Delaware | 001-14471 | 52-1574808 | ||
(State of Incorporation) | (Commission File Number) | (IRS Employer Identification Number) |
o | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
o | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
o | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
o | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 2.02 Results of Operations and Financial Condition | ||||||||
Item 9.01 Exhibits | ||||||||
SIGNATURES | ||||||||
EX-99.1 |
Item 2.02 | Results of Operations and Financial Condition. |
Item 9.01 | Exhibits. |
99.1
|
Press Release dated May 5, 2011. |
Date: May 5, 2011 | By: | /s/ Richard D. Peterson | ||
Richard D. Peterson | ||||
Executive Vice President, Chief Financial Officer and Treasurer | ||||
CONTACT: | 7720 N. Dobson Road | |
Kara Stancell (media) | Scottsdale, AZ 85256 | |
(480) 291-5454 Sean Andrews (investors) |
(602) 808-8800 www.Medicis.com |
|
(480) 291-5854 |
First | Second | Third | Fourth | Calendar | ||||||||||||||||
Quarter | Quarter | Quarter | Quarter | Year-End | ||||||||||||||||
(3/31/11) | (6/30/11) | (9/30/11) | (12/31/11) | 2011 | ||||||||||||||||
Actual | Estimated | Estimated | Estimated | Estimated | ||||||||||||||||
Revenue |
$ | 165 | $ | 185-$197 | $ | 190-$202 | $ | 195-$206 | $ | 735-$770 | ||||||||||
Non-GAAP diluted
EPS objectives |
$ | 0.50 | $ | 0.61-$0.66 | $ | 0.63-$0.68 | $ | 0.71-$0.76 | $ | 2.45-$2.60 |
| Revenue and non-GAAP diluted EPS objectives include certain assumptions associated with: |
| continued acceptance of newer strengths of SOLODYN by physicians; | ||
| the Companys early 2011 discontinuation of TRIAZ and decision to no longer promote PLEXION; | ||
| the exclusion of all revenue and expenses associated with LipoSonix as the Company is classifying the LipoSonix business as a discontinued operation beginning in the first quarter of 2011; | ||
| competition in the dermal filler and botulinum toxin markets; | ||
| gross profit margins of approximately 90-92% of revenues; | ||
| SG&A expenses of approximately 45-47% of revenues; | ||
| R&D expenses of approximately 6-7% of revenues; | ||
| depreciation and amortization of approximately $30-$32 million for the year; | ||
| effective tax rate of approximately 38-39%; and |
| fully diluted weighted average shares outstanding of approximately 65-66 million shares. |
| disposition of the LipoSonix business; | ||
| special charges associated with R&D milestones or contract payments; | ||
| the financial impact of fluctuations in the Companys stock price and the resulting effect on the Companys SARs; | ||
| additional recognized losses on our auction rate securities investments; | ||
| recognized losses resulting from impairments on our intangible assets; | ||
| the impact of accounting for new collaborative arrangements with Medicis partners; | ||
| the financial impact of changes in accounting or governmental pronouncements; | ||
| charges related to the accounting for our investment in Revance or Hyperion; | ||
| material changes to the demand for ZIANA associated with the launch of a competitive product; | ||
| material changes to our assumptions regarding sales of SOLODYN to wholesalers and the demand for SOLODYN associated with the anticipated November 2011 launch of generic versions of SOLODYN in 45 mg, 90 mg and 135 mg strengths; | ||
| material changes to our assumptions regarding prescription trends toward the newer strengths of SOLODYN; | ||
| the timing of additional SOLODYN patent allowances, if any; | ||
| uncertainty relating to the reduction of the average selling price, including reserves, for covered products as a result of the rise in costs associated with consumer rebate programs, including MediSAVE, RESTYLANE Rewards® and other point-of-sale offers; | ||
| changes in reimbursement policies of health plans and other health insurers; | ||
| the impact of the U.S. economy on the Companys aesthetic and therapeutic franchises; and | ||
| significant changes in assumptions and estimates used for calculating various sales reserves. |
| the Companys future prospects; |
| revenues, gross profit margin, expense, tax rate and earnings guidance; |
| information regarding business development activities and future regulatory approval of the Companys products; |
| timing of FDA approval of the LipoSonix system1, if at all; |
| the commercial success of the Companys products; | ||
| the patentability of certain intellectual property; | ||
| the potential for generic competition to SOLODYN and other Medicis products; | ||
| the future expansion of the aesthetics market; | ||
| the occurrence, timing and financial terms or effect of the Companys proposed disposition of LipoSonix and other potential business development transactions; and | ||
| expectations relating to the Companys product development pipeline. |
| the anticipated size of the markets and demand for the Companys products; | ||
| the availability of product supply or changes in the costs of raw materials; | ||
| the receipt of required regulatory approvals; | ||
| competitive developments affecting our products; | ||
| product liability claims; | ||
| the introduction of federal and/or state regulations relating to the Companys business; | ||
| dependence on sales of key products; |
| changes in the treatment practices of physicians that currently prescribe the Companys products, including prescription levels; |
| the uncertainty of future financial results and fluctuations in operating results, and the factors that may attribute to such fluctuations as set forth in our SEC filings; | ||
| dependence on the Companys strategy (including the uncertainty of license payments and/or other payments due from third parties); | ||
| changes in reimbursement policies of health plans and other health insurers; | ||
| decreases in revenues associated with the FDAs requirement, effective March 2011, that prescription benzoyl peroxide products that are not approved through a New Drug Application, such as TRIAZ, not be sold as prescription products; | ||
| the timing and success of new product development by the Company or third parties; | ||
| the inability to secure patent protection from filed patent applications, inadequate protection of the Companys intellectual property or challenges to the validity or enforceability of the Medicis proprietary rights; | ||
| the risks of pending and future litigation or government investigations; and | ||
| other risks described from time to time in the Companys filings with the SEC. |
1 | The LipoSonix system is not approved or cleared for sale in the U.S. |
Three months ended | ||||||||
March 31, | ||||||||
2011 | 2010 | |||||||
Product revenues |
$ | 163,896 | $ | 163,592 | ||||
Contract revenues |
1,017 | 1,950 | ||||||
Total revenues |
164,913 | 165,542 | ||||||
Cost of revenues |
14,331 | 15,106 | ||||||
Gross profit |
150,582 | 150,436 | ||||||
Operating expenses: |
||||||||
Selling, general and administrative |
84,630 | 72,284 | ||||||
Research and development |
14,273 | 6,558 | ||||||
Depreciation and amortization |
7,324 | 6,733 | ||||||
Total operating expenses |
106,227 | 85,575 | ||||||
Operating income |
44,355 | 64,861 | ||||||
Interest (income) expense, net |
(216 | ) | (102 | ) | ||||
Other expense, net |
| 258 | ||||||
Income from continuing operations before income tax expense |
44,571 | 64,705 | ||||||
Income tax expense |
17,886 | 24,683 | ||||||
Net income from continuing operations |
26,685 | 40,022 | ||||||
Loss from discontinued operations, net of income tax benefit |
7,325 | 4,650 | ||||||
Net income |
$ | 19,360 | $ | 35,372 | ||||
Basic net income per common share |
$ | 0.32 | $ | 0.59 | ||||
Diluted net income per common share |
$ | 0.30 | $ | 0.54 | ||||
Shares used in basic net income per common share |
59,124 | 58,049 | ||||||
Shares used in diluted net income per common share |
65,381 | 64,192 | ||||||
Cash flow from operations |
$ | 91,232 | $ | 38,217 |
Three months ended | Three months ended | |||||||||||||||
March 31, 2011 | March 31, 2010 | |||||||||||||||
Dollar Value | EPS Impact | Dollar Value | EPS Impact | |||||||||||||
GAAP net income |
$ | 19,360 | $ | 35,372 | ||||||||||||
Less: income allocated to participating securities |
(562 | ) | (1,163 | ) | ||||||||||||
GAAP net income attributable to common shareholders |
18,798 | $ | 0.32 | 34,209 | $ | 0.59 | ||||||||||
Less: net undistributed earnings allocated to unvested shareholders |
(3 | ) | (6 | ) | ||||||||||||
Interest expense and associated bond offering costs (tax-effected) |
666 | {a} | 666 | {a} | ||||||||||||
GAAP if-converted net income and diluted EPS |
19,461 | $ | 0.30 | 34,869 | $ | 0.54 | ||||||||||
Non-GAAP adjustments: |
||||||||||||||||
Research and development expenses
related to our collaborations |
7,000 | $ | 0.11 | | | |||||||||||
Loss from discontinued operations |
11,428 | $ | 0.17 | 7,291 | $ | 0.11 | ||||||||||
Impact of stock price fluctuation on SARs |
2,078 | $ | 0.03 | |||||||||||||
Income tax effects related to the above
transactions |
(6,986 | ) | $ | (0.11 | ) | (2,641 | ) | $ | (0.04 | ) | ||||||
Less: income allocated to participating
securities and net undistributed
earnings allocated to unvested
shareholders related to the above
transactions |
(435 | ) | | (156 | ) | | ||||||||||
Non-GAAP if-converted net income and diluted EPS |
$ | 32,546 | $ | 0.50 | $ | 39,363 | $ | 0.61 | ||||||||
Shares used in basic net income per
common share |
59,124 | 58,049 | ||||||||||||||
Shares used in diluted net income per
common share |
65,381 | 64,192 |
{a} | In order to determine if-converted net income, the tax-effected net interest on the 2.5% and 1.5% contingent convertible notes of $0.7 million are added back to GAAP net income for the three months ended March 31, 2011 and March 31, 2010. |
March 31, | December 31, | |||||||
2011 | 2010 | |||||||
(unaudited) | ||||||||
Assets |
||||||||
Cash, cash equivalents & short-term investments |
$ | 775,534 | $ | 703,554 | ||||
Accounts receivable, net |
99,584 | 130,622 | ||||||
Inventory, net |
34,404 | 35,282 | ||||||
Deferred tax assets |
79,351 | 70,461 | ||||||
Other current assets |
18,150 | 15,268 | ||||||
Assets held for sale from discontinued operations |
10,054 | 13,127 | ||||||
Total current assets |
1,017,077 | 968,314 | ||||||
Property & equipment, net |
24,077 | 24,435 | ||||||
Intangible assets, net |
294,891 | 287,706 | ||||||
Deferred tax assets |
33,103 | 36,898 | ||||||
Long-term investments |
32,193 | 21,480 | ||||||
Other assets |
2,991 | 2,991 | ||||||
Total assets |
$ | 1,404,332 | $ | 1,341,824 | ||||
Liabilities and stockholders equity |
||||||||
Current liabilities of continuing operations |
$ | 372,602 | $ | 332,616 | ||||
Liabilities held for sale from discontinued operations |
5,936 | 7,276 | ||||||
Total current liabilities |
378,538 | 339,892 | ||||||
Contingent convertible senior notes 2.5%, due 2032 |
169,145 | 169,145 | ||||||
Contingent convertible senior notes 1.5%, due 2033 |
181 | 181 | ||||||
Other liabilities |
4,960 | 5,084 | ||||||
Stockholders equity |
851,508 | 827,522 | ||||||
Total liabilities and stockholders equity |
$ | 1,404,332 | $ | 1,341,824 | ||||
Working capital |
$ | 638,539 | $ | 628,422 | ||||
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