NEW YORK, Oct. 17 /PRNewswire-FirstCall/ -- Forest Laboratories, Inc. , an international pharmaceutical manufacturer and marketer, today announced that fully diluted earnings per share equaled $0.75 in the second quarter of fiscal 2007, an increase of 27% over last year’s second quarter’s fully diluted earnings per share of $0.59. Reported earnings included a $9.1 million charge for stock option expense in accordance with the adoption of Statement of Financial Accounting Standard 123R.
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Net revenues for the quarter increased 15% to $846,975,000 from $736,472,000 in the year-ago period.
Net revenues were comprised of net sales, which increased 13% to $778,676,000 from $691,633,000 in the prior year. Sales in the quarter included $522,662,000 for Lexapro(R) (escitalopram oxalate), our SSRI for the treatment of depression and anxiety in adults, an increase of 12% from the year-ago period. Namenda(R), our NMDA receptor antagonist for the treatment of moderate and severe Alzheimer’s disease, recorded sales of $155,586,000 during the quarter, growth of 26% from last year. Also included in net revenues was other income of $68,299,000 which includes $48,315,000 in earnings contribution from the Benicar(R)* (olmesartan medoxomil) co-promotion agreement, an increase of 55%. The remaining component of other income was principally interest income.
Net income in the current quarter increased 18% to $241,111,000 from $204,884,000 reported in the second quarter of the prior year. Selling, general and administrative expenses increased 2% to $259,008,000. Research and development expenses increased 43% to $93,752,000 during the quarter.
Fully diluted shares outstanding at September 30, 2006 were 322,581,000 a reduction of 23 million shares compared to the year-ago period due mainly to the Company’s ongoing share repurchase program. During the just-completed quarter, the Company repurchased approximately 7.2 million shares leaving an additional 16 million shares available for repurchase under the existing program, which has no expiration date.
Six Month Results
Revenues for the six months ended September 30, 2006 increased 15% to $1,663,313,000 from $1,448,238,000 in the prior year.
Net income for the six months ended September 30, 2006 increased 5% to $441,718,000 from net income of $421,461,000 reported in the six months of the prior year. Diluted earnings per share increased 12% to $1.36 in the current year’s first six months as compared to diluted earnings per share of $1.21 in last year’s six months. The year-ago six-month earnings per share reflect a one-time tax benefit of $36.4 million, or $0.10 per share, related to the repatriation of foreign funds under the American Jobs Creation Act of 2004. Excluding the one-time tax benefit, year-ago fully diluted earnings per share were $1.11.
Fiscal 2007 Guidance
Based on the stronger-than-projected performance of our promoted products, accretion from shares repurchased fiscal year-to-date, and shifting approximately $43 million in planned product milestone payments into next fiscal year, the Company has increased its expectations for fully diluted earning per share for the fiscal year ending March 31, 2007 to $2.60-$2.65 from prior guidance of $2.45-$2.50 per share. The earnings per share guidance does not include the potential impact from additional share repurchases which may be made under the Company’s remaining authorization of 16 million shares.
Howard Solomon, Chairman and Chief Executive Officer of Forest, commented: “We are very pleased with the continued strong performance of our key marketed products: Lexapro, Namenda and Benicar. Given this performance as well as accretion from our significant share repurchases, Forest is now projecting a level of annual earnings per share that meaningfully exceeds our prior record level achieved in fiscal 2005, the last year of Celexa’s exclusivity. At the same time the Company is also significantly increasing its investment in research and development.
This investment will support the continued development of current pipeline products as well as allow the Company to continue to expand the product pipeline. The ultimate goal and key focus of the Company is to successfully license, develop and commercialize a next generation of Forest products that will ultimately more than replace profits from today’s key products which lose exclusivity in the early part of the next decade.”
Forest will host a conference call at 10:00 AM EDT today to discuss the results. The conference call will be webcast live beginning at 10:00 AM EDT on the Company’s website at www.frx.com and also on the website www.streetevents.com. Please log on to either website at least fifteen minutes prior to the conference call as it may be necessary to download software to access the call. A replay of the conference call will be available until October 31, 2006 at both websites and also by dialing 1-800-642-1687 (US investors) or +1-706-645-9291 (international investors) passcode 8085488.
About Forest Laboratories and Its Products
Forest Laboratories (www.frx.com) is a US-based pharmaceutical company dedicated to identifying, developing, and delivering products that make a positive difference in peoples’ lives. Forest Laboratories’ growing product line includes Lexapro(R) (escitalopram oxalate), an SSRI indicated for adults for the initial and maintenance treatment of major depressive disorder and for generalized anxiety disorder; Namenda(R) (memantine HCl), an N-methyl-D- aspartate (NMDA)-receptor antagonist indicated for the treatment of moderate and severe Alzheimer’s disease; Benicar(R)* (olmesartan medoxomil), an angiotensin receptor blocker, and Benicar* HCT(R) (olmesartan medoxomil- hydrochlorothiazide), an angiotensin receptor blocker and diuretic combination product, each indicated for the treatment of hypertension; and Campral(R)* (acamprosate calcium), indicated in combination with psychosocial support for the maintenance of abstinence from alcohol in patients with alcohol dependence who are abstinent at treatment initiation.
* Benicar is a registered trademark of Daiichi Sankyo, and Campral is a registered trademark of Merck Sante s.a.s., subsidiary of Merck KGaA, Darmstadt, Germany.
Except for the historical information contained herein, this release contains “forward-looking statements” within the meaning of the Private Securities Reform Act of 1995. These statements involve a number of risks and uncertainties, including the difficulty of predicting FDA approvals, acceptance and demand for new pharmaceutical products, the impact of competitive products and pricing, the timely development and launch of new products and the risk factors listed from time to time in the Company’s SEC reports, including the Company’s Annual Report on Form 10-K for the fiscal year ended March 31, 2006 and on Form 10-Q for the period ended June 30, 2006.
FOREST LABORATORIES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (Unaudited) THREE MONTHS SIX MONTHS ENDED SEPTEMBER 30 ENDED SEPTEMBER 30 (In thousands, except per share amounts) 2006 2005 2006 2005 Revenues: Net sales $778,676 $691,633 $1,537,444 $1,366,286 Contract revenue 48,909 32,303 91,571 58,572 Other income 19,390 12,536 34,298 23,380 Net revenues 846,975 736,472 1,663,313 1,448,238 Costs and expenses: Cost of goods sold 185,098 158,415 360,783 317,261 Selling, general and administrative 259,008 253,237 503,391 521,710 Research and development 93,752 65,473 232,834 121,866 537,858 477,125 1,097,008 960,837 Income before income tax expense 309,117 259,347 566,305 487,401 Income tax expense 68,006 54,463 124,587 65,940 Net income $241,111 $204,884 $441,718 $421,461 Net income per share: Basic $0.76 $0.60 $1.38 $1.23 Diluted $0.75 $0.59 $1.36 $1.21 Weighted average number of shares outstanding: Basic 317,809 340,531 319,623 341,808 Diluted 322,581 345,815 324,256 346,883
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CONTACT: Charles E. Triano, Vice President - Investor Relations of ForestLaboratories, Inc., +1-212-224-6714, charles.triano@frx.com
Web site: http://www.frx.com//
