News Release Detail
Mylan Reports Record Quarterly Earnings of $0.33 Per Diluted Share; Record Revenues and Net Earnings also Reported, as well as Another Record Quarter for the Generic Segment
Quarterly Financial Highlights
-- Record diluted earnings per share of $0.33 ($0.50 on a
pre-split basis).
-- Net revenues increased 13% to a record $360.1 million.
-- Net earnings increased 34% to a record $91.3 million.
-- A three-for-two stock split was effected on October 8, 2003.
Mylan Laboratories Inc. (NYSE:MYL) today announced financial results for the second quarter ended September 30, 2003, which included record diluted earnings per share, net revenues and net earnings. The quarter was driven by a strong performance from the Generic Segment which contributed net revenues of $299.5 million, a record quarter for that segment, as well as improved results from the Brand Segment. Overall, revenues for the second quarter increased 13% to $360.1 million from $319.5 million a year ago.
Diluted earnings per share for the second quarter were $0.33 compared to $0.24 for the second quarter of fiscal 2003, an increase of 38%. For the six months ended September 30, 2003, diluted earnings per share were $0.63 compared to $0.46 in the same prior year period, an increase of 37%. Included in the results for the six months ended September 30, 2003 are gains on legal settlements which amounted, net of tax, to approximately $0.05 per diluted share. All share and per share amounts in this press release have been adjusted to reflect the three-for-two stock split which was effected on October 8, 2003.
Net earnings for the quarter increased 34% to $91.3 million from $68.2 million in the same prior year period. For the six months, net earnings increased 35% to $175.1 million in fiscal 2004, compared to $130.1 million in fiscal 2003.
"We achieved the best quarter in the Company's history," commented Robert J. Coury, Vice Chairman and Chief Executive Officer. "Clearly the strength of the quarter was driven by our Generic business and the recent launch of omeprazole. While omeprazole has been a focus of recent attention, it is just one of a number of opportunities that we see contributing to our current and future success, and is a continuation of our commitment to bring to the market quality and affordable products."
Second quarter net revenues for the Generic Segment increased 9% or $25.2 million, which included $68.6 million from products launched subsequent to September 30, 2002, largely due to omeprazole. Brand Segment net revenues for the second quarter were $60.6 million, an increase of 34% or $15.3 million from the same prior year period.
For the six months ended September 30, 2003, net revenues increased 16% or $96.5 million to $691.5 million from $595.0 million for the six months ended September 30, 2002. Generic Segment revenues were $554.7 million, an increase of 9% over the same prior year period, while Brand Segment revenues increased 61% to $136.8 million.
Segment Information
-------------------
Three Months Ended Six Months Ended
September 30, September 30,
------------------------ ------------------------
2003 2002 Change 2003 2002 Change
Net Revenues (in
millions):
Generic Segment $299.5 $274.3 9% $554.7 $509.9 9%
Brand Segment 60.6 45.3 34% 136.8 85.1 61%
------- ------- ------- -------
Total $360.1 $319.5 13% $691.5 $595.0 16%
Generic Segment
Net revenues for the quarter increased 9% or $25.2 million to $299.5 million from $274.3 million for the same prior year period. This increase is the result of $68.6 million from products launched subsequent to September 30, 2002, largely due to omeprazole, offset in part by changes in the portfolio mix.
Gross profit for the quarter increased $29.3 million to $169.2 million from $139.9 million, while earnings from operations increased $26.4 million to $147.1 million from $120.7 million in the same prior year period. The increase in earnings from operations was driven primarily by the higher gross profit, partially offset by increased research and development expense from the continued expansion of the development platform.
For the six months ended September 30, 2003, net revenues increased $44.8 million or 9% to $554.7 million from $509.9 million. New products launched subsequent to September 30, 2002 contributed net revenues of $74.4 million.
Gross profit for the year-to-date period was $307.7 million compared to $264.4 million in fiscal 2003, an increase of $43.3 million. Operating income for the six month period increased by 17% or $37.6 million to $264.7 million from $227.1 million. The increase in operating income was driven by the increased gross profit partially offset by higher research and development expenses.
Brand Segment
For the second quarter, the Brand Segment reported net revenues of $60.6 million, an increase of 34% or $15.3 million from $45.3 million in the same prior year period. Over 50% of the increase in Brand Segment net revenues resulted from Amnesteem, which was launched in late fiscal 2003, with the remainder attributable to growth in the existing portfolio of products. Gross profit for the second quarter increased $11.6 million or 43% to $38.5 million from $26.9 million.
Earnings from operations were $11.7 million compared to $1.1 million in the same quarter of the prior year. The increase was primarily attributable to the increase in gross profit.
For the six months ended September 30, 2003, net revenues increased 61% or $51.7 million to $136.8 million from $85.1 million. Amnesteem accounted for approximately 70% of this increase. The remainder of the increase was the result of continued growth in the existing product portfolio.
Gross profit for the first six months of fiscal 2004 was $77.5 million, an increase of $27.5 million or 55% from $50.0 million in fiscal 2003. Earnings from operations were $21.5 million compared to $0.7 million. The improvement in earnings from operations was the result of increased gross profit partially offset by higher research and development expenses, primarily due to on-going studies related to nebivolol.
Corporate/Other
General and administrative expenses for the second quarter of fiscal 2004 were $24.7 million, an increase of $7.8 million from the same prior year period. For the six months ended September 30, 2003, general and administrative expenses were $46.7 million, an increase of $18.6 million from the same prior year period. The increases for both the three and six month periods were primarily due to increased legal costs and other costs related to the Company's continued investment in its infrastructure.
Other income for the second quarter was $7.4 million which included a gain of $5.0 million on the sale of an office building. For the year-to-date period, other income was $10.5 million compared to $3.6 million in fiscal 2003.
Fiscal 2004 Earnings Guidance
Mylan reaffirms its fiscal 2004 earnings guidance of $1.11 to $1.18 per diluted share ($1.67 to $1.77 per diluted share on a pre-split basis).
Conference Call and Live Webcast
Mylan will host a conference call and live webcast to discuss its second quarter earnings on Thursday, October 30, at 10:00 a.m. ET. The dial-in number to access the live call is 719-457-2629. In addition to the live call, a replay will be available from approximately noon ET on October 30, through noon ET on November 6, and can be accessed by dialing 719-457-0820 with access pass code 731067.
To access the live webcast, go to Mylan's Web site at www.mylan.com and click on the webcast icon at least 15 minutes before the call is to begin to register and download or install any necessary audio software. If you are unable to listen to the live webcast, please access www.mylan.com at any time within seven days to listen to a replay of the webcast.
Forward-Looking Statements
This press release includes statements that constitute "forward-looking statements," including with regard to the Company's opportunities and future success; the Company's commitment to bring quality and affordable products to the market; and the Company's fiscal 2004 earnings guidance. These statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Because such statements inherently involve risks and uncertainties, actual future results may differ materially from those expressed or implied by such forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to:
-- the Company's ability to successfully develop, license or
otherwise acquire and introduce new products on a timely basis
in relation to competing product introductions;
-- the Company's ability to obtain required FDA approvals for new
products on a timely basis;
-- uncertainties regarding continued market acceptance of and
demand for the Company's products;
-- the Company's periodic dependence on a relatively small group
of products as a significant source of its net revenue or net
income;
-- the effects of vigorous competition on commercial acceptance
of the Company's products and their pricing;
-- the high cost and uncertainty associated with compliance with
extensive regulation of the pharmaceutical industry;
-- the significant research and development expenditures the
Company makes to develop products, the commercial success of
which is uncertain;
-- the possible loss of business from the Company's concentrated
customer base;
-- the potential costs and product introduction delays that may
result from use of legal, regulatory and legislative
strategies by the Company's competitors;
-- the Company's dependence on third-party suppliers and
distributors for the raw materials, particularly the chemical
compound(s) which produces the desired therapeutic effect, the
active ingredient the Company uses to manufacture its
products;
-- the possible negative effects of any interruption of
manufacturing of the Company's generic products at its
principal facility;
-- the effects of consolidation of the Company's customer base;
-- uncertainties regarding patent, intellectual and other
proprietary property protections;
-- the expending of substantial resources associated with
litigation involving patent or other intellectual property
protection of competing products;
-- possible reductions in reimbursement rates for pharmaceutical
products;
-- possible negative effect on product pricing of current or
future legislative or regulatory programs;
-- the Company's exposure to lawsuits and contingencies
associated with its business;
-- uncertainties regarding the Company's performance under
indemnification clauses in certain material agreements;
-- the Company's exposure to risks inherent in acquisitions or
joint ventures;
-- the Company's ability to attract and retain key personnel;
-- possible adverse effects resulting from any significant
decline in the value of securities that the Company holds or
from uninsured losses of funds;
-- uncertainties and matters beyond the control of management,
which could affect the Company's earnings guidance, as well as
the subjectivity inherent in any probability weighted analysis
underlying the Company's assumptions and estimates with
respect to the future; and
-- inherent uncertainties involved in the estimates and judgments
used in the preparation of financial statements in accordance
with GAAP and related standards.
The cautionary statements referred to above should be considered in connection with any subsequent written or oral forward-looking statements that may be made by the Company or by persons acting on its behalf and in conjunction with its periodic SEC filings. In addition, please refer to the cautionary statements and risk factors in Item I of the Company's Form 10-K for the year ended March 31, 2003, as well as those contained in the Company's Form 10-Q for the period ended June 30, 2003. The Company undertakes no duty to update its forward-looking statements, even though its situation may change in the future.
Mylan Laboratories Inc. is a leading pharmaceutical company with four subsidiaries, Mylan Pharmaceuticals Inc., Mylan Technologies Inc., UDL Laboratories, Inc. and Bertek Pharmaceuticals Inc., that develop, manufacture and market an extensive line of generic and proprietary products. For more information about Mylan, visit www.mylan.com.
MYLAN LABORATORIES INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Earnings
(unaudited; in thousands, except per share amounts)
Three Months Ended Six Months Ended
September September September September
30, 2003 30, 2002 30, 2003 30, 2002
---------- ---------- ---------- ----------
Net revenues $ 360,060 $ 319,539 $ 691,468 $ 595,012
Cost of sales 152,352 152,807 306,331 280,678
---------- ---------- ---------- ----------
Gross profit 207,708 166,732 385,137 314,334
Operating expenses:
Research and development 23,946 20,169 48,685 37,012
Selling and marketing 17,274 16,538 35,110 33,425
General and
administrative 32,312 25,030 61,920 44,251
Litigation settlements - - (21,669) -
---------- ---------- ---------- ----------
Total operating expenses 73,532 61,737 124,046 114,688
---------- ---------- ---------- ----------
Earnings from operations 134,176 104,995 261,091 199,646
Other income, net 7,428 1,613 10,533 3,601
---------- ---------- ---------- ----------
Earnings before income
taxes 141,604 106,608 271,624 203,247
Provision for income
taxes 50,326 38,379 96,483 73,169
---------- ---------- ---------- ----------
Net earnings $ 91,278 $ 68,229 $ 175,141 $ 130,078
========== ========== ========== ==========
Earnings per common
share:
Basic $ 0.34 $ 0.24 $ 0.65 $ 0.46
========== ========== ========== ==========
Diluted $ 0.33 $ 0.24 $ 0.63 $ 0.46
========== ========== ========== ==========
Weighted average common
shares:
Basic 268,644 282,064 269,432 282,727
========== ========== ========== ==========
Diluted 276,424 285,248 276,276 285,448
========== ========== ========== ==========
MYLAN LABORATORIES INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(unaudited; in thousands)
Sept. 30, March 31,
2003 2003
------------ ------------
Assets:
Current assets:
Cash and cash equivalents $ 194,145 $ 258,902
Marketable securities 444,207 427,904
Accounts receivable, net 232,479 187,587
Inventories 290,742 237,777
Other current assets 113,770 116,041
------------ ------------
Total current assets 1,275,343 1,228,211
Non-current assets 525,029 517,012
------------ ------------
Total assets $ 1,800,372 $ 1,745,223
============ ============
Liabilities:
Current liabilities $ 227,636 $ 265,771
Non-current liabilities 39,411 33,120
------------ ------------
Total liabilities 267,047 298,891
Total shareholders' equity 1,533,325 1,446,332
------------ ------------
Total liabilities and shareholders' equity $ 1,800,372 $ 1,745,223
============ ============
MYLAN LABORATORIES INC. AND SUBSIDIARIES
Segment Results
(unaudited; in thousands)
Three Months Ended Six Months Ended
September September September September
30, 2003 30, 2002 30, 2003 30, 2002
---------- ---------- ---------- ----------
Consolidated:
Net revenues $ 360,060 $ 319,539 $ 691,468 $ 595,012
Cost of sales 152,352 152,807 306,331 280,678
---------- ---------- ---------- ----------
Gross profit 207,708 166,732 385,137 314,334
Research and development 23,946 20,169 48,685 37,012
Selling and marketing 17,274 16,538 35,110 33,425
General and
administrative 32,312 25,030 61,920 44,251
Litigation settlements - - (21,669) -
---------- ---------- ---------- ----------
Earnings from
operations $ 134,176 $ 104,995 $ 261,091 $ 199,646
========== ========== ========== ==========
Generic Segment:
Net revenues $ 299,483 $ 274,281 $ 554,711 $ 509,926
Cost of sales 130,271 134,409 247,044 245,571
---------- ---------- ---------- ----------
Gross profit 169,212 139,872 307,667 264,355
Research and development 14,154 10,873 27,641 20,887
Selling and marketing 2,761 2,551 5,517 5,299
General and
administrative 5,164 5,701 9,855 11,099
---------- ---------- ---------- ----------
Earnings from
operations $ 147,133 $ 120,747 $ 264,654 $ 227,070
========== ========== ========== ==========
Brand Segment:
Net revenues $ 60,577 $ 45,258 $ 136,757 $ 85,086
Cost of sales 22,081 18,398 59,287 35,107
---------- ---------- ---------- ----------
Gross profit 38,496 26,860 77,470 49,979
Research and development 9,792 9,296 21,044 16,125
Selling and marketing 14,513 13,987 29,593 28,126
General and
administrative 2,468 2,450 5,371 5,015
---------- ---------- ---------- ----------
Earnings from
operations $ 11,723 $ 1,127 $ 21,462 $ 713
========== ========== ========== ==========
Corporate/Other:
General and
administrative $ 24,680 $ 16,879 $ 46,694 $ 28,137
Litigation settlements - - (21,669) -
---------- ---------- ---------- ----------
Loss from operations $ (24,680) $ (16,879) $ (25,025) $ (28,137)
========== ========== ========== ==========
CONTACT: Mylan Laboratories Inc.
Kris King, 724-514-1800
SOURCE: Mylan Laboratories Inc.