LAKE FOREST, Ill., April 30, 2014 /PRNewswire/ -- Hospira, Inc.
(NYSE: HSP), the world's leading provider of injectable drugs and
infusion technologies, today reported results for the first quarter
ended March 31, 2014. Net sales for
the quarter were $1.1 billion and
adjusted* diluted earnings per share were $0.60. (Adjusted* measures exclude certain
specified items as described later in this press release and the
attached schedules.) On a U.S. Generally Accepted Accounting
Principles (GAAP) basis, first-quarter 2014 diluted earnings per
share were $0.40.
"Hospira generated stronger-than-expected first-quarter results,
starting the year off on a positive note," said F. Michael Ball, chief executive officer. "Our
performance underscores the value of our strategy and the
investments we have been making to reinforce our foundation and
drive growth. As we mark Hospira's 10-year anniversary as an
independent company, we remain committed to advancing wellness
around the world, and are well positioned to build on the many
achievements of our first decade, with a focus on driving
profitable growth and shareholder value."
First-Quarter 2014 Results
The following table highlights selected financial results for
the first quarter of 2014 compared to the same period in 2013:
In $ millions,
except per share
amounts
|
GAAP
Three Months
Ended
March 31,
|
%
Change
|
Adjusted*
Three Months
Ended
March 31,
|
%
Change
|
|
2014
|
2013
|
2014
|
2013
|
|
Net Sales
|
$1,050.8
|
$884.0
|
18.9%
|
$1,050.8
|
$988.3
|
6.3%
|
|
Gross Profit (Net
Sales less
Cost of Products
Sold)
|
$369.6
|
$150.1
|
146.2%
|
$419.9
|
$359.5
|
16.8%
|
|
Income (Loss) from
Operations
|
$99.6
|
$(118.6)
|
184.0%
|
$151.5
|
$101.2
|
49.7%
|
|
Diluted Earnings
(Loss) per
Share
|
$0.40
|
$(0.46)
|
187.0%
|
$0.60
|
$0.52
|
15.4%
|
|
Statistics (as a %
of Net Sales)
|
|
Gross Profit (Net
Sales less
Cost of Products
Sold)
|
35.2%
|
17.0%
|
|
40.0%
|
36.4%
|
|
|
Income (Loss) from
Operations
|
9.5%
|
(13.4)%
|
|
14.4%
|
10.2%
|
|
Results under GAAP include items as detailed in the schedules
attached to this press release.
Net sales were $1.1 billion in the
first quarter of 2014, an increase of 6.3 percent compared to the
first quarter of 2013 adjusted* net sales of $988 million. Adjusted* net sales in the first
quarter of 2013 exclude the impact of customer sales allowances
associated with the company's device strategy, which was launched
in 2013 to streamline and modernize Hospira's device portfolio. Net
sales benefitted from continued strong global sales of Specialty
Injectable Pharmaceuticals (SIP) products, which were driven mainly
by improved pricing and increased volume. Volume increased due to
continued supply recovery as well as competitor supply issues in
the United States. Partially
offsetting the quarter's net sales performance was the negative
impact of the expected year-over-year decline of U.S. sales of the
oncolytic docetaxel; the device ship-hold effected in February 2013; and foreign currency. On a GAAP
basis, first-quarter 2013 net sales were $884 million, which included the impact of
customer sales allowances in the first quarter of 2013 associated
with the company's device strategy.
Adjusted* income from operations increased 49.7 percent to
$152 million in the first quarter of
2014, compared to $101 million in the
first quarter of 2013. The increase primarily reflects the impact
of improved pricing and increased volume in the company's SIP
products, partially offset by the device ship-hold, declining
docetaxel sales and higher R&D expense. On a GAAP basis, income
from operations was $100 million,
compared to a loss from operations of $119
million in the first quarter of 2013. In addition to the
factors impacting the adjusted* income from operations results, the
year-over-year increase in first-quarter GAAP income from
operations primarily reflects higher device-strategy related
charges in first-quarter 2013.
The effective tax rate on an adjusted basis* in the first
quarter of 2014 was an expense of 24.5 percent, compared to an
expense of 1.0 percent in the first quarter of 2013. The increase
is primarily due to the benefit in 2013 related to the retroactive
reinstatement of the U.S. federal R&D tax credit and other
corporate provisions for 2012 and 2013. In addition, the effective
tax rate on an adjusted* basis reflects a shift in the mix of
earnings to higher tax-rate jurisdictions in 2014 compared to 2013.
On a GAAP basis, the first-quarter 2014 effective tax rate was an
expense of 20.3 percent, compared to a benefit of 41.6 percent for
the same period in 2013.
Cash Flow
Cash flow from operations for the first three months of 2014 was
$18 million, compared to $21 million in the first three months of 2013.
The decrease is primarily due to higher working capital, partially
offset by higher income from operations.
Capital expenditures were $95
million for the first three months of 2014, compared to
$69 million for the same period in
2013. The increase reflects capital spending primarily associated
with modernization initiatives at several of the company's
manufacturing facilities, as well as on the construction of the
company's facility in Vizag, India.
2014 Projections
The projection ranges for full-year 2014 net sales and adjusted*
diluted earnings per share include, among several factors,
assumptions related to the timing of genericization of Precedex™
(dexmedetomidine HCl), the company's proprietary pharmaceutical for
sedation.
Hospira continues to expect the change to net sales for
full-year 2014 to range between negative 2 and positive 3 percent
on a constant-currency basis, with a flat to negative 1 percent
impact from foreign currency.
The company also continues to expect adjusted* diluted earnings
per share for 2014 to be in a range of $2.00
to $2.25.
The reconciliation between the projected 2014 adjusted* diluted
earnings per share and projected GAAP diluted earnings per share
follows:
|
Diluted earnings per
share -- adjusted*
|
$2.00- $2.25
|
|
|
|
Estimated charges
related to the company's device
strategy (mid-point of an estimated range of
$0.13 to $0.19 per diluted share)
|
$(0.16)
|
|
|
|
Estimated
amortization of intangible assets related to
certain acquisitions (mid-point of an estimated range
of $0.23 to $ 0.27 per diluted share)
|
$(0.25)
|
|
|
|
Estimated charges for
certain quality and product-related
matters (mid-point of an estimated range of
$0.25 to $0.31 per diluted share)
|
$(0.28)
|
|
|
|
Estimated charges
related to capacity expansion
(mid-point of an estimated range of $0.30 to $0.38
per diluted share)
|
$(0.34)
|
|
|
|
Estimated acquisition
and integration-related charges
associated with the pending acquisition of an API-related
business from Orchid Chemicals & Pharmaceuticals
(mid-point of an estimated range of $0.05 to $0.07
per diluted share)
|
$(0.06)
|
|
|
|
Estimated charges
related to facilities optimization
and other restructuring (mid-point of an estimated
range of $0.02 to $0.04 per diluted share)
|
$(0.03)
|
|
|
|
Diluted earnings per
share -- GAAP
|
$0.88- $1.13
|
The adjusting items are shown net of tax in aggregate of
$87 million, which is calculated for
the specified adjustments stated above, based on the statutory tax
rates in the various tax jurisdictions in which the items are
expected to occur.
The company continues to project that cash flow from operations
in 2014 will range between $100 million and
$200 million. Capital expenditure projections remain in a
range between $375 million to $425
million. The company continues to expect depreciation and
amortization to range between $225 million
and $275 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, April 30, 2014. A live 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
Hospira website for 30 days following the call.
About Hospira
Hospira, Inc. is the world's leading provider of injectable
drugs and infusion technologies, and a global leader in
biosimilars. Through its broad, integrated portfolio, Hospira is
uniquely positioned to Advance Wellness™ by improving patient and
caregiver safety while reducing healthcare costs. The company is
headquartered in Lake Forest,
Ill., and has approximately 17,000 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, expenses, and cash flow; and other statements
regarding Hospira's goals, plans and strategy. Hospira cautions
that these forward-looking statements are subject to
risks and uncertainties, including adequate and sustained progress
on the company's quality initiatives, continuous improvement
activities, and device strategy, that may cause actual
results to differ materially from those indicated in the
forward-looking statements. Economic, competitive, governmental,
regulatory, legal, intellectual property, product development,
technological, supply, quality, 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 "Forward-Looking Statements,"
"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 and incorporated by
reference. Hospira undertakes no obligation to release publicly any
revisions to forward-looking statements as the result of subsequent
events or developments.
|
Hospira,
Inc.
|
|
Condensed
Consolidated Statements of Income (Loss)
|
|
(Unaudited)
|
|
(dollars and
shares in millions, except for per share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
March 31,
|
|
|
%
Change
|
|
|
|
|
|
|
2014
|
|
|
2013
|
|
|
|
|
Net sales
|
$
1,050.8
|
|
|
$
884.0
|
|
|
18.9 %
|
|
|
|
|
|
|
|
|
|
Cost of products
sold
|
681.2
|
|
|
733.9
|
|
|
(7.2)%
|
|
Restructuring and
impairment
|
0.7
|
|
|
8.8
|
|
|
(92.0)%
|
|
Research and
development
|
83.2
|
|
|
73.8
|
|
|
12.7 %
|
|
Selling, general and
administrative
|
186.1
|
|
|
186.1
|
|
|
—%
|
|
Total
operating costs and expenses
|
951.2
|
|
|
1,002.6
|
|
|
(5.1)%
|
|
Income
(Loss) From Operations
|
99.6
|
|
|
(118.6)
|
|
|
184.0 %
|
|
|
|
|
|
|
|
|
|
Interest
expense
|
20.5
|
|
|
19.6
|
|
|
4.6 %
|
|
Other (income)
expense, net
|
(2.0)
|
|
|
2.3
|
|
|
187.0 %
|
|
Income
(Loss) Before Income Taxes
|
81.1
|
|
|
(140.5)
|
|
|
157.7 %
|
|
|
|
|
|
|
|
|
|
Income tax expense
(benefit)
|
16.5
|
|
|
(58.4)
|
|
|
128.3 %
|
|
Equity income from
affiliates, net
|
(3.3)
|
|
|
(5.5)
|
|
|
(40.0)%
|
|
Net
Income (Loss)
|
$
67.9
|
|
|
$
(76.6)
|
|
|
188.6 %
|
|
|
|
|
|
|
|
|
|
Earnings (Loss) Per
Common Share:
|
|
|
|
|
|
|
|
|
Basic
|
$
0.41
|
|
|
$
(0.46)
|
|
|
189.1 %
|
|
Diluted
|
$
0.40
|
|
|
$
(0.46)
|
|
|
187.0 %
|
|
|
|
|
|
|
|
|
|
Weighted Average
Common Shares Outstanding:
|
|
|
|
|
|
|
|
|
Basic
|
166.5
|
|
|
165.3
|
|
|
0.7 %
|
|
Diluted
|
168.4
|
|
|
165.3
|
|
|
1.9 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Net Sales
(1)(2)
|
$
1,050.8
|
|
|
$
988.3
|
|
|
6.3 %
|
|
Adjusted Gross Profit
(1)(3)
|
$
419.9
|
|
|
$
359.5
|
|
|
16.8 %
|
|
Adjusted Income From
Operations (1)
|
$
151.5
|
|
|
$
101.2
|
|
|
49.7 %
|
|
Adjusted Net Income
(1)
|
$
101.7
|
|
|
$
86.1
|
|
|
18.1 %
|
|
Adjusted Diluted
Earnings Per Share (1)
|
$
0.60
|
|
|
$
0.52
|
|
|
15.4 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Statistics (as a % of
net sales, except for income tax rate)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP Three Months
Ended March 31,
|
|
|
Adjusted
(1) Three Months Ended March 31,
|
|
|
|
|
2014
|
|
2013
|
|
|
2014
|
|
|
2013
|
|
Gross Profit
(3)
|
|
35.2 %
|
|
17.0 %
|
|
|
40.0 %
|
|
|
36.4 %
|
|
Income (Loss) From
Operations
|
|
9.5 %
|
|
(13.4)%
|
|
|
14.4 %
|
|
|
10.2 %
|
|
Net Income
(Loss)
|
|
6.5 %
|
|
(8.7)%
|
|
|
9.7 %
|
|
|
8.7 %
|
|
Income Tax
Rate
|
|
20.3 %
|
|
41.6 %
|
|
|
24.5 %
|
|
|
1.0 %
|
|
|
|
(1)
|
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 contained in
this press release.
|
|
(2)
|
There were no device
strategy charges included in GAAP Net sales for the three months
ended March 31, 2014.
|
|
(3)
|
Gross profit is
defined as Net sales less Cost of products sold. Adjusted gross
profit excludes certain specified items, as indicated in the
previous footnotes.
|
|
Hospira,
Inc.
|
|
Reconciliation of
GAAP to Non-GAAP Financial Measures
|
|
(Unaudited)
|
|
(dollars in
millions, except for per share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
March 31, 2014 Reconciliation of GAAP to Non-GAAP Financial
Measures:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross
Profit(1)
|
|
Income
from
Operations
|
|
Net Income
|
|
Diluted
EPS
|
|
GAAP Financial
Measures
|
|
$
369.6
|
|
$
99.6
|
|
$
67.9
|
|
$
0.40
|
|
Specified Items
(2)
|
|
|
|
|
|
|
|
|
|
Device
strategy charges (A)
|
|
5.9
|
|
6.3
|
|
4.6
|
|
0.03
|
|
Amortization of certain intangible assets (B)
|
|
17.5
|
|
17.5
|
|
12.3
|
|
0.07
|
|
Certain
quality and product related charges (C)
|
|
12.9
|
|
12.9
|
|
8.5
|
|
0.05
|
|
Capacity
expansion related charges (D)
|
|
14.0
|
|
14.0
|
|
9.3
|
|
0.06
|
|
Acquisition and integration related charges
(E)
|
|
—
|
|
0.9
|
|
(1.1)
|
|
(0.01)
|
|
Other
restructuring charges (F)
|
|
—
|
|
0.3
|
|
0.2
|
|
—
|
|
Adjusted financial
measures (3)
|
|
$
419.9
|
|
$
151.5
|
|
$
101.7
|
|
$
0.60
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP results for the
three months ended March 31, 2014 include:
|
|
(A)
|
Device strategy
charges: $5.9 million in Cost of products sold and $0.4 million in
Restructuring and impairment. These charges include consulting,
customer accommodations, collection and destruction costs,
accelerated depreciation, and other costs associated with Hospira's
device strategy.
|
|
(B)
|
Amortization of
certain intangible assets reported in Cost of products sold
resulting from acquisitions including Mayne Pharma Limited ("Mayne
Pharma") and a generic injectable business by Hospira Healthcare
India Private Limited ("Hospira India").
|
|
(C)
|
Certain quality and
product related charges reported in Cost of products sold primarily
include third party oversight and consulting costs, extended
production downtime related costs, and device product review and
remediation costs to address identified issues. These charges are
primarily associated with Hospira's response to the United States
Food and Drug Administration ("FDA") warning letters and charges
related to certain device related remediation
activities.
|
|
(D)
|
Capacity expansion
related charges reported in Cost of products sold include start-up
charges related to manufacturing capacity expansion in
India.
|
|
(E)
|
Acquisition and
integration related charges (gains): $0.9 million reported in
Selling, general, and administrative and $(2.7) million reported in
Other (income) expense, net. These amounts include purchase price
hedge gains and costs for the pending acquisition and integration
of an active pharmaceutical ingredient business.
|
|
(F)
|
Other restructuring
charges: $0.3 million reported in Restructuring and impairment.
These charges include severance costs associated with Hospira's
commercial reorganization.
|
|
Three months ended
March 31, 2013 Reconciliation of GAAP to Non-GAAP Financial
Measures:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Sales
|
|
Gross
Profit(1)
|
|
(Loss) Income
from
Operations
|
|
Net (Loss)
Income
|
|
Diluted
EPS
|
|
GAAP Financial
Measures
|
|
$
884.0
|
|
$
150.1
|
|
$
(118.6)
|
|
$
(76.6)
|
|
$
(0.46)
|
|
Specified Items
(2)
|
|
|
|
|
|
|
|
|
|
|
|
Device
strategy charges (A)
|
|
104.3
|
|
176.8
|
|
181.5
|
|
134.3
|
|
0.81
|
|
Amortization of certain intangible assets (B)
|
|
—
|
|
18.2
|
|
18.2
|
|
12.6
|
|
0.08
|
|
Impairment of certain assets (C)
|
|
—
|
|
—
|
|
—
|
|
2.1
|
|
0.01
|
|
Certain
quality and product related charges (D)
|
|
—
|
|
10.7
|
|
10.7
|
|
7.4
|
|
0.04
|
|
Capacity
expansion related charges (E)
|
|
—
|
|
3.7
|
|
3.7
|
|
2.4
|
|
0.01
|
|
Acquisition and integration related charges
(F)
|
|
—
|
|
—
|
|
1.6
|
|
1.1
|
|
0.01
|
|
Other
restructuring charges (G)
|
|
—
|
|
—
|
|
4.1
|
|
2.8
|
|
0.02
|
|
Adjusted financial
measures (3)
|
|
$
988.3
|
|
$
359.5
|
|
$
101.2
|
|
$
86.1
|
|
$
0.52
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP results for the
three months ended March 31, 2013 include:
|
|
(A)
|
Device strategy
charges: $104.3 million reported in Net sales, $72.5 million in
Cost of product sold and $4.7 million in Restructuring and
impairment. These charges include device related customer sales
allowances, contract termination, collection and destruction costs,
inventory charges and other asset impairments associated with
Hospira's device strategy.
|
|
(B)
|
Amortization of
certain intangible assets reported in Cost of products sold
resulting from acquisitions including Mayne Pharma and a generic
injectable business by Hospira India.
|
|
(C)
|
Impairment of certain
assets: $2.1 million reported in Other (income) expense, net,
related to a marketable equity investment.
|
|
(D)
|
Certain quality and
product related charges reported in Cost of products sold primarily
include third party oversight and consulting costs, extended
production downtime related costs, failure to supply penalties,
device product review and remediation costs to address identified
issues, and costs for corrective actions including product recalls.
These charges are primarily associated with Hospira's response to
the FDA warning letters and charges related to certain device
related remediation activities.
|
|
(E)
|
Capacity expansion
related charges reported in Cost of products sold include start-up
charges related to manufacturing capacity expansion in
India.
|
|
(F)
|
Acquisition and
integration related charges reported in Selling, general, and
administrative include costs for the pending acquisition and
integration of an active pharmaceutical ingredient
business.
|
|
(G)
|
Other restructuring
charges: $4.1 million reported in Restructuring and impairment.
These charges include severance charges associated with Hospira's
commercial reorganization.
|
|
(1)
|
Gross profit is
defined as Net sales less Cost of products sold.
|
|
(2)
|
Specified items are
shown net of tax in aggregate of $15.4 million and $59.2 million
for the three months ended March 31, 2014 and 2013, respectively,
based on the statutory tax rates in the various tax jurisdictions
in which the items occurred.
|
|
(3)
|
The Non-GAAP
financial measures contained in this press release (including
adjusted net sales, 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 Form 8-K furnished on April 30,
2014.
|
|
Hospira,
Inc.
|
|
Condensed
Consolidated Balance Sheets
|
|
(Unaudited)
|
|
(dollars in
millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
March 31,
|
|
December
31,
|
|
|
|
|
|
|
|
|
|
|
2014
|
|
2013
|
|
Assets
|
|
|
|
|
|
|
|
|
|
|
Current
Assets:
|
|
|
|
|
|
Cash and
cash equivalents
|
|
$
677.1
|
|
$
798.1
|
|
Trade
receivables, less allowances of $11.6 and $11.2,
respectively
|
|
555.7
|
|
574.3
|
|
Inventories, net
|
|
1,138.3
|
|
1,066.2
|
|
Deferred
income taxes and other
|
|
218.4
|
|
208.6
|
|
Prepaid
expenses
|
|
68.6
|
|
90.0
|
|
Other
receivables
|
|
145.9
|
|
101.3
|
|
Total
Current Assets
|
|
2,804.0
|
|
2,838.5
|
|
Property and
equipment, net
|
|
1,616.4
|
|
1,574.2
|
|
Intangible assets,
net
|
|
161.6
|
|
172.2
|
|
Goodwill
|
|
1,070.3
|
|
1,057.7
|
|
Deferred income
taxes
|
|
316.7
|
|
358.9
|
|
Investments
|
|
36.2
|
|
33.1
|
|
Other
assets
|
|
152.5
|
|
144.3
|
|
Total
Assets
|
|
$
6,157.7
|
|
$
6,178.9
|
|
Liabilities and
Shareholders' Equity
|
|
|
|
|
|
|
|
|
|
|
Current
Liabilities:
|
|
|
|
|
|
Short-term borrowings
|
|
$
31.9
|
|
$
93.7
|
|
Trade
accounts payable
|
|
339.5
|
|
329.2
|
|
Salaries, wages and commissions
|
|
127.9
|
|
185.4
|
|
Other
accrued liabilities
|
|
568.3
|
|
556.8
|
|
Total
Current Liabilities
|
|
1,067.6
|
|
1,165.1
|
|
Long-term
debt
|
|
1,747.5
|
|
1,747.0
|
|
Deferred income
taxes
|
|
5.5
|
|
3.2
|
|
Post-retirement
obligations and other long-term liabilities
|
|
241.0
|
|
301.7
|
|
Commitments and
Contingencies
|
|
|
|
|
|
Total Shareholders'
Equity
|
|
3,096.1
|
|
2,961.9
|
|
Total Liabilities and Shareholders' Equity
|
|
$
6,157.7
|
|
$
6,178.9
|
|
Hospira,
Inc.
|
|
Condensed
Consolidated Statements of Cash Flows
|
|
(Unaudited)
|
|
(dollars in
millions)
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
March 31,
|
|
Cash Flow From
Operating Activities:
|
|
2014
|
|
2013
|
|
Net
Income (Loss)
|
|
$
67.9
|
|
$
(76.6)
|
|
Adjustments to reconcile Net Income (Loss) to net cash from
operating activities-
|
|
|
|
|
|
Depreciation
|
|
43.9
|
|
41.7
|
|
Amortization of intangible assets
|
|
21.8
|
|
21.9
|
|
Stock-based compensation expense
|
|
11.0
|
|
11.5
|
|
Undistributed equity income from affiliates
|
|
(3.3)
|
|
(5.5)
|
|
Deferred
income taxes and other tax adjustments
|
|
12.9
|
|
(43.9)
|
|
Impairments and other asset charges
|
|
—
|
|
55.5
|
|
Changes
in assets and liabilities-
|
|
|
|
|
|
Trade
receivables
|
|
20.4
|
|
20.5
|
|
Inventories
|
|
(70.4)
|
|
(51.5)
|
|
Prepaid
expenses and other assets
|
|
(32.9)
|
|
(20.8)
|
|
Trade
accounts payable
|
|
20.2
|
|
(12.5)
|
|
Other
liabilities
|
|
(78.8)
|
|
75.8
|
|
Other,
net
|
|
5.6
|
|
4.7
|
|
Net Cash
Provided by Operating Activities
|
|
18.3
|
|
20.8
|
|
|
|
|
|
|
Cash Flow From
Investing Activities:
|
|
|
|
|
|
Capital
expenditures (including instruments placed with or leased to
customers)
|
|
(95.1)
|
|
(68.6)
|
|
Acquisition, net of cash acquired
|
|
(9.0)
|
|
—
|
|
Purchases of intangibles and other investments
|
|
(3.1)
|
|
(7.9)
|
|
Proceeds
from disposition of businesses and assets
|
|
2.9
|
|
1.4
|
|
Net Cash
Used in Investing Activities
|
|
(104.3)
|
|
(75.1)
|
|
|
|
|
|
|
Cash Flow From
Financing Activities:
|
|
|
|
|
|
Other
borrowings, net
|
|
(62.2)
|
|
11.2
|
|
Excess
tax benefit from stock-based compensation arrangements
|
|
0.7
|
|
0.2
|
|
Proceeds
from stock options exercised
|
|
25.2
|
|
2.7
|
|
Net Cash
(Used in) Provided by Financing Activities
|
|
(36.3)
|
|
14.1
|
|
|
|
|
|
|
Effect of exchange
rate changes on cash and cash equivalents
|
|
1.3
|
|
(5.1)
|
|
|
|
|
|
|
Net change in cash
and cash equivalents
|
|
(121.0)
|
|
(45.3)
|
|
Cash and cash
equivalents at beginning of period
|
|
798.1
|
|
772.1
|
|
Cash and cash
equivalents at end of period
|
|
$
677.1
|
|
$
726.8
|
|
|
|
|
|
|
Supplemental Cash
Flow Information:
|
|
|
|
|
|
Cash paid during the
period-
|
|
|
|
|
|
Interest
|
|
$
50.5
|
|
$
14.4
|
|
Income
taxes, net of refunds
|
|
$
4.9
|
|
$
6.1
|
|
Accrued capital
expenditures
|
|
$
23.0
|
|
$
15.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hospira,
Inc.
|
|
Net Sales by
Product Line
|
|
(Unaudited)
|
|
(dollars in
millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
March 31,
|
|
|
|
|
|
|
|
|
Reported
|
|
Adjusted(1)(3)
|
|
|
GAAP Net Sales
2014
|
|
GAAP Net Sales
2013
|
|
Adjusted Net
Sales
2013(1)(3)
|
|
% Change at
Actual
Currency Rates
|
|
% Change at
Constant
Currency Rates(2)
|
|
% Change at
Actual
Currency Rates
|
|
% Change at
Constant
Currency Rates(2)
|
|
Americas—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Specialty Injectable Pharmaceuticals
|
$
570.6
|
|
$
511.0
|
|
$
511.0
|
|
11.7 %
|
|
12.9 %
|
|
11.7 %
|
|
12.9 %
|
|
Medication Management
|
170.5
|
|
98.8
|
|
187.2
|
|
72.6 %
|
|
76.3 %
|
|
(8.9)%
|
|
(6.9)%
|
|
Other Pharma
|
100.7
|
|
88.6
|
|
88.6
|
|
13.7 %
|
|
14.3 %
|
|
13.7 %
|
|
14.3 %
|
|
Total
Americas
|
841.8
|
|
698.4
|
|
786.8
|
|
20.5 %
|
|
22.0 %
|
|
7.0 %
|
|
8.3 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EMEA—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Specialty Injectable Pharmaceuticals
|
85.8
|
|
82.3
|
|
82.3
|
|
4.3 %
|
|
0.4 %
|
|
4.3 %
|
|
0.4 %
|
|
Medication Management
|
25.7
|
|
18.3
|
|
31.5
|
|
40.4 %
|
|
35.0 %
|
|
(18.4)%
|
|
(21.6)%
|
|
Other Pharma
|
21.2
|
|
16.5
|
|
16.5
|
|
28.5 %
|
|
23.6 %
|
|
28.5 %
|
|
23.6 %
|
|
Total EMEA
|
132.7
|
|
117.1
|
|
130.3
|
|
13.3 %
|
|
9.1 %
|
|
1.8 %
|
|
(1.9)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
APAC—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Specialty Injectable Pharmaceuticals
|
59.9
|
|
58.2
|
|
58.2
|
|
2.9 %
|
|
11.2 %
|
|
2.9 %
|
|
11.2 %
|
|
Medication Management
|
10.0
|
|
7.4
|
|
10.1
|
|
35.1 %
|
|
45.9 %
|
|
(1.0)%
|
|
6.9 %
|
|
Other Pharma
|
6.4
|
|
2.9
|
|
2.9
|
|
120.7 %
|
|
120.7 %
|
|
120.7 %
|
|
120.7 %
|
|
Total APAC
|
76.3
|
|
68.5
|
|
71.2
|
|
11.4 %
|
|
19.7 %
|
|
7.2 %
|
|
15.2 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Sales
|
$
1,050.8
|
|
$
884.0
|
|
$
988.3
|
|
18.9 %
|
|
20.1 %
|
|
6.3 %
|
|
7.5 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Global—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Specialty Injectable Pharmaceuticals
|
$
716.3
|
|
$
651.5
|
|
$
651.5
|
|
9.9 %
|
|
11.1 %
|
|
9.9 %
|
|
11.1 %
|
|
Medication Management
|
206.2
|
|
124.5
|
|
228.8
|
|
65.6 %
|
|
68.5 %
|
|
(9.9)%
|
|
(8.3)%
|
|
Other Pharma
|
128.3
|
|
108.0
|
|
108.0
|
|
18.8 %
|
|
18.6 %
|
|
18.8 %
|
|
18.6 %
|
|
Net Sales
|
$
1,050.8
|
|
$
884.0
|
|
$
988.3
|
|
18.9 %
|
|
20.1 %
|
|
6.3 %
|
|
7.5 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Adjusted Net sales
for the three months ended March 31, 2013 excludes charges of
$104.3 million related to the device strategy. The device strategy
charges are reported in the respective Medication Management Net
sales by product line as follows: Americas-$88.4 million,
EMEA-$13.2 million and APAC-$2.7 million. There were no device
strategy charges included in GAAP Net sales for the three months
ended March 31, 2014.
|
|
(2)
|
The Non-GAAP
financial measures contained in this press release include
comparisons at constant currency rates, which reflect comparative
local currency balances at prior period foreign exchange rates.
Hospira calculated these percentages by taking current period
reported net sales less the respective prior period reported net
sales, divided by the prior period reported net sales, all at the
respective prior period's foreign exchange rates. This 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 measure
aids in the understanding of our change in net sales without the
impact of foreign currency and provides greater transparency into
Hospira's results of operations.
|
|
(3)
|
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 contained in
this press release.
|
SOURCE Hospira, Inc.