Hospira Reports Fourth-Quarter and Full-Year 2009 Results
-- Provides Sales and Earnings Projections for 2010 --
LAKE FOREST, Ill., Feb. 4 /PRNewswire-FirstCall/ -- Hospira, Inc. (NYSE: HSP), a leading global specialty pharmaceutical and medication delivery company, today reported results for the fourth quarter and full year ended Dec. 31, 2009. For the fourth quarter of 2009, net sales were $1.1 billion, and adjusted* diluted earnings per share were $0.87. For the full year of 2009, net sales were $3.9 billion, and adjusted* diluted earnings per share were $3.11. (Adjusted* measures exclude certain specified items as described later in this press release and the attached schedules.)
"Driven by double-digit revenue and adjusted earnings growth, the fourth quarter concluded a year of transformation for Hospira. In addition to our strong financial performance, we made significant progress on many fronts, including augmenting our biogenerics program, launching a generic version of a blockbuster oncology drug, and advancing Project Fuel, our corporate-wide optimization initiative," said Christopher B. Begley, chairman and chief executive officer. "Looking forward, we expect 2010 to be another good year of growth for Hospira. Backed by our commitment to strong execution and focus on sustained operational improvement, we continue to position Hospira for sustainable, long-term growth and increased shareholder value."
Fourth-Quarter 2009 Results
The following table highlights selected financial results for the fourth quarter of 2009 compared to the same period in 2008:
In $ millions, GAAP Adjusted*
except per Three Months Ended Three Months Ended
share amounts Dec. 31, Dec. 31,
------------------ % ------------------ %
2009 2008 Change 2009 2008 Change
-------- ------ ------ -------- ------- ------
Net Sales $1,055.2 $913.7 15.5% n/a n/a n/a
Gross Profit
(Net Sales
less Cost of
Products Sold) $395.0 $356.7 10.7% $427.5 $376.4 13.6%
Income from
Operations $135.6 $155.7 (12.9%) $204.2 $188.2 8.5%
Diluted EPS $0.58 $0.65 (10.8%) $0.87 $0.78 11.5%
Statistics (as a % of Net Sales)
--------------------------------
Gross Profit
(Net Sales
less Cost of
Products Sold) 37.4% 39.0% 40.5% 41.2%
Income from
Operations 12.9% 17.0% 19.4% 20.6%
Results under U.S. Generally Accepted Accounting Principles (GAAP) include items as detailed in the schedules attached to this press release.
Net sales increased 15.5 percent to $1.1 billion in the fourth quarter of 2009, compared to $914 million in the fourth quarter of 2008. The growth was driven mainly by an increase in Specialty Injectable Pharmaceuticals, primarily a result of the third-quarter 2009 launch of the generic chemotherapy agent oxaliplatin in solution form in the United States and strength in our proprietary sedation agent, Precedex™.
Adjusted* income from operations increased 8.5 percent to $204 million in the fourth quarter of 2009, compared to $188 million in the fourth quarter of 2008. Driving the majority of the increase were higher net sales, more favorable product mix and improvements resulting from the company's Project Fuel optimization initiatives.
Full-Year 2009 Results
The following table highlights selected financial results for the full-year 2009 compared to the same period in 2008:
In $ millions, GAAP Adjusted*
except per Year Ended Year Ended
share amounts Dec. 31, Dec. 31,
------------------ % ------------------ %
2009 2008 Change 2009 2008 Change
-------- -------- ------ -------- -------- ------
Net Sales $3,879.3 $3,629.5 6.9% n/a n/a n/a
Gross Profit
(Net Sales
less Cost of
Products Sold) $1,456.4 $1,342.7 8.5% $1,551.3 $1,426.5 8.7%
Income from
Operations $502.9 $517.8 (2.9%) $738.0 $647.1 14.0%
Diluted EPS $2.47 $1.99 24.1% $3.11 $2.53 22.9%
Statistics (as a % of Net Sales)
--------------------------------
Gross Profit
(Net Sales
less Cost of
Products Sold) 37.5% 37.0% 40.0% 39.3%
Income from
Operations 13.0% 14.3% 19.0% 17.8%
Net sales increased 6.9 percent to $3.9 billion for the year ended Dec. 31, 2009, compared to $3.6 billion for the prior year. The growth was driven mainly by Specialty Injectable Pharmaceuticals, with strong growth from the U.S. launch of oxaliplatin and strength in Precedex.
Adjusted* income from operations increased 14.0 percent to $738 million for the full year of 2009, compared to $647 million for the full year of 2008. Higher net sales volume and increased manufacturing efficiency, including the impact of Project Fuel optimization initiatives, were the major drivers of the full-year operating income performance. Partially offsetting these factors were the impact of costs associated with certain product corrective actions, as well as foreign exchange rate fluctuations.
Cash Flow
Cash flow from operations for the full-year 2009 was $945 million, compared to the $584 million generated in 2008. The increase reflects stronger income from operations and favorable changes in working capital, which were primarily associated with the timing of the payment of rebate and chargeback accruals related to 2009 sales of oxaliplatin.
Capital expenditures were $159 million for the full year, compared to $164 million in 2008. The decline was partly due to lower spending in 2009 than in 2008 related to the company's facilities optimization initiatives.
2010 Projections
Hospira expects net sales growth for full-year 2010 to be approximately 6 to 8 percent on a constant-currency basis, excluding the projected year-over-year impact of oxaliplatin sales and business disposals. Including the impact of these items and foreign exchange, the company expects net sales to be flat to slightly up. Adjusted* diluted earnings per share for 2010 are expected to be in the range of $3.25 to $3.35.
The reconciliation between the projected 2010 adjusted* diluted earnings per share and GAAP diluted earnings per share follows:
Diluted earnings per share -- adjusted* $3.25 - $3.35
-------------
Estimated charges related to Project Fuel
initiatives (mid-point of an estimated range of
$0.28 to $0.32 per diluted share) ($0.30)
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 $58 million for the amortization of
intangibles related to the Mayne Pharma acquisition ($0.24)
-------------
Diluted earnings per share -- GAAP $2.66 - $2.76
=============
The estimated charges are shown net of tax of $51 million, which is calculated for the individual components of the provided ranges based on the statutory tax rate in the various tax jurisdictions in which the adjustments are expected to occur.
The company projects that cash flow from operations in 2010 will be in the $600 million to $650 million range. The year-over-year decrease in cash flow from operations includes the projected effect of timing related to rebate and chargeback payments associated with 2009 sales of oxaliplatin. Depreciation and amortization is expected to be between $235 million and $245 million. Capital expenditures are projected to be between $195 million and $215 million, primarily related to Information Technology projects associated with the company's Project Fuel initiatives.
"The significant momentum we generated in 2009 has paved the way for continued progress in 2010," said Begley. "With our robust product pipeline, anticipated advancements in both Specialty Injectable Pharmaceuticals and Medication Management Systems, combined with our focus on operational optimization through Project Fuel, Hospira is on track for another good year."
*Use of Non-GAAP Financial Measures
Non-GAAP financial 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 Thursday, Feb. 4, 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™. 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, 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
December 31,
---------------- %
2009 2008 Change
-------- ------ -------
Net sales $1,055.2 $913.7 15.5 %
-------- ------
Cost of products sold 660.2 557.0 18.5 %
Restructuring and impairment 15.1 8.6 75.6 %
Research and development 79.7 53.0 50.4 %
Selling, general and administrative 164.6 139.4 18.1 %
-------- ------
Total operating costs and expenses 919.6 758.0 21.3 %
-------- ------
Income From Operations 135.6 155.7 (12.9)%
Interest expense 26.1 29.0 (10.0)%
Other (income) expense, net (2.5) 0.6 (516.7)%
-------- ------
Income Before Income Taxes 112.0 126.1 (11.2)%
Income tax expense 15.3 21.5 (28.8)%
-------- ------
Net Income $96.7 $104.6 (7.6)%
======== ======
Earnings Per Common Share:
Basic $0.59 $0.66 (10.6)%
======== ======
Diluted $0.58 $0.65 (10.8)%
======== ======
Weighted Average Common Shares Outstanding:
Basic 162.6 159.5 1.9 %
======== ======
Diluted 165.9 160.9 3.1 %
======== ======
Adjusted Gross Profit (1)(2) $427.5 $376.4 13.6 %
Adjusted Income From Operations (1) $204.2 $188.2 8.5 %
Adjusted Net Income (1) $144.6 $126.3 14.5 %
Adjusted Diluted Earnings Per Share (1) $0.87 $0.78 11.5 %
Statistics (as a % of net sales,
except for income tax rate):
GAAP Adjusted (1)
Three Months Ended Three Months Ended
December 31, December 31,
------------------ ------------------
2009 2008 2009 2008
-------- -------- -------- -------
Gross Profit (2) 37.4 % 39.0 % 40.5 % 41.2 %
Income From Operations 12.9 % 17.0 % 19.4 % 20.6 %
Net Income 9.2 % 11.4 % 13.7 % 13.8 %
Income Tax Rate 13.7 % 17.1 % 19.9 % 20.4 %
(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 schedule.
(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)
Years Ended
December 31,
------------------ %
2009 2008 Change
-------- -------- --------
Net sales $3,879.3 $3,629.5 6.9 %
-------- --------
Cost of products sold 2,422.9 2,286.8 6.0 %
Restructuring and impairment 94.2 22.4 320.5 %
Research and development 240.5 211.9 13.5 %
Acquired in-process research and
development - 0.5 (100.0)%
Selling, general and administrative 618.8 590.1 4.9 %
-------- --------
Total operating costs and expenses 3,376.4 3,111.7 8.5 %
-------- --------
Income From Operations 502.9 517.8 (2.9)%
Interest expense 106.3 116.2 (8.5)%
Other expense (income), net 11.8 (5.9) (300.0)%
-------- --------
Income Before Income Taxes 384.8 407.5 (5.6)%
Income tax (benefit) expense (19.1) 86.6 (122.1)%
-------- --------
Net Income $403.9 $320.9 25.9 %
======== ========
Earnings Per Common Share:
Basic $2.51 $2.02 24.3 %
======== ========
Diluted $2.47 $1.99 24.1 %
======== ========
Weighted Average Common Shares Outstanding:
Basic 161.0 159.2 1.1 %
======== ========
Diluted 163.2 161.3 1.2 %
======== ========
Adjusted Gross Profit (1)(2) $1,551.3 $1,426.5 8.7 %
Adjusted Income From Operations (1) $738.0 $647.1 14.0 %
Adjusted Net Income (1) $507.0 $408.1 24.2 %
Adjusted Diluted Earnings Per Share (1) $3.11 $2.53 22.9 %
Statistics (as a % of net sales,
except for income tax rate):
GAAP Adjusted (1)
Years Ended Years Ended
December 31, December 31,
------------------ ------------------
2009 2008 2009 2008
-------- -------- -------- -------
Gross Profit (2) 37.5 % 37.0 % 40.0 % 39.3 %
Income From Operations 13.0 % 14.3 % 19.0 % 17.8 %
Net Income 10.4 % 8.8 % 13.1 % 11.2 %
Income Tax Rate (5.0)% 21.3 % 20.3 % 24.0 %
(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.
(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 December 31, 2009 Reconciliation of GAAP to Non-GAAP
Financial Measures:
------------------------------------------------------------------------
Income
Gross From Net Diluted
Profit(1) Operations Income(2) EPS
-------- ---------- -------- -------
GAAP financial measures $395.0 $135.6 $96.7 $0.58
Specified items:
Project Fuel and related
impairment charges(A) 13.8 31.0 19.7 0.12
Facilities Optimization
charges (B) 5.4 8.3 5.4 0.03
Amortization of Mayne Pharma
intangible assets (C) 13.3 13.3 11.4 0.07
Research and development
charges (D) - 16.0 11.4 0.07
-------- ---------- -------- -------
Adjusted financial measures (3) $427.5 $204.2 $144.6 $0.87
======== ========== ======== =======
GAAP results for the three months ended December 31, 2009 include:
A -- Project Fuel and related impairment charges: $13.8 million reported
in Cost of products sold, $12.2 million reported in Restructuring and
impairment, $0.7 million reported in Research and development and
$4.3 million reported in Selling, general and administrative. Project
Fuel initiatives include costs for severance and other employee
benefits, process optimization implementation, exit costs and other
asset charges. Impairment charges relate to non-strategic businesses
and underlying assets committed for disposal including related
property and equipment.
B -- Facilities Optimization charges: $5.4 million reported in Cost of
products sold and $2.9 million reported in Restructuring and
impairment. 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 Mayne Pharma Limited ("Mayne Pharma") intangible
assets resulting from the Mayne Pharma acquisition is reported in
Cost of products sold.
D -- Research and development charges resulting from an initial payment
related to an agreement and corresponding milestones reached for
development of an oncology product that has not yet achieved
regulatory approval.
Three months ended December 31, 2008 Reconciliation of GAAP to Non-GAAP
Financial Measures:
------------------------------------------------------------------------
Income
Gross From Net Diluted
Profit(1) Operations Income(2) EPS
-------- ---------- -------- -------
GAAP financial measures $356.7 $155.7 $104.6 $0.65
Specified items:
Facilities Optimization
charges (A) 0.9 9.5 6.1 0.04
Amortization of Mayne Pharma
intangible assets (B) 16.0 16.0 10.9 0.06
Integration-related
charges (C) 2.8 7.0 4.7 0.03
-------- ---------- -------- -------
Adjusted financial measures (3) $376.4 $188.2 $126.3 $0.78
======== ========== ======== =======
GAAP results for the three months ended December 31, 2008 include:
A -- Facilities Optimization charges: $0.9 million reported in Cost of
products sold and $8.6 million reported in Restructuring and
impairment.
B -- Amortization of Mayne Pharma intangible assets is reported in Cost of
products sold.
C -- Integration-related charges: $2.8 million reported in Cost of
products sold and $4.2 million reported in Selling, general and
administrative. These charges relate to the integration of Mayne
Pharma and other acquisitions into our operations and include costs
for closure of facilities, termination of lease agreements, severance
and other employee benefit costs.
(1) Gross profit is defined as Net sales less Cost of products sold.
(2) Adjusted Net Income is shown net of tax of $36.0 million and $32.3
million for the three months ended December 31, 2009 and 2008,
respectively, based on the statutory tax rate in the various tax
jurisdictions in which the adjustments 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 February 4, 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)
Year ended December 31, 2009 Reconciliation of GAAP to Non-GAAP Financial
Measures:
--------------------------------------------------------------------------
Income
Gross From Net Diluted
Profit(1) Operations Income(2) EPS
-------- ---------- -------- -------
GAAP financial measures $1,456.4 $502.9 $403.9 $2.47
Specified items:
Project Fuel and related
impairment charges(A) 26.4 136.5 111.2 0.69
Facilities Optimization
charges (B) 14.3 28.4 18.8 0.12
Amortization of Mayne Pharma
intangible assets (C) 54.2 54.2 37.3 0.23
Research and development
charges (D) - 16.0 11.1 0.07
Impairment of marketable
equity securities (E) - - 16.6 0.10
Resolution of IRS tax audit
benefit (F) - - (91.9) (0.57)
-------- ---------- -------- -------
Adjusted financial measures (3) $1,551.3 $738.0 $507.0 $3.11
======== ========== ======== =======
GAAP results for the year ended December 31, 2009 include:
A -- Project Fuel and related impairment charges: $26.4 million reported
in Cost of products sold, $80.1 million reported in Restructuring and
impairment, $3.3 million reported in Research and development and
$26.7 million reported in Selling, general and administrative.
Project Fuel initiatives include costs for severance and other
employee benefits, process optimization implementation, exit costs
and other asset charges. Impairment charges relate to non-strategic
businesses and underlying assets committed for disposal including
related property and equipment, allocated goodwill and intangible
assets.
B -- Facilities Optimization charges: $14.3 million reported in Cost of
products sold and $14.1 million reported in Restructuring and
impairment. 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 Mayne Pharma Limited ("Mayne Pharma") intangible
assets resulting from the Mayne Pharma acquisition is reported in
Cost of products sold.
D -- Research and development charges resulting from an initial payment
related to an agreement and corresponding milestones reached for
development of an oncology product that has not yet achieved
regulatory approval.
E -- Impairment of marketable equity securities is reported in Other
expense (income), net.
F -- Resolution of IRS tax audit benefit of $91.9 million reported in
Income tax (benefit) expense. This discrete income tax benefit is
related to the completion and effective settlement of U.S. tax return
audits.
Year ended December 31, 2008 Reconciliation of GAAP to Non-GAAP Financial
Measures:
--------------------------------------------------------------------------
Income
Gross From Net Diluted
Profit(1) Operations Income(2) EPS
-------- ---------- -------- -------
GAAP financial measures $1,342.7 $517.8 $320.9 $1.99
Specified items:
Facilities Optimization
charges (A) 12.4 35.4 22.1 0.14
Amortization of Mayne Pharma
intangible assets (B) 62.8 62.8 42.3 0.26
Integration-related
charges (C) 8.6 30.6 22.3 0.14
Acquired in-process research
and development - 0.5 0.5 -
-------- ---------- -------- -------
Adjusted financial measures (3) $1,426.5 $647.1 $408.1 $2.53
======== ========== ======== =======
GAAP results for the year ended December 31, 2008 include:
A -- Facilities Optimization charges: $12.4 million reported in Cost of
products sold, $22.4 million reported in Restructuring and
impairments and $0.6 million reported in R&D.
B -- Amortization of Mayne Pharma intangible assets is reported in Cost of
products sold.
C -- Integration-related charges: $8.6 million reported in Cost of
products sold, $1.0 million reported in R&D and $21.0 million
reported in Selling, general and administrative. These charges relate
to the integration of Mayne Pharma and other acquisitions into our
operations and include costs for closure of facilities, termination
of lease agreements, severance and other employee benefit costs.
(1) Gross profit is defined as Net sales less Cost of products sold.
(2) Adjusted Net Income is shown net of tax of $129.5 million and $128.7
million for the years ended December 31, 2009 and 2008,
respectively, based on the statutory tax rate in the various tax
jurisdictions in which the adjustments 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 February 4, 2010 for additional information.
Hospira, Inc.
Condensed Consolidated Balance Sheets
(Unaudited)
(dollars in millions)
December 31, December 31,
Assets 2009 2008
-------- --------
Current Assets:
Cash and cash equivalents $946.0 $483.8
Trade receivables, less allowances of
$6.2 in 2009 and $6.7 in 2008 498.1 583.4
Inventories 755.4 830.5
Deferred income taxes 185.9 172.2
Prepaid expenses 34.3 35.7
Other receivables 41.5 43.7
Assets held for sale 65.0 -
-------- --------
Total Current Assets 2,526.2 2,149.3
-------- --------
Property and equipment, net 1,147.8 1,192.1
Intangible assets, net 406.5 404.4
Goodwill 1,243.4 1,167.4
Deferred income taxes 54.5 70.1
Investments 49.3 37.6
Other assets 75.2 53.2
-------- --------
Total Assets $5,502.9 $5,074.1
======== ========
Liabilities and Shareholders' Equity
Current Liabilities:
Short-term borrowings $23.6 $338.3
Trade accounts payable 229.5 231.5
Salaries, wages and commissions 176.5 144.7
Deferred income taxes 0.1 1.5
Other accrued liabilities 438.3 331.5
Liabilities related to assets held for sale 13.9 -
-------- --------
Total Current Liabilities 881.9 1,047.5
-------- --------
Long-term debt 1,707.3 1,834.0
Deferred income taxes 18.6 25.2
Post-retirement obligations and other
long-term liabilities 271.4 391.0
Commitments and Contingencies
-------- --------
Total Shareholders' Equity 2,623.7 1,776.4
-------- --------
Total Liabilities and Shareholders' Equity $5,502.9 $5,074.1
======== ========
Hospira, Inc.
Condensed Consolidated Statements of Cash Flows
(Unaudited)
(dollars in millions)
Years Ended
December 31,
---------------
2009 2008
------ ------
Cash Flow From Operating Activities:
Net income $403.9 $320.9
Adjustments to reconcile net income to net cash from
operating activities-
Depreciation 168.6 183.2
Amortization of intangible assets 61.5 68.7
Write-off of acquired in-process research and
development - 0.5
Stock-based compensation expense 40.5 42.0
Deferred income taxes and other tax adjustments (66.3) 43.5
Impairment and other asset charges 95.8 -
Net gains on sales of assets - (3.0)
Changes in assets and liabilities-
Trade receivables 97.2 (55.4)
Inventories 54.4 (117.9)
Prepaid expenses and other assets 8.2 12.9
Trade accounts payable (4.2) 49.5
Other liabilities 107.5 15.8
Other, net (22.2) 23.4
------- -------
Net Cash Provided by Operating Activities 944.9 584.1
------- -------
Cash Flow From Investing Activities:
Capital expenditures (including instruments placed
with or leased to customers) (159.4) (164.3)
Acquisitions, net of cash acquired, and payments for
contingent consideration (86.6) (26.1)
Purchases of intangibles and other investments (14.3) (50.8)
Proceeds from disposition of businesses and assets 49.2 0.8
Purchases of marketable equity securities - (24.5)
------- -------
Net Cash Used in Investing Activities (211.1) (264.9)
------- -------
Cash Flow From Financing Activities:
Issuance of long-term debt, net of fees paid 246.7 -
Repayment of long-term debt (681.2) (95.2)
Other borrowings, net 2.6 6.3
Excess tax benefit from stock-based compensation
arrangements 0.8 1.0
Proceeds from stock options exercised 122.5 27.8
------- -------
Net Cash Used in Financing Activities (308.6) (60.1)
------- -------
Effect of exchange rate changes on cash and cash
equivalents 37.0 (16.4)
------- -------
Net change in cash and cash equivalents 462.2 242.7
Cash and cash equivalents at beginning of year 483.8 241.1
------- -------
Cash and cash equivalents at end of year $946.0 $483.8
======= =======
Supplemental Cash Flow Information:
Cash paid during the year-
Interest $108.7 $120.8
Income taxes, net of refunds $28.4 $14.9
Hospira, Inc.
Net Sales by Product Line
(Unaudited)
(dollars in millions)
Three Months Ended December 31,
-----------------------------------
% Change % Change
at at
Actual Constant
Currency Currency
2009 2008 Rates Rates (1)
-------- ------ ----- ---------
Americas--
Pharmaceuticals
Specialty Injectables $439.2 $347.2 26.5 % 25.1 %
Other Pharma 153.2 147.6 3.8 % 3.0 %
-------- ------
592.4 494.8 19.7 % 18.5 %
Devices
Medication Management Systems 148.0 140.6 5.3 % 3.1 %
Other Devices 83.1 85.8 (3.1)% (4.9)%
-------- ------
231.1 226.4 2.1 % 0.0 %
Total Americas 823.5 721.2 14.2 % 12.7 %
Europe, Middle East & Africa--
Pharmaceuticals
Specialty Injectables 76.7 63.2 21.4 % 9.7 %
Other Pharma 39.7 31.9 24.5 % 12.9 %
-------- ------
116.4 95.1 22.4 % 10.7 %
Devices
Medication Management Systems 22.1 16.7 32.3 % 18.6 %
Other Devices 15.1 16.0 (5.6)% (19.4)%
-------- ------
37.2 32.7 13.8 % 0.0 %
Total Europe, Middle East & Africa 153.6 127.8 20.2 % 8.0 %
Asia Pacific--
Pharmaceuticals
Specialty Injectables 62.4 50.1 24.6 % 0.6 %
Other Pharma 4.3 3.1 38.7 % 9.7 %
-------- ------
66.7 53.2 25.4 % 1.1 %
Devices
Medication Management Systems 6.2 4.4 40.9 % 25.0 %
Other Devices 5.2 7.1 (26.8)% (39.4)%
-------- ------
11.4 11.5 (0.9)% (14.8)%
Total Asia Pacific 78.1 64.7 20.7 % (1.7)%
-------- ------
Net Sales $1,055.2 $913.7 15.5 % 11.0 %
======== ======
Global--
Pharmaceuticals
Specialty Injectables $578.3 $460.5 25.6 % 20.3 %
Other Pharma 197.2 182.6 8.0 % 4.8 %
-------- ------
775.5 643.1 20.6 % 15.9 %
Devices
Medication Management Systems 176.3 161.7 9.0 % 5.3 %
Other Devices 103.4 108.9 (5.1)% (9.3)%
-------- ------
279.7 270.6 3.4 % (0.6)%
-------- ------
Net Sales $1,055.2 $913.7 15.5 % 11.0 %
======== ======
Years Ended December 31,
----------------------------------
% Change % Change
at at
Currency Currency
Actual Constant
2009 2008 Rates Rates (1)
-------- -------- ----- ---------
Americas--
Pharmaceuticals
Specialty Injectables $1,589.9 $1,328.9 19.6 % 20.3 %
Other Pharma 556.4 522.0 6.6 % 7.8 %
-------- --------
2,146.3 1,850.9 16.0 % 16.7 %
Devices
Medication Management Systems 559.7 558.9 0.1 % 1.2 %
Other Devices 357.3 368.5 (3.0)% (2.3)%
-------- --------
917.0 927.4 (1.1)% (0.2)%
Total Americas 3,063.3 2,778.3 10.3 % 11.1 %
Europe, Middle East & Africa--
Pharmaceuticals
Specialty Injectables 272.0 287.4 (5.4)% 2.1 %
Other Pharma 128.4 152.1 (15.6)% (8.8)%
-------- --------
400.4 439.5 (8.9)% (1.7)%
Devices
Medication Management Systems 77.8 75.9 2.5 % 8.6 %
Other Devices 64.6 68.4 (5.6)% 0.9 %
-------- --------
142.4 144.3 (1.3)% 4.9 %
Total Europe, Middle East & Africa 542.8 583.8 (7.0)% (0.1)%
Asia Pacific--
Pharmaceuticals
Specialty Injectables 211.4 205.4 2.9 % 7.2 %
Other Pharma 16.4 15.2 7.9 % 17.8 %
-------- --------
227.8 220.6 3.3 % 7.9 %
Devices
Medication Management Systems 21.2 19.9 6.5 % 11.1 %
Other Devices 24.2 26.9 (10.0)% (8.9)%
-------- --------
45.4 46.8 (3.0)% (0.4)%
Total Asia Pacific 273.2 267.4 2.2 % 6.5 %
-------- --------
Net Sales $3,879.3 $3,629.5 6.9 % 9.0 %
======== ========
Global--
Pharmaceuticals
Specialty Injectables $2,073.3 $1,821.7 13.8 % 15.9 %
Other Pharma 701.2 689.3 1.7 % 4.4 %
-------- --------
2,774.5 2,511.0 10.5 % 12.7 %
Devices
Medication Management Systems 658.7 654.7 0.6 % 2.3 %
Other Devices 446.1 463.8 (3.8)% (2.2)%
-------- --------
1,104.8 1,118.5 (1.2)% 0.4 %
-------- --------
Net Sales $3,879.3 $3,629.5 6.9 % 9.0 %
======== ========
(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.
Hospira, Inc.
Segment Information
(Unaudited)
(dollars in millions)
Three Months Ended December 31,
----------------------------------------------------------
Net Sales Income from Operations
----------------- % -------------------- %
2009 2008 Change 2009 2008 Change
-------- ------ ------ ------ ------ ------
Americas $823.5 $721.2 14.2 % $173.9 A $172.0 A 1.1 %
Europe, Middle
East & Africa 153.6 127.8 20.2 % (7.8) B 2.1 B (471.4)%
Asia Pacific 78.1 64.7 20.7 % 3.1 C 9.4 C (67.0)%
-------- ------ ------ ------
Total reportable
segments $1,055.2 $913.7 15.5 % 169.2 183.5 (7.8)%
======== ======
Corporate
functions (24.6) D (19.0) D 29.5 %
Stock-based
compensation (9.0) (8.8) 2.3 %
------ ------
Income from
operations 135.6 155.7 (12.9)%
Interest expense
and other expense, net (23.6) (29.6) (20.3)%
------ ------
Income before
income taxes $112.0 $126.1 (11.2)%
====== ======
Included in the reported Income before income
taxes above, are the following charges:
A -- Americas
Project Fuel and related impairment $19.2 $ -
Facilities Optimization 8.3 9.5
Amortization of Mayne Pharma
intangible assets 4.8 4.2
Integration-related - 1.6
------ ------
Total Americas 32.3 15.3
B -- Europe, Middle East & Africa
Project Fuel and related impairment 5.7 -
Amortization of Mayne Pharma
intangible assets 4.0 8.1
Integration-related - 0.5
Research and development 16.0 -
------ ------
Total Europe, Middle East & Africa 25.7 8.6
C -- Asia Pacific
Project Fuel and related impairment 1.5 -
Amortization of Mayne Pharma
intangible assets 4.5 3.7
Integration-related - 1.8
------ ------
Total Asia Pacific 6.0 5.5
D -- Corporate functions
Project Fuel and related impairment 4.6 -
Integration-related - 3.1
------ ------
Total Corporate functions 4.6 3.1
------ ------
Total $68.6 $32.5
====== ======
Hospira, Inc.
Segment Information
(Unaudited)
(dollars in millions)
Years Ended December 31,
----------------------------------------------------------
Net Sales Income from Operations
----------------- % -------------------- %
2009 2008 Change 2009 2008 Change
-------- -------- ------ ------ ------ ------
Americas $3,063.3 $2,778.3 10.3 % $625.5 A $598.0 A 4.6 %
Europe, Middle
East & Africa 542.8 583.8 (7.0)% 1.8 B 12.8 B (85.9)%
Asia Pacific 273.2 267.4 2.2 % 7.0 C 23.0 C (69.6)%
-------- -------- ------ ------
Total reportable
segments $3,879.3 $3,629.5 6.9 % 634.3 633.8 0.1 %
======== ========
Corporate
functions (90.9) D (74.0) D 22.8 %
Stock-based
compensation (40.5) (42.0) (3.6)%
------ ------
Income from
operations 502.9 517.8 (2.9)%
Interest expense
and other expense, net (118.1) E (110.3) E 7.1 %
------ ------
Income before
income taxes $384.8 $407.5 (5.6)%
====== ======
Included in the reported Income before income
taxes above, are the following charges:
A -- Americas
Project Fuel and related impairment $101.2 $ -
Facilities Optimization 28.4 35.4
Amortization of Mayne Pharma
intangible assets 17.9 19.2
Integration-related - 3.7
Acquired in-process research
and development - 0.5
------ ------
Total Americas 147.5 58.8
B -- Europe, Middle East & Africa
Project Fuel and related impairment 9.7 -
Amortization of Mayne Pharma
intangible assets 20.1 25.8
Integration-related - 10.6
Research and development 16.0 -
------ ------
Total Europe, Middle East & Africa 45.8 36.4
C -- Asia Pacific
Project Fuel and related impairment 10.8 -
Amortization of Mayne Pharma
intangible assets 16.2 17.8
Integration-related - 8.5
------ ------
Total Asia Pacific 27.0 26.3
D -- Corporate functions
Project Fuel and related impairment 14.8 -
Integration-related - 7.8
------ ------
Total Corporate functions 14.8 7.8
E -- Interest expense and other expense
(income), net
Impairment of marketable equity
securities 16.6 -
------ ------
Total Interest expense and other expense
(income), net 16.6 -
------ ------
Total $251.7 $129.3
====== ======
SOURCE Hospira, Inc.
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