LAKE FOREST, Ill., Nov. 5 /PRNewswire-FirstCall/ -- Hospira, Inc.
(NYSE: HSP), a leading global specialty pharmaceutical and medication delivery
company, today reported results for the third quarter of 2008.
-- Net sales increased 10.4 percent to $925.5 million during the
third quarter of 2008, compared to $838.0 million during the
third quarter of 2007.
-- Adjusted* diluted earnings per share increased 28.6 percent in the
third quarter to $0.63 compared to $0.49 during the third quarter
last year. GAAP third-quarter 2008 diluted earnings per share were
$0.51 versus $0.37 for the same period last year. (Adjusted* measures
exclude certain specified items as described later in this press
release and attached schedules.)
"We are pleased by the strong growth we achieved during the quarter in our
primary areas of strategic focus," said Christopher B. Begley, chairman and
chief executive officer. "Both Specialty Injectable Pharmaceuticals and
Medication Management Systems posted double-digit sales increases, and each
area saw favorable developments that will drive future growth. We remain on
track to achieve our 2008 earnings projections and continue to position
Hospira for future success."
Third-quarter Financial Highlights
The following table summarizes selected financial results for the quarters
ended September 30:
In $ millions GAAP Adjusted*
Three Months Ended Three Months Ended
Sept. 30, Sept. 30,
---------------- % ---------------- %
2008 2007 Change 2008 2007 Change
------ ------ ------ ------ ------ ------
Net Sales $925.5 $838.0 10.4% $925.5 $838.0 10.4%
Gross Profit $330.0 $294.5 12.1% $355.5 $316.5 12.3%
R&D $51.7 $51.4 0.6% $50.8 $50.8 0.0%
SG&A $145.6 $136.5 6.7% $143.2 $129.4 10.7%
Income from
Operations $132.7 $106.6 24.5% $161.5 $136.3 18.5%
Statistics (as a % of Net Sales)
--------------------------------
Gross Profit 35.7% 35.1% 38.4% 37.8%
R&D 5.6% 6.1% 5.5% 6.1%
SG&A 15.7% 16.3% 15.5% 15.4%
Income from
Operations 14.3% 12.7% 17.5% 16.3%
Results under U.S. Generally Accepted Accounting Principles (GAAP) include
items as detailed in the schedules attached to this release.
Net sales for the third quarter of 2008 increased 10.4 percent compared to
the third quarter of 2007. The primary contributors were strong sales in
Specialty Injectable Pharmaceuticals coupled with increased demand for the
company's Medication Management Systems product lines. Net sales for the third
quarter of 2008 increased in all segments compared to the third quarter of
2007: the Americas; Europe, Middle East and Africa (EMEA); and Asia Pacific
(APAC) increased 9.5 percent, 9.6 percent and 23.0 percent, respectively.
Adjusted* income from operations for the third quarter of 2008 was
$161.5 million, up 18.5 percent compared to the third quarter of 2007. The
increase was driven by improved adjusted* gross profit performance, partially
offset by an increase in adjusted* Selling, General and Administrative (SG&A)
expenses. Adjusted* SG&A grew due to increased sales and marketing support
within the Americas and new product launches outside of the Americas.
Cash Flow
Cash flow from operations for the first nine months of 2008 was
$328.6 million compared to $354.5 million for the same period in 2007. The
decrease reflects increased inventory levels for new product launches and new
contract awards with group purchasing organizations, as well as higher trade
receivables, which were primarily due to the increased level of sales in the
third quarter of 2008 compared to the same period in 2007.
Capital expenditures were $126.9 million for the first nine months of
2008, compared with $128.7 million for the same period in 2007.
2008 Projections
The company has revised its net sales projections for the full year to
reflect growth on a constant-currency basis. Full-year net sales are expected
to increase in a range of 6 to 7 percent, excluding the impact of foreign
exchange.
Projections for full-year 2008 adjusted* diluted earnings per share remain
unchanged, and are expected to be between $2.50 and $2.55.
The reconciliation between the projected adjusted* diluted earnings per
share and GAAP diluted earnings per share follows:
Diluted earnings per share -- adjusted* $2.50 - $2.55
--------------
Estimated charges related to planned facilities
optimization initiatives (mid-point of an estimated
range of $0.12 to $0.14 per diluted share for 2008) ($0.13)
Estimated integration and other acquisition-related
expenses (high end of an estimated range of $0.10 to
$0.12 per diluted share for 2008) ($0.12)
Estimated $62 million for the amortization of intangibles
related to the Mayne Pharma acquisition ($0.26)
--------------
Diluted earnings per share -- GAAP $1.99 - $2.04
==============
The company continues to project that cash flow from operations in 2008
will be in the $575 million to $625 million range. Depreciation and
amortization, excluding amortization of intangibles related to the Mayne
Pharma acquisition, are projected to be between $190 million and $200 million.
Capital expenditures are now estimated to range between $170 million and
$190 million in 2008.
*Use of Non-GAAP Financial Measures
Non-GAAP financial measures used in this press release are referred to as
"adjusted" and are reconciled to the most comparable measures calculated in
accordance with GAAP in the schedules attached to this release. For more
information regarding these non-GAAP financial measures, please see Hospira's
Current Report on Form 8-K furnished to the Securities and Exchange Commission
on the date of this press release.
Webcast
A conference call for investors and media will be held at 8 a.m. Central
time on Wednesday, Nov. 5, 2008. A live webcast of the conference call will be
available at www.hospirainvestor.com. Listeners should log on approximately
10 minutes in advance to ensure proper computer setup for receiving the
webcast. A replay will be available on the Hospira Web site for 30 days
following the call.
About Hospira
Hospira, Inc. is a global specialty pharmaceutical and medication delivery
company dedicated to Advancing Wellness(TM). As the world leader in specialty
generic injectable pharmaceuticals, Hospira offers one of the broadest
portfolios of generic acute-care and oncology injectables, as well as
integrated infusion therapy and medication management solutions. Through its
products, Hospira helps improve the safety, cost and productivity of patient
care. The company is headquartered in Lake Forest, Ill., and has more than
14,000 employees. Learn more at www.hospira.com.
Private Securities Litigation Reform Act of 1995 --
A Caution Concerning Forward-Looking Statements
This press release contains forward-looking statements within the meaning
of the Private Securities Litigation Reform Act of 1995, including projections
of certain measures of Hospira's results of operations, projections of certain
charges and expenses, statements regarding the financial impact of the
acquisition of Mayne Pharma, and other statements regarding Hospira's goals,
strategy, expectations and commitments. Hospira cautions that these
forward-looking statements are subject to risks and uncertainties that may
cause actual results to differ materially from those indicated in the
forward-looking statements. Economic, competitive, governmental, technological
and other factors that may affect Hospira's operations and may cause actual
results to be materially different from expectations include the risks,
uncertainties and factors discussed under the headings "Risk Factors" and
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" in Hospira's latest Annual Report on Form 10-K, and Hospira's
subsequent Quarterly Reports on Form 10-Q, which are filed with the Securities
and Exchange Commission, and incorporated by reference. Hospira undertakes no
obligation to release publicly any revisions to forward-looking statements as
the result of subsequent events or developments.
Hospira, Inc.
Condensed Consolidated Statements of Income
(Unaudited)
(dollars and shares in millions, except for per share amounts)
Three Months Ended Nine Months Ended
September 30, September 30,
--------------- % ------------------ %
2008 2007 Change 2008 2007 Change
------ ------ ------ -------- -------- ------
Net sales $925.5 $838.0 10.4 % $2,715.8 $2,490.1 9.1 %
Cost of products
sold 595.5 543.5 9.6 % 1,742.4 1,654.8 5.3 %
------ ------ -------- --------
Gross Profit 330.0 294.5 12.1 % 973.4 835.3 16.5 %
Research and
development 51.7 51.4 0.6 % 160.1 147.5 8.5 %
Acquired
in-process
research and
development - - nm 0.5 84.8 (99.4)%
Selling,
general and
administrative 145.6 136.5 6.7 % 450.7 414.4 8.8 %
------ ------ -------- --------
Income From
Operations 132.7 106.6 24.5 % 362.1 188.6 92.0 %
Interest expense 27.6 34.7 (20.5)% 87.2 102.5 (14.9)%
Other income, net (2.4) (6.2) (61.3)% (6.5) (12.0) (45.8)%
------ ------ -------- --------
Income Before
Income Taxes 107.5 78.1 37.6 % 281.4 98.1 186.9 %
Income tax expense 25.7 18.7 37.4 % 65.1 37.4 74.1 %
------ ------ -------- --------
Net Income $81.8 $59.4 37.7 % $216.3 $60.7 256.3 %
====== ====== ======== ========
Earnings Per
Common Share:
Basic $0.51 $0.38 34.2 % $1.36 $0.39 248.7 %
====== ====== ======== ========
Diluted $0.51 $0.37 37.8 % $1.34 $0.38 252.6 %
====== ====== ======== ========
Weighted Average
Common Shares
Outstanding:
Basic 159.4 157.1 1.5 % 159.1 156.6 1.6 %
====== ====== ======== ========
Diluted 161.6 160.1 0.9 % 161.4 159.5 1.2 %
====== ====== ======== ========
nm = Percent change is not meaningful.
Hospira, Inc.
Reconciliation of Condensed Consolidated Statements of Income
(Unaudited)
(dollars and shares in millions, except per share amounts)
Three Months Ended September 30,
-------------------------------------------------------
2008 2007
-------------------------- --------------------------
GAAP Adjustments Adjusted GAAP Adjustments Adjusted
------ ------ ------ ------ ------ ------
Net sales $925.5 $ - $925.5 $838.0 $ - $838.0
Cost of
products sold 595.5 (25.5)A 570.0 543.5 (22.0)E 521.5
------ ------ ------ ------ ------ ------
Gross Profit 330.0 25.5 355.5 294.5 22.0 316.5
Research and
development 51.7 (0.9)B 50.8 51.4 (0.6)C 50.8
Acquired
in-process
research and
development - - - - - -
Selling,
general and
administrative 145.6 (2.4)C 143.2 136.5 (7.1)C 129.4
------ ------ ------ ------ ------ ------
Income From
Operations 132.7 28.8 161.5 106.6 29.7 136.3
Interest expense 27.6 - 27.6 34.7 - 34.7
Other income,
net (2.4) - (2.4) (6.2) - (6.2)
------ ------ ------ ------ ------ ------
Income Before
Income Taxes 107.5 28.8 136.3 78.1 29.7 107.8
Income tax
expense 25.7 9.1 D 34.8 18.7 10.4 D 29.1
------ ------ ------ ------ ------ ------
Net Income $81.8 $19.7 $101.5 $59.4 $19.3 $78.7
====== ====== ====== ====== ====== ======
Earnings Per
Common Share:
Basic $0.51 $0.13 $0.64 $0.38 $0.12 $0.50
====== ====== ====== ====== ====== ======
Diluted $0.51 $0.12 $0.63 $0.37 $0.12 $0.49
====== ====== ====== ====== ====== ======
Weighted Average
Common Shares
Outstanding:
Basic 159.4 159.4 159.4 157.1 157.1 157.1
====== ====== ====== ====== ====== ======
Diluted 161.6 161.6 161.6 160.1 160.1 160.1
====== ====== ====== ====== ====== ======
Statistics
(as a % of
Net Sales,
except for
income tax rate)
-----------------
Gross Profit 35.7% 38.4% 35.1% 37.8%
R&D 5.6% 5.5% 6.1% 6.1%
SG&A 15.7% 15.5% 16.3% 15.4%
Income From
Operations 14.3% 17.5% 12.7% 16.3%
Income Before
Income Taxes 11.6% 14.7% 9.3% 12.9%
Net Income 8.8% 11.0% 7.1% 9.4%
Income Tax Rate 23.9% 25.5% 24.0% 27.0%
% Change vs. Prior Year
-----------------------
GAAP Adjusted
------- --------
Net sales 10.4 % 10.4 %
Cost of products sold 9.6 % 9.3 %
Gross Profit 12.1 % 12.3 %
Research and development 0.6 % 0.0 %
Acquired in-process research and
development nm nm
Selling, general and administrative 6.7 % 10.7 %
Income From Operations 24.5 % 18.5 %
Interest expense (20.5)% (20.5)%
Other income, net (61.3)% (61.3)%
Income Before Income Taxes 37.6 % 26.4 %
Income tax expense 37.4 % 19.6 %
Net Income 37.7 % 29.0 %
Earnings Per Common Share:
Basic 34.2 % 28.0 %
Diluted 37.8 % 28.6 %
Weighted Average Common Shares Outstanding:
Basic 1.5 % 1.5 %
Diluted 0.9 % 0.9 %
A -- Includes intangible assets amortization of $15.2 related to the Mayne
Pharma acquisition; charges of $10.0 related to the planned closures
of the Ashland, OH; Montreal, Canada; North Chicago, IL; and Morgan
Hill, CA facilities as well as charges to limit, and transfer, R&D
facility operations related to brain-function monitoring devices as
part of Hospira's facilities optimization initiatives; a gain on the
sale of the Montreal, Canada manufacturing plant ($2.5); and Mayne
Pharma integration and other acquisition-related charges of $2.8.
B -- Includes integration and other acquisition-related charges of $0.2
and facilities optimization initiatives of $0.7.
C -- Mayne Pharma Integration and other acquisition-related charges.
D -- Reflects the tax effect of the above adjustments.
E -- Includes intangible assets amortization of $13.4 related to the Mayne
Pharma acquisition; charges of $8.0 related to the planned closures
of the Donegal, Ireland; Ashland, OH; Montreal, Canada; and North
Chicago, IL facilities as part of Hospira's facilities optimization
initiatives; and Mayne Pharma integration charges of $0.6.
nm = Percent change is not meaningful.
Hospira, Inc.
Reconciliation of Condensed Consolidated Statements of Income
(Unaudited)
(dollars and shares in millions, except per share amounts)
Nine Months Ended September 30,
---------------------------------------------------------
2008 2007
----------------------------- --------------------------
GAAP Adjustments Adjusted GAAP Adjustments Adjusted
-------- ------ ------- ------- ------ -------
Net sales $2,715.8 $ - $2,715.8 $2,490.1 $ - $2,490.1
Cost of
products sold 1,742.4 (76.7)A 1,665.7 1,654.8 (126.1)F 1,528.7
-------- ------ ------- ------- ------ -------
Gross Profit 973.4 76.7 1,050.1 835.3 126.1 961.4
Research and
development 160.1 (2.8)B 157.3 147.5 (1.3)D 146.2
Acquired
in-process
research and
development 0.5 (0.5)C - 84.8 (84.8)C -
Selling,
general and
administrative 450.7 (16.8)D 433.9 414.4 (25.2)D 389.2
-------- ------ ------- ------- ------ -------
Income From
Operations 362.1 96.8 458.9 188.6 237.4 426.0
Interest expense 87.2 - 87.2 102.5 (2.2)G 100.3
Other income,
net (6.5) - (6.5) (12.0) (5.7)H (17.7)
-------- ------ ------- ------- ------ -------
Income Before
Income Taxes 281.4 96.8 378.2 98.1 245.3 343.4
Income tax
expense 65.1 31.3 E 96.4 37.4 55.3 E 92.7
-------- ------ ------- ------- ------ -------
Net Income $216.3 $65.5 $281.8 $60.7 $190.0 $250.7
======== ====== ======= ======= ====== =======
Earnings Per
Common Share:
Basic $1.36 $0.41 $1.77 $0.39 $1.21 $1.60
======== ====== ======= ======= ====== =======
Diluted $1.34 $0.41 $1.75 $0.38 $1.19 $1.57
======== ====== ======= ======= ====== =======
Weighted Average
Common Shares
Outstanding:
Basic 159.1 159.1 159.1 156.6 156.6 156.6
======== ====== ======= ======= ====== =======
Diluted 161.4 161.4 161.4 159.5 159.5 159.5
======== ====== ======= ======= ====== =======
Statistics
(as a % of
Net Sales,
except for
income tax rate)
-----------------
Gross Profit 35.8% 38.7% 33.5% 38.6%
R&D 5.9% 5.8% 5.9% 5.9%
SG&A 16.6% 16.0% 16.6% 15.6%
Income From
Operations 13.3% 16.9% 7.6% 17.1%
Income Before
Income Taxes 10.4% 13.9% 3.9% 13.8%
Net Income 8.0% 10.4% 2.4% 10.1%
Income Tax Rate 23.1% 25.5% 38.1% 27.0%
% Change vs. Prior Year
-----------------------
GAAP Adjusted
------- --------
Net sales 9.1 % 9.1 %
Cost of products sold 5.3 % 9.0 %
Gross Profit 16.5 % 9.2 %
Research and development 8.5 % 7.6 %
Acquired in-process research and
development (99.4)% nm
Selling, general and administrative 8.8 % 11.5 %
Income From Operations 92.0 % 7.7 %
Interest expense (14.9)% (13.1)%
Other income, net (45.8)% (63.3)%
Income Before Income Taxes 186.9 % 10.1 %
Income tax expense 74.1 % 4.0 %
Net Income 256.3 % 12.4 %
Earnings Per Common Share:
Basic 248.7 % 10.6 %
Diluted 252.6 % 11.5 %
Weighted Average Common Shares Outstanding:
Basic 1.6 % 1.6 %
Diluted 1.2 % 1.2 %
A -- Includes intangible assets amortization of $46.8 related to the Mayne
Pharma acquisition; charges of $26.6 related to the planned closures
of the Ashland, OH; Montreal, Canada; North Chicago, IL; and Morgan
Hill, CA facilities as well as charges to limit, and transfer, R&D
facility operations related to brain-function monitoring devices as
part of Hospira's facilities optimization initiatives; a gain on the
sale of the Montreal, Canada manufacturing plant ($2.5); and Mayne
Pharma integration and other acquisition-related charges of $5.8.
B -- Includes Mayne Pharma integration and other acquisition-related
charges of $1.0 and facilities optimization initiatives of $1.8.
C -- Acquired in-process research and development.
D -- Mayne Pharma integration and other acquisition-related charges.
E -- Reflects the tax effect of the above adjustments.
F -- Includes inventory step-up charge of $53.1 and intangible assets
amortization of $35.0 related to the Mayne Pharma acquisition;
charges of $33.4 related to the planned closures of the Donegal,
Ireland; Ashland, OH; Montreal, Canada; and North Chicago, IL
facilities as part of Hospira's facilities optimization initiatives;
a reduction of the obligation associated with the sale of the Salt
Lake City, UT manufacturing plant to ICU Medical ($1.6); and Mayne
Pharma integration charges of $6.2.
G -- Other acquisition-related cost: bridge loan fees incurred as a result
of the Mayne Pharma acquisition expensed upon refinancing of loan
during the first quarter of 2007.
H -- Other acquisition-related cost: foreign exchange losses related to
the Mayne Pharma acquisition.
nm = Percent change is not meaningful.
Hospira, Inc.
Reconciliation of Diluted Earnings Per Share
(Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
------------------- --------------------
2008 2007 2008 2007
------ ------ ------ ------
Diluted Earnings Per
Share - GAAP $0.51 $0.37 $1.34 $0.38
Adjustments:
Mayne Pharma acquisition
related:
Acquired in-process
research and
development - - - 0.53
Inventory step-up
charge - - - 0.23
Integration and
other acquisition-
related charges 0.03 0.03 0.11 0.16
Intangible assets
amortization 0.06 0.06 0.20 0.15
Charges related to
facilities optimization
initiatives 0.04 0.03 0.11 0.13
Gain on the sale of the
Montreal, Canada
manufacturing plant (0.01) - (0.01) -
Reduction of obligation
associated with the
sale of the Salt Lake
City, UT manufacturing
plant - - - (0.01)
------ ------ ------ ------
Subtotal of Adjustments 0.12 0.12 0.41 1.19
Diluted Earnings Per
Share - Adjusted $0.63 $0.49 $1.75 $1.57
====== ====== ====== ======
Hospira, Inc.
Condensed Consolidated Balance Sheets
(Unaudited)
(dollars in millions)
September 30, December 31,
Assets 2008 2007
-------- --------
Current Assets:
Cash and cash equivalents $287.4 $241.1
Trade receivables, less allowances of
$12.6 in 2008 and $14.1 in 2007 618.7 559.0
Inventories 854.8 766.6
Deferred income taxes 156.7 176.7
Prepaid expenses 29.0 23.8
Other receivables 71.7 73.8
-------- --------
Total Current Assets 2,018.3 1,841.0
-------- --------
Property and equipment, net 1,226.4 1,276.9
Intangible assets, net 473.3 554.0
Goodwill 1,181.4 1,240.9
Deferred income taxes 65.9 79.4
Investments 47.6 23.7
Other assets 54.3 68.8
-------- --------
Total Assets $5,067.2 $5,084.7
======== ========
Liabilities and Shareholders' Equity
Current Liabilities:
Short-term borrowings $328.8 $58.5
Trade accounts payable 193.3 190.3
Salaries, wages and commissions 141.6 143.6
Deferred income taxes - 8.4
Other accrued liabilities 305.6 393.5
-------- --------
Total Current Liabilities 969.3 794.3
-------- --------
Long-term debt 1,832.6 2,184.4
Deferred income taxes 32.7 50.7
Post-retirement obligations and other long-
term liabilities 335.0 310.1
Commitments and Contingencies -------- --------
Total Shareholders' Equity 1,897.6 1,745.2
-------- --------
Total Liabilities and Shareholders' Equity $5,067.2 $5,084.7
======== ========
Hospira, Inc.
Condensed Consolidated Statements of Cash Flows
(Unaudited)
(dollars in millions)
Nine Months Ended September 30,
-------------------------------
2008 2007
------- -------
Cash Flow From Operating Activities:
Net income $216.3 $60.7
Adjustments to reconcile net income to net
cash from operating activities --
Depreciation 141.2 136.2
Amortization of intangibles 51.1 37.1
Write-off of acquired in-process research
and development 0.5 84.8
Step-up value of acquired inventories sold - 53.1
Stock-based compensation expense 33.2 31.6
Net gains on sales of assets (3.0) (2.9)
Changes in assets and liabilities --
Trade receivables (75.8) (42.3)
Inventories (107.6) (3.4)
Prepaid expenses and other assets 4.1 5.4
Trade accounts payable 7.3 4.8
Other liabilities 37.1 (31.0)
Other, net 24.2 20.4
------- -------
Net Cash Provided by Operating Activities 328.6 354.5
------- -------
Cash Flow From Investing Activities:
Capital expenditures (including instruments
placed with or leased to customers) (126.9) (128.7)
Acquisitions, net of cash acquired, including
payments for deferred consideration (22.2) (1,963.2)
Purchases of intangibles and other investments (49.6) -
(Purchases) Sales of marketable securities (24.5) 0.6
Settlements of foreign currency contracts - (55.7)
Proceeds from dispositions of product rights - 13.8
Proceeds from disposal of facilities 0.8 -
------- -------
Net Cash Used in Investing Activities (222.4) (2,133.2)
------- -------
Cash Flow From Financing Activities:
Issuance of long-term debt, net of fees paid - 3,336.2
Repayment of long-term debt (90.1) (1,700.1)
Other borrowings, net 8.5 (0.3)
Excess tax benefit from stock-based
compensation arrangements 1.0 0.9
Proceeds from stock options exercised 27.4 40.4
------- -------
Net Cash (Used in) Provided by Financing
Activities (53.2) 1,677.1
------- -------
Effect of exchange rate changes on cash
and cash equivalents (6.7) 16.0
------- -------
Net change in cash and cash equivalents 46.3 (85.6)
Cash and cash equivalents at beginning of period 241.1 322.0
------- -------
Cash and cash equivalents at end of period $287.4 $236.4
======= =======
Supplemental Cash Flow Information:
Cash paid during the period --
Interest $96.6 $57.7
Income taxes, net $8.6 $57.6
Hospira, Inc.
Net Sales by Product Line
(Unaudited)
(dollars in millions)
Three Months Ended September 30,
-------------------------------------------------
% Change at % Change at
Actual Constant
2008 2007 Rates Rates
------ ------ ------- -------
Americas --
Pharmaceuticals
Specialty
Injectables $341.1 $299.9 13.7 % 13.5 %
Other Pharma 129.8 131.3 (1.1)% (1.4)%
------ ------
470.9 431.2 9.2 % 9.0 %
Devices
Medication
Management Systems 138.5 123.0 12.6 % 11.9 %
Other Devices 96.3 90.5 6.4 % 6.2 %
------ ------
234.8 213.5 10.0 % 9.5 %
Total Americas 705.7 644.7 9.5 % 9.2 %
Europe, Middle East &
Africa --
Pharmaceuticals
Specialty
Injectables 67.5 65.0 3.8 % (2.3)%
Other Pharma 41.3 37.8 9.3 % 5.4 %
------ ------
108.8 102.8 5.8 % 0.5 %
Devices
Medication
Management Systems 19.6 16.1 21.7 % 12.5 %
Other Devices 18.2 14.9 22.1 % 13.1 %
------ ------
37.8 31.0 21.9 % 12.8 %
Total Europe, Middle
East & Africa 146.6 133.8 9.6 % 3.4 %
Asia Pacific --
Pharmaceuticals
Specialty
Injectables 57.3 45.7 25.4 % 19.8 %
Other Pharma 4.5 4.2 7.1 % 1.2 %
------ ------
61.8 49.9 23.8 % 18.2 %
Devices
Medication
Management Systems 4.8 4.0 20.0 % 14.7 %
Other Devices 6.6 5.6 17.9 % 10.5 %
------ ------
11.4 9.6 18.8 % 12.3 %
Total Asia Pacific 73.2 59.5 23.0 % 17.3 %
------ ------
Net Sales $925.5 $838.0 10.4 % 8.8 %
====== ======
Nine Months Ended September 30,
--------------------------------------------------
% Change at % Change at
Actual Constant
2008 2007 Rates Rates
-------- -------- ------- -------
Americas --
Pharmaceuticals
Specialty
Injectables $981.7 $891.2 10.2 % 9.4 %
Other Pharma 374.4 393.6 (4.9)% (5.5)%
-------- --------
1,356.1 1,284.8 5.5 % 4.7 %
Devices
Medication
Management Systems 418.3 372.2 12.4 % 11.1 %
Other Devices 282.7 273.4 3.4 % 2.4 %
-------- --------
701.0 645.6 8.6 % 7.4 %
Total Americas 2,057.1 1,930.4 6.6 % 5.7 %
Europe, Middle East &
Africa --
Pharmaceuticals
Specialty
Injectables 224.2 184.3 21.6 % 11.0 %
Other Pharma 120.3 111.3 8.1 % 0.1 %
-------- --------
344.5 295.6 16.5 % 6.9 %
Devices
Medication
Management Systems 59.3 49.8 19.1 % 6.4 %
Other Devices 52.2 51.1 2.2 % (8.4)%
-------- --------
111.5 100.9 10.5 % (1.1)%
Total Europe, Middle
East & Africa 456.0 396.5 15.0 % 4.9 %
Asia Pacific --
Pharmaceuticals
Specialty
Injectables 155.3 121.6 27.7 % 16.5 %
Other Pharma 12.1 10.8 12.0 % (0.2)%
-------- --------
167.4 132.4 26.4 % 15.1 %
Devices
Medication
Management Systems 15.5 12.3 26.0 % 16.6 %
Other Devices 19.8 18.5 7.0 % (3.1)%
-------- --------
35.3 30.8 14.6 % 4.8 %
Total Asia Pacific 202.7 163.2 24.2 % 13.2 %
-------- --------
Net Sales $2,715.8 $2,490.1 9.1 % 6.1 %
======== ========
Notes:
Specialty Injectables include generic injectables and proprietary
specialty injectables. Other Pharmaceuticals include large volume IV
solutions, nutritionals and contract manufacturing services (including
former "Sales to Abbott"). Medication Management Systems include infusion
pumps, related software, services and administration sets. Other Devices
include gravity administration sets, critical care products, and other
device products.
Net sales for the nine months ended September 30, 2008 and 2007,
include nine and eight months, respectively, of Mayne Pharma net sales.
Hospira, Inc.
Segment Information
(Unaudited)
(dollars in millions)
Three Months Ended September 30,
----------------------------------------------------------
Net Sales Income from Operations
----------------- ------------------
% %
2008 2007 Change 2008 2007 Change
------ ------ ------ ------ ------ ------
Americas $705.7 $644.7 9.5 % $151.1 A $127.2 A 18.8 %
Europe,
Middle East
& Africa 146.6 133.8 9.6 % 4.4 B 1.8 B 144.4 %
Asia Pacific 73.2 59.5 23.0 % 6.4 C 5.6 C 14.3 %
------ ------ ------ ------
Total
reportable
segments $925.5 $838.0 10.4 % 161.9 134.6 20.3 %
====== ======
Corporate
functions (20.5)D (19.9)D 3.0 %
Stock-based
compensation (8.7) (8.1) 7.4 %
------ ------
Income from
operations 132.7 106.6 24.5 %
Interest
expense and
other income,
net (25.2)E (28.5)E (11.6)%
------ ------
Income before
income taxes $107.5 $78.1 37.6 %
====== ======
Included in the reported Income before
income taxes above, are the following charges:
A -- Americas
Mayne Pharma acquisition related:
Acquired in-process research and
development $ - $ -
Inventories step-up charge - -
Integration and other acquisition-
related charges 1.0 0.9
Intangible assets amortization 4.8 3.4
Charges related to facilities
optimization initiatives 10.7 7.6
Integration and other acquisition-
related charges (0.2) -
Acquired in-process research and
development - -
Gain on the sale of the Montreal,
Canada manufacturing plant (2.5) -
Reduction of obligation associated with
the sale of the Salt Lake City, UT
manufacturing plant - -
------ ------
Total Americas 13.8 11.9
B -- Europe, Middle East & Africa
Mayne Pharma acquisition related:
Acquired in-process research and
development - -
Inventories step-up charge - -
Integration and other acquisition-
related charges 0.7 1.1
Intangible assets amortization 5.8 5.7
Charges related to facilities
optimization initiatives - 0.4
------ ------
Total Europe, Middle East & Africa 6.5 7.2
C -- Asia Pacific
Mayne Pharma acquisition related:
Inventories step-up charge - -
Integration and other acquisition-
related charges 2.1 0.9
Intangible assets amortization 4.6 4.3
Charges related to facilities
optimization initiatives - -
Integration and other acquisition-
related charges 0.8 0.4
------ ------
Total Asia Pacific 7.5 5.6
D -- Corporate functions
Integration and other acquisition-
related charges 1.0 5.0
------ ------
Total Corporate functions 1.0 5.0
E -- Interest expense and other
income, net
Integration and other acquisition-
related charges - -
------ ------
Total Interest expense and other
income, net - -
------ ------
Total $28.8 $29.7
====== ======
Hospira, Inc.
Segment Information
(Unaudited)
(dollars in millions)
Nine Months Ended September 30,
----------------------------------------------------------
Net Sales Income from Operations
------------------- -------------------
% %
2008 2007 Change 2008 2007 Change
-------- -------- ------ ------ ------ ------
Americas $2,057.1 $1,930.4 6.6 % $426.0 A $301.4 A 41.3 %
Europe,
Middle East
& Africa 456.0 396.5 15.0 % 10.7 B (15.4)B 169.5 %
Asia Pacific 202.7 163.2 24.2 % 13.6 C (8.4)C 261.9 %
-------- -------- ------ ------
Total
reportable
segments $2,715.8 $2,490.1 9.1 % 450.3 277.6 62.2 %
======== ========
Corporate
functions (55.0)D (57.4)D (4.2)%
Stock-based
compensation (33.2) (31.6) 5.1 %
------ ------
Income from
operations 362.1 188.6 92.0 %
Interest
expense and
other income,
net (80.7)E (90.5)E (10.8)%
------ ------
Income before
income taxes $281.4 $98.1 186.9 %
====== ======
Included in the reported Income before
income taxes above, are the following charges:
A -- Americas
Mayne Pharma acquisition related:
Acquired in-process research and
development $ - $66.2
Inventories step-up charge - 10.0
Integration and other acquisition-
related charges 2.1 13.0
Intangible assets amortization 15.0 8.8
Charges related to facilities
optimization initiatives 28.4 32.1
Integration and other acquisition-
related charges - -
Acquired in-process research and
development 0.5 -
Gain on the sale of the Montreal,
Canada manufacturing plant (2.5) -
Reduction of obligation associated with
the sale of the Salt Lake City, UT
manufacturing plant - (1.6)
------ ------
Total Americas 43.5 128.5
B -- Europe, Middle East & Africa
Mayne Pharma acquisition related:
Acquired in-process research and
development - 18.6
Inventories step-up charge - 18.0
Integration and other acquisition-
related charges 10.1 2.1
Intangible assets amortization 17.7 14.9
Charges related to facilities
optimization initiatives - 1.3
------ ------
Total Europe, Middle East & Africa 27.8 54.9
C -- Asia Pacific
Mayne Pharma acquisition related:
Inventories step-up charge - 25.1
Integration and other acquisition-
related charges 5.5 1.9
Intangible assets amortization 14.1 11.3
Charges related to facilities
optimization initiatives - -
Integration and other acquisition-
related charges 1.2 0.4
------ ------
Total Asia Pacific 20.8 38.7
D -- Corporate functions
Integration and other acquisition-
related charges 4.7 15.3
------ ------
Total Corporate functions 4.7 15.3
E -- Interest expense and other
income, net
Integration and other acquisition-
related charges - 7.9
------ ------
Total Interest expense and other
income, net - 7.9
------ ------
Total $96.8 $245.3
====== ======
