EX-99.1 2 a05-4102_7ex99d1.htm EX-99.1

Exhibit 99.1

 

CHIRON

Chiron Corporation

4560 Horton Street

Emeryville, California 94608-2916

510.655.8730    Fax 510.655.9910

 

 

 

News Release

 

For Immediate Release

 

Contacts:

Chiron Corporate Communications &

Investor Relations

Media:

(510) 923-6500

Investors:

(510) 923-2300

 

CHIRON REVISES FULL-YEAR 2004 PRO-FORMA EARNINGS FROM 70
CENTS TO 67 CENTS PER SHARE, GAAP EARNINGS FROM 32 CENTS TO 28
CENTS PER SHARE

 

—Chiron will restate second-quarter and third-quarter 2004 financial statements—

 

EMERYVILLE, Calif., Tuesday, March 8, 2005 — Chiron Corporation (NASDAQ: CHIR) today announced that it has revised its fourth-quarter and year-end December 31, 2004, financial results, previously released on January 26, 2005.  The company also announced that it will restate its second-quarter and third-quarter 2004 financial statements in connection with a revenue recognition adjustment for certain travel vaccine sales.  Specifically, the company has determined that certain sales of the travel vaccine recorded as revenues in the second quarter of 2004 should not have been recorded as revenue at that time, and that portions of those sales should have been recorded as revenues in the third and fourth quarters of 2004 and possibly in later quarters.  The revisions and restatements, which include adjustments to revenues and expenses, and reclassifications of certain balance sheet accounts, were identified during the company’s ongoing year-end financial statement review and Section 404 Sarbanes-Oxley review.

 

Chiron also today announced that it has identified three material weaknesses in internal controls over financial reporting as of December 31, 2004, one related to the revenue recognition for certain travel vaccine sales described above, one related to booking of entries to tax accounts, including computational errors, and one related to the reporting of legal expense accruals.  Chiron will report on its final assessment of its internal controls over financial reporting in its Annual Report on Form 10-K for the year ended December 31, 2004.  Chiron’s year-end financial statement review and Section 404 Sarbanes-Oxley review are continuing, and there can be no assurance that the company and its external auditors will not identify further material weaknesses.  In addition, there can be no assurance that the company will not identify further adjustments to its previously announced financial information.

 

- more -

 



 

Year-End December 31, 2004, Financial Results

For the year ended December 31, 2004, Chiron reported revised pro-forma income from continuing operations of $127 million, or $0.67 per share, a decrease of $0.03 per share from financial results as reported on January 26, 2005.  On a GAAP basis, Chiron reported revised income from continuing operations of $54 million, or $0.28 per share, a decrease of $0.04 per share from financial results as reported on January 26, 2005.

 

Revised revenues for 2004 reflect a decrease of $2.5 million from financial results as reported on January 26, 2005 but remain at $1.7 billion after rounding.  Chiron has also identified an additional $5 million in expenses incurred in the year ended December 31, 2004 and not included in the results of operations previously announced on January 26, 2005.

 

Fourth-Quarter 2004 Financial Results

For the fourth quarter of 2004, Chiron reported a revised pro-forma loss from continuing operations of $7 million, or a loss of $0.04 per share, consistent with the loss of $0.04 per share reported on January 26, 2005.  On a GAAP basis, Chiron reported a revised loss from continuing operations of $23 million, or a loss of $0.12 per share, consistent with the loss of $0.12 per share reported on January 26, 2005.

 

Chiron reported revised revenues for the fourth quarter of 2004 of $434 million, an increase of $6 million from financial results as reported on January 26, 2005.  Chiron has also identified an additional $6 million in expenses incurred in the fourth quarter of 2004 and not included in the results of operations previously announced on January 26, 2005.

 

Second-Quarter and Third-Quarter 2004 Financial Results; Unavailability of Registration Statements

Chiron will restate the financial statements included in its Quarterly Reports on Form 10-Q for each of the second quarter of 2004 and third quarter of 2004.  Chiron’s previously issued financial statements included in those reports should no longer be relied upon.  In addition, the availability of Chiron’s registration statements relating to its 1 5/8% convertible debentures due 2033 and 2 ¾% convertible debentures due 2034 is suspended until such time as Chiron provides the holders with notice that such registration statements are again available.

 

Chiron management uses pro-forma financial statements to gain an understanding of the company’s operating performance on a comparative basis.  Pro-forma amounts exclude certain revenue items and special items relating to certain acquisitions, which may not be indicative of the company’s trends or potential future performance.  Please refer to the tables at the end of this document for more detail on these items and a reconciliation of

 

2



 

the pro-forma information to GAAP financial statements.  All references to per-share amounts are per diluted share.

 

For revised financial results for the year ended December 31, 2004, and for the fourth quarter of 2004, please refer to the tables at the end of this document or visit our website at www.chiron.com.  Chiron intends to file amendments to its Quarterly Reports on Form 10-Q for the quarters ended June 30, 2004 and September 30, 2004, to include the restated financial statements mentioned above.

 

About Chiron

Chiron delivers innovative and valuable products to protect human health by advancing pioneering science across the landscape of biotechnology. The company works to deliver on the limitless promise of science and make a positive difference in people’s lives. For more information, please visit www.chiron.com.

 

— Revised Unaudited Condensed Consolidated Balance Sheets and Statements of Operations and Pro-forma-to-GAAP Reconciliation, Revised Revenue Summary Sheets, Revised Earnings Per Share Table, and Revised Non-FLUVIRIN® Influenza Virus Vaccine–Related Reconciliation follow —

 

#  #  #

 

3



 

CHIRON CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (REVISED)

(Unaudited)

(In thousands, except per share data)

 

 

 

Three Months Ended
December 31,

 

 

 

2004

 

2003

 

 

 

Pro Forma
Adjusted (1)

 

Pro Forma
Adjustments

 

Actual

 

Pro Forma
Adjusted (2)

 

Pro Forma
Adjustments

 

Actual

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues:

 

 

 

 

 

 

 

 

 

 

 

 

 

Product sales, net

 

$

330,467

 

$

 

$

330,467

 

$

448,611

 

$

 

$

448,611

 

Revenues from joint business arrangement

 

25,336

 

 

25,336

 

28,313

 

 

28,313

 

Collaborative agreement revenues

 

3,577

 

 

3,577

 

3,008

 

 

3,008

 

Royalty and license fee revenues

 

68,177

 

 

68,177

 

63,605

 

 

63,605

 

Other revenues

 

6,838

 

 

6,838

 

11,044

 

 

11,044

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total revenues

 

434,395

 

 

434,395

 

554,581

 

 

554,581

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of sales

 

175,212

 

 

175,212

 

214,508

 

 

214,508

 

Research and development

 

129,392

 

 

129,392

 

140,242

 

 

140,242

 

Selling, general and administrative

 

139,651

 

 

139,651

 

121,302

 

 

121,302

 

Purchased in-process research and development

 

 

 

 

 

77,400

 

(77,400

)

Amortization expense

 

 

(21,426

)

21,426

 

 

(21,230

)

21,230

 

Other operating expenses

 

4,804

 

 

4,804

 

3,803

 

 

3,803

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total operating expenses

 

449,059

 

(21,426

)

470,485

 

479,855

 

56,170

 

423,685

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(Loss) income from operations

 

(14,664

)

21,426

 

(36,090

)

74,726

 

(56,170

)

130,896

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loss on disposal of assets

 

(2,092

)

 

(2,092

)

(25

)

 

(25

)

Interest expense

 

(6,653

)

 

(6,653

)

(6,581

)

 

(6,581

)

Interest and other income, net

 

14,390

 

 

14,390

 

7,523

 

 

7,523

 

Minority interest

 

(385

)

 

(385

)

(329

)

 

(329

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(Loss) income from continuing operations before income taxes

 

(9,404

)

21,426

 

(30,830

)

75,314

 

(56,170

)

131,484

 

Provision for (benefit of) income taxes

 

(2,351

)

5,356

 

(7,707

)

18,828

 

5,307

 

13,521

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(Loss) income from continuing operations

 

(7,053

)

16,070

 

(23,123

)

56,486

 

(61,477

)

117,963

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gain from discontinued operations

 

 

 

 

3,837

 

 

3,837

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net (loss) income

 

$

(7,053

)

$

16,070

 

$

(23,123

)

$

60,323

 

$

(61,477

)

$

121,800

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic (loss) earnings per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

(Loss) income from continuing operations

 

$

(0.04

)

 

 

$

(0.12

)

$

0.30

 

 

 

$

0.63

 

Net (loss) income

 

$

(0.04

)

 

 

$

(0.12

)

$

0.32

 

 

 

$

0.65

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted (loss) earnings per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

(Loss) income from continuing operations

 

$

(0.04

)

 

 

$

(0.12

)

$

0.29

 

 

 

$

0.59

 

Net (loss) income

 

$

(0.04

)

 

 

$

(0.12

)

$

0.31

 

 

 

$

0.61

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shares used in calculating basic (loss) earnings per share

 

186,813

 

 

 

186,813

 

187,393

 

 

 

187,393

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shares used in calculating diluted (loss) earnings per share

 

186,813

 

 

 

186,813

 

200,567

 

 

 

205,795

 

 


(1) Pro Forma Adjusted amounts exclude (a) the amortization expense on acquired intangible assets related to the acquisitions of PathoGenesis, Chiron Behring, Pulmopharm and PowderJect Pharmaceuticals.

 

(2) Pro Forma Adjusted amounts exclude (a) the amortization expense on acquired intangible assets related to the acquisitions of PathoGenesis, Chiron Behring, Pulmopharm and PowderJect Pharmaceuticals and (b) purchased in-process research and development related to the PowderJect Pharmaceuticals acquisition. Note that in Q4’03, there was a purchase price allocation adjustment to the purchased in-process research and development related to the PowderJect Pharmaceuticals acquisition, upon completion of strategic assessments of the value of certain research and development projects.  The adjustment reduced purchased in-process research and development by $77.4 million.

 



 

CHIRON CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (REVISED)

(Unaudited)

(In thousands, except per share data)

 

 

 

Year to Date
December 31,

 

 

 

2004

 

2003

 

 

 

Pro Forma
Adjusted (3)

 

Pro Forma
Adjustments

 

Actual

 

Pro Forma
Adjusted (4)

 

Pro Forma
Adjustments

 

Actual

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues:

 

 

 

 

 

 

 

 

 

 

 

 

 

Product sales, net

 

$

1,268,303

 

$

 

$

1,268,303

 

$

1,345,833

 

$

 

$

1,345,833

 

Revenues from joint business arrangement

 

118,246

 

 

118,246

 

108,298

 

 

108,298

 

Collaborative agreement revenues

 

18,044

 

 

18,044

 

18,562

 

 

18,562

 

Royalty and license fee revenues

 

289,561

 

 

289,561

 

250,142

 

 

250,142

 

Other revenues

 

29,201

 

 

29,201

 

29,113

 

(14,413

)

43,526

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total revenues

 

1,723,355

 

 

1,723,355

 

1,751,948

 

(14,413

)

1,766,361

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of sales

 

669,667

 

 

669,667

 

571,897

 

 

571,897

 

Research and development

 

431,128

 

 

431,128

 

409,806

 

 

409,806

 

Selling, general and administrative

 

465,779

 

 

465,779

 

380,388

 

 

380,388

 

Purchased in-process research and development

 

 

(9,629

)

9,629

 

 

(45,300

)

45,300

 

Amortization expense

 

 

(84,503

)

84,503

 

 

(56,365

)

56,365

 

Other operating expenses

 

12,844

 

 

12,844

 

11,532

 

 

11,532

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total operating expenses

 

1,579,418

 

(94,132

)

1,673,550

 

1,373,623

 

(101,665

)

1,475,288

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income from operations

 

143,937

 

94,132

 

49,805

 

378,325

 

87,252

 

291,073

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loss on disposal of assets

 

(3,247

)

 

(3,247

)

(224

)

 

(224

)

Interest expense

 

(26,093

)

 

(26,093

)

(19,104

)

 

(19,104

)

Interest and other income, net

 

56,797

 

 

56,797

 

38,892

 

 

38,892

 

Minority interest

 

(1,968

)

 

(1,968

)

(1,753

)

 

(1,753

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income from continuing operations before income taxes

 

169,426

 

94,132

 

75,294

 

396,136

 

87,252

 

308,884

 

Provision for income taxes

 

42,357

 

21,126

 

21,231

 

99,034

 

10,488

 

88,546

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income from continuing operations

 

127,069

 

73,006

 

54,063

 

297,102

 

76,764

 

220,338

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gain from discontinued operations

 

24,854

 

 

24,854

 

6,975

 

 

6,975

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

$

151,923

 

$

73,006

 

$

78,917

 

$

304,077

 

$

76,764

 

$

227,313

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic earnings per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

Income from continuing operations

 

$

0.68

 

 

 

$

0.29

 

$

1.59

 

 

 

$

1.18

 

Net income

 

$

0.81

 

 

 

$

0.42

 

$

1.63

 

 

 

$

1.22

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted earnings per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

Income from continuing operations

 

$

0.67

 

 

 

$

0.28

 

$

1.54

 

 

 

$

1.15

 

Net income

 

$

0.80

 

 

 

$

0.41

 

$

1.58

 

 

 

$

1.19

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shares used in calculating basic earnings per share

 

187,545

 

 

 

187,545

 

186,835

 

 

 

186,835

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shares used in calculating diluted earnings per share

 

190,202

 

 

 

190,202

 

199,143

 

 

 

193,915

 

 


(3) Pro Forma Adjusted amounts exclude (a) the amortization expense on acquired intangible assets related to the acquisitions of PathoGenesis, Chiron Behring, Pulmopharm and PowderJect Pharmaceuticals and (b) the purchased in-process research and development related to the Sagres acquisition.

 

(4) Pro Forma Adjusted amounts exclude: (a) the Biogen and Serono settlements in connection with the McCormick patents owned by Schering’s U.S. subsidiary, Berlex Laboratories, (b) purchased in-process research and development related to the PowderJect Pharmaceuticals acquisition and (c) the amortization expense on acquired intangible assets related to the acquisitions of PathoGenesis, Chiron Behring, Pulmopharm and PowderJect Pharmaceuticals.

 

Note: Due to rounding, quarterly earnings (loss) per share amounts may not sum fully to yearly earnings per share amounts.

 



 

CHIRON CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS (REVISED)

(Unaudited)

(In thousands)

 

 

 

December 31,
2004

 

December 31,
2003

 

 

 

 

 

 

 

Assets

 

 

 

 

 

Current assets:

 

 

 

 

 

Cash and short-term investments

 

$

603,621

 

$

538,482

 

Accounts receivable, net

 

392,788

 

382,933

 

Current portion of notes receivable

 

 

1,479

 

Inventories, net

 

221,154

 

199,625

 

Other current assets

 

167,154

 

135,130

 

Total current assets

 

1,384,717

 

1,257,649

 

Noncurrent investments in marketable debt securities

 

409,421

 

560,292

 

Property, plant, equipment and leasehold improvements, net

 

799,415

 

689,750

 

Other noncurrent assets

 

1,702,644

 

1,687,478

 

Total assets

 

$

4,296,197

 

$

4,195,169

 

 

 

 

 

 

 

Liabilities and stockholders’ equity

 

 

 

 

 

Current liabilities

 

$

425,138

 

$

436,913

 

Long-term debt

 

936,652

 

926,709

 

Capital lease

 

156,952

 

157,677

 

Noncurrent unearned revenue

 

26,175

 

45,564

 

Other noncurrent liabilities

 

140,226

 

176,944

 

Minority interest

 

9,350

 

7,002

 

Stockholders’ equity

 

2,601,704

 

2,444,360

 

Total liabilities and stockholders’ equity

 

$

4,296,197

 

$

4,195,169

 

 



 

 

CHIRON CORPORATION

SUPPLEMENTAL SCHEDULE OF COMPUTATION OF EARNINGS (LOSS) PER SHARE (REVISED)

(Unaudited)

(In thousands, except per share data)

 

 

 

Three Months Ended
December 31,

 

 

 

 

 

 

2004

 

2003

 

 

 

Pro Forma
Adjusted

 

Actual

 

Pro Forma
Adjusted

 

Actual

 

 

 

 

 

 

 

 

 

 

 

Computation for earnings (loss) per share - continuing operations

 

 

 

 

 

 

 

 

 

Income (loss) (Numerator):

 

 

 

 

 

 

 

 

 

Income (loss) from continuing operations

 

$

(7,053

)

$

(23,123

)

$

56,486

 

$

117,963

 

Plus: Interest on 1.625% convertible debentures, net of taxes

 

 

 

1,574

 

1,574

 

Plus: Interest on Liquid Yield Option Notes, net of taxes

 

 

 

 

1,767

 

Income (loss) from continuing operations, plus impact from assumed conversions

 

$

(7,053

)

$

(23,123

)

$

58,060

 

$

121,304

 

 

 

 

 

 

 

 

 

 

 

Shares (Denominator):

 

 

 

 

 

 

 

 

 

Weighted-average common shares outstanding

 

186,813

 

186,813

 

187,393

 

187,393

 

Effect of dilutive securities:

 

 

 

 

 

 

 

 

 

Stock options and equivalents

 

 

 

5,868

 

5,868

 

1.625% convertible debentures

 

 

 

7,306

 

7,306

 

Liquid Yield Option Notes

 

 

 

 

5,228

 

Weighted-average common shares outstanding, plus impact from assumed conversions

 

186,813

 

186,813

 

200,567

 

205,795

 

 

 

 

 

 

 

 

 

 

 

Basic earnings (loss) per share from continuing operations

 

$

(0.04

)

$

(0.12

)

$

0.30

 

$

0.63

 

Diluted earnings (loss) per share from continuing operations

 

$

(0.04

)

$

(0.12

)

$

0.29

 

$

0.59

 

 

 

 

 

 

 

 

 

 

 

Computation for earnings (loss) per share -net income (loss)

 

 

 

 

 

 

 

 

 

Income (loss) (Numerator):

 

 

 

 

 

 

 

 

 

Net income (loss)

 

$

(7,053

)

$

(23,123

)

$

60,323

 

$

121,800

 

Plus: Interest on 1.625% convertible debentures, net of taxes

 

 

 

1,574

 

1,574

 

Plus: Interest on Liquid Yield Option Notes, net of taxes

 

 

 

 

1,767

 

Net income (loss), plus impact from assumed conversions

 

$

(7,053

)

$

(23,123

)

$

61,897

 

$

125,141

 

 

 

 

 

 

 

 

 

 

 

Shares (Denominator):

 

 

 

 

 

 

 

 

 

Weighted-average common shares outstanding

 

186,813

 

186,813

 

187,393

 

187,393

 

Effect of dilutive securities:

 

 

 

 

 

 

 

 

 

Stock options and equivalents

 

 

 

5,868

 

5,868

 

1.625% convertible debentures

 

 

 

7,306

 

7,306

 

Liquid Yield Option Notes

 

 

 

 

5,228

 

Weighted-average common shares outstanding, plus impact from assumed conversions

 

186,813

 

186,813

 

200,567

 

205,795

 

 

 

 

 

 

 

 

 

 

 

Basic earnings (loss) per share

 

$

(0.04

)

$

(0.12

)

$

0.32

 

$

0.65

 

Diluted earnings (loss) per share

 

$

(0.04

)

$

(0.12

)

$

0.31

 

$

0.61

 

 



 

CHIRON CORPORATION

SUPPLEMENTAL SCHEDULE OF COMPUTATION OF EARNINGS PER SHARE (REVISED)

(Unaudited)

(In thousands, except per share data)

 

 

 

Year to Date
December 31,

 

 

 

 

 

 

2004

 

2003

 

 

 

Pro Forma
Adjusted

 

Actual

 

Pro Forma
Adjusted

 

Actual

 

 

 

 

 

 

 

 

 

 

 

Computation for earnings per share - continuing operations

 

 

 

 

 

 

 

 

 

Income (Numerator):

 

 

 

 

 

 

 

 

 

Income from continuing operations

 

$

127,069

 

$

54,063

 

$

297,102

 

$

220,338

 

Plus: Interest on 1.625% convertible debentures, net of taxes

 

 

 

2,638

 

2,638

 

Plus: Interest on Liquid Yield Option Notes, net of taxes

 

 

 

7,027

 

 

Income from continuing operations, plus impact from assumed conversions

 

$

127,069

 

$

54,063

 

$

306,767

 

$

222,976

 

 

 

 

 

 

 

 

 

 

 

Shares (Denominator):

 

 

 

 

 

 

 

 

 

Weighted-average common shares outstanding

 

187,545

 

187,545

 

186,835

 

186,835

 

Effect of dilutive securities:

 

 

 

 

 

 

 

 

 

Stock options and equivalents

 

2,657

 

2,657

 

4,339

 

4,339

 

1.625% convertible debentures

 

 

 

2,740

 

2,740

 

Liquid Yield Option Notes

 

 

 

5,228

 

 

Put options

 

 

 

1

 

1

 

Weighted-average common shares outstanding, plus impact from assumed conversions

 

190,202

 

190,202

 

199,143

 

193,915

 

 

 

 

 

 

 

 

 

 

 

Basic earnings per share from continuing operations

 

$

0.68

 

$

0.29

 

$

1.59

 

$

1.18

 

Diluted earnings per share from continuing operations

 

$

0.67

 

$

0.28

 

$

1.54

 

$

1.15

 

 

 

 

 

 

 

 

 

 

 

Computation for earnings per share -net income

 

 

 

 

 

 

 

 

 

Income (Numerator):

 

 

 

 

 

 

 

 

 

Net income

 

$

151,923

 

$

78,917

 

$

304,077

 

$

227,313

 

Plus: Interest on 1.625% convertible debentures, net of taxes

 

 

 

2,638

 

2,638

 

Plus: Interest on Liquid Yield Option Notes, net of taxes

 

 

 

7,027

 

 

Net income

 

$

151,923

 

$

78,917

 

$

313,742

 

$

229,951

 

 

 

 

 

 

 

 

 

 

 

Shares (Denominator):

 

 

 

 

 

 

 

 

 

Weighted-average common shares outstanding

 

187,545

 

187,545

 

186,835

 

186,835

 

Effect of dilutive securities:

 

 

 

 

 

 

 

 

 

Stock options and equivalents

 

2,657

 

2,657

 

4,339

 

4,339

 

1.625% convertible debentures

 

 

 

2,740

 

2,740

 

Liquid Yield Option Notes

 

 

 

5,228

 

 

Put options

 

 

 

1

 

1

 

Weighted-average common shares outstanding, plus impact from assumed conversions

 

190,202

 

190,202

 

199,143

 

193,915

 

 

 

 

 

 

 

 

 

 

 

Basic earnings per share

 

$

0.81

 

$

0.42

 

$

1.63

 

$

1.22

 

Diluted earnings per share

 

$

0.80

 

$

0.41

 

$

1.58

 

$

1.19

 

 



 

 

CHIRON CORPORATION

Supplemental Revenue Summary (Pro Forma) (Revised)

USD $ (in thousands)

 

 

 

Current

 

Prior

 

Change

 

 

 

Year Ago

 

Change

 

 

 

 

 

Quarter

 

Quarter

 

from

 

Change

 

Quarter

 

from

 

Change

 

 

 

Q4 2004

 

Q3 2004

 

Prior QTR

 

%

 

Q4 2003

 

Prior Year

 

%

 

Product Sales

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Blood Testing

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Ortho

 

$

7,904

 

$

7,098

 

$

806

 

11.4

%

$

8,625

 

$

(721

)

(8.4

)%

NAT

 

63,705

 

63,629

 

76

 

0.1

%

58,299

 

5,406

 

9.3

%

Total Blood Testing

 

71,609

 

70,727

 

882

 

1.2

%

66,924

 

4,685

 

7.0

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Vaccines

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Flu Vaccines

 

44,015

 

93,486

 

(49,471

)

(52.9

)%

141,142

 

(97,127

)

(68.8

)%

Meningococcus Vaccines

 

9,309

 

8,865

 

444

 

5.0

%

33,672

 

(24,363

)

(72.4

)%

Travel Vaccines (TBE, Rabies, Arilvax and Dukoral)

 

21,159

 

26,434

 

(5,275

)

(20.0

)%

27,850

 

(6,691

)

(24.0

)%

Pediatric/Other Vaccines

 

57,656

 

44,491

 

13,165

 

29.6

%

58,974

 

(1,318

)

(2.2

)%

Total Vaccines

 

132,139

 

173,276

 

(41,137

)

(23.7

)%

261,638

 

(129,499

)

(49.5

)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Biopharmaceuticals:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Proleukin

 

30,713

 

31,739

 

(1,026

)

(3.2

)%

29,852

 

861

 

2.9

%

TOBI

 

53,276

 

55,734

 

(2,458

)

(4.4

)%

49,307

 

3,969

 

8.0

%

Betaseron*

 

33,639

 

35,171

 

(1,532

)

(4.4

)%

36,148

 

(2,509

)

(6.9

)%

Other

 

9,091

 

8,902

 

189

 

2.1

%

4,742

 

4,349

 

91.7

%

Total Biopharmaceuticals

 

126,719

 

131,546

 

(4,827

)

(3.7

)%

120,049

 

6,670

 

5.6

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

TOTAL PRODUCT SALES

 

$

330,467

 

$

375,549

 

$

(45,082

)

(12.0

)%

$

448,611

 

$

(118,144

)

(26.3

)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues From Joint Business Arrangement

 

$

25,336

 

$

34,017

 

$

(8,681

)

(25.5

)%

$

28,313

 

$

(2,977

)

(10.5

)%

Collaborative Agreement Revenues

 

3,577

 

4,124

 

(547

)

(13.3

)%

3,008

 

569

 

18.9

%

Royalty and License Fees

 

68,177

 

111,396

 

(43,219

)

(38.8

)%

63,605

 

4,572

 

7.2

%

Other Revenues

 

6,838

 

4,450

 

2,388

 

53.7

%

11,044

 

(4,206

)

(38.1

)%

TOTAL REVENUES

 

$

434,395

 

$

529,536

 

$

(95,141

)

(18.0

)%

$

554,581

 

$

(120,186

)

(21.7

)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross Margins

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Blood Testing

 

40

%

43

%

(3

)%

 

 

38

%

2

%

 

 

Vaccines

 

29

%

11

%

18

%

 

 

49

%

(20

)%

 

 

Biopharmaceuticals

 

70

%

67

%

3

%

 

 

66

%

4

%

 

 

TOTAL GROSS MARGINS

 

47

%

36

%

11

%

 

 

52

%

(5

)%

 

 

 


* Excludes Betaferon Royalty

 

$

12,798

 

$

13,374

 

$

(576

)

(4.3

)%

$

16,658

 

$

(3,860

)

(23.2

)%

 



 

CHIRON CORPORATION

Supplemental YTD Revenue Summary (Pro Forma) (Revised)

USD $ (in thousands)

 

 

 

Twelve Months Ended December 31,

 

Change from

 

Change

 

 

 

2004

 

2003

 

Prior Year

 

%

 

Product Sales

 

 

 

 

 

 

 

 

 

Blood Testing

 

 

 

 

 

 

 

 

 

Ortho

 

$

27,844

 

$

28,391

 

$

(547

)

(1.9

)%

NAT

 

249,809

 

200,066

 

49,743

 

24.9

%

Total Blood Testing

 

277,653

 

228,457

 

49,196

 

21.5

%

 

 

 

 

 

 

 

 

 

 

Vaccines

 

 

 

 

 

 

 

 

 

Flu Vaccines

 

153,413

 

332,428

 

(179,015

)

(53.9

)%

Meningococcus Vaccines

 

27,739

 

65,548

 

(37,809

)

(57.7

)%

Travel Vaccines (TBE, Rabies, Arilvax and Dukoral)

 

96,864

 

87,831

 

9,033

 

10.3

%

Pediatric/Other Vaccines

 

200,948

 

192,511

 

8,437

 

4.4

%

Total Vaccines

 

478,964

 

678,318

 

(199,354

)

(29.4

)%

 

 

 

 

 

 

 

 

 

 

Biopharmaceuticals:

 

 

 

 

 

 

 

 

 

Proleukin

 

129,377

 

115,075

 

14,302

 

12.4

%

TOBI

 

212,876

 

172,047

 

40,829

 

23.7

%

Betaseron*

 

130,572

 

124,936

 

5,636

 

4.5

%

Other

 

38,861

 

27,000

 

11,861

 

43.9

%

Total Biopharmaceuticals

 

511,686

 

439,058

 

72,628

 

16.5

%

 

 

 

 

 

 

 

 

 

 

TOTAL PRODUCT SALES

 

$

1,268,303

 

$

1,345,833

 

$

(77,530

)

(5.8

)%

 

 

 

 

 

 

 

 

 

 

Revenues From Joint Business Arrangement

 

$

118,246

 

$

108,298

 

$

9,948

 

9.2

%

Collaborative Agreement Revenues

 

18,044

 

18,562

 

(518

)

(2.8

)%

Royalty and License Fees

 

289,561

 

250,142

 

39,419

 

15.8

%

Other Revenues

 

29,201

 

29,113

 

88

 

0.3

%

TOTAL REVENUES

 

$

1,723,355

 

$

1,751,948

 

$

(28,593

)

(1.6

)%

 

 

 

 

 

 

 

 

 

 

Gross Margins

 

 

 

 

 

 

 

 

 

Blood Testing

 

42

%

41

%

1

%

 

 

Vaccines

 

24

%

53

%

(29

)%

 

 

Biopharmaceuticals

 

72

%

72

%

0

%

 

 

TOTAL GROSS MARGINS

 

47

%

58

%

(11

)%

 

 

 


* Excludes Betaferon Royalty

 

$

51,564

 

$

63,768

 

$

(12,204

)

(19.1

)%

 



 

CHIRON CORPORATION

Non-FLUVIRIN(R) Influenza Virus Vaccine-Related Reconciliation for 2004  press release (Revised)

USD $ (in thousands, except percentages)

 

 

 

Current

 

Year

 

Change

 

 

 

 

 

Year

 

Ago

 

from

 

Change

 

 

 

2004

 

2003

 

Prior Year

 

%

 

 

 

 

 

 

 

 

 

 

 

TOTAL PRODUCT SALES

 

$

1,268,303

 

$

1,345,833

 

$

(77,530

)

(6

)%

Fluvirin vaccine sales

 

2,255

 

219,240

 

(216,985

)

(99

)%

TOTAL PRODUCT SALES, Excluding Fluvirin vaccine sales

 

$

1,266,048

 

$

1,126,593

 

$

139,455

 

12

%

 

 

 

 

 

 

 

 

 

 

TOTAL VACCINES PRODUCT SALES

 

$

478,964

 

$

678,318

 

$

(199,354

)

(29

)%

Fluvirin vaccine sales

 

2,255

 

219,240

 

(216,985

)

(99

)%

TOTAL VACCINES PRODUCT SALES, Excluding Fluvirin vaccine sales

 

$

476,709

 

$

459,078

 

$

17,631

 

4

%

 

 

 

 

 

 

 

 

 

 

FLU VACCINES PRODUCT SALES

 

$

153,413

 

$

332,428

 

$

(179,015

)

(54

)%

Fluvirin vaccine sales

 

2,255

 

219,240

 

(216,985

)

(99

)%

FLU VACCINES PRODUCT SALES, Excluding Fluvirin vaccine sales

 

$

151,158

 

$

113,188

 

$

37,970

 

34

%

 

 

 

 

 

 

 

 

 

 

Vaccines Gross Margin

 

 

 

 

 

 

 

 

 

Vaccines product sales

 

$

478,964

 

 

 

 

 

 

 

Cost of sales

 

363,243

 

 

 

 

 

 

 

Gross Margin

 

$

115,721

 

 

 

 

 

 

 

Gross Margin %

 

24

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Vaccines Gross Margin, excluding Fluvirin charge of $91,300 and remediation costs of $2,600

 

 

 

 

 

 

 

 

 

Vaccines product sales

 

$

478,964

 

 

 

 

 

 

 

Cost of sales, excluding Fluvirin charge of $91,300 and remediation costs of $2,600

 

269,343

 

 

 

 

 

 

 

Gross Margin

 

$

209,621

 

 

 

 

 

 

 

Gross Margin %

 

44

%