EX-99 3 wp-8kexhibit_53850.txt EXHIBIT 99.1 Exhibit 99.1 Five-Year Summary West Pharmaceutical Services, Inc. and Subsidiaries (in thousands of dollars, except per share data)
2001 2000 1999 1998 1997 ----------------------------------------------------------------- SUMMARY OF OPERATIONS Net sales ................................................. $ 396,900 378,600 395,800 359,900 371,900 Operating profit .......................................... $ 41,300 31,000 61,800 25,300 59,200 Income from continuing operations ......................... $ 19,600 12,700 35,900 1,400 41,900 (Loss) income from discontinued operations................. $ (24,800) (11,100) 2,800 5,300 2,500 ----------------------------------------------------------------- Net (loss) income ......................................... $ (5,200) 1,600 38,700 6,700 44,400 ================================================================= SFAS 142 reconciliation (a): Reported net (loss) income................................. $ (5,200) 1,600 38,700 Goodwill amortization, net of tax ......................... $ 1,300 1,600 1,600 ------------------------------------- Adjusted net (loss) income................................. $ (3,900) 3,200 40,300 ===================================== Net (loss) income per share: Basic (b) Continuing operations ................................. $ 1.37 0.88 2.41 0.09 2.54 Discontinued operations ............................... $ (1.73) (0.77) 0.18 0.32 0.15 ----------------------------------------------------------------- $ (0.36) 0.11 2.59 0.41 2.69 SFAS 142 Reconciliation (a): Reported net (loss) income per share .................. $ (0.36) 0.11 2.59 Goodwill amortization, net of tax...................... $ 0.09 0.11 0.11 ------------------------------------- Adjusted net (loss) income per share................... $ (0.27) 0.22 2.70 Assuming dilution (c) Continuing operations ................................. $ 1.37 0.88 2.39 0.08 2.53 Discontinued operations ............................... $ (1.73) (0.77) 0.18 0.32 0.15 ----------------------------------------------------------------- $ (0.36) 0.11 2.57 0.40 2.68 SFAS 142 Reconciliation (a): Reported net (loss) income per share .................. $ (0.36) 0.11 2.57 Goodwill amortization, net of tax ..................... $ 0.09 0.11 0.11 ------------------------------------- Adjusted net (loss) income per share .................. $ (0.27) 0.22 2.68 Average common shares outstanding ......................... 14,336 14,407 14,914 16,435 16,475 Average shares assuming dilution .......................... 14,348 14,409 15,048 16,504 16,572 Dividends paid per common share ........................... $ .73 .69 .65 .61 .57 ----------------------------------------------------------------- Research, development and engineering expenses ................................................. $ 17,800 17,100 14,200 12,200 11,700 Capital expenditures ...................................... $ 44,100 47,700 39,300 35,100 30,100 -----------------------------------------------------------------
2001 2000 1999 1998 1997 ----------------------------------------------------------------- YEAR-END FINANCIAL POSITION Working capital ........................................... $ 83,200 87,800 68,100 37,000 105,500 Total assets .............................................. $ 511,300 549,100 542,900 500,000 467,600 Total invested capital: Total debt ............................................... $ 193,000 199,400 171,100 141,100 89,000 Minority interests ....................................... $ -- 1,000 800 600 400 Shareholders' equity ..................................... $ 176,800 204,800 231,200 230,100 277,700 ----------------------------------------------------------------- Total invested capital .................................... $ 369,800 405,200 403,100 371,800 367,100 ----------------------------------------------------------------- PERFORMANCE MEASUREMENTS Gross margin (d) .......................................... % 29.3 28.8 34.0 33.5 33.2 Operating profitability (e) ............................... % 10.4 8.2 15.6 7.0 15.9 Tax rate .................................................. % 30.7 34.6 31.3 93.0 22.3 Asset turnover ratio (f) .................................. .75 .69 .76 .74 .80 Return on average shareholders' equity .................... % (2.7) .7 16.8 2.6 16.7 Total debt as a percentage of total invested capital ......................................... % 52.2 49.2 42.5 37.9 24.2 ----------------------------------------------------------------- Stock price range ......................................... $28.35-22.75 31.88-19.63 40.44-30.88 35.69-25.75 35.06-27.00
Performance measurements represent performance indicators commonly used in the financial community. They are not measures of financial performance under generally accepted accounting principles. (a) Effective January 1, 2002, the Company adopted Financial Accounting Standards Statement No. 142, "Goodwill and Other Intangible Assets." SFAS 142 eliminated the previous requirement to amortize goodwill and indefinite-lived intangible assets. Instead, goodwill and intangible assets with indefinite lives are tested for impairment on at least an annual basis or sooner if an event occurs which indicates that there could be impairment. The SFAS 142 impairment test begins with an estimate of the fair value of the reporting unit or intangible asset. The Company has determined its reporting units to be each of the four geographic regions in the Pharmaceutical Systems segment, the drug delivery business unit, and the clinical services business unit. If the fair value of the reporting unit is less than the carrying value, the goodwill or intangible asset is considered impaired. Once impairment is determined, an impairment loss is recognized for the amount that the carrying amount exceeds the fair value. The Company performed an impairment test of its goodwill as of January 1, 2002 and determined that no impairment of the recorded goodwill existed. The changes in the carrying amount of goodwill for the years ended December 31, 2001 and 2000 are as follows: Pharmaceutical Drug Delivery Systems Systems Total --------------------------------------- Balance January 1, 2000 $ 34,200 $ 14,100 $ 48,300 Write-down of site management organization -- (9,200) (9,200) Goodwill amortization (1,200) (700) (1,900) Foreign currency translation adjustments (2,300) -- (2,300) ------------------------------------ Balance December 31, 2000 30,700 4,200 34,900 Goodwill acquired 500 -- 500 Goodwill amortization (1,100) (300) (1,400) Foreign currency translation adjustments (1,400) -- (1,400) ------------------------------------ Balance December 31, 2001 $ 28,700 $ 3,900 $ 32,600 ==================================== Balance as of January 1, 2000 and December 31, 2000 excludes $18,200 and $17,500, respectively, of goodwill related to the contract manufacturing and packaging business. This business was sold in November 2001, therefore goodwill was included in net assets of discontinued operations. Upon the sale of the business, $16,900 of goodwill was included in the loss on disposal. The cost and respective accumulated amortization for the Company's intangible assets, mainly patents, was $11,200 and $3,300 respectively, as of December 31, 2001, and $11,500 and $2,700, respectively, as of December 31, 2000. The cost basis of intangibles includes the effects of foreign currency translation adjustments. The weighted average life of intangibles purchased or acquired for the years ended 2001, 2000 and 1999 was 17 years, 15 years and 17 years, respectively. Amortization expense for the years ended December 31, 2001, 2000 and 1999 was $600, $700 and $1,000, respectively. Estimated amortization for the next five years will be approximately $700 per year. (b) Based on average common shares outstanding. (c) Based on average shares, assuming dilution. (d) Net sales minus cost of goods sold, including applicable depreciation and amortization, divided by net sales. (e) Operating profit (loss) divided by net sales. (f) Net sales divided by average total assets. 2001 includes a net restructuring charge that reduced operating results by $.09 per share. 2000 includes tax benefits totaling $.11 per share realized upon the favorable resolution of tax issues connected to the 1997 reorganization of the Company's German subsidiaries, and 2000 includes a net restructuring charge that reduced operating results by $.78 per share. 1999 includes net tax benefits totaling $.16 per share related to a favorable determination of a prior years' tax appeal and the refund of taxes paid previously as a result of a dividend, and 1999 includes for the first time results of the clinical service business acquired on April 20, 1999. 1998 includes a charge for acquired research and development and a restructuring charge that reduced operating results by $1.72 per share and $.15 per share, respectively, and 1998 includes for the first time the results of two companies acquired in 1998. 1997 includes the net tax benefit mainly from a German tax reorganization which increased net income per share by $.48.