<PAGE> 1
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
______________________________________________________________________________
(Mark One)
[x] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1994........................
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934.
____________________________________________________________________________
<TABLE>
<S> <C>
FOR THE QUARTER ENDED COMMISSION FILE NUMBER
SEPTEMBER 30, 1994 1-10269
ALLERGAN, INC.
A DELAWARE CORPORATION IRS EMPLOYER IDENTIFICATION
95-1622442
</TABLE>
2525 DUPONT DRIVE, IRVINE, CALIFORNIA 92715
TELEPHONE NUMBER 714/752-4500
Indicate by a check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
(1) X yes ______no
(2) X yes ______no
Indicate the number of shares outstanding of each of the issuer's classes of
common stock as of the latest practicable date.
As of October 31, 1994 there were 63,551,996 shares of common stock
outstanding.
<PAGE> 2
ALLERGAN, INC.
FORM 10-Q FOR THE QUARTER ENDED SEPTEMBER 30, 1994
INDEX
<TABLE>
<CAPTION>
Page
<S> <C>
PART I - FINANCIAL INFORMATION
ITEM 1 - FINANCIAL STATEMENTS
(A) Consolidated Statements of Earnings - 3
Three Months and Nine Months Ended
September 30, 1994 and 1993
(B) Consolidated Balance Sheets - 4
September 30, 1994 and December 31, 1993
(C) Consolidated Statements of Cash Flows - 5
Nine Months Ended September 30, 1994 and 1993
(D) Notes to Consolidated Financial Statements 6-7
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS 8-11
PART II - OTHER INFORMATION
ITEM 5 12
ITEM 6 13
Signature 14
Exhibits
</TABLE>
2
<PAGE> 3
PART I - FINANCIAL INFORMATION
Allergan, Inc.
Consolidated Statements of Earnings
(In millions, except per share amounts)
<TABLE>
<CAPTION>
Three months Nine months
ended ended
September 30, September 30,
---------------- -----------------
1994 1993 1994 1993
------ ------ ------ ------
<S> <C> <C> <C> <C>
Net Sales $242.2 $216.9 $677.0 $627.6
Operating costs and expenses:
Cost of sales 74.9 63.1 205.8 181.7
Selling, general and
administrative 99.5 89.3 281.9 270.6
Research and development 26.2 25.8 80.0 72.9
------ ------ ------ ------
200.6 178.2 567.7 525.2
------ ------ ------ ------
Operating income 41.6 38.7 109.3 102.4
Nonoperating income (expense):
Interest income 2.2 1.8 5.9 4.7
Interest expense (3.2) (1.9) (8.2) (6.3)
Other, net 3.4 (0.1) 3.7 0.4
------ ------ ------ ------
2.4 (0.2) 1.4 (1.2)
------ ------ ------ ------
Earnings from continuing operations
before income taxes and
minority interest 44.0 38.5 110.7 101.2
Provision for income taxes 13.1 9.5 32.9 25.4
Minority interest 0.7 0.7 1.9 1.8
------ ------ ------ ------
Earnings from continuing operations 30.2 28.3 75.9 74.0
Discontinued Operations
Earnings from operations,
net of income taxes -- 1.4 -- 4.0
Gain on disposal,
net of income taxes -- 0.4 -- 0.4
------ ------ ------ ------
Net Earnings $ 30.2 $ 30.1 $ 75.9 $ 78.4
====== ====== ====== ======
Net Earnings Per Common Share:
Continuing operations $ 0.47 $ 0.43 $ 1.19 $ 1.11
Discontinued operations
Earnings from operations -- 0.02 -- 0.06
Gain on disposal -- 0.01 -- 0.01
------- ------- ------- -------
$ 0.47 $ 0.46 $ 1.19 $ 1.18
======= ======= ======= =======
Weighted Average Common
Shares Outstanding 64.0 66.0 63.8 66.5
</TABLE>
See accompanying notes to consolidated financial statements.
3
<PAGE> 4
Allergan, Inc.
Consolidated Balance Sheets
(In millions, except share data)
<TABLE>
<CAPTION>
September 30, December 31,
1994 1993
------------- ------------
ASSETS
<S> <C> <C>
Current assets:
Cash and equivalents $ 146.2 $141.8
Trade receivables, net 169.6 146.8
Inventories 99.0 90.2
Other current assets 74.3 65.1
-------- ------
Total current assets 489.1 443.9
Investments and other assets 130.2 89.9
Property, plant and equipment, net 296.7 288.1
Goodwill and intangibles, net 124.9 117.9
-------- ------
Total assets $1,040.9 $939.8
======== ======
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Notes payable $ 42.6 $ 38.0
Accounts payable 41.3 59.1
Accrued expenses 164.6 132.6
Income taxes 51.0 46.7
-------- ------
Total current liabilities 299.5 276.4
Long-term debt 122.4 104.6
Other liabilities 39.0 29.6
Commitments and contingencies
Minority interest 10.5 14.7
Stockholders' equity:
Preferred stock, $.01 par value; authori
5,000,000 shares; none issued -- --
Common stock, $.01 par value; authorized
150,000,000 shares; issued 67,403,000
and 67,495,000 shares 0.7 0.7
Additional paid-in capital 195.1 194.5
Foreign currency translation
adjustment 3.0 (5.0)
Retained earnings 457.6 403.2
-------- ------
656.4 593.4
Less - treasury stock, at cost
(3,873,000 and 3,512,000 shares) (86.9) (78.9)
-------- ------
Total stockholders' equity 569.5 514.5
-------- ------
Total liabilities and
stockholders' equity $1,040.9 $939.8
======== ======
</TABLE>
See accompanying notes to consolidated financial statements.
4
<PAGE> 5
Allergan, Inc.
Consolidated Statements of Cash Flows
(In millions)
<TABLE>
<CAPTION>
Nine months
ended September 30,
-------------------
1994 1993
------ ------
<S> <C> <C>
CASH FLOWS PROVIDED BY OPERATING ACTIVITIES:
Net earnings $75.9 $78.4
Non-cash items included in net earnings:
Depreciation and amortization 38.6 35.5
Deferred income taxes (0.4) --
Gain on disposal of business -- (0.9)
Loss on sale of assets 4.5 2.4
Expense of compensation plans 1.4 4.9
Minority interest 1.9 1.9
Changes in assets and liabilities:
Trade receivables (16.8) (15.6)
Inventories 1.1 (8.3)
Accounts payable (16.5) (17.1)
Accrued liabilities (7.1) (6.0)
Income taxes 5.0 3.1
Other (5.7) (0.4)
------ ------
Net cash provided by operating activities 81.9 77.9
------ ------
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to property, plant and equipment (28.9) (32.1)
Disposals of property, plant and equipment 0.8 0.2
Other (42.2) 7.1
------ ------
Net cash used in investing activities (70.3) (24.8)
------ ------
CASH FLOWS FROM FINANCING ACTIVITIES:
Dividends to stockholders (19.7) (19.9)
Net borrowings under commercial paper obligations 9.6 6.9
Increase in notes payable 2.8 0.7
Sale of stock to employees 7.8 3.0
Borrowings of long term debt 10.0 --
Repayments of long term debt (1.4) (3.5)
Payments to acquire treasury stock (21.6) (40.5)
------ ------
Net cash used in financing activities (12.5) (53.3)
------ ------
Effect of exchange rates on cash and
equivalents 5.3 3.7
------ ------
Net increase in cash and equivalents 4.4 3.5
Cash and equivalents at beginning of period 141.8 121.3
------ ------
Cash and equivalents at end of period $146.2 $124.8
====== ======
</TABLE>
See accompanying notes to consolidated financial statements.
5
<PAGE> 6
Allergan, Inc.
Notes to Consolidated Financial Statements
1. In the opinion of management, the accompanying consolidated financial
statements contain all adjustments necessary (consisting only of normal
recurring accruals) to present fairly the financial information contained
therein. These statements do not include all disclosures required by generally
accepted accounting principles and should be read in conjunction with the
audited financial statements of the Company for the year ended December 31,
1993. The results of operations for the nine months ended September 30, 1994
are not necessarily indicative of the results to be expected for the year
ending December 31, 1994. Earnings per common and common equivalent share were
computed by dividing net earnings by the weighted average number of common and
common equivalent shares outstanding during the respective periods.
2. Components of inventory were:
<TABLE>
<CAPTION>
September 30, December 31,
1994 1993
------------- ------------
(in millions)
<S> <C> <C>
Finished goods $ 68.3 $ 58.7
Work in process 11.1 13.8
Raw materials 19.6 17.7
------ ------
Total $ 99.0 $ 90.2
====== ======
</TABLE>
3. Income taxes are determined using an estimated annual effective tax
rate, which is less than the U.S. Federal statutory rate, primarily because of
lower tax rates in Puerto Rico and in certain non U.S. jurisdictions.
Withholding and U.S. taxes have not been provided for unremitted earnings of
certain non U.S. subsidiaries because the Company expects that such earnings
have been or will be reinvested in operations, or will be offset by appropriate
credits for foreign income taxes paid.
4. The Company is involved in various litigation and claims arising in
the normal course of business. The Company's management believes that recovery
or liability with respect to these matters would not have a material adverse
effect on the consolidated financial position and results of operations of the
Company.
5. On October 19, 1994 the Board of Directors declared a quarterly cash
dividend of $0.11 per share, payable December 8, 1994 to stockholders of record
on November 17, 1994.
6
<PAGE> 7
Allergan, Inc.
Notes to Consolidated Financial Statements (Continued)
6. In November 1992, the Company sold its contact lens business in North
and South America. In August 1993, the Company completed the divestiture of
its contact lens business outside of the Americas. Results of operations of
the contact lens business have been reported as a discontinued operation, and
the consolidated statements of earnings exclude sales and expenses of this
business from results of continuing operations for all periods presented.
Results of operations of the contact lens business were as follows:
<TABLE>
<CAPTION>
Three Months ended Nine Months ended
September 30, September 30,
1993 1993
------------------- -----------------
(in millions)
<S> <C> <C>
Net sales $8.0 $29.1
Earnings from operations before
income taxes 2.4 6.7
Earnings from operations,
net of income taxes 1.4 4.0
</TABLE>
7. In September 1994, the Company acquired the assets of Ioptex, a
manufacturer of intraocular lenses. The results of operations of the Ioptex
business contributed $1.1 million to net sales in the third quarter of 1994.
7
<PAGE> 8
ALLERGAN, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS FOR THE QUARTER ENDED SEPTEMBER 30, 1994
RESULTS OF OPERATIONS
The following table compares 1994 and 1993 net sales by Product Line for the
second quarter and year-to-date periods:
<TABLE>
<CAPTION>
Three Months Nine Months
Ended September 30, Ended September 30,
------------------- -------------------
(in millions)
1994 1993 1994 1993
---- ---- ---- ----
<S> <C> <C> <C> <C>
Product Line Sales:
Specialty Pharmaceuticals
Eye Care $108.5 $ 97.5 $306.9 $281.3
Skin Care 8.9 6.5 24.7 22.5
------ ------ ------ ------
117.4 104.0 331.6 303.8
Surgical 35.4 28.9 96.6 81.2
Optical lens care 89.4 84.0 248.8 242.6
------ ------ ------ ------
Total Net Sales $242.2 $216.9 $677.0 $627.6
====== ====== ====== ======
</TABLE>
For the quarter ended September 30, 1994 total net sales increased 12% to
$242.2 million as compared to the third quarter of 1993. Net sales for the
nine months ended September 30, 1994 were $677.0 million, or 8% greater than
the comparable 1993 amount. The impact of foreign currency fluctuations for
the three month period ended September 30, 1994 increased sales by $3.5 million
over the prior comparable period. For the nine months ended September 30,
1994, the impact of foreign currency fluctuations decreased sales by $5.8
million over the prior comparable period. Sales growth excluding the impact of
foreign exchange between comparable periods was 10% for the third quarter and
9% for the nine months ended September 30, 1994. Sales in the United States
and Europe accounted for 49% and 33% of total sales in the third quarter of
1994, respectively. Excluding the impact of foreign currency fluctuations,
sales increased by 14% in the United States and 3% in Europe in the third
quarter of 1994 over comparable 1993 results. Year-to-date 1994 sales
increased by 8% in the United States and 8% in Europe. Net sales in the third
quarter of 1994 included $1.1 million in sales of Ioptex surgical products
acquired September 7, 1994.
These sales growth rates are affected, in part, by the highly competitive and,
in certain cases, also highly regulated markets worldwide in which the company
competes. The ability to increase prices has been limited by, among other
reasons, governmental actions, customer demands, the introduction of
competitors' innovative products and the introduction of lower cost generic
products. The impact to the Company for those affected product lines is the
partial loss of the ability to utilize price increases to offset the effect of
inflation on costs and expenses.
For the three months ended September 30, 1994, Eye Care Pharmaceuticals sales
increased 11% over the comparable 1993 period. For the nine months ended
September 30, 1994, such sales increased by 9% over the comparable 1993 period.
This growth is attributable to increased sales of Acular(R) ophthalmic solution
introduced in the United States in 1993, continued growth in sales of Botox(R)
(Botulinum Toxin Type A) purified neurotoxin complex and other products.
Growth in sales has been negatively impacted by governmental pressure to
restrict price increases in the United States, and governmental
8
<PAGE> 9
Allergan, Inc.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS FOR THE QUARTER ENDED SEPTEMBER 30, 1994
(Continued)
RESULTS OF OPERATIONS (Continued)
actions to control or reduce prices in many international markets. The largest
sales volume products in this product line are glaucoma therapy products,
including Betagan(R) and Propine(R) ophthalmic solutions. In 1994, two major
competitors introduced generic versions of levobunolol (Betagan(R)) and
dipivefrin (Propine(R)). The Company responded by offering its own versions of
generic Betagan(R) and Propine(R) solutions through a distribution agreement
with Schein Pharmaceutical. Future generic competition with other Allergan
products is anticipated. The impact of this form of competition will be
reduced sales.
Skin Care Pharmaceuticals third quarter 1994 sales were 37% higher than the
comparable quarter in 1993. The 1994 increase was partially the result of
lower than expected sales in the third quarter of 1993. Sales for the nine
months ended September 30, 1994 were 10% higher than the comparable period in
1993. Sales increases were primarily the result of increases in sales of
Elimite(R) cream.
Surgical sales increased 22% in the third quarter of 1994 compared to the third
quarter of 1993. For the first nine months of 1994, surgical sales were 19%
greater than the comparable period in 1993. For the third quarter, domestic
sales increased 19% while international sales increased 28% over the prior
comparable quarter. For the nine month period ended September 30, 1994,
domestic sales increased 11% and international sales increased 30% compared to
the first nine months of 1993. The increases in the U.S. market are primarily
the result of increased silicone intraocular lens (IOLs) sales due, in part, to
the introduction of new silicone IOL models. U.S. market sales in the first
nine months of 1994 were impacted by a decline in PMMA IOL sales due to
competitive pressures. Sales growth in international markets is primarily the
result of growth in silicone IOL sales. IOL selling prices continue to decline
in the United States and many international markets as a result of competitive
pressures and governmental actions reducing reimbursement rates for cataract
surgery.
Optical lens care sales of $89.4 million for the three months ended September
30, 1994 were 6% higher than the third quarter of 1993. Sales for the nine
months ended September 30, 1994 of $248.8 million were 3% higher than
comparable 1993 sales. Domestic optical sales increased by 2% in the third
quarter and decreased 5% in the first nine months of 1994 compared to
comparable 1993 results. Optical sales in international markets increased by
8% in the third quarter and 6% in the first nine months of 1994 compared to
comparable 1993 results. Domestic sales were impacted as a result of
continuing competitive pressures within the U.S. contact lens care market
including, among other things, the introduction by Allergan's competitors of
disposable contact lenses and lens disinfection systems that were easier to
use. In 1992 the Company introduced a new contact lens disinfection system
marketed in the United States under the name UltraCare(R) (hydrogen peroxide
based system). During 1993, the Company introduced in certain overseas markets
the Complete(R) disinfection system. This product is targeted at the
convenience oriented market segment. The Complete brand multi-purpose
disinfection system was introduced in the United States in June 1994 and
contributed to the domestic sales increase in the third quarter of 1994.
International lens care product sales increased primarily as a result of
9
<PAGE> 10
Allergan, Inc.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS FOR THE QUARTER ENDED SEPTEMBER 30, 1994
(Continued)
RESULTS OF OPERATIONS (Continued)
increases in sales of UltraCare(R) and Complete(R). Sales increases in 1994
were depressed as a result of the relative strength of the U.S. dollar versus
foreign currencies in the first six months of 1994 in comparison with the
comparable period in 1993.
Allergan's gross margin percentage for the third quarter of 1994 was 69.1% of
net sales, which represents a 1.8 percentage point decrease from the third
quarter of 1993. The gross margin percentage for the nine months ended
September 30, 1994 was 69.6% representing a 1.4 percentage point decrease from
the comparable 1993 percentage. These decreases are a result of, among other
things, the net unfavorable impact of pressures on certain unit average selling
prices, product mix shifts and declining margins on surgical sales. The rate
of decline in gross margin percentage was offset by reductions in royalty and
distribution costs. Gross margin increased in the third quarter of 1994 and
for the first nine months of 1994 over 1993 periods as a result of increases in
net sales offset by the decreases in gross margin percentage.
Operating income was $41.6 million for the third quarter and $109.3 million for
the nine months ended September 30, 1994, representing increases of 7% each for
the third quarter and the nine months over comparable 1993 amounts. The
increases are the result of increases in gross margin discussed above,
decreases in selling, general and administrative expenses as a percentage of
sales, and increases in research and development. Selling, general and
administrative expenses were 41.1% of sales for the third quarter and 41.6% of
sales for the first nine months of 1994 compared to 41.2% and 43.1% for the
comparable periods in 1993. These declines are the result of continuing
management actions to reduce such costs. Research and development expenditures
increased 2% in the third quarter and 10% for the first nine months of 1994
compared to 1993 amounts. Such increases are the result of increased spending
related to Botox(R) and to the clinical trials for the topical retinoid
tazarotene (AGN190168).
Net earnings increased by $0.1 million to $30.2 million in the third quarter
and decreased by $2.5 million to $75.9 million for the first nine months of
1994 compared to 1993 results. Results for 1993 include earnings from
discontinued operations of the contact lens business sold in 1993 amounting to
$1.8 million in the third quarter and $4.4 million for the nine months ended
September 30, 1993. Included in such amounts is a $0.4 million gain from
divestiture of the Company's contact lens business outside the Americas. Net
earnings were increased by the increase in operating income discussed above, a
decline in currency translation losses, and a recovery of costs related to a
shareholder class action lawsuit which was dismissed in 1993. Net earnings
were decreased in 1994 compared to 1993 as a result of an increase in the
effective tax rate from 25% in 1993 to 30% in 1994. Such tax rate increase was
the result of changes in the United States tax laws governing Puerto Rican
operations enacted in 1993.
10
<PAGE> 11
Allergan, Inc.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS FOR THE QUARTER ENDED SEPTEMBER 30, 1994 (Continued)
LIQUIDITY AND CAPITAL RESOURCES
As of September 30, 1994, the Company had no borrowings against its bank credit
facility. This facility allows for borrowings of up to $225 million on a
revolving basis through September 1999. Borrowings under the credit facility
are subject to certain financial and operating covenants, including a
requirement that the Company maintain certain financial ratios and other
customary covenants for credit facilities of similar kind. As of September 30,
1994, the Company had commercial paper borrowings of $112 million including $82
million classified as long-term debt.
The net cash provided by operating activities for the nine months ended
September 30, 1994 was $81.9 million compared with $77.9 million for the
respective 1993 period. Operating cash flow in 1994 was increased by the
effect of reductions in inventories in 1994 offset by the decrease in net
earnings. Most of the Company's existing cash and equivalents are held by its
non-U.S. subsidiaries and will be reinvested in operations outside the United
States.
The Company invested $28.9 million in new facilities and equipment during the
nine months ended September 30, 1994 compared to $32.1 million during the same
period in 1993. Other investing activities in 1994 include $18.3 for product
rights including lump sum payments on royalty agreements, and $16.0 for
acquisition of the assets of the Ioptex business.
Cash outflow committed to financing activities was $12.5 million in the nine
months ended September 30, 1994 compared to $53.3 million cash outflow in 1993.
The 1994 outflow includes $21.6 million in payments to acquire treasury stock
compared to $40.5 million during the comparable period in 1993.
11
<PAGE> 12
Allergan, Inc.
PART II - OTHER INFORMATION
Item 5. Other Information.
The Company's next annual stockholders' meeting will be held on
Tuesday, April 25, 1995 at 10:00 A.M. at the Company's headquarters, Irvine,
California.
Nomination of Directors.
The Restated Certificate of Incorporation of the Company provides that
any stockholder entitled to vote for the election of directors at a meeting may
nominate persons for election as directors only if written notice of such
stockholder's intent to make such nomination is given, either by personal
delivery or United States mail, postage prepaid, to Francis R. Tunney, Jr.,
Secretary, Allergan, Inc., 2525 Dupont Drive, Irvine, CA 92715. To be timely,
a stockholder's notice must be delivered to, or mailed and received at, the
address provided not less than 30 days nor more than 60 days prior to the
scheduled annual meeting, regardless of any postponements, deferrals or
adjournments of that meeting to a later date; provided, however, that if less
than 40 days' notice or prior public disclosure of the date of the scheduled
annual meeting is given or made, notice by the stockholder, to be timely, must
be so delivered or received not later than the close of business on the tenth
day following the earlier of the day on which such notice of the date of the
scheduled annual meeting was mailed or the day on which such public disclosure
was made. A stockholder's notice to the Secretary shall set forth (a) as to
each person whom the stockholder proposes to nominate for election or
re-election as a director, (i) the name, age, business address and residence
address of the person, (ii) the principal occupation or employment of the
person, (iii) the class and number of shares of capital stock of the Company
which are beneficially owned by the person, (iv) any other information relating
to the person that is required to be disclosed in solicitations for proxies for
election of directors pursuant to Rule 14a under the Securities Exchange Act of
1934, as amended; and (b) as to the stockholder giving the notice (i) the name
and address, as they appear on the Company's books, of the stockholder and (ii)
the class and number of shares of the Company's stock which are beneficially
owned by the stockholder on the date of such stockholder notice. The Company
may require any proposed nominee to furnish such other information as may be
reasonably required by the Company to determine the eligibility of such
proposed nominee to serve as director of the Company.
12
<PAGE> 13
Allergan, Inc.
Other Business.
As of the date of this Quarterly Report on Form 10-Q, management knows
of no other matters to be brought before the stockholders at the Annual
Meeting. With respect to any other matters, pursuant to the Company's Restated
Certificate of Incorporation only such business shall be conducted at an annual
meeting of stockholders as is properly brought before the meeting. For
business to be properly brought before an annual meeting by a stockholder, in
addition to any other applicable requirements, timely notice of the matter must
be first given to the Secretary of the Company. To be timely, written notice
must be received by the Secretary no less than 30 days nor more than 60 days
prior to the meeting. If less than 40 days' notice or prior public disclosure
of the meeting has been given to stockholders, then notice of the proposed
business matter must be received by the Secretary not later than ten days after
the mailing of notice of the meeting or such public disclosure. Any notice to
the Secretary must include as to each matter the stockholder proposes to bring
before the meeting (a) a brief description of the proposal desired to be
brought before the meeting and the reason for conducting such business at the
annual meeting, (b) the name and record address of the stockholder proposing
such business and any other stockholders known by such stockholder to be
supporting such proposal, (c) the class and number of shares of the Company
which are beneficially owned by the stockholder on the date of such stockholder
notice and by other stockholders known by such stockholder to be supporting
such proposal on the date of such stockholder notice, and (d) any material
interest of the stockholder in such business.
Item 6. Exhibits and Reports on Form 8-K
Exhibits
(numbered in accordance with Item 601 of Regulation S-K)
(10.1) Amendment No. 1 dated as of September 30, 1994 to the
$150,000,000 Credit Agreement dated as of December 31, 1993
among the Company, the Banks Listed Therein, Morgan Guaranty
Trust Company of New York, as Agent and Bank of America
National Trust and Savings Association, as Co-Agent.
(11) Statement re Computation of Per Share Earnings
(27) Financial Data Schedules
Reports on Form 8-K.
(1) None.
13
<PAGE> 14
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Date: November 9, 1994 ALLERGAN, INC.
----------------------
/s/ Edgar J. Cummins
-----------------------------
Edgar J. Cummins
Vice President of Finance and
Chief Financial Officer
14
<PAGE> 1
EXHIBIT 10.1
CONFORMED COPY
AMENDMENT NO. 1
TO CREDIT AGREEMENT
Amendment, dated as of September 30, 1994 to the Credit Agreement
dated as of December 22, 1993 (the "Agreement") among Allergan, Inc. (the
"Borrower"), the Banks listed on the signature pages hereof, Morgan Guaranty
Trust Company of New York (the "Agent") and Bank of America National Trust and
Savings Association (the "Co-Agent") in the original aggregate principal amount
of $150,000,000.
The parties hereto desire to amend the Agreement subject to the terms
and conditions of this Amendment, as hereinafter provided. Accordingly, the
parties hereto agree as follows:
1. Definitions. Except as otherwise defined herein, capitalized
terms used herein have the respective meanings assigned to them in the
Agreement.
2. Amendments.
(A) The definition of "Commitment" set forth in Section
1.01 of the Agreement is amended to read in its entirety as follows:
"Commitment" means, with respect to each Bank, the
amount set forth opposite the name of such Bank on the
signature pages of Amendment No. 1 dated September 30, 1994 to
the Agreement, as such amount may be reduced from time to time
pursuant to Section 2.09.
(B) The definition of "Level III Status" set forth in
Section 1.01 of the Agreement is amended to read in its entirety as follows:
"Level III Status" exists at any date if, at such
date, (i) the Borrower's outstanding senior unsecured
long-term debt securities are rated BBB+ or higher by S&P and
Baa1 or higher by Moody's and (ii) neither Level I Status nor
Level II Status exists.
(C) The definition of "Level IV Status" set forth in
Section 1.01 of the Agreement is amended to read in its entirety as follows:
"Level IV Status" exists at any date if, at such
date, (i) the Borrower's outstanding senior unsecured
long-term debt securities are rated BBB or higher by S&P and
Baa2 or higher by Moody's and (ii) none of Level I Status,
Level II Status or Level III Status exists.
<PAGE> 2
-2-
(D) Section 1.01 of the Agreement is amended by
alphabetically inserting the term "Level V Status", which shall read in its
entirety as follows:
"Level V Status" exists at any date if, at such date,
none of Level I Status, Level II Status, Level III Status or
Level IV Status exists.
(E) The definition of "Termination Date" set forth in
Section 1.01 of the Agreement is amended by deleting the reference to "December
22, 1998" and by inserting "September 30, 1999" in lieu thereof.
(F) The definition of "CD Margin" set forth in Section
2.07(b) of the Agreement is amended to read in its entirety as follows:
"CD Margin" means (i) 0.295% for any day on which
Level I Status exists, (ii) 0.325% for any day on which Level
II Status exists, (iii) 0.375% for any day on which Level III
Status exists , (iv) 0.425% for any day on which Level IV
Status exists and (v) 0.500% for any day on which Level V
Status exists.
(G) The definition of "Euro-Dollar Margin" set forth in
Section 2.07(c) of the Agreement is amended to read in its entirety as follows:
"Euro-Dollar Margin" means (i) 0.170% for any day on
which Level I Status exists, (ii) 0.20% for any day on which
Level II Status exists, (iii) 0.250% for any day on which
Level III Status exists, (iv) 0.30% for any day on which
Level IV Status exists and (v) 0.375% for any day on which
Level V Status exists.
(H) The definition of "Facility Fee Rate" set forth in
Section 2.08(a) of the Agreement is amended to read in its entirety as follows:
"Facility Fee Rate" means (i) 0.080% per annum for
any day on which Level I Status exists, (ii) 0.10% per annum
for any day on which Level II Status exists, (iii) 0.125% per
annum for any day on which Level III Status exists, (iv)
0.175% per annum for any day on which Level IV Status exists
and (v) 0.250% per annum for any day on which Level V Status
exists.
<PAGE> 3
-3-
(I) Section 5.07 of the Agreement is amended to read in
its entirety as follows:
SECTION 5.07 Subsidiary Debt. The Borrower will
not permit any Subsidiary to incur or suffer to exist any Debt
(excluding Debt owed to the Borrower or a Wholly-Owned
Subsidiary) in excess of 20% of Consolidated Net Worth at any
time in the aggregate for all Subsidiaries .
3. Representations. The Borrower hereby confirms and repeats each
of the representations and warranties set forth in the Agreement on and as of
the date of this Amendment as if made on and as of such date and as if each
reference therein to the Agreement referred to the Agreement as modified
hereby, and represents and warrants that no Event of Default or other event
which, with the giving of notice or the lapse of time, or both, would
constitute such an Event of Default has occurred and is continuing.
4. Agreement as Amended. Except as expressly amended hereby, the
Agreement shall continue in full force and effect in accordance with the terms
thereof.
5. Governing Law. This Amendment, and the Agreement as amended
hereby, shall be construed in accordance with and governed by the laws of the
State of New York.
6. Severability. In case any one or more of the provisions
contained in this Amendment would be invalid, illegal or unenforceable in any
respect, the validity, legality and enforceability of the remaining provisions
contained herein shall not in any way be affected or impaired thereby.
7. Counterparts; Effective Date. This amendment may be executed
in any number of counterparts, each of which shall constitute an original but
all of which when taken together shall constitute one and the same instrument.
This Amendment shall become effective as of the date first above written upon
receipt by the Agent of (i) counterparts hereof executed by each of the parties
hereto and (ii) the Notes, duly executed and delivered by the Borrower,
evidencing the increased Commitments of the Banks and the obligation of the
Borrower to repay any Loans.
<PAGE> 4
-4-
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be executed by their duly authorized officers as of the day and year first
above written.
ALLERGAN, INC.
By: /s/ Jeffrey L. Edwards
------------------------------------
Vice President, Treasurer
Commitments
- - - -----------
$48,375,000 MORGAN GUARANTY TRUST COMPANY
OF NEW YORK
By: /s/ Adam J. Silver
------------------------------------
Associate
$46,125,000 BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION
By: /s/ Yvonne C. Dennis
------------------------------------
Vice President
$46,125,000 CITICORP USA, INC.
By: /s/ Barbara A. Cohen
------------------------------------
Vice President
<PAGE> 5
-5-
<TABLE>
<S> <C>
$28,125,000 ABN AMRO BANK N.V.
LOS ANGELES INTERNATIONAL
BRANCH
By: /s/ John A. Miller
-------------------------------------
Vice President
By: /s/ J. Alexander Pruijs
-------------------------------------
Vice President
$28,125,000 UNION BANK OF SWITZERLAND
By: /s/ Thomas G. Jackson
-------------------------------------
First Vice President
By: /s/ Peter S. Humber
-------------------------------------
Vice President
$28,125,000 WACHOVIA BANK OF GEORGIA, N.A.
By: /s/ Terry L. Atkins
-------------------------------------
Senior Vice President
</TABLE>
<PAGE> 6
-6-
Total Commitments
$225,000,000
MORGAN GUARANTY TRUST COMPANY
OF NEW YORK, As Agent
By: /s/ Adam J. Silver
-----------------------------------
Associate
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION,
As Co-Agent
By: /s/ Yvonne C. Dennis
-----------------------------------
Vice President
<PAGE> 1
ALLERGAN, INC.
EXHIBIT 11
COMPUTATION OF EARNINGS PER SHARE
Earnings per share of common stock, including common stock equivalents, have
been computed based on the following weighted average number of shares and net
earnings:
<TABLE>
<CAPTION>
Three Months Nine Months
Ended Ended
September 30, 1994 September 30, 1994
------------------ ------------------
(000's, except per share amounts)
<S> <C> <C>
Weighted average number of shares
outstanding during the period 63,379 63,468
Weighted average number of additional
shares issuable in connection with
dilutive stock options based upon
use of the treasury stock method
and average market prices 633 381
------- -------
Weighted average number of common shares
including common stock equivalents 64,012 63,849
======= =======
Net earnings for the period $30,230 $75,939
======= =======
Primary earnings per common share $ 0.47 $ 1.19
======= =======
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED STATEMENTS OF EARNINGS AND BALANCE SHEETS OF ALLERGAN, INC. AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH REPORT ON FORM 10Q FOR THE
QUARTER ENDED SEPTEMBER 30, 1994
</LEGEND>
<MULTIPLIER> 1,000
<CURRENCY> US DOLLARS
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-START> JAN-01-1994
<PERIOD-END> SEP-30-1994
<EXCHANGE-RATE> 1
<CASH> 146,200
<SECURITIES> 0
<RECEIVABLES> 177,800
<ALLOWANCES> 8,200
<INVENTORY> 99,000
<CURRENT-ASSETS> 489,100
<PP&E> 476,800
<DEPRECIATION> 180,100
<TOTAL-ASSETS> 1,040,900
<CURRENT-LIABILITIES> 299,500
<BONDS> 122,400
<COMMON> 700
0
0
<OTHER-SE> 568,800
<TOTAL-LIABILITY-AND-EQUITY> 1,040,900
<SALES> 677,000
<TOTAL-REVENUES> 677,000
<CGS> 205,800
<TOTAL-COSTS> 205,800
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 700
<INTEREST-EXPENSE> 8,200
<INCOME-PRETAX> 110,700
<INCOME-TAX> 32,900
<INCOME-CONTINUING> 75,900
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 75,900
<EPS-PRIMARY> 1.19
<EPS-DILUTED> 1.19
</TABLE>
