S.
 Pharmaceuticals and Fine Chemicals, overall performance, excluding the U.K.,
 in line with expectations for International Pharmaceuticals, and performance
 above expectations in the aggregate of our Animal Pharmaceuticals business
 excluding U.S. poultry and new products."
 
     Outlook
     Continuing with comments on the Company's outlook, Ms. Wiik said, "As we
 have previously disclosed, we have re-evaluated our view of the remainder of
 2001 as a direct result of our first quarter results and the continuing impact
 of softness in certain poultry and livestock markets, slower market
 penetration for new Animal Pharmaceuticals products and unfavorable U.K.
 pricing trends.  These negatives caused us to reduce our estimate of operating
 income for the remainder of 2001 by approximately $10 million for Animal
 Pharmaceuticals market softness, $7 million for slower market acceptance of
 new Animal Pharmaceuticals products and $6 million for International
 Pharmaceuticals pricing."
     "We are reaffirming that full year 2001 revenue should be in excess of
 $1 billion, net income should increase and be about $75 million and earnings
 per share should be approximately $1.70.  On a quarterly basis, we estimate
 that the second quarter earnings per share will be approximately the same as
 we report for the first quarter.  We now estimate that earnings per share in
 the second half of this year should grow about 20% compared to last year.
 Because of the uncertainty of the timing of the factors that we expect will
 influence the second half, we are not prepared to give specific guidance on
 the third and fourth quarters at this time.  However, our estimates indicate
 that both quarters should exceed last year's reported amounts."
     "While the operating income reductions already discussed are fully
 reflected in our new estimates for the second half of 2001, these estimates
 are also based upon the occurrence of the following positive business
 developments. We believe that our Human Pharmaceuticals business will exhibit
 continued strong growth in revenue and operating profit in both U.S.
 Pharmaceuticals and Fine Chemicals.  In International Pharmaceuticals, even
 with lower pricing, based upon market estimates for growth in all of our key
 markets, we expect a stronger second half than last year.  In Animal
 Pharmaceuticals, we are performing well and in line with original 2001
 estimates in swine and cattle, which in total make up over 50% of our business
 and we see no change in our outlook for the remainder of the year in these
 areas.  As regards poultry, based upon industry outlooks predicting poultry
 price recovery as well as conversations with customers relating to the use of
 our products, we believe the conditions will improve beginning in the third
 quarter and that the improvement will continue through the remainder of the
 year. Additionally new products in all businesses are expected to make a
 stronger contribution in the second half.  Finally, our entire Human
 Pharmaceuticals and Animal Pharmaceuticals businesses have historically strong
 second half performance based upon seasonal factors."
 
     Conference Call
     The call will be open to all interested parties including analysts,
 institutional investors, individuals and the media.  The call may be accessed
 by using the following information:
 
                             CONFERENCE CALL ACCESS
 
                Domestic Dial In:       800-231-9012
                International Dial In:  719-457-2617
                Participant Code:       774251
 
     The call will also be webcast live in a "listen only" mode via the
 Internet at http://www.streetevents.com.  In addition, for those unable to
 participate at the time of the call, a rebroadcast will be available following
 the call from Tuesday, May 1, 2001 at 7:00 PM Eastern Daylight Time until
 Friday, May 4, 2001 at midnight.  The rebroadcast may be accessed on the
 Internet at http://www.streetevents.com or by telephone using the following
 information:
 
                               REBROADCAST ACCESS
 
                Domestic Dial In:       888-203-1112
                International Dial In:  719-457-0820
                Participant Code:       774251
 
     Alpharma Inc. (NYSE:   ALO) is a growing specialty pharmaceutical company
 with expanding global leadership positions in products for humans and animals.
 Uniquely positioned to expand internationally, Alpharma is presently active in
 more than 60 countries.  Alpharma is the largest manufacturer of generic
 liquid and topical pharmaceuticals in the U.S. and one of the largest
 manufacturers of generic solid dose pharmaceuticals in Europe, with a growing
 presence in Southeast Asia.  Alpharma is among the world's leading producers
 of several important pharmaceutical-grade bulk antibiotics and is
 internationally recognized as a leading provider of pharmaceutical products
 for poultry, swine, cattle, and vaccines for farmed-fish worldwide.
 
     Statements made in this press release include forward-looking statements
 within the meaning of the Private Securities Litigation Reform Act of 1995.
 These statements include, but are not limited to, the statement made in the
 Outlook section herein.  Forward-looking statements involve risks and
 uncertainties that could cause actual results to differ materially from those
 stated in the forward-looking statements.  Risks and uncertainties include,
 but are not limited to, those risks described in this press release, the "Risk
 Factors' section of the Company's 10-K report for the year ended December 31,
 2000 and in the Company's Form  10-Q for the quarter ended March 31, 2001,
 which is expected to be filed by May 14, 2001.
 
     All Alpharma press releases are also available at our website:
 http://www.alpharma.com
 
     If you would like to receive future Alpharma press releases via e-mail
 please contact: investorrelations@alpharma.com.
 
                                 ALPHARMA INC.
                  Consolidated Statement of Income (Unaudited)
                     (In thousands, except per share data)
 
                                                         Three Months Ended
                                                             March 31,
                                                        2001           2000
     Total revenue                                   $234,831       $186,078
       Cost of sales                                  133,913         97,042
     Gross profit                                     100,918         89,036
       Selling, general & admin. exp.                  74,643         63,097
     Operating income                                  26,275         25,939
       Interest expense                               (8,680)       (10,860)
       Other, net                                     (1,120)            948
     Income before income taxes                        16,475         16,027
       Provision for income taxes                       5,437          5,662
     Net income                                       $11,038       $ 10,365
 
     Avge common shares outstanding:
       Basic                                           40,220         29,626
       Diluted (1)                                     47,304         36,695
 
     Earnings per common share:
       Basic                                           $ 0.27         $ 0.35
       Diluted                                         $ 0.27         $ 0.33
 
     (1)  Includes shares assumed issued under the if-converted method for the
 convertible notes.
 
                      Consolidated Condensed Balance Sheet
                                 (In thousands)
 
                                                     March 31,
                                                       2001        December 31,
                                                    (unaudited)        2000
     Current assets                                  $566,113       $614,463
     Non-current assets                               999,795      1,010,017
         Total assets                              $1,565,908     $1,624,480
 
     Current liabilities                             $177,091       $206,438
     Long-term debt:
       Senior                                         120,474        130,837
       Convertible subordinated notes                 375,430        373,608
 
     Deferred taxes and other                          49,350         51,665
     Stockholders' equity                             843,563        861,932
         Total liabilities and
          stockholders' equity                     $1,565,908     $1,624,480
 
                                 ALPHARMA INC.
                          Operating Results by Segment
                      (in millions, except per share data)
 
 
     Three Months
      Ended March 31,                Revenues               Operating Income
                                2001         2000          2001         2000
     Human Pharmaceuticals
       International
        Pharmaceuticals       $69.8         $85.1         $6.1         $14.6
       U.S. Pharmaceuticals    65.7          43.9          5.8           3.5
       Fine Chemicals          16.9          15.9          7.9           5.9
                              152.4         144.9         19.8          24.0
 
     Animal Pharmaceuticals    83.5          42.4         12.7           6.8
 
       Unallocated and
        Eliminations          (1.1)         (1.2)        (6.2)         (4.9)
         Total               $234.8        $186.1        $26.3         $25.9
 
                            Diluted EPS Calculation
                      (in millions, except per share data)
 
                                                            Three Months
     Periods ended March 31,                            2001            2000
 
     Net Income Used for Diluted EPS Calculation:
     Net Income                                        $ 11.0         $ 10.4
     Adjustments under if converted method,
      net of tax                                          1.8            1.8
       Adjusted Net Income                             $ 12.8         $ 12.2
 
     Average Common Shares Outstanding - Basic           40.2           29.6
       Convertible Notes                                  6.7            6.7
       Stock Options                                       .4             .4
     Average Common Shares Outstanding - Diluted         47.3           36.7
 
     Diluted Earnings per Share                        $ 0.27          $0.33
 
                     MAKE YOUR OPINION COUNT -- Click Here
                http://tbutton.prnewswire.com/prn/11690X24430924
 
 

SOURCE Alpharma Inc.
    FORT LEE, N.J., April 30 /PRNewswire/ -- Alpharma Inc. (NYSE:   ALO), a
 growing specialty pharmaceutical company with expanding global leadership
 positions in products for humans and animals, today announced financial
 results for the first quarter ended March 31, 2001.
     For the first quarter, revenue increased 26% to $234.8 million from
 $186.1 million in 2000.  The May 2000 Roche Medicated Feed Additive
 acquisition contributed revenue of approximately $48 million for the quarter
 and the negative impact of foreign currency translation lowered revenue for
 the first quarter of 2001 by approximately $7 million.  Net income for the
 first quarter of 2001 increased 6.5% to $11.0 million compared to
 $10.4 million in 2000.  Diluted earnings per share in 2001 were $.27 per share
 compared to $.33 per share for last year.  Diluted shares used for calculating
 earnings per share were 47.3 million in 2001 compared to 36.7 million in 2000.
     The Company has previously disclosed that it expected earnings per share
 to be lower in the first quarter of 2001 compared to 2000 due primarily to the
 negative impact of lower U.K. pricing and related volume declines in the
 Company's International Human Pharmaceuticals business, softness in U.S.
 poultry and some international livestock markets and lower than estimated
 earnings from new animal pharmaceutical products.
     Overall, Human Pharmaceuticals revenue increased 5% and operating income
 declined 17%.  In the Company's U.S. Human Pharmaceutical business, revenue
 increased 50% and operating income increased 64%.  Higher volume and new
 products drove the strong U.S. performance.  The higher operating income was
 achieved despite an almost doubling in R&D expense for the quarter.  In the
 Company's Fine Chemicals business, revenue increased 7% and operating income
 increased 34%.  The Fine Chemicals operating income increase was primarily
 attributable to higher volume, improved fermentation yields and leveraging of
 operating expenses.  In International Human Pharmaceuticals, revenues and
 operating income were lower in 2001 compared to 2000 by 18% and 58%
 respectively.  Unfavorable currency translation accounted for about 40% of the
 $15 million revenue decrease.  Lower U.K. pricing and related lower volume
 account for the remainder of the revenue decline and virtually the entire
 decline in operating income.
     Overall, Animal Pharmaceuticals revenue increased 97% and operating income
 increased 87%.  Excluding Roche, revenue declined 20% or about $8 million.
 Unfavorable market conditions in the U.S. poultry and some international
 livestock markets, which based upon the Company's view of the market are
 temporary, were the major cause of the decline.
     Commenting on the announcement, Ingrid Wiik, President and Chief Executive
 Officer of Alpharma said, "The quarter was obviously disappointing with
 respect to the areas we have highlighted.  We should, however, not lose sight
 of the positive developments which include strong performance by U.S.
 Pharmaceuticals and Fine Chemicals, overall performance, excluding the U.K.,
 in line with expectations for International Pharmaceuticals, and performance
 above expectations in the aggregate of our Animal Pharmaceuticals business
 excluding U.S. poultry and new products."
 
     Outlook
     Continuing with comments on the Company's outlook, Ms. Wiik said, "As we
 have previously disclosed, we have re-evaluated our view of the remainder of
 2001 as a direct result of our first quarter results and the continuing impact
 of softness in certain poultry and livestock markets, slower market
 penetration for new Animal Pharmaceuticals products and unfavorable U.K.
 pricing trends.  These negatives caused us to reduce our estimate of operating
 income for the remainder of 2001 by approximately $10 million for Animal
 Pharmaceuticals market softness, $7 million for slower market acceptance of
 new Animal Pharmaceuticals products and $6 million for International
 Pharmaceuticals pricing."
     "We are reaffirming that full year 2001 revenue should be in excess of
 $1 billion, net income should increase and be about $75 million and earnings
 per share should be approximately $1.70.  On a quarterly basis, we estimate
 that the second quarter earnings per share will be approximately the same as
 we report for the first quarter.  We now estimate that earnings per share in
 the second half of this year should grow about 20% compared to last year.
 Because of the uncertainty of the timing of the factors that we expect will
 influence the second half, we are not prepared to give specific guidance on
 the third and fourth quarters at this time.  However, our estimates indicate
 that both quarters should exceed last year's reported amounts."
     "While the operating income reductions already discussed are fully
 reflected in our new estimates for the second half of 2001, these estimates
 are also based upon the occurrence of the following positive business
 developments. We believe that our Human Pharmaceuticals business will exhibit
 continued strong growth in revenue and operating profit in both U.S.
 Pharmaceuticals and Fine Chemicals.  In International Pharmaceuticals, even
 with lower pricing, based upon market estimates for growth in all of our key
 markets, we expect a stronger second half than last year.  In Animal
 Pharmaceuticals, we are performing well and in line with original 2001
 estimates in swine and cattle, which in total make up over 50% of our business
 and we see no change in our outlook for the remainder of the year in these
 areas.  As regards poultry, based upon industry outlooks predicting poultry
 price recovery as well as conversations with customers relating to the use of
 our products, we believe the conditions will improve beginning in the third
 quarter and that the improvement will continue through the remainder of the
 year. Additionally new products in all businesses are expected to make a
 stronger contribution in the second half.  Finally, our entire Human
 Pharmaceuticals and Animal Pharmaceuticals businesses have historically strong
 second half performance based upon seasonal factors."
 
     Conference Call
     The call will be open to all interested parties including analysts,
 institutional investors, individuals and the media.  The call may be accessed
 by using the following information:
 
                             CONFERENCE CALL ACCESS
 
                Domestic Dial In:       800-231-9012
                International Dial In:  719-457-2617
                Participant Code:       774251
 
     The call will also be webcast live in a "listen only" mode via the
 Internet at http://www.streetevents.com.  In addition, for those unable to
 participate at the time of the call, a rebroadcast will be available following
 the call from Tuesday, May 1, 2001 at 7:00 PM Eastern Daylight Time until
 Friday, May 4, 2001 at midnight.  The rebroadcast may be accessed on the
 Internet at http://www.streetevents.com or by telephone using the following
 information:
 
                               REBROADCAST ACCESS
 
                Domestic Dial In:       888-203-1112
                International Dial In:  719-457-0820
                Participant Code:       774251
 
     Alpharma Inc. (NYSE:   ALO) is a growing specialty pharmaceutical company
 with expanding global leadership positions in products for humans and animals.
 Uniquely positioned to expand internationally, Alpharma is presently active in
 more than 60 countries.  Alpharma is the largest manufacturer of generic
 liquid and topical pharmaceuticals in the U.S. and one of the largest
 manufacturers of generic solid dose pharmaceuticals in Europe, with a growing
 presence in Southeast Asia.  Alpharma is among the world's leading producers
 of several important pharmaceutical-grade bulk antibiotics and is
 internationally recognized as a leading provider of pharmaceutical products
 for poultry, swine, cattle, and vaccines for farmed-fish worldwide.
 
     Statements made in this press release include forward-looking statements
 within the meaning of the Private Securities Litigation Reform Act of 1995.
 These statements include, but are not limited to, the statement made in the
 Outlook section herein.  Forward-looking statements involve risks and
 uncertainties that could cause actual results to differ materially from those
 stated in the forward-looking statements.  Risks and uncertainties include,
 but are not limited to, those risks described in this press release, the "Risk
 Factors' section of the Company's 10-K report for the year ended December 31,
 2000 and in the Company's Form  10-Q for the quarter ended March 31, 2001,
 which is expected to be filed by May 14, 2001.
 
     All Alpharma press releases are also available at our website:
 http://www.alpharma.com
 
     If you would like to receive future Alpharma press releases via e-mail
 please contact: investorrelations@alpharma.com.
 
                                 ALPHARMA INC.
                  Consolidated Statement of Income (Unaudited)
                     (In thousands, except per share data)
 
                                                         Three Months Ended
                                                             March 31,
                                                        2001           2000
     Total revenue                                   $234,831       $186,078
       Cost of sales                                  133,913         97,042
     Gross profit                                     100,918         89,036
       Selling, general & admin. exp.                  74,643         63,097
     Operating income                                  26,275         25,939
       Interest expense                               (8,680)       (10,860)
       Other, net                                     (1,120)            948
     Income before income taxes                        16,475         16,027
       Provision for income taxes                       5,437          5,662
     Net income                                       $11,038       $ 10,365
 
     Avge common shares outstanding:
       Basic                                           40,220         29,626
       Diluted (1)                                     47,304         36,695
 
     Earnings per common share:
       Basic                                           $ 0.27         $ 0.35
       Diluted                                         $ 0.27         $ 0.33
 
     (1)  Includes shares assumed issued under the if-converted method for the
 convertible notes.
 
                      Consolidated Condensed Balance Sheet
                                 (In thousands)
 
                                                     March 31,
                                                       2001        December 31,
                                                    (unaudited)        2000
     Current assets                                  $566,113       $614,463
     Non-current assets                               999,795      1,010,017
         Total assets                              $1,565,908     $1,624,480
 
     Current liabilities                             $177,091       $206,438
     Long-term debt:
       Senior                                         120,474        130,837
       Convertible subordinated notes                 375,430        373,608
 
     Deferred taxes and other                          49,350         51,665
     Stockholders' equity                             843,563        861,932
         Total liabilities and
          stockholders' equity                     $1,565,908     $1,624,480
 
                                 ALPHARMA INC.
                          Operating Results by Segment
                      (in millions, except per share data)
 
 
     Three Months
      Ended March 31,                Revenues               Operating Income
                                2001         2000          2001         2000
     Human Pharmaceuticals
       International
        Pharmaceuticals       $69.8         $85.1         $6.1         $14.6
       U.S. Pharmaceuticals    65.7          43.9          5.8           3.5
       Fine Chemicals          16.9          15.9          7.9           5.9
                              152.4         144.9         19.8          24.0
 
     Animal Pharmaceuticals    83.5          42.4         12.7           6.8
 
       Unallocated and
        Eliminations          (1.1)         (1.2)        (6.2)         (4.9)
         Total               $234.8        $186.1        $26.3         $25.9
 
                            Diluted EPS Calculation
                      (in millions, except per share data)
 
                                                            Three Months
     Periods ended March 31,                            2001            2000
 
     Net Income Used for Diluted EPS Calculation:
     Net Income                                        $ 11.0         $ 10.4
     Adjustments under if converted method,
      net of tax                                          1.8            1.8
       Adjusted Net Income                             $ 12.8         $ 12.2
 
     Average Common Shares Outstanding - Basic           40.2           29.6
       Convertible Notes                                  6.7            6.7
       Stock Options                                       .4             .4
     Average Common Shares Outstanding - Diluted         47.3           36.7
 
     Diluted Earnings per Share                        $ 0.27          $0.33
 
                     MAKE YOUR OPINION COUNT -- Click Here
                http://tbutton.prnewswire.com/prn/11690X24430924
 
 SOURCE  Alpharma Inc.