<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 June 26, 1998
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934.
- --------------------------------------------------------------------------------
FOR THE QUARTER ENDED COMMISSION FILE NUMBER
JUNE 26, 1998 1-10269
ALLERGAN, INC.
A DELAWARE CORPORATION IRS EMPLOYER IDENTIFICATION
95-1622442
2525 DUPONT DRIVE, IRVINE, CALIFORNIA 92612
TELEPHONE NUMBER 714/246-4500
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 July 31, 1998 there were 65,373,334 shares of common stock
outstanding.
<PAGE> 2
ALLERGAN, INC.
FORM 10-Q FOR THE QUARTER ENDED JUNE 26, 1998
INDEX
<TABLE>
<CAPTION>
Page
----
<S> <C>
PART I - FINANCIAL INFORMATION
ITEM 1 - CONSOLIDATED FINANCIAL STATEMENTS
(A) Consolidated Statements of Earnings - 3
Three Months and Six Months Ended
June 26, 1998 and June 27, 1997
(B) Consolidated Balance Sheets - 4
June 26, 1998 and December 31, 1997
(C) Consolidated Statements of Cash Flows - 5
Six Months Ended June 26, 1998 and June 27, 1997
(D) Notes to Consolidated Financial Statements 6-9
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS 10-15
PART II - OTHER INFORMATION
ITEM 5 16
ITEM 6 16
Signature 17
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 Six Months
Ended Ended
---------------------- ----------------------
June 26, June 27, June 26, June 27,
1998 1997 1998 1997
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Product Sales
Net sales $325.0 $284.5 $594.3 $540.7
Cost of sales 106.7 100.1 200.4 192.7
------ ------ ------ ------
Product gross margin 218.3 184.4 393.9 348.0
Research Services
Research service revenues 6.3 2.9 15.9 6.0
Cost of research services 5.9 2.7 14.8 5.6
------ ------ ------ ------
Research services margin 0.4 0.2 1.1 0.4
Operating costs and expenses
Selling, general and
administrative 139.0 122.2 257.4 234.1
Research and development 35.7 30.9 59.8 58.5
Contribution to ASTI -- -- 171.4 --
------ ------ ------- ------
Operating income (loss) 44.0 31.5 (93.6) 55.8
Nonoperating income (expense)
Interest income 2.3 2.0 5.2 3.8
Interest expense (4.0) (2.5) (7.0) (4.7)
Gain on investments, net 5.5 -- 53.5 --
Contribution to Allergan
Foundation -- -- (11.0) --
Other, net 1.1 (1.1) (0.4) --
------ ------ ------ ------
4.9 (1.6) 40.3 (0.9)
------ ------ ------ ------
Earnings (loss) from continuing
operations before income taxes
and minority interest 48.9 29.9 (53.3) 54.9
Provision for income taxes 14.1 8.6 34.2 15.9
Minority interest -- (0.1) (0.1) (0.2)
------ ------ ------ ------
Net earnings (loss) $ 34.8 $ 21.4 $(87.4) $ 39.2
====== ====== ====== ======
Earnings (loss) per share
Basic $ 0.53 $ 0.33 $(1.34) $ 0.60
====== ====== ====== ======
Diluted $ 0.52 $ 0.33 $(1.34) $ 0.59
====== ====== ====== ======
</TABLE>
See accompanying notes to consolidated financial statements.
3
<PAGE> 4
Allergan, Inc.
Consolidated Balance Sheets
(In millions, except share data)
<TABLE>
<CAPTION>
June 26, December 31,
1998 1997
---- ----
<S> <C> <C>
ASSETS
Current assets:
Cash and equivalents $ 153.6 $ 180.9
Trade receivables, net 214.6 187.0
Inventories 143.5 147.8
Other current assets 121.5 120.7
-------- --------
Total current assets 633.2 636.4
Investments and other assets 168.7 191.3
Property, plant and equipment, net 351.4 357.8
Goodwill and intangibles, net 200.2 213.4
-------- --------
Total assets $1,353.5 $1,398.9
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Notes payable $ 82.0 $ 80.5
Accounts payable 68.1 83.3
Accrued expenses 174.8 167.0
Income taxes 42.4 32.5
-------- --------
Total current liabilities 367.3 363.3
Long-term debt 246.4 142.5
Other liabilities 54.6 51.7
Commitments and contingencies -- --
Stockholders' equity:
Preferred stock, $.01 par value; authorized
5,000,000 shares; none issued -- --
Common stock, $.01 par value; authorized
150,000,000 shares; issued 67,159,000
and 67,196,000 shares 0.7 0.7
Additional paid-in capital 210.2 208.1
Accumulated other comprehensive income 1.6 11.7
Retained earnings 540.2 670.8
-------- --------
752.7 891.3
Less - treasury stock, at cost
(2,011,000 and 1,903,000 shares) (67.5) (49.9)
-------- --------
Total stockholders' equity 685.2 841.4
-------- --------
Total liabilities and
stockholders' equity $1,353.5 $1,398.9
======== ========
</TABLE>
See accompanying notes to consolidated financial statements.
4
<PAGE> 5
Allergan, Inc.
Consolidated Statements of Cash Flows
(In millions)
<TABLE>
<CAPTION>
Six Months Ended
-----------------------
June 26, June 27,
1998 1997
-------- --------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net earnings (loss) $(87.4) $ 39.2
Adjustments to reconcile Net earnings (loss) to net
cash provided by/(used in) operating activities:
Depreciation and amortization 37.6 35.9
Amortization of prepaid royalties 5.0 4.9
Gain on investments, net (57.3) --
Contribution to Allergan Foundation 11.0 --
Deferred income taxes (4.6) 1.2
Loss on disposal of assets 3.8 0.7
Expense of compensation plans 4.1 3.7
Minority interest (0.1) (0.2)
Adjustment in reporting of foreign subsidiaries 0.7 --
Changes in assets and liabilities:
Trade receivables (32.1) 21.1
Inventories 1.3 (14.0)
Accounts payable (14.1) (7.8)
Accrued liabilities 25.6 (20.5)
Income taxes 8.1 (12.8)
Other 1.6 (2.8)
------ ------
Net cash provided by/(used in)
operating activities (96.8) 48.6
------ ------
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to property, plant and equipment (17.7) (20.7)
Proceeds from sale of property, plant and equipment 1.4 5.2
Proceeds from sale of investments 55.0 --
Other, net (11.6) (12.4)
------ ------
Net cash provided by/(used in)
investing activities 27.1 (27.9)
------ ------
CASH FLOWS FROM FINANCING ACTIVITIES:
Dividends to stockholders (16.8) (16.8)
ASTI dividend (28.6) --
Net borrowings under commercial
paper obligations 66.6 48.9
Increase/(decrease) in notes payable 1.1 (15.6)
Sale of stock to employees 13.0 9.2
Increase in long term debt 45.3 3.6
Decrease in long term debt (1.2) (0.6)
Acquisition of capital leases -- (0.5)
Payments to acquire treasury stock (32.9) (34.0)
------ ------
Net cash provided by/(used in)
financing activities 46.5 (5.8)
------ ------
Effect of exchange rates on cash and equivalents (4.1) (1.4)
------ ------
Net increase (decrease) in cash and equivalents (27.3) 13.5
Cash and equivalents at beginning of period 180.9 112.0
------ ------
Cash and equivalents at end of period $153.6 $125.5
====== ======
</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,
1997. The results of operations for the six months ended June 26, 1998 are not
necessarily indicative of the results to be expected for the year ending
December 31, 1998.
2. Components of inventory were:
<TABLE>
<CAPTION>
June 26, December 31,
1998 1997
---- ----
(in millions)
<S> <C> <C>
Finished goods $ 98.6 $ 96.8
Work in process 16.4 15.7
Raw materials 28.5 35.3
-------- --------
Total $ 143.5 $ 147.8
======== ========
</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 July 21, 1998 the Board of Directors declared a quarterly cash dividend of
$0.13 per share, payable September 11, 1998 to stockholders of record on August
21, 1998.
6
<PAGE> 7
Allergan, Inc.
Notes to Consolidated Financial Statements (Continued)
6. The reconciliations of the numerators and denominators of the basic and
diluted earnings per share computations in accordance with SFAS No. 128 are as
follows:
<TABLE>
<CAPTION>
Second Quarter
------------------------------------------------------------------------------------------
1998 1997
------------------------------------------------------------------------------------------
Income Shares Per-Share Income Shares Per-Share
(Numerator) (Denominator) Amount (Numerator) (Denominator) Amount
------------ ------------- --------- ----------- ------------- ------------
(In millions, except per share data)
<S> <C> <C> <C> <C> <C> <C>
Computation of
basic EPS:
Income available
to common
stockholders $34.8 65.4 $0.53 $21.4 65.1 $0.33
===== =====
Effect of
dilutive
options 1.3 0.5
---- ----
Computation of
diluted EPS:
Income available
to common
stockholders
assuming
exercises $34.8 66.7 $0.52 $21.4 65.6 $0.33
==== ===== ==== =====
</TABLE>
<TABLE>
<CAPTION>
Six Months
------------------------------------------------------------------------------------------
1998 1997
------------------------------------------------------------------------------------------
Income/(loss) Shares Per-Share Income Shares Per-Share
(Numerator) (Denominator) Amount (Numerator) (Denominator) Amount
-------------- ------------- --------- ----------- ------------- -----------
(In millions, except per share data)
<S> <C> <C> <C> <C> <C> <C>
Computation of
basic EPS:
Income (loss)
available to
common
stockholders $(87.4) 65.4 $(1.34) $39.2 65.3 $0.60
====== =====
Effect of
dilutive
options 0.0 0.7
---- ----
Computation of
diluted EPS:
Income (loss)
available to
common
stockholders
assuming
exercises $(87.4) 65.4 $(1.34) $39.2 66.0 $0.59
==== ====== ==== =====
</TABLE>
7
<PAGE> 8
Allergan, Inc.
Notes to Consolidated Financial Statements (Continued)
Options to purchase 4,463,000 shares of common stock at prices ranging from
$13.50 per share to $35.13 per share were outstanding since dates ranging from
September 27, 1988 through January 29, 1998. These options were not included in
the computation of diluted earnings per share for the six months ended June 26,
1998 because the effect would be antidilutive due to the loss for the period.
7. In 1997, the Financial Accounting Standards Board issued SFAS No. 130,
"Reporting Comprehensive Income" which is effective for fiscal years beginning
after December 15, 1997. SFAS No. 130 requires that the components of
comprehensive income be disclosed. Such amounts are as follows:
<TABLE>
<CAPTION>
Second Quarter
-------------------------------------------------------------------------------------
(in millions) 1998 1997
------------------------------------------ --------------------------------------
Tax Tax
Before-tax (expense) Net-of-tax Before-tax (expense) Net-of-tax
amount or benefit amount amount or benefit amount
------------- ---------- ---------- ---------- ---------- ----------
(in millions)
<S> <C> <C> <C> <C> <C> <C>
Foreign currency
translation
adjustments $ 1.5 -- $ 1.5 $(0.7) -- $(0.7)
Unrealized holding
gains/(losses)
arising during
period 5.4 $(1.9) 3.5 1.1 $(0.5) 0.6
Reclassification
adjustment for net
gains realized in
net income (5.5) 2.0 (3.5) -- -- --
----- ----- ----- ----- ----- -----
Other comprehensive
income $ 1.4 $ 0.1 $ 1.5 $ 0.4 $(0.5) $(0.1)
===== ===== ===== ===== ===== =====
</TABLE>
8
<PAGE> 9
Allergan, Inc.
Notes to Consolidated Financial Statements (Continued)
<TABLE>
<CAPTION>
Six Months Ended
------------------------------------------------------------------------------------
(in millions) June 26, 1998 June 27, 1997
---------------------------------------- --------------------------------------
Tax Tax
Before-tax (expense) Net-of-tax Before-tax (expense) Net-of-tax
amount or benefit amount amount or benefit amount
------------ ---------- ---------- ---------- ---------- ----------
(in millions)
<S> <C> <C> <C> <C> <C> <C>
Foreign currency
translation
adjustments $ 1.2 -- $ 1.2 $(8.9) -- $(8.9)
Unrealized holding
gains/(losses)
arising during
period 36.1 $(12.6) 23.5 (0.9) $ 0.2 (0.7)
Reclassification
adjustment for net
gains realized in
net income (53.5) 18.7 (34.8) -- -- --
------ ------ ------ ----- ----- -----
Other
comprehensive
income $(16.2) $ 6.1 $(10.1) $(9.8) $ 0.2 $(9.6)
====== ====== ====== ===== ===== =====
</TABLE>
8. In June 1997, SFAS No. 131 - "Disclosures about Segments of an Enterprise and
Related Information" was issued and is effective for periods beginning after
December 15, 1997. SFAS No. 131 establishes standards for reporting financial
and descriptive information regarding an enterprise's operating segments.
In February 1998, SFAS No. 132 - "Employee's Disclosures about Pension and Other
Postretirement Benefits" was issued and is effective for periods after December
15, 1997. SFAS No. 132 revises disclosures about pension and other
postretirement benefit plans. These standards increase disclosure in the
financial statements and will have no impact on the Company's financial position
or results of operations.
In June 1998, SFAS No. 133 - "Accounting for Derivative Instruments and Hedging
Activities" was issued and is effective for all fiscal quarters of fiscal years
beginning after June 15, 1999. SFAS No. 133 establishes accounting and reporting
standards for derivative instruments, including certain derivative instruments
embedded in other contracts, and for hedging activities. SFAS No. 133 requires
that an entity recognize all derivatives as either assets or liabilities in the
statement of financial position and measure those instruments at fair value. The
Company is currently evaluating the impact of SFAS No. 133 will have on its
financial statements, if any.
9
<PAGE> 10
ALLERGAN, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS FOR THE QUARTER ENDED JUNE 26, 1998
RESULTS OF OPERATIONS
The following table compares 1998 and 1997 net sales by Product Line for the
second quarter and year-to-date periods (in millions):
<TABLE>
<CAPTION>
Three Months Six Months
Ended Ended
---------------------- ---------------------
June 26, June 27, June 26, June 27,
1998 1997 1998 1997
-------- -------- -------- --------
($ millions)
<S> <C> <C> <C> <C>
Net Sales by Product Line:
Specialty Pharmaceuticals
Eye Care Pharmaceuticals $137.9 $103.8 $238.8 $197.1
Skin Care 19.6 20.1 35.3 33.6
Botox(R)/Neuromuscular 30.1 22.3 56.2 42.0
------ ------ ------ ------
Total 187.6 146.2 330.3 272.7
Medical devices and OTC
Product Lines
Ophthalmic Surgical 48.6 44.9 91.9 85.2
Optical Contact Lens Care 88.8 93.4 172.1 182.8
------ ------ ------ ------
Total 137.4 138.3 264.0 268.0
------ ------ ------ ------
Total Product Net Sales $325.0 $284.5 $594.3 $540.7
====== ====== ====== ======
</TABLE>
For the quarter ended June 26, 1998 total net sales increased 14% to $325.0
million as compared to the second quarter of 1997. Net sales for the six months
ended June 26, 1998 were $594.3 million, a 10% increase from the comparable 1997
amount.
The impact of foreign currency changes since the comparable prior year period
decreased net sales by $7.5 million or 3% for the quarter and by $19.2 million
or 4% for the six months ended June 26, 1998 compared with the same periods
during the prior year. Excluding the impact of foreign currency changes, sales
increased by $48.0 million or 17% during the quarter, and $72.8 million or 13%
for the six months ended June 26, 1998 compared with the same periods during the
prior year.
For the three months ended June 26, 1998 Eye Care Pharmaceutical sales increased
by 33% from the comparable 1997 period. For this first six months of 1998 sales
increased by 21% from the comparable 1997 amount. Sales in the United States
increased $28.8 million in the quarter and $33.1 million in the first six months
of 1998 primarily as a result of increases in sales of Alphagan(R) (brimonidine)
and Acular(R) (ketorolac) offset by decreases in other products due to generic
competition. The Company experienced strong wholesaler demand for Eye Care
Pharmaceutical products in the second quarter. The Company believes that such
U.S. wholesaler demand may exceed current U.S. in-market demand. Sales in
international markets increased by $5.3 million in the quarter and $8.6 million
in the first six months of 1998 primarily as a result of increased sales of
Alphagan(R) and Acular(R). The negative effect of currency changes amounted to
$2.3 million in the quarter and $5.7 million for the six months ended June 26,
1998.
10
<PAGE> 11
Allergan, Inc.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS FOR THE QUARTER ENDED JUNE 26, 1998 (Continued)
RESULTS OF OPERATIONS (Continued)
Skin Care Pharmaceuticals second quarter 1998 sales decreased by 2% from the
comparable quarter in 1997. Sales for the six months ended June 26, 1998 were 5%
higher than the comparable period in 1997. Growth in sales of
Tazorac(R)/Zorac(R) (tazarotene topical gel) was offset by decreases in sales of
Azelex(R) (azelaic acid) during both the second quarter and the first six months
of 1998.
Botox(R) (Botulinum Toxin Type A) purified neurotoxin complex sales increased by
35% in the second quarter and 34% in the first six months of 1998 compared to
1997 results. The increases were the result of strong growth in both the United
States and international markets.
Surgical sales increased 8% in both the second quarter of 1998 and for the first
six months of 1998 compared to comparable 1997 amounts. For the second quarter,
domestic sales increased 22% while international sales decreased 2% from the
second quarter of 1997. For the six month period ended June 26, 1998, domestic
sales increased 19% and international sales were flat compared to the first six
months of 1997. Sales increased in both domestic and international markets as a
result of increased sales of SI-40 silicone intraocular lenses (IOLs) and the
AMO(R)Array(R) multifocal IOL partially offset by decreases in sales of PMMA
IOLs and other silicone IOL models. International sales were decreased as a
result of foreign currency changes. Absent the effects of foreign currency
changes, international surgical sales increased by 4% in the second quarter and
7% for the first six months of 1998 compared with 1997 results for comparable
periods.
Optical Contact Lens Care sales of $88.8 million for the three months ended June
26, 1998 decreased by 5% from the second quarter of 1997. Sales for the six
months ended June 26, 1998 of $172.1 million decreased by 6% compared to 1997
sales. Domestic optical sales decreased by 2% in the second quarter and by 15%
in the first six months of 1998 compared to comparable 1997 amounts. Optical
sales in international markets decreased by 6% in the second quarter and 3% in
the first six months of 1998 compared to comparable 1997 results. Domestic and
international optical sales decreased during the second quarter and for the six
months ended June 26, 1998 as a result of decreases in sales of peroxide based
disinfection products offset by increases in sales of Complete(R) brand
products, and an increase in sales of Concept F(R) solution in the Japan market.
Domestic results for the first six months of 1998 were also negatively impacted
by the timing of promotion activities in 1998 compared to 1997, and by a
reduction of inventory in the trade in the first quarter of 1998. International
sales were also negatively impacted by foreign currency changes. Absent the
effects of foreign currency changes, international optical sales decreased by 1%
during the second quarter of 1998, and increased by 4% for the first six months,
compared to comparable periods in 1997.
Allergan's gross margin percentage for the second quarter of 1998 was 67.2% of
net sales, which represents a 2.4 percentage point increase from the second
quarter of 1997. The gross margin percentage for the six months ended June 26,
1998 was 66.3% representing a 1.9 percentage point increase from the comparable
1997 percentage. The gross margin percentages
11
<PAGE> 12
Allergan, Inc.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS FOR THE QUARTER ENDED JUNE 26, 1998 (Continued)
RESULTS OF OPERATIONS (Continued)
increased in 1998 compared to 1997 primarily as a result of shifts in the mix of
products sold to higher margin products including Botox(R) and eye care
pharmaceuticals.
Gross margin in dollars increased by $33.9 million or 18% in the second quarter
and $45.9 million or 13% in the first six months of 1998 from comparable 1997
results. Such increases were the result of the increases in net sales combined
with the increases in gross margin percentage.
Operating income was $44.0 million in the second quarter of 1998, compared to
$31.5 million for the second quarter of 1997. The $12.5 million increase in
operating income is the result of the $33.9 million increase in gross margin
offset by a $4.8 million increase in research and development costs, and a $16.8
million increase in selling, general and administrative expense. The increase in
selling, general and administrative expense in 1998 includes approximately $7
million in one-time costs to terminate operations in certain markets, streamline
marketing staffs and initiate a realignment of certain administrative functions.
The increase in selling, general and administrative expense in 1998 was
partially offset by $2.5 million in technology fees received by Allergan from
Allergan Specialty Therapeutics, Inc. (ASTI) in the second quarter of 1998.
Operating income was a loss of $93.6 million for the first six months of 1998.
Such loss included a charge of $171.4 million in the first quarter relating to a
dividend of stock of ASTI to Allergan shareholders. ASTI is a newly established
company formed to conduct research and development of potential pharmaceutical
products based primarily upon Allergan's retinoid and neuroprotective
technologies. Allergan contributed $200 million and certain related technologies
to ASTI prior to the dividend distribution. Excluding the effect of the charge
in the first quarter for the dividend distribution of ASTI stock of $171.4
million, operating income was $77.8 million in the first six months of 1998, a
$22.0 million or 39% increase over operating income of $55.8 million in the
first six months of 1997. Adjusted operating income increased as a result of the
$45.9 million increase in gross margin, offset by a $1.3 million increase in
research and development and a $23.3 million increase in selling, general and
administrative expense. Research and development costs were decreased in the
first quarter of 1998 as a result of recovery from ASTI of $3.8 million in costs
incurred and expensed in the fourth quarter of 1997. Selling, general and
administrative expense increased in 1998 as a result of increased product launch
expenses relating to Alphagan(R), Tazorac(R)/Zorac(R) and the AMO(R)Array(R)
IOL, in addition to the $7 million one-time charges in the second quarter. Such
increases were partially offset by $6.9 million in technology fees received by
Allergan from ASTI in 1998.
Net earnings were $34.8 million in the second quarter of 1998, compared to $21.4
million for the second quarter of 1997. The $13.4 million increase in net
earnings is primarily the result of the $12.5 million increase in operating
income, and a $5.5 million gain on sale of stock of Ligand Pharmaceuticals,
Incorporated (Ligand). Such increases were offset by a $5.5 million increase in
the provision for income taxes resulting from the increase in income before
income taxes.
12
<PAGE> 13
Allergan, Inc.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS FOR THE QUARTER ENDED JUNE 26, 1998 (Continued)
RESULTS OF OPERATIONS (Continued)
Allergan recorded a net loss of $87.4 million in the first six months of 1998.
Excluding the effect of a $171.4 million charge relating to ASTI, net earnings
were $84.0 million, a $44.8 million or 114% increase over net earnings of $39.2
million in the first six months of 1997. Other non-operating income in 1998
included four significant items. In the first quarter, the Company realized a
gain of $51.8 million on its investment in Ocular Sciences, Inc. (OSI) stock.
The Company contributed a portion of its OSI stock to The Allergan Foundation, a
recently founded charitable foundation, resulting in a charge of $11.0 million.
The Company and the foundation sold their investments in OSI in the first
quarter of 1998. The Company also recorded a charge of $3.8 million in the first
quarter to recognize the permanent impairment in value of certain other
investments. In addition, the Company realized the $5.5 million gain on sale of
Ligand stock in the second quarter. Excluding the effect of the charge relating
to ASTI and the after tax effect of four significant non-operating items
discussed above, net earnings would have been $53.8 million, a 37% increase over
the first six months of 1997. Such increase is primarily the result of the
increase in operating income excluding the effect of the charge relating to
ASTI, partially offset by an increase in the provision for income taxes of $6.0
million.
LIQUIDITY AND CAPITAL RESOURCES
As of June 26, 1998, the Company had a medium term note program and three
long-term credit facilities, one of which supports a commercial paper borrowing
arrangement. The note program allows the company to issue up to an additional
$60 million in notes on a non-revolving basis. The credit facilities allow for
borrowings of up to $14.4 million through February 1999, $26.6 million through
December 1999, $2.0 million through 2001, and $286.0 million through 2003.
Borrowings under the credit facilities 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 June 26, 1998, the company had $109.0 million in borrowings under
the note program, $107.2 million of commercial paper borrowings and $78.0
million in borrowings under the credit facilities. As of June 26, 1998 the
Company has classified $77.2 million of its commercial paper borrowings as
long-term debt based upon the Company's ability to maintain such debt under
terms of the credit facilities described above.
The net cash used in operating activities for the six months ended June 26, 1998
was $96.8 million. Such amount includes the $171.4 million charge relating to
ASTI. Excluding such charge, cash provided by operating activities in the first
six months of 1998 was $74.6 million compared to cash provided by operating
activities of $48.6 million for the respective 1997 period. The increase in cash
provided by operating activities, excluding the charge relating to ASTI, was
primarily the result of increases in accrued liabilities in 1998 combined with
decreases in such accounts in 1997. Offsetting this increase was a decrease in
cash provided by operating activities resulting from an increase in accounts
receivable in 1998, combined with a decrease in such accounts in 1997.
13
<PAGE> 14
Allergan, Inc.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS FOR THE QUARTER ENDED JUNE 26, 1998 (Continued)
LIQUIDITY AND CAPITAL RESOURCES (Continued)
Cash provided by investing activities in the first six months of 1998 was $27.1
million. Such amounts included $55.0 million in proceeds from the sale of
investments. Excluding these transactions, cash used in investing activities was
$27.9 million in the first six months of 1998 compared to cash used in such
activities of $27.9 million in the first six months of 1997. The Company
invested $17.7 million in new facilities and equipment during the six months
ended June 26, 1998 compared to $20.7 million during the same period in 1997.
Cash provided by financing activities was $46.5 million in the six months ended
June 26, 1998 compared to $5.8 million cash used in financing activities in
1997. Borrowings, net of repayments of debt totaled $111.8 million in the first
six months of 1998 compared to $36.3 million for the comparable period in 1997.
The increased borrowings in 1998 were used to make a portion of the $200 million
contribution to ASTI. The balance of the amount contributed was provided by cash
from operations, the proceeds from the sale of stock, and a reduction of cash
and equivalents. The amounts are net of dividend outflows of $45.4 million in
1998 and $16.8 million in 1997. The 1998 dividends include $28.6 million
representing the dividend of ASTI stock to Allergan shareholders. The 1998
amount of cash provided by financing activities includes $32.9 million used to
repurchase treasury stock, and the amount of cash used in financing activities
in 1997 includes $34.0 million used to repurchase treasury stock.
The Company believes that the net cash provided by operating activities,
supplemented as necessary with borrowings available under the Company's existing
credit facilities, will provide it with sufficient resources to meet current and
long-term working capital requirements, debt service and other cash needs.
CERTAIN FACTORS AND TRENDS AFFECTING ALLERGAN AND ITS BUSINESSES
Certain disclosures made by the Company in this report and in other reports and
statements released by the Company are and will be forward-looking in nature,
such as comments which express the Company's opinions about trends and factors
which may impact future operating results. Disclosures which use words such as
the Company "believes," "anticipates," "expects" and similar expressions are
intended to identify forward-looking statements. Such statements are subject to
certain risks and uncertainties which could cause actual results to differ
materially from expectations. Any such forward-looking statements, whether made
in this report or elsewhere, should be considered in context with the various
disclosures made by the Company about its businesses including the factors
discussed below.
o The three largest parts of the Company's overall business in terms of
revenue -- eye care pharmaceuticals, ophthalmic surgical and optical contact
lens care -- did not experience any significant overall revenue growth in
the past three years, 1995-1997.
14
<PAGE> 15
Allergan, Inc.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS FOR THE QUARTER ENDED JUNE 26, 1998 (Continued)
CERTAIN FACTORS AND TRENDS AFFECTING ALLERGAN AND ITS BUSINESSES (Continued)
o The pharmaceutical industry and other healthcare-related industries
continue to experience consolidation, resulting in larger, more diversified
companies with greater resources than the Company. Among other things, these
larger companies can spread their research and development costs over much
broader revenue bases than Allergan.
o Two of the Company's largest ophthalmic pharmaceutical products, Betagan(R)
and Propine(R), are off patent in the U.S. and continue to face competition
from generic versions of these compounds as well as from recently introduced
new technology glaucoma products. Other significant products are also off
patent and may face similar generic competition.
o The Company's Optical Contact Lens Care business continues to be impacted
by trends in the contact lens and lens care marketplace, including
technological and medical advances in surgical techniques for the correction
of vision impairment; the popularity of one-bottle chemical disinfection
systems among soft contact lens wearers instead of peroxide-based lens care
products which have historically been Allergan's strongest family of lens
care products; and the growing use and acceptance of daily contact lenses
which could have the effect of reducing demand for lens care products
generally.
o Sales of the Company's surgical and pharmaceutical products have been and
are expected to continue to be impacted by continuing pricing pressures
resulting from various government initiatives as well as from the purchasing
and operational decisions made by managed care organizations. Failure of the
AMO(R)Array(R) multifocal IOL to be designated as an "advanced technology
IOL" by HCFA will adversely affect the Company's profit margin for the
product.
o Increased wholesaler purchases during the second quarter of 1998 may be in
excess of consumer demand and, as a result, may be followed by reduced
wholesaler purchases in the coming quarters.
o The Company is undergoing an assessment of opportunities to significantly
reduce G&A expenses and improve efficiencies, currently planned to be
announced late in the third quarter of 1998. These initiatives, which are
expected to improve profitability, may not provide the anticipated cost
reductions.
o The Company has allocated significant resources to the development and
introduction of new products. The successful development, as well as
regulatory approval and market acceptance of the products cannot be assured.
o There are intrinsic uncertainties associated with Research & Development
efforts and the regulatory process both of which are discussed in greater
details in the "Research and Development" and the "Government Regulation"
sections, respectively, in the Company's Annual Report on Form 10-K for the
Year Ended December 31, 1997.
15
<PAGE> 16
Allergan, Inc.
PART II - OTHER INFORMATION
Item 5. Other Information.
Deadline for Stockholder Proposals. Any stockholder of the Registrant
wishing to have a proposal considered for inclusion in the Registrant's 1999
proxy solicitation materials must, in addition to other applicable requirements,
set forth such proposal in writing and send the proposal to the Secretary of the
Registrant so that it is received on or before November 10, 1998.
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 to the $250,000,000 Credit Agreement dated as
of December 22, 1993 and amended and restated as of May 10,
1996 among the Company, as Borrower and Guarantor, the
Eligible Subsidiaries Referred to Therein, 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 (the "Credit Agreement")
10.2 Second Amendment to the Allergan, Inc. Pension Plan
10.3 Second Amendment to the Allergan, Inc. Executive Deferred
Compensation Plan
10.4 Third Amendment to the Allergan, Inc. Employee Stock Ownership
Plan
10.5 First Amendment to the Allergan, Inc. 1989 Incentive
Compensation Plan
27 Financial Data Schedule
- Reports on Form 8-K. The Registrant filed a Current Report on Form
8-K on June 9, 1998, reporting under Item 5 that Ms. Tamara J.
Erickson had resigned as a director of the Registrant to pursue other
interests. The Registrant filed a Current Report on Form 8-K on June
25, 1998, reporting under Item 5 that Mr. Howard E. Greene, Jr. had
resigned as a director of the Registrant to pursue other interests.
16
<PAGE> 17
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: August 7, 1998 ALLERGAN, INC.
/s/ Francis R. Tunney, Jr.
---------------------------------
Francis R. Tunney, Jr.
Principal Financial Officer
17
<PAGE> 1
EXHIBIT 10.1
AMENDMENT NO. 1 TO CREDIT AGREEMENT
AMENDMENT dated as of March 5, 1998 to the Credit Agreement dated as of
May 10, 1996 (the "CREDIT AGREEMENT") among ALLERGAN, INC. (the "COMPANY"), the
ELIGIBLE SUBSIDIARIES referred to therein, the BANKS party thereto, BANK OF
AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION, as Co-Agent and MORGAN GUARANTY
TRUST COMPANY OF NEW YORK, as Agent (the "Agent").
W I T N E S S E T H :
WHEREAS, the parties hereto desire to amend the Minimum Consolidated Net
Worth covenant in the Credit Agreement (i) to reset the required amount to
reflect the Company's current net worth and (ii) to adjust for the effect of a
special dividend (consisting of callable shares of Allergan Specialty
Therapeutics, Inc.) that the Company may distribute to its shareholders in the
first quarter of 1998;
NOW, THEREFORE, the parties hereto agree as follows:
SECTION 1. Defined Terms; References. Unless otherwise specifically
defined herein, each term used herein which is defined in the Credit Agreement
has the meaning assigned to such term in the Credit Agreement. Each reference to
"hereof", "hereunder", "herein" and "hereby" and each other similar reference
and each reference to "this Agreement" and each other similar reference
contained in the Credit Agreement shall, after this Amendment becomes effective,
refer to the Credit Agreement as amended hereby.
SECTION 2. Minimum Consolidated Net Worth. Section 5.09 of the Credit
Agreement is amended to read as follows:
SECTION 5.09. Minimum Consolidated Net Worth. Consolidated Net
Worth will at no time be less $651,000,000; provided that the foregoing
amount shall be:
(i) increased at the end of each of the Company's fiscal
years ending after December 31, 1997, by 50% of Consolidated Net
Income (if positive) for such fiscal year;
(ii) increased by 100% of the amount by which Consolidated
Net Worth is increased from time to time after December 31, 1997
as a result of the issuance or sale of the Company's capital
stock; and
(iii) reduced by 100% of the amount by which Consolidated
Net Worth is decreased during the first fiscal quarter of 1998 as
a result of any contribution by the Company to Allergan Specialty
Therapeutics, Inc. and/or any distribution of callable shares of
Allergan Specialty Therapeutics, Inc. as a special dividend to
the company's shareholders; provided that such reduction shall
not exceed $200,000,000.
<PAGE> 2
To the extent that the reduction referred to in clause (iii) above
results from charges that reduce the Company's Consolidated Net Income,
the amount thereof shall be added back to the Company's Consolidated Net
Income for 1998 for purposes of clause (i) above.
SECTION 3. Financial Information. Section 4.04 of the Credit Agreement
is amended to read as follows:
SECTION 4.04. Financial Information. (a) The consolidated balance
sheet of the Company and its Consolidated Subsidiaries as of September
30, 1997 and the related consolidated statements of earnings and cash
flows for the nine months then ended, a copy of which has been delivered
to each of the Banks, fairly present, in conformity with generally
accepted accounting principles (except for the absence of notes), the
consolidated financial position of the Company and its Consolidated
Subsidiaries as of such date and their consolidated results of
operations and cash flows for such nine-month period (subject to normal
year-end adjustments).
(b) Excluding the effect of any contribution and/or special
dividend referred to in Section 5.09(iii), there has been no material
adverse change since September 30, 1997 in the business, financial
position, assets, liabilities or results of operations of the Company
and its Consolidated Subsidiaries, considered as a whole.
SECTION 4. Representations of Company. The Company represents and
warrants that (i) the representations and warranties of the Company set forth in
Article 4 of the Credit Agreement will be true on and as of the Amendment
Effective Date and (ii) no Default will have occurred and be continuing on such
date.
SECTION 5. Governing Law. This Amendment shall be governed by and
construed in accordance with the laws of the State of New York.
SECTION 6. Counterparts. This Amendment may be signed in any number of
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.
SECTION 7. Effectiveness. This Amendment shall become effective as of
the date hereof on the date (the "AMENDMENT EFFECTIVE DATE") when the Agent
shall have received from each of the Company and the Required Banks a
counterpart hereof signed by such party or facsimile or other written
confirmation (in form satisfactory to the Agent) that such party has signed a
counterpart hereof.
2
<PAGE> 3
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed as of the date first above written.
ALLERGAN, INC. ALLERGAN, INC.
By: /s/ Gary Prem By: /s/ Jeffrey L. Edwards
--------------------------- ------------------------------------
Name: Gary Prem Name: Jeffrey L. Edwards
Title: Assistant Treasurer Title: Vice President, Treasurer
MORGAN GUARANTY TRUST
COMPANY OF NEW YORK
By: /s/ Diana H. Imhof
------------------------------------
Name: Diana H. Imhof
Title: Vice President
BANK OF AMERICA NATIONAL
TRUST AND SAVINGS ASSOCIATION
By: /s/ Therese A. Fontaine
------------------------------------
Name: Therese A. Fontaine
Title: Vice President
CITICORP USA, INC.
By: /s/ Connie R. Pecsar
------------------------------------
Name: Connie R. Pecsar
Title: Vice President
ABN AMRO BANK N.V. LOS ANGELES
INTERNATIONAL BRANCH
By: /s/ Paul K. Stimpfl By: /s/ John H. Penfield
--------------------------- ------------------------------------
Name: Paul K. Stimpfl Name: John H. Penfield
Title: Vice President Title: Vice President
UNION BANK OF SWITZERLAND,
NEW YORK BRANCH
By:
------------------------------------
Name:
Title:
WACHOVIA BANK OF GEORGIA, N.A.
By: /s/ Steven M. Takei
------------------------------------
Name: Steven M. Takei
Title: Senior Vice President
3
<PAGE> 1
EXHIBIT 10.2
SECOND AMENDMENT TO
ALLERGAN, INC.
PENSION PLAN (RESTATED 1996)
The ALLERGAN, INC. PENSION PLAN (the "Plan") is hereby amended to read as
follows:
I. Article III is hereby amended by adding the following Section 3.4 which
reads as follows:
3.4 Accrued Benefit for Participants participating in the Voluntary
Early Retirement Incentive Program. The Accrued Benefit of a "VERI Employee"
shall be determined as follows:
(a) For the purpose of calculating the Accrued Benefit of a VERI
Employee under Section 3.1, a VERI Employee shall be credited with five
(5) Benefit Years in addition to the number of Benefit Years credited
under Section 1.1.
(b) The early retirement reduction factors of Sections 4.3(a)
and 4.3(b) shall not apply to reduce the monthly pension derived from
the Accrued Benefit of a VERI Employee.
For purposes of this Section 3.4 and Section 3.5 below, a "VERI
Employee" means a Participant who has elected by August 31, 1998 (or
such later date as approved by the Sponsor but in no event later than
September 30, 1998) to participate in the Voluntary Early Retirement
Incentive program offered by the Sponsor.
II. Article III is hereby amended by adding the following Section 3.5 which
reads as follows:
3.5 Temporary Supplemental Monthly Benefit for Participants
participating in the Voluntary Early Retirement Incentive Program. In
addition to his Accrued Benefit, a VERI Employee shall receive a temporary
supplemental monthly pension determined as follows:
(a) A VERI Employee who is unmarried when his monthly pension
payments begin shall receive a temporary supplemental monthly pension
following the month in which his retirement occurs and continuing until
the earlier of (i) the month immediately preceding the month in which
the VERI Employee attain age 62 or (ii) the month in which the VERI
Employee dies. The amount of the temporary supplemental monthly pension
shall be determined in accordance with the following Table:
-1-
<PAGE> 2
Age at Amount of
December 31, 1998 Supplemental Monthly Pension
----------------- ----------------------------
60-61 $500.00
55-59 $400.00
50-54 $300.00
(b) A VERI Employee who is married when his monthly pension
payments begin shall receive a temporary supplemental monthly pension
following the month in which his retirement occurs and continuing until
the earlier of (i) the month immediately preceding the month in which
the VERI Employee attain age 62 or (ii) the month in which the VERI
Employee dies unless the VERI Employee elects to receive his monthly
pension in the form of (i) a contingent beneficiary option, (ii) a
guaranteed payment option, or (iii) a level income option as described
in Section 5.3. In such case, if the married VERI Employee dies before
reaching age 62, his temporary supplemental monthly pension shall be
paid to his spouse, if living, and shall continue until the month
immediately preceding the month in which the VERI Employee would have
attained age 62. The amount of the temporary supplemental monthly
pension shall be determined in accordance with the Table set forth in
subsection (a) above.
III. Section 4.3 is hereby amended by adding the following subsection (c)
which reads as follows:
(c) The pension of a Participant who has elected by August 31,
1998 (or such later date as approved by the Sponsor but in no event
later than September 30, 1998) to participate in the Voluntary Early
Retirement Incentive program offered by the Sponsor shall begin as of
the first day following his actual retirement or, at his election, as of
the first day of any subsequent month not later than his Special
Retirement Date.
IV. This Second Amendment shall be effective as of July 15, 1998.
IN WITNESS WHEREOF, Allergan, Inc. hereby executes this Amendment on the 3rd day
of August, 1998.
ALLERGAN, INC.
By: /s/ FRANCIS R. TUNNEY, JR.
----------------------------------
Francis R. Tunney, Jr.
Corporate Vice President,
General Counsel and Secretary
-2-
<PAGE> 1
EXHIBIT 10.3
SECOND AMENDMENT TO
ALLERGAN, INC.
EXECUTIVE DEFERRED COMPENSATION PLAN
The ALLERGAN, INC. EXECUTIVE DEFERRED COMPENSATION PLAN (the "Plan") is hereby
amended to read as follows:
I. Section 2.15 of the Plan is hereby amended to read as follows:
2.15 Early Retirement Date. "Early Retirement Date" means
(a) the later of the Participant's fifty-fifth (55th) birthday or
completion of at least five (5) years of Credited Service (as
defined in the Savings and Investment Plan) or (b) in the case of
a Participant who has elected by August 31, 1998 (or such later
date as approved by Allergan, Inc. but in no event later than
September 30, 1998) to participate in the Voluntary Early
Retirement Incentive program offered by Allergan, Inc., his
retirement date as set forth thereunder.
II. This Second Amendment shall be effective as of July 15, 1998.
IN WITNESS WHEREOF, Allergan, Inc. hereby executes this Amendment on the 3rd day
of August, 1998.
ALLERGAN, INC.
By: /s/ FRANCIS R. TUNNEY, JR.
----------------------------------
Francis R. Tunney, Jr.
Corporate Vice President,
General Counsel and Secretary
-1-
<PAGE> 1
EXHIBIT 10.4
THIRD AMENDMENT TO ALLERGAN, INC.
EMPLOYEE STOCK OWNERSHIP PLAN (RESTATED 1996)
The ALLERGAN, INC. EMPLOYEE STOCK OWNERSHIP PLAN (the "Plan") is hereby amended
to read as follows:
I. Section 4.2 of the Plan is hereby amended by adding the following
subsection (e) which reads as follows:
(e) For the 1998 Plan Year only, the term "Eligible
Employee" as defined in Section 4.2(a) shall include any
Participant who ceased to be an Eligible Employee during the 1998
Plan Year due to his election to participate in the Sponsor's
Voluntary Early Retirement Incentive by August 31, 1998 (or such
later date as approved by the Sponsor but in no event later than
September 30, 1998).
II. This Third Amendment shall be effective as of July 15, 1998.
IN WITNESS WHEREOF, Allergan, Inc. hereby executes this Amendment on the 3rd day
of August, 1998.
ALLERGAN, INC.
By: /s/ FRANCIS R. TUNNEY, JR.
---------------------------------
Francis R. Tunney, Jr.
Corporate Vice President,
General Counsel and Secretary
<PAGE> 1
EXHIBIT 10.5
FIRST AMENDMENT TO
ALLERGAN, INC.
1989 INCENTIVE COMPENSATION PLAN (AS AMENDED AND RESTATED)
The ALLERGAN, INC. 1989 INCENTIVE COMPENSATION PLAN (the "Plan") is hereby
amended as follows:
I. Section 1.4(a) of the Plan is hereby amended to change the requirement
that the Committee (as defined therein) consist of three or more
qualifying persons to two or more qualifying persons.
II. This First Amendment shall be effective as of July 20, 1998.
IN WITNESS WHEREOF, Allergan, Inc. hereby executes this Amendment on the 3rd day
of August, 1998.
ALLERGAN, INC.
By: /s/ FRANCIS R. TUNNEY, JR.
---------------------------------
Francis R. Tunney, Jr.
Corporate Vice President,
General Counsel and Secretary
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED STATEMENT OF EARNINGS AND BALANCE SHEETS OF ALLERGAN, INC.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUN-26-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> DEC-31-1998
<CASH> 153,600
<SECURITIES> 0
<RECEIVABLES> 221,900
<ALLOWANCES> 7,300
<INVENTORY> 143,500
<CURRENT-ASSETS> 633,200
<PP&E> 614,400
<DEPRECIATION> 263,000
<TOTAL-ASSETS> 1,353,500
<CURRENT-LIABILITIES> 367,300
<BONDS> 246,400
0
0
<COMMON> 700
<OTHER-SE> 684,500
<TOTAL-LIABILITY-AND-EQUITY> 1,353,500
<SALES> 594,300
<TOTAL-REVENUES> 610,200
<CGS> 200,400
<TOTAL-COSTS> 215,200
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 856
<INTEREST-EXPENSE> 7,000
<INCOME-PRETAX> (53,300)
<INCOME-TAX> 34,200
<INCOME-CONTINUING> (87,400)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (87,400)
<EPS-PRIMARY> (1.34)
<EPS-DILUTED> (1.34)
</TABLE>
