EX-99.1 2 y10448exv99w1.txt SUMMARY HISTORICAL AND PRO FORMA FINANCIAL DATA SUMMARY HISTORICAL AND PRO FORMA FINANCIAL DATA The following tables present our summary historical and pro forma financial data. We derived annual historical information from our consolidated financial statements as of and for each of the fiscal years ended March 31, 2003 through 2005. The information is only a summary and should be read in conjunction with our historical consolidated financial statements and related notes contained in our annual report on Form 10-K for the fiscal year ended March 31, 2005, as well as other information that has been filed with the SEC. The historical results included below may not be indicative of our future performance. Our unaudited pro forma statement of earnings and other pro forma financial information for the fiscal year ended March 31, 2005 gives effect to the financing for the tender offer as if it had occurred on April 1, 2004. The unaudited pro forma balance sheet data as of March 31, 2005 gives effect to the financing for the tender offer as if it had occurred on March 31, 2005. The unaudited pro forma data does not give effect to our expected repurchase of up to an additional $250 million of our common stock. The unaudited pro forma financial data does not purport to represent what our results of operations or financial condition would actually have been had the financing for the tender offer in fact occurred as of such dates and may not be indicative of our future performance.
PRO FORMA SUMMARY HISTORICAL FINANCIAL INFORMATION AS OF AND FOR THE AS OF AND FOR THE FISCAL YEAR FISCAL YEAR ENDED MARCH 31, ENDED MARCH 31, ------------------------------------------ ----------------- 2003 2004 2005 2005(3) ------------ ------------ ------------ ----------------- (IN THOUSANDS) (UNAUDITED) STATEMENTS OF EARNINGS: Total revenues.......................... $1,269,192 $1,374,617 $1,253,374 $1,253,374 Cost of sales........................... 597,756 612,149 629,834 629,834 ---------- ---------- ---------- ---------- Gross profit............................ 671,436 762,468 623,540 623,540 Operating expenses: Research and development............. 86,748 100,813 87,881 87,881 Selling and administrative........... 173,070 201,612 259,478 259,478 Litigation settlements, net(1)....... (2,370) (34,758) (25,990) (25,990) ---------- ---------- ---------- ---------- Earnings from operations................ 413,988 494,801 302,171 302,171 Interest expense(2)..................... -- -- -- 52,773 Other income, net....................... 12,525 17,807 10,076 10,076 ---------- ---------- ---------- ---------- Earnings before income taxes............ 426,513 512,608 312,247 259,474 Provision for income taxes.............. 154,160 177,999 108,655 90,184 ---------- ---------- ---------- ---------- Net earnings............................ $ 272,353 $ 334,609 $ 203,592 $ 169,290 BALANCE SHEET DATA: Cash and marketable securities.......... $ 686,806 $ 696,929 $ 808,081 $ 561,965 Total assets............................ $1,745,223 $1,885,061 $2,135,673 $1,904,673 Long-term debt, including amounts due within one year...................... $ -- $ -- $ -- $ 775,000 Total shareholders' equity.............. $1,446,332 $1,659,788 $1,845,936 $ 839,936 CASH FLOW DATA: Net cash provided from operating activities........................... $ 313,143 $ 225,578 $ 203,711 Net cash provided by (used in) investing activities........................... $ 16,268 $ (250,326) $ (174,891) Net cash used in financing activities... $ (231,299) $ (122,670) $ (2,571)
PRO FORMA SUMMARY HISTORICAL FINANCIAL INFORMATION AS OF AND FOR THE AS OF AND FOR THE FISCAL YEAR FISCAL YEAR ENDED MARCH 31, ENDED MARCH 31, ------------------------------------------ ----------------- 2003 2004 2005 2005(3) ------------ ------------ ------------ ----------------- (IN THOUSANDS) (UNAUDITED) OTHER FINANCIAL DATA: Adjusted EBITDA(4)...................... $ 454,568 $ 539,124 $ 370,171 $ 370,171 Adjusted EBITDA as a percentage of total revenues............................. 35.8% 39.2% 29.5% 29.5% Capital expenditures.................... $ 32,595 $ 118,451 $ 90,746 $ 90,746 SELECTED RATIOS: Ratio of earnings to fixed charges...... -- -- -- 6.0x Ratio of Adjusted EBITDA to interest expense.............................. -- -- -- 7.0x Ratio of total debt to Adjusted EBITDA............................... -- -- -- 2.1x
------------ (1) In fiscal years 2005, 2004 and 2003, we settled various outstanding legal matters for a net gain of $25,990, $34,758 and $2,370, respectively. (2) Pro forma interest expense has been computed using an average interest rate of 6.3%. (3) Following the completion of the Transactions, we expect to repurchase up to $250.0 million of our common stock using existing cash reserves. The unaudited pro forma data does not give effect to this follow-on repurchase program. (4) Adjusted EBITDA has been reported as it is commonly used by investors to evaluate performance of companies. Adjusted EBITDA represents net earnings from continuing operations before depreciation and amortization, interest expense, other income, net, costs related to the terminated acquisition of King Pharmaceuticals, Inc., and income taxes. Other income, net, includes interest income, income or loss from equity method investees, other non-operating income and expense items. Adjusted EBITDA is not defined under accounting principles generally accepted in the United States, or GAAP, should not be considered in isolation or as a substitute for a measure of performance prepared in accordance with GAAP and is not indicative of operating income from operations as determined under GAAP. Items excluded from Adjusted EBITDA are significant components in understanding and assessing our financial performance. Additionally, our computation of Adjusted EBITDA may not be comparable to other similarly titled measures computed by other companies, because all companies do not calculate it in the same fashion. The following table reconciles Adjusted EBITDA, as presented above, to net earnings:
PRO FORMA FOR THE FISCAL YEAR FISCAL YEAR ENDED MARCH 31, ENDED MARCH 31, --------------------------------- ----------------- 2003 2004 2005 2005 --------- --------- --------- ----------------- (IN THOUSANDS) RECONCILIATION OF ADJUSTED EBITDA TO NET EARNINGS: Adjusted EBITDA.................. $ 454,568 $ 539,124 $ 370,171 $370,171 Add (deduct) Depreciation and amortization.... (40,580) (44,323) (45,100) (45,100) Other income, net................ 12,525 17,807 10,076 10,076 Terminated acquisition costs..... -- -- (22,900) (22,900) Interest expense................. -- -- -- (52,773) Provision for income taxes....... (154,160) (177,999) (108,655) (90,184) --------- --------- --------- -------- Net earnings..................... $ 272,353 $ 334,609 $ 203,592 $169,290 ========= ========= ========= ========