HOSPIRA, INC. 
By LAKE FOREST, Ill., July 27, 2011 /PRNewswire/ -- Hospira, Inc. (NYSE: HSP), a leading global specialty pharmaceutical and medication delivery company, today reported results for the second quarter ended June 30, 2011. Net sales for the quarter were $1.1 billion, and adjusted* diluted earnings per share were $0.94. (Adjusted* measures exclude certain specified items as described later in this press release and the attached schedules.)
"Hospira delivered strong second-quarter performance, driven primarily by positive results for the oncolytic docetaxel in the United States," said F. Michael Ball, chief executive officer. "We continued to advance the business and make progress on our quality and product supply improvement initiatives. In part due to the quarter's results, we are increasing our sales projections for the year, and remain focused on driving value for our customers, patients and shareholders."
Second-Quarter 2011 Results
The following table highlights selected financial results for the second quarter of 2011 compared to the same period in 2010:
In $
millions, GAAP Adjusted*
except
per
share ---- ---------
Three Months Three Months
amounts Ended Ended
------------- -------------
June 30, June 30,
-------- --------
2011 2010% 2011 2010%
---- ---- ---- ----
Change Change
------ ------
Net
Sales $1,064.1 $968.2 9.9% n/a n/a n/a
------ -------- ------ --- --- --- ---
Gross
Profit
(Net
Sales
less $413.4 $369.2 12.0% $433.4 $416.8 4.0%
------- ------ ------ ---- ------ ------ ---
Cost of Products
Sold)
----------------
Income
from
Operations $190.5 $116.3 63.8% $212.0 $213.1 (0.5)%
----------- ------ ------ ---- ------ ------ -----
Diluted
EPS $0.85 $0.49 73.5% $0.94 $0.86 9.3%
------- ----- ----- ---- ----- ----- ---
Statistics (as a % of Net Sales)
--------------------------------
Gross
Profit
(Net
Sales
less 38.8% 38.1% 40.7% 43.0%
------- ---- ---- ---- ----
Cost of Products
Sold)
----------------
Income
from
Operations 17.9% 12.0% 19.9% 22.0%
----------- ---- ---- ---- ----
Results under U.S. Generally Accepted Accounting Principles (GAAP) include items as detailed in the schedules attached to this press release.
Net sales increased 9.9 percent to $1.1 billion in the second quarter of 2011, compared to $968 million in the second quarter of 2010. Driving the quarter's performance was strong sales in Specialty Injectable Pharmaceuticals, primarily driven by U.S. sales of the oncolytic docetaxel, as well as by contribution from several other newer compounds.
Adjusted* income from operations decreased 0.5 percent to $212 million in the second quarter of 2011, compared to $213 million in the second quarter of 2010. The decrease is primarily due to a difficult year-over-year comparison driven by strong margin contribution from U.S. sales of oncolytic oxaliplatin in the second quarter of 2010, as well as the 2011 impact of the joint-venture arrangement related to the production of docetaxel, which tempered the margin contribution of U.S. docetaxel sales.
The effective tax rate on an adjusted basis* in the quarter was 23.0 percent, a slight decrease from the second-quarter 2010 rate of 23.8 percent.
Cash Flow
Cash flow from operations for the first six months of 2011 was $253 million, compared to the $144 million generated for the same period in 2010. The increase primarily reflects the timing of rebate and chargeback payments, partially offset by higher inventory levels.
Capital expenditures were $139 million for the first six months of 2011, compared to $79 million for the first six months of 2010. The increase is related to the company's capacity expansion and information technology (IT) initiatives.
During the second quarter, Hospira entered into accelerated share repurchase (ASR) agreements under its $1 billion share repurchase authorization. Under the agreements, which the company completed in July 2011, the company repurchased 3.7 million shares of common stock for a total of $200 million.
2011 Projections
Hospira is now projecting full-year net sales growth of approximately 7 to 9 percent on a constant-currency basis, with foreign exchange now expected to contribute an additional 2 percent.
The company anticipates that the projected higher sales growth will be offset by lower than originally anticipated gross margin performance. As a result, Hospira is maintaining its adjusted* diluted earnings per share projection for full-year 2011, which is expected to range between $3.90 and $4.00 per share, representing year-over-year growth of 18 to 21 percent.
The reconciliation between the projected 2011 adjusted* diluted earnings per share and GAAP diluted earnings per share follows:
Diluted earnings per share --
adjusted* $3.90 - $4.00
-------------
Charges related to Project Fuel
initiatives ($0.04)
Charges related to facilities
optimization initiatives ($0.01)
Charges related to certain Latin
America
distributor operations ($0.03)
Tax benefit from the first-quarter
2011 settlement
of a U.S. income tax audit $0.12
Estimated $81 million for the
amortization and impairment
of intangible assets related to
certain acquisitions ($0.33)
------
Diluted earnings per share -- GAAP $3.61 - $3.71
=============
The adjusting items are shown net of tax in aggregate of $32 million, which is calculated for the specified adjustments stated above, based on the statutory tax rate in the various tax jurisdictions in which the items are expected to occur.
The company is maintaining its guidance for cash flow from operations, depreciation and amortization and capital expenditures. Cash flow from operations is projected to range between $650 million and $700 million. Depreciation and amortization is projected to range between $230 million to $250 million, and capital expenditures are projected to range between $375 million and $400 million.
*Use of Non-GAAP Financial Measures
Adjusted measures used in this press release 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 / Complementary Material
Hospira will hold a conference call for investors and media at 8 a.m. Central time on Wednesday, July 27, 2011. A simultaneous webcast of the conference call will be available on Hospira's website at www.hospirainvestor.com. Listeners should log on approximately 10 minutes in advance to ensure proper setup for receiving the webcast. In addition, complementary information will be available on the presentations page of the Investor Relations website at the beginning of the conference call. A replay will be available on the website 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 approximately 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, cash flow and other statements regarding Hospira's goals and strategy. 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, regulatory, legal, 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 subsequent Forms 10-Q, filed with the Securities and Exchange Commission, which are 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 June 30, % Change
--------------------------- --------
2011 2010
---- ----
Net sales $1,064.1 $968.2 9.9%
-------- ------
Cost of
products
sold 650.7 599.0 8.6%
Restructuring,
impairment and
(gain) on
disposition of
assets, net 1.5 2.6 (42.3)%
Research and
development 65.8 80.4 (18.2)%
Selling,
general and
administrative 155.6 169.9 (8.4)%
Total
operating
costs and
expenses 873.6 851.9 2.5%
----- -----
Income From
Operations 190.5 116.3 63.8%
Interest
expense 23.9 24.2 (1.2)%
Other income,
net (2.0) (0.3) 566.7%
Income Before
Income Taxes 168.6 92.4 82.5%
Income tax
expense 36.7 9.4 290.4%
Equity income
from
affiliates,
net (11.7) (0.5) nm
Net Income $143.6 $83.5 72.0%
====== =====
Earnings Per
Common
Share:
Basic $0.86 $0.50 72.0%
===== =====
Diluted $0.85 $0.49 73.5%
===== =====
Weighted
Average
Common
Shares
Outstanding:
Basic 166.1 165.8 0.2%
=
Diluted 169.0 169.1 (0.1)%
=
Adjusted
Gross Profit
(1)(2) $433.4 $416.8 4.0%
Adjusted
Income From
Operations
(1) $212.0 $213.1 (0.5)%
Adjusted Net
Income (1) $158.1 $144.7 9.3%
Adjusted
Diluted
Earnings Per
Share (1) $0.94 $0.86 9.3%
Statistics (as a % of net sales,
except for income tax rate):
GAAP Three Months Ended June
30,
-----------------------------
2011 2010
---- ----
Gross Profit (2) 38.8% 38.1%
Income From
Operations 17.9% 12.0%
Net Income 13.5% 8.6%
Income Tax Rate 21.8% 10.2%
Adjusted (1) Three Months Ended
June 30,
-------------------------------
2011 2010
---- ----
Gross Profit (2) 40.7% 43.0%
Income From
Operations 19.9% 22.0%
Net Income 14.9% 14.9%
Income Tax Rate 23.0% 23.8%
Adjusted financial measures exclude certain specified items as
described and reconciled to comparable GAAP financial measures in
the Reconciliation of GAAP to Non-GAAP Financial Measures
(1) contained in this press release.
Gross profit is defined as Net sales less Cost of products sold.
Adjusted gross profit excludes certain specified items, as
(2) indicated in the previous footnote.
nm - Percentage change is not meaningful.
Hospira, Inc.
Condensed Consolidated Statements of Income
(Unaudited)
(dollars and shares in millions, except for per share amounts)
Six Months Ended June 30, % Change
------------------------- --------
2011 2010
---- ----
Net sales $2,066.4 $1,975.8 4.6%
-------- --------
Cost of
products
sold 1,253.9 1,176.3 6.6%
Restructuring,
impairment and
(gain) on
disposition of
assets, net 14.7 (5.0) (394.0)%
Research and
development 122.7 132.1 (7.1)%
Selling,
general and
administrative 320.8 348.5 (7.9)%
Total operating
costs and
expenses 1,712.1 1,651.9 3.6%
------- -------
Income From
Operations 354.3 323.9 9.4%
Interest
expense 47.3 47.6 (0.6)%
Other
income,
net (4.2) (1.5) 180.0%
---- ----
Income Before
Income Taxes 311.2 277.8 12.0%
Income tax
expense 46.6 53.6 (13.1)%
Equity income
from
affiliates,
net (28.9) (1.0) nm
----- ----
Net Income $293.5 $225.2 30.3%
====== ======
Earnings Per
Common Share:
Basic $1.76 $1.36 29.4%
===== =====
Diluted $1.73 $1.34 29.1%
===== =====
Weighted
Average Common
Shares
Outstanding:
Basic 166.5 165.0 0.9%
Diluted 169.6 168.5 0.7%
Adjusted Gross
Profit (1)(2) $857.7 $871.5 (1.6)%
Adjusted Income
From
Operations (1) $415.4 $453.0 (8.3)%
Adjusted Net
Income (1) $315.6 $304.1 3.8%
Adjusted
Diluted
Earnings Per
Share (1) $1.86 $1.80 3.3%
Statistics (as a % of net sales,
except for income tax rate):
GAAP Six Months Ended June 30,
------------------------------
2011 2010
---- ----
Gross Profit (2) 39.3% 40.5%
Income From
Operations 17.1% 16.4%
Net Income 14.2% 11.4%
Income Tax Rate 15.0% 19.3%
Adjusted (1) Six Months Ended
June 30,
-----------------------------
2011 2010
---- ----
Gross Profit (2) 41.5% 44.1%
Income From
Operations 20.1% 22.9%
Net Income 15.3% 15.4%
Income Tax Rate 23.0% 25.6%
Adjusted financial measures exclude certain specified items
as described and reconciled to comparable GAAP financial
measures in the Reconciliation of GAAP to Non-GAAP
(1) Financial Measures contained in this press release.
Gross profit is defined as Net sales less Cost of products
sold. Adjusted gross profit excludes certain specified
(2) items, as indicated in the previous footnote.
nm - Percentage change is not meaningful.
Hospira, Inc.
Reconciliation of GAAP to Non-GAAP Financial Measures
(Unaudited)
(dollars and shares in millions, except for per share amounts)
Three months
ended June 30,
2011
Reconciliation
of GAAP to
Non-GAAP
Financial
Measures:
---------------
Gross Income Net Income Diluted
Profit (1) From (2) EPS
----------- ------- ----------- --------
Operations
----------
GAAP financial
measures $413.4 $190.5 $143.6 $0.85
Specified item:
Amortization
and impairment
of certain
intangible
assets (A) 20.0 21.5 14.5 0.09
Adjusted
financial
measures (3) $433.4 $212.0 $158.1 $0.94
====== ====== ====== =====
GAAP results for the three months ended June 30, 2011 include:
(A)Amortization and impairment of certain intangible assets: $20.0 million
reported in Cost of products sold and $1.5 million reported in
Restructuring, impairment and (gain) on disposition of assets, net
resulting from acquisitions including Mayne Pharma Limited ("Mayne
Pharma"), Javelin Pharmaceuticals, Inc. ("Javelin Pharma") and a
generic injectable business by Hospira Healthcare India Private Limited
("Hospira India").
Three months
ended June 30,
2010
Reconciliation
of GAAP to Non-
GAAP Financial
Measures:
----------------
Gross Income Net Income Diluted
Profit (1) From (2) EPS
----------- ------- ----------- --------
Operations
----------
GAAP financial
measures $369.2 $116.3 $ 83.5 $0.49
Specified items:
Project Fuel and
related
charges (A) 4.0 11.1 7.4 0.05
Facilities
Optimization
charges (B) 2.1 2.5 1.8 0.01
Amortization of
certain
intangible
assets (C) 15.7 15.7 9.6 0.06
Certain quality
and product
related charges
(D) 25.8 25.8 16.6 0.10
Acquisition and
integration-
related charges
(E) - 0.2 0.1 -
Litigation
settlement and
related charges
(F) - 14.0 8.5 0.05
Research and
development
charge (G) - 27.5 17.2 0.10
Adjusted
financial
measures (3) $416.8 $213.1 $144.7 $0.86
====== ====== ====== =====
GAAP results for the three months ended June 30,
2010 include:
Project Fuel and related charges: $4.0
million reported in Cost of products sold,
$2.2 million reported in Restructuring,
impairment and (gain) on disposition of
assets, net, $0.1 million reported in
Research and development and $4.8 million
reported in Selling, general and
administrative. Project Fuel initiatives
include costs for process optimization
implementation, severance and other
employee benefits, exit costs, and other
(A) asset charges.
Facilities Optimization charges: $2.1
million reported in Cost of products sold
and $0.4 million reported in
Restructuring, impairment and (gain) on
disposition of assets, net. These charges
relate to facilities optimization from the
closure or departure from certain
manufacturing and research and development
("R&D") facilities and include costs for
severance and other employee benefits,
accelerated depreciation and relocation of
(B) production and R&D operations.
Amortization of certain intangible assets
reported in Cost of products sold
resulting from acquisitions including
Mayne Pharma and a generic injectable
(C) business by Hospira India.
Certain quality and product related charges
reported in Cost of products sold
primarily include third party oversight
and consulting costs and penalties for
failure to supply certain product to
customers. These charges are directly
associated with Hospira's response to the
United States Food and Drug Administration
("FDA") Warning Letter received in April
(D) 2010.
Acquisition and integration-related
charges: $1.2 million reported in Research
and development and $(1.0) million
reported in Selling, general and
administrative. These charges include
acquisition and integration costs
resulting from acquisitions including
Javelin Pharma and a generic injectable
(E) business by Hospira India.
Retractable Technologies, Inc. ("RTI")
litigation settlement and related charges
reported in Selling, general and
(F) administrative.
Research and development charge resulting
from an initial payment related to an
agreement with DURECT and corresponding
milestone reached for development of a
long-acting local anesthetic product that
(G) has not yet achieved regulatory approval.
Gross profit is defined as Net sales less Cost
(1) of products sold.
Adjusted Net Income is shown net of tax of $7.0
million and $35.7 million for the three months
ended June 30, 2011 and 2010, respectively,
based on the statutory tax rate in the various
tax jurisdictions in which the adjustments
(2) occurred.
The Non-GAAP financial measures contained in
this press release (including adjusted gross
profit, adjusted income from operations,
adjusted net income and adjusted diluted
Earnings Per Share) adjust for certain
specified items. All Non-GAAP financial
measures are intended to supplement the
applicable GAAP measures and should not be
considered in isolation from, or a replacement
for, financial measures prepared in accordance
with GAAP. Refer to Hospira's filing on Form
8-K filed on July 27, 2011 for additional
(3) information.
Hospira, Inc.
Reconciliation of GAAP to Non-GAAP Financial Measures
(Unaudited)
(dollars and shares in millions, except for per share amounts)
Six months
ended June
30, 2011
Reconciliation
of GAAP to
Non-GAAP
Financial
Measures:
---------------
Gross Income Net Income Diluted
Profit (1) From (2) EPS
----------- ------- ----------- --------
Operations
----------
GAAP financial
measures $812.5 $354.3 $293.5 $1.73
Specified
items:
Project Fuel
and related
charges (A) 5.0 9.6 6.3 0.04
Facilities
Optimization
charges (B) 0.8 1.1 0.7 0.01
Amortization
and
impairment of
certain
intangible
assets (C) 39.4 42.6 29.0 0.17
Other
restructuring
charges (D) - 7.8 5.8 0.03
Settlement of
IRS tax audit
benefit (E) - - (19.7) (0.12)
Adjusted
financial
measures (3) $857.7 $415.4 $315.6 $1.86
====== ====== ====== =====
GAAP results for the six months ended June 30, 2011 include:
Project Fuel and related charges: $5.0 million reported
in Cost of products sold, $3.4 million reported in
Restructuring, impairment and (gain) on disposition of
assets, net and $1.2 million reported in Selling,
general and administrative. Project Fuel initiatives
include costs for process optimization implementation,
severance and other employee benefits, exit costs, and
(A) other asset charges.
Facilities Optimization charges: $0.8 million reported in
Cost of products sold and $0.3 million reported in
Restructuring, impairment and (gain) on disposition of
assets, net. These charges relate to facilities
optimization from the closure or departure from certain
manufacturing and R&D facilities and include costs for
severance and other employee benefits, accelerated
depreciation and relocation of production and R&D
(B) operations.
Amortization and impairment of certain intangible assets:
$39.4 million reported in Cost of products sold and $3.2
million reported in Restructuring, impairment and (gain)
on disposition of assets, net resulting from
acquisitions including Mayne Pharma, Javelin Pharma and
(C) a generic injectable business by Hospira India.
Other restructuring charges: $7.8 million reported in
Restructuring, impairment and (gain) on disposition of
assets, net for distribution contract termination
(D) charges related to certain Latin America operations.
Settlement of IRS tax audit benefit of $19.7 million
reported in Income tax expense. This discrete income tax
benefit is related to the completion and effective
(E) settlement of U.S. tax return audits.
Six months
ended June 30,
2010
Reconciliation
of GAAP to
Non-GAAP
Financial
Measures:
---------------
Gross Income Net Income Diluted
Profit (1) From (2) EPS
----------- ------- ----------- --------
Operations
----------
GAAP financial
measures $799.5 $323.9 $225.2 $1.34
Specified
items:
Project Fuel
and related
charges (A) 7.7 9.7 2.8 0.02
Facilities
Optimization
charges (B) 4.1 5.5 3.9 0.02
Amortization of
certain
intangible
assets (C) 34.4 34.4 22.2 0.13
Certain quality
and product
related
charges (D) 25.8 25.8 16.6 0.10
Acquisition and
integration-
related
charges (E) - 12.2 7.7 0.04
Litigation
settlement and
related
charges (F) - 14.0 8.5 0.05
Research and
development
charge (G) - 27.5 17.2 0.10
Adjusted
financial
measures (3) $871.5 $453.0 $304.1 $1.80
====== ====== ====== =====
GAAP results for the six months ended June 30, 2010 include:
Project Fuel and related charges: $7.7 million reported in
Cost of products sold, $5.0 million reported in
Restructuring, impairment and (gain) on disposition of
assets, net, $0.3 million reported in Research and
development and $8.1 million reported in Selling, general
and administrative. Project Fuel initiatives include costs
for process optimization implementation, severance and
other employee benefits, exit costs, and other asset
charges. These charges are offset by a $11.4 million gain
reported in Restructuring, impairment and (gain) on
disposition of assets, net related to the disposal of the
non-strategic net assets associated with the Wasserburg,
(A) Germany, facility.
Facilities Optimization charges: $4.1 million reported in
Cost of products sold and $1.4 million reported in
Restructuring, impairment and (gain) on disposition of
assets, net. These charges relate to facilities
optimization from the closure or departure from certain
manufacturing and R&D facilities and include costs for
severance and other employee benefits, accelerated
depreciation and relocation of production and R&D
(B) operations.
Amortization of certain intangible assets reported in Cost
of products sold resulting from acquisitions including
Mayne Pharma and a generic injectable business by Hospira
(C) India.
Certain quality and product related charges reported in
Cost of products sold primarily include third party
oversight and consulting costs and penalties for failure
to supply certain product to customers. These charges are
directly associated with Hospira's response to the FDA
(D) Warning Letter received in April 2010.
Acquisition and integration-related charges: $2.2 million
reported in Research and development and $10.0 million
reported in Selling, general and administrative. These
charges include acquisition and integration costs
resulting from acquisitions including Javelin Pharma and a
(E) generic injectable business by Hospira India.
RTI litigation settlement and related charges reported in
(F) Selling, general and administrative.
Research and development charge resulting from an initial
payment related to an agreement with DURECT and
corresponding milestone reached for development of a long-
acting local anesthetic product that has not yet achieved
(G) regulatory approval.
Gross profit is defined as Net sales less Cost of products
(1) sold.
Adjusted Net Income is shown net of tax of $19.3 million and
$50.5 million exclusive of the 2011 tax audit settlement for
the six months ended June 30, 2011 and 2010, respectively,
based on the statutory tax rate in the various tax
(2) jurisdictions in which the adjustments occurred.
The Non-GAAP financial measures contained in this press
release (including adjusted gross profit, adjusted income from
operations, adjusted net income and adjusted diluted Earnings
Per Share) adjust for certain specified items. All Non-GAAP
financial measures are intended to supplement the applicable
GAAP measures and should not be considered in isolation from,
or a replacement for, financial measures prepared in
accordance with GAAP. Refer to Hospira's filing on Form 8-K
(3) filed on July 27, 2011 for additional information.
Hospira, Inc.
Condensed Consolidated Balance Sheets
(Unaudited)
(dollars in millions)
June 30, December 31,
2011 2010
---- ----
Assets
Current Assets:
Cash and cash equivalents $601.4 $604.3
Trade receivables, less allowances of
$10.8 in 2011 and $8.2 in 2010 593.8 605.0
Inventories 1,141.6 955.5
Deferred income taxes 149.0 165.2
Prepaid expenses 57.1 43.6
Other receivables 60.3 103.9
---- -----
Total Current Assets 2,603.2 2,477.5
------- -------
Property and equipment, net 1,346.0 1,279.2
Intangible assets, net 448.8 480.3
Goodwill 1,531.7 1,500.8
Deferred income taxes 216.5 178.8
Investments 91.1 64.7
Other assets 74.4 65.0
---- ----
Total Assets $6,311.7 $6,046.3
======== ========
Liabilities and Shareholders' Equity
Current Liabilities:
Short-term borrowings $43.1 $33.5
Trade accounts payable 280.3 320.7
Salaries, wages and commissions 128.1 136.0
Other accrued liabilities 476.6 441.4
----- -----
Total Current Liabilities 928.1 931.6
----- -----
Long-term debt 1,716.4 1,714.4
Deferred income taxes 4.5 4.4
Post-retirement obligations and other
long-term liabilities 189.0 212.4
Commitments and Contingencies
Total Shareholders' Equity 3,473.7 3,183.5
Total Liabilities and Shareholders'
Equity $6,311.7 $6,046.3
======== ========
Hospira, Inc.
Condensed Consolidated Statements of Cash Flows
(Unaudited)
(dollars in millions)
Six Months Ended June 30,
-------------------------
2011 2010
---- ----
Cash Flow From Operating Activities:
Net income $293.5 $225.2
Adjustments to reconcile net income to net
cash from operating activities-
Depreciation 81.7 79.9
Amortization of intangible assets 45.1 40.2
Stock-based compensation expense 23.0 27.8
Undistributed equity income from
affiliates (28.9) (1.0)
Deferred income taxes and other tax
adjustments (24.6) 12.1
Impairment and other asset charges
(benefits) 8.3 (5.9)
Gain on disposition of assets - (11.4)
Changes in assets and liabilities-
Trade receivables 29.1 (126.7)
Inventories (173.6) (41.9)
Prepaid expenses and other assets (2.7) (12.6)
Trade accounts payable (44.9) 34.0
Other liabilities 43.9 (94.7)
Other, net 3.1 18.8
Net Cash Provided by Operating Activities 253.0 143.8
----- -----
Cash Flow From Investing Activities:
Capital expenditures (including
instruments placed with or leased to
customers) (138.6) (79.4)
Acquisitions, net of cash acquired - (397.7)
Purchases of intangibles and other
investments (4.2) (11.2)
Proceeds from disposition of businesses
and assets 13.3 62.6
Net Cash Used in Investing Activities (129.5) (425.7)
------ ------
Cash Flow From Financing Activities:
Other borrowings, net 6.7 (3.5)
Common stock repurchased (200.0) -
Excess tax benefit from stock-based
compensation arrangements 6.8 16.3
Proceeds from stock options exercised 44.0 112.4
Net Cash (Used in) Provided by Financing
Activities (142.5) 125.2
------ -----
Effect of exchange rate changes on cash
and cash equivalents 16.1 (6.0)
---- ----
Net change in cash and cash equivalents (2.9) (162.7)
Cash and cash equivalents at beginning of
period 604.3 946.0
Cash and cash equivalents at end of period $601.4 $783.3
====== ======
Supplemental Cash Flow Information:
Cash paid during the period-
Interest $50.8 $50.3
Income taxes, net of refunds $31.2 $70.9
Hospira, Inc.
Net Sales by Product Line
(Unaudited)
(dollars in millions)
Three Months Ended June 30,
---------------------------
2011 2010 % Change at % Change at
---- ---- ----------- -----------
Constant
Actual Currency Currency
--------------- ---------
Rates Rates (1)
----- ---------
Americas--
Specialty Injectable
Pharmaceuticals $528.7 $453.0 16.7% 15.9%
Medication Management 200.5 205.2 (2.3)% (4.4)%
Other Pharma 113.9 122.9 (7.3)% (5.7)%
----- -----
Total Americas 843.1 781.1 7.9% 7.2%
Europe, Middle East &
Africa--
Specialty Injectable
Pharmaceuticals 76.1 67.3 13.1% (0.4)%
Medication Management 33.9 28.6 18.5% 4.5%
Other Pharma 24.6 24.9 (1.2)% (8.4)%
---- ----
Total Europe, Middle
East & Africa 134.6 120.8 11.4% (0.9)%
Asia Pacific--
Specialty Injectable
Pharmaceuticals 70.4 54.1 30.1% 12.0%
Medication Management 12.1 10.4 16.3% 2.9%
Other Pharma 3.9 1.8 116.7% 116.7%
--- ---
Total Asia Pacific 86.4 66.3 30.3% 13.4%
Net Sales $1,064.1 $968.2 9.9% 6.6%
======== ======
Global--
Specialty Injectable
Pharmaceuticals $675.2 $574.4 17.5% 13.6%
Medication Management 246.5 244.2 0.9% (3.0)%
Other Pharma 142.4 149.6 (4.8)% (4.7)%
Net Sales $1,064.1 $968.2 9.9% 6.6%
======== ======
Six Months Ended June 30,
-------------------------
2011 2010 % Change at % Change at
---- ---- ----------- -----------
Constant
Actual Currency Currency
--------------- ---------
Rates Rates (1)
----- ---------
Americas--
Specialty
Injectable
Pharmaceuticals $1,040.0 $936.9 11.0% 10.4%
Medication
Management 396.5 411.7 (3.7)% (5.2)%
Other Pharma 215.5 248.3 (13.2)% (12.4)%
----- -----
Total Americas 1,652.0 1,596.9 3.5% 2.8%
Europe, Middle East
& Africa--
Specialty
Injectable
Pharmaceuticals 144.6 137.2 5.4% (1.5)%
Medication
Management 67.7 62.6 8.1% 2.1%
Other Pharma 42.3 43.5 (2.8)% (7.4)%
---- ----
Total Europe,
Middle East &
Africa 254.6 243.3 4.6% (1.6)%
Asia Pacific--
Specialty
Injectable
Pharmaceuticals 129.2 111.7 15.7% 3.0%
Medication
Management 22.5 20.0 12.5% 1.5%
Other Pharma 8.1 3.9 107.7% 97.4%
--- ---
Total Asia Pacific 159.8 135.6 17.8% 5.5%
Net Sales $2,066.4 $1,975.8 4.6% 2.4%
======== ========
Global--
Specialty
Injectable
Pharmaceuticals $1,313.8 $1,185.8 10.8% 8.3%
Medication
Management 486.7 494.3 (1.5)% (4.0)%
Other Pharma 265.9 295.7 (10.1)% (10.2)%
Net Sales $2,066.4 $1,975.8 4.6% 2.4%
======== ========
The Non-GAAP financial measures contained in this press
release include comparisons at constant currency rates
(reflecting comparative local currency balances at
(1) prior period foreign exchange rates),
which we define as current period net sales excluding
the impact of the change in foreign exchange rates less
prior period reported net sales divided by prior period
reported net sales. This financial measure
provides information on the change in net sales assuming
that foreign currency exchange rates have not changed
between the prior and the current period. Management
believes the use of this financial measure
aids in the understanding of our change in net sales
without the impact of foreign currency. All Non-GAAP
financial measures are intended to supplement the
applicable GAAP measures and should not be
considered in isolation from, or a replacement for,
financial measures prepared in accordance with GAAP.
SOURCE Hospira, Inc.
