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Mylan Reports a 19% Increase in First Quarter 2013 Adjusted Diluted EPS to $0.62

  Mylan Reports a 19% Increase in First Quarter 2013 Adjusted Diluted EPS to
                                    $0.62

Reaffirms 2013 Adjusted Diluted EPS Guidance Range of $2.75 - $2.95

PR Newswire

PITTSBURGH, May 2, 2013

PITTSBURGH, May2, 2013 /PRNewswire/ -- Mylan Inc. (Nasdaq: MYL) today
announced its financial results for the three months ended March31, 2013.

Financial Highlights

  oAdjusted diluted EPS of $0.62 for the three months ended March 31, 2013
    compared to $0.52 for the same prior year period, an increase of 19%
  oTotal revenues of $1.63 billion for the three months ended March 31, 2013
    compared to $1.58 billion for the same prior year period, an increase of
    3%
  oOn a GAAP basis, diluted EPS of $0.27 for the three months ended March 31,
    2013 compared to $0.30 for the same prior year period, a decrease of 10%
    (the 2013 first quarter included pretax expenses related to research and
    development licensing payments of $23 million and acquisition related
    costs of $19 million, reducing GAAP diluted EPS by a total of
    approximately $0.08)
  oAdjusted operating cash flow of $90 million for the three months ended
    March 31, 2013, an increase of 30% compared to the same prior year period
  oOn a GAAP basis, cash flow from operating activities of $88 million for
    the three months ended March 31, 2013, an increase of $195 million
    compared to the same prior year period
  oCompleted the repurchase of approximately 16.3 million shares of common
    stock for approximately $500 million during the three months ended March
    31, 2013

Mylan Chief Executive Officer, Heather Bresch commented: "Our first quarter
results provide a strong start to the year and are fully in line with our
expectations. We generated double-digit, constant currency top-line growth in
our European and Asia Pacific regions, and saw strong performance in our North
American business. I am also very pleased with the performance of our
Specialty segment, particularly our EpiPen® Auto-Injector franchise, which
celebrates its 25^th anniversary this year and continues to be an exciting
growth opportunity. We remain very confident in our outlook for our business
in 2013 and are reaffirming our full year guidance, including our adjusted
diluted EPS guidance range of $2.75 to $2.95."

John Sheehan, Mylan's chief financial officer, added: "I am pleased with our
first quarter results, which represent a great foundation for 2013. During the
first quarter we completed our previously announced share repurchase program,
consistent with our objective to return capital to our shareholders. We
maintain significant financial flexibility and continue to look to use this
flexibility for accretive opportunities that create value for our
shareholders, while also maintaining our investment grade credit rating."

Financial Results Summary

Three Months Ended March31, 2013

For the three months ended March 31, 2013, Mylan reported total revenues of
$1.63 billion compared to $1.58 billion in the comparable prior year period,
an increase of $47.8 million or 3.0%. The effect of foreign currency
translation had an unfavorable impact of approximately 2% on total revenues
primarily reflecting a stronger U.S. Dollar in comparison to the currencies of
the other major markets in which Mylan operates. Translating total revenues
for the current quarter at prior year comparative period exchange rates would
have resulted in year-over-year growth of approximately $72 million, or 5%.

A tabular summary of Mylan's revenues for the three months ended March31,
2013 and 2012 is included at the end of this release. Also included at the end
of this release are the reconciliations of adjusted financial results to the
most closely applicable GAAP financial result.

Third party net revenues from Mylan's Generics segment, which are derived from
sales in North America, Europe, the Middle East and Africa (collectively,
EMEA) and Australia, India, Japan and New Zealand (collectively, Asia Pacific)
were $1.41 billion in the quarter ended March31, 2013, compared to $1.40
billion in the comparable prior year period, representing a slight increase of
$5.8 million, or an increase of approximately 2% when excluding the
unfavorable effect of foreign currency translation.

Third party net revenues from North America were $732.8 million for the
current quarter, compared to $767.7 million for the comparable prior year
period, representing a decrease of $34.9 million, or 4.5%. The decrease in
third party net revenues was due to a greater amount of revenue from new
product launches in the prior year ($211 million) as compared to the current
year ($117 million), which was due principally to the launch of Escitalopram,
our most significant product launch in the prior year. Excluding the impact of
Escitalopram in both periods, third party net revenues in North America would
have experienced double-digit growth. The effect of foreign currency
translation was insignificant within North America.

Third party net revenues from EMEA were $369.9 million for the current
quarter, compared to $335.6 million for the comparable prior year period,
representing an increase of $34.2 million, or 10.2%. Foreign currency
translation had a minimal impact on sales for the current quarter, as
translating current quarter third party net revenues from EMEA at prior year
comparative period exchange rates resulted in an increase in third party net
revenues of approximately 10%. This increase was principally the result of a
double-digit increase in revenues in France as a result of new product revenue
and favorable volume. Partially offsetting these increases was unfavorable
pricing in a number of European markets in which Mylan operates as a result of
government imposed pricing reductions and competitive market conditions.

Third party net revenues from Asia Pacific were $305.1 million for the current
quarter, compared to $298.7 million for the comparable prior year period, an
increase of $6.4 million, or 2.2%. However, foreign currency translation had a
negative impact on sales for the current quarter, principally reflecting the
significant strengthening of the U.S. Dollar versus the Indian Rupee and
Japanese Yen. Excluding the effect of foreign currency translation, calculated
as described above, third party net revenues would have increased by
approximately $31 million, or 10%. This increase is primarily driven by higher
revenues by Mylan India, as a result of increased sales of antiretroviral
finished dosage form generic products, which are used in the treatment of
HIV/AIDS, and an increase in sales of active pharmaceutical ingredients (API).

For the current quarter, Mylan's Specialty segment reported third party net
sales of $211.6 million, an increase of $40.6 million, or 23.7%, from the
comparable prior year period of $171.1 million. The most significant
contributor to Specialty segment revenues continues to be the EPIPEN®
Auto-Injector, sales of which increased as a result of favorable pricing. The
EPIPEN® Auto-Injector is the number one epinephrine auto-injector for the
treatment of severe allergic reactions. In addition, Perforomist® Inhalation
Solution sales increased by double digits from the comparable prior year
period as a result of favorable pricing and volume.

Gross profit for the three months ended March 31, 2013, was $693.5 million and
gross margins were 42.5%. For the three months ended March 31, 2012, gross
profit was $670.2 million, and gross margins were 42.3%. Adjusted gross
profit, as further defined below, for the three months ended March 31, 2013
was $796.5 million and adjusted gross margins were 49% as compared to adjusted
gross profit of $760.0 million and adjusted gross margins of 48% in the
comparable prior year period. The increase in adjusted gross margins was
primarily the result of the increase in sales of the EPIPEN® Auto-Injector and
margins on new products, partially offset by the impact of unfavorable pricing
on existing products in all regions within our Generics segment.

Earnings from operations were $213.8 million for the three months ended March
31, 2013, compared to $250.5 million for the comparable prior year period.
Adjusted earnings from operations, as further defined below, for the three
months ended March 31, 2013 was $383.0 million as compared to adjusted
earnings from operations of $368.3 million in the comparable prior year
period. This increase was driven by higher gross profit in the current year,
as discussed above, partially offset by increases in research and development
costs ("R&D"). R&D increased primarily due to licensing payments in the
current year totaling approximately $23 million and increases related to the
development of the respiratory and biologics programs. Selling, general and
administrative costs increased principally as a result of acquisition related
costs in the current quarter.

Interest expense for the three months ended March 31, 2013, totaled $78.0
million, compared to $82.4 million for the comparable prior year period.
Adjusted interest expense, as further defined below, for the three months
ended March 31, 2013 was $62.6 million as compared to adjusted interest
expense of $60.9 million in the comparable prior year period. The increase was
the result of an increased level of borrowings in 2013.

Other income (expense), net, was income of $3.4 million in the current quarter
compared to expense of $9.8 million in the comparable prior year period.
Generally included in other income (expense), net, are losses from equity
affiliates, foreign exchange gains and losses and interest and dividend
income.

Net earnings attributable to Mylan Inc. decreased $22.2 million, or 17.2%, to
$106.9 million for the three months ended March 31, 2013 as compared to $129.1
million for the prior year comparable period. Adjusted earnings increased
$21.4 million or 9.5% to $245.9 million for the three months ended March 31,
2013 as compared to adjusted earnings of $224.5 million for the prior year
comparable period.

EBITDA, which is defined as net income (excluding the non-controlling interest
and income from equity method investees) plus income taxes, interest expense,
depreciation and amortization, was $350.5 million for the quarter ended
March31, 2013, and $368.5 million for the comparable prior year period. After
adjusting for certain items as further detailed below, adjusted EBITDA was
$443.4 million for the current three-month period and $411.2 million for the
comparable prior year period.

Cash Flow

Adjusted cash provided by operating activities was $90 million for the three
months ended March 31, 2013, compared to $69 million for the comparable prior
year period. On a GAAP basis, cash provided by operating activities was $88
million for the three months ended March 31, 2013, compared to a cash usage of
$107 million for the comparable prior year period. Capital expenditures were
approximately $53 million in the current year as compared to approximately $36
million in the same prior year period.

During the three months ended March 31, 2013, the Company completed a share
repurchase program by purchasing approximately 16.3 million shares of common
stock for approximately $500 million.

Non-GAAP Financial Measures

Mylan is disclosing non-GAAP financial measures when providing financial
results. Primarily due to acquisitions, Mylan believes that an evaluation of
its ongoing operations (and comparisons of its current operations with
historical and future operations) would be difficult if the disclosure of its
financial results were limited to financial measures prepared only in
accordance with accounting principles generally accepted in the U.S. (GAAP).
In addition to disclosing its financial results determined in accordance with
GAAP, Mylan is disclosing certain non-GAAP results that exclude items such as
amortization expense and other costs directly associated with the acquisitions
as well as certain other expenses, other income and operating cash flow items
in order to supplement investors' and other readers' understanding and
assessment of the Company's financial performance, because the Company's
management uses these measures internally for forecasting, budgeting and
measuring its operating performance. In addition, the Company believes that
including EBITDA and supplemental adjustments applied in presenting adjusted
EBITDA pursuant to our credit agreement is appropriate to provide additional
information to investors to demonstrate the Company's ability to comply with
financial debt covenants (which are calculated using a measure similar to
adjusted EBITDA) and assess the Company's ability to incur additional
indebtedness. Whenever Mylan uses such a non-GAAP measure, it will provide a
reconciliation of non-GAAP financial measures to the most closely applicable
GAAP financial measure. Investors and other readers are encouraged to review
the related GAAP financial measures and the reconciliation of non-GAAP
measures to their most closely applicable GAAP measure set forth below and
should consider non-GAAP measures only as a supplement to, not as a substitute
for or as a superior measure to, measures of financial performance prepared in
accordance with GAAP.

Below is a reconciliation of GAAP net earnings attributable to Mylan Inc. and
diluted GAAP EPS to adjusted net earnings attributable to Mylan Inc. and
adjusted diluted EPS for the three months ended March31, 2013 and 2012 (in
millions, except per share amounts):



                                          Three Months Ended March 31,
                                          2013               2012
GAAP net earnings attributable to Mylan   $ 106.9   $ 0.27   $ 129.1   $ 0.30
Inc. and diluted GAAP EPS
Purchase accounting related amortization  92.1               87.5
(included in cost of sales) (a)
Litigation settlements, net               1.8                2.2
Interest expense, primarily amortization  7.7                13.3
of convertible debt discount
Non-cash accretion and fair value
adjustments of contingent consideration   5.8                8.2
liability
Clean energy investment pre-tax loss (b)  4.4                4.2
Acquisition related costs (primarily
included in selling, general and          19.4               —
administrative expense)
Restructuringand other special items
included in:
Cost of sales                             10.9               2.2
Research and development expense          23.3               1.4
Selling, general and administrative       24.0               24.4
expense
Other income, net                         6.8                2.3
Tax effect of the above items and other   (57.2)             (50.3)
income tax related items
Adjusted net earnings attributable to     $ 245.9   $ 0.62   $ 224.5   $ 0.52
Mylan Inc. and adjusted diluted EPS
Weighted average diluted common shares    399.0              432.4
outstanding

(a) Purchase accounting related amortization expense for the three months
ended March 31, 2013 includes $5.1 million of in-process research and
development asset impairment charges.

(b) Adjustment represents exclusion of the pre-tax loss related to Mylan's
investment in a clean energy partnership, the activities of which qualify for
income tax credits under section 45 of the Internal Revenue Code. Amount is
included in other income (expense), net. Certain insignificant prior period
amounts of other revenue, cost of sales, operating expenses and the related
EBITDA and Adjusted EBITDA have been reclassified to other income (expense),
net to conform to the presentation for the current period. The
reclassifications had no impact on the previously reported net earnings
attributable to Mylan Inc. common shareholders.

Below is a reconciliation of GAAP net earnings attributable to Mylan Inc. to
adjusted EBITDA for the three months ended March31, 2013 and 2012 (in
millions):



                                                            Three Months Ended
                                                            March 31,
                                                            2013      2012
GAAP net earnings attributable to Mylan Inc.                $ 106.9   $ 129.1
Add adjustments:
Net contribution attributable to the noncontrolling         5.0       4.5
interest and equity method investees
Income taxes                                                31.7      28.8
Interest expense                                            78.0      82.4
Depreciation and amortization                               128.9     123.7
EBITDA                                                      $ 350.5   $ 368.5
Add adjustments:
Stock-based compensation expense                            12.1      12.3
Litigation settlements, net                                 1.8       2.2
Restructuring& other special items                         79.0      28.2
Adjusted EBITDA                                             $ 443.4   $ 411.2



Conference Call

Mylan will host a conference call and live webcast, today, May2, 2013, at
4:30 pm ET, in conjunction with the release of its financial results. The
dial-in number to access the call is 877.402.3913 or 817.382.5964 for
international callers. A replay, available for approximately seven days, will
be available at 800.585.8367 or 404.537.3406 for international callers with
access pass code 33371489. To access a live webcast of the callplease log on
to Mylan's Web site (www.mylan.com) at least 15 minutes before the event is to
begin to register and download or install any necessary software. A replay of
the webcast will be available on www.mylan.comfor approximately seven days.

About Mylan

Mylan is a global pharmaceutical company committed to setting new standards in
health care. Working together around the world to provide 7 billion people
access to high quality medicine, we innovate to satisfy unmet needs; make
reliability and service a habit, do what's right, not what's easy and impact
the future through passionate global leadership. We offer a growing portfolio
of approximately 1,100 generic pharmaceuticals and several brand medications.
In addition, we offer a wide range of antiretroviral therapies, upon which
approximately 40% of HIV/AIDS patients in developing countries depend. We also
operate one of the largest active pharmaceutical ingredient manufacturers and
currently market products in approximately 140 countries and territories. Our
workforce of more than 20,000 people is dedicated to improving the customer
experience and increasing pharmaceutical access to consumers around the world.
But don't take our word for it. See for yourself. See inside. mylan.com

Forward-Looking Statements

This press release includes statements that constitute "forward-looking
statements", including with regard to the Company's future operations, its
anticipated business levels, future earnings, planned activities, anticipated
growth, and other expectations and targets for future periods. These
statements are made pursuant to the safe harbor provisions of the Private
Securities Litigation Reform Act of 1995, and often may be identified by the
use of words such as "may," "believe," "anticipate," "expect," "plan,"
"estimate," "target" and variations of these words or comparable words.
Because such statements inherently involve risks and uncertainties, actual
future results may differ materially from those expressed or implied by such
forward-looking statements. Factors that could cause or contribute to such
differences include, but are not limited to: challenges, risks and costs
inherent in business integrations and in achieving anticipated synergies; the
effect of any changes in customer and supplier relationships and customer
purchasing patterns; the ability to attract and retain key personnel; changes
in third-party relationships; the impacts of competition; changes in economic
and financial conditions of the Company's business; uncertainties and matters
beyond the control of management; and inherent uncertainties involved in the
estimates and judgments used in the preparation of financial statements, and
the providing of estimates of financial measures, in accordance with GAAP and
related standards or on an adjusted basis. These forward-looking statements
should be considered in connection with any subsequent written or oral
forward-looking statements that may be made by the Company or by persons
acting on its behalf and in conjunction with its periodic SEC filings. In
addition, please refer to the cautionary note on forward-looking statements
and risk factors set forth in the Company's Annual Report on Form 10-K for
the year ended December31, 2012, and in its other filings with the SEC.
Further, uncertainties or other circumstances, or matters outside of the
Company's control between the date of this release and the date that its Form
10-Q for the quarter ended March31, 2013, is filed with the SEC could
potentially result in adjustments to reported results. The Company undertakes
no obligation to update statements herein for revisions or changes after the
date of this release.





Mylan Inc. and Subsidiaries
Condensed Consolidated Statements of Operations
(Unaudited; in thousands, except per share amounts)
                                                    Three Months Ended
                                                    March 31,
                                                    2013          2012
Revenues:
Net revenues                                        $ 1,619,408   $ 1,573,075
Other revenues                                      12,082        10,580
Total revenues                                      1,631,490     1,583,655
Cost of sales                                       938,000       913,426
Gross profit                                        693,490       670,229
Operating expenses:
Research and development                            126,486       80,959
Selling, general and administrative                 351,367       336,559
Litigation settlements, net                         1,790         2,173
Total operating expenses                            479,643       419,691
Earnings from operations                            213,847       250,538
Interest expense                                    77,987        82,409
Other income (expense), net                         3,398         (9,815)
Earnings before income taxes and noncontrolling     139,258       158,314
interest
Income tax provision                                31,714        28,844
Net earnings                                        107,544       129,470
Net earnings attributable to the noncontrolling     (662)         (391)
interest
Net earnings attributable to Mylan Inc. common      $ 106,882     $ 129,079
shareholders
Earnings per common share attributable to Mylan
Inc. common shareholders:
Basic                                               $ 0.27        $ 0.30
Diluted                                             $ 0.27        $ 0.30
Weighted average common shares outstanding:
Basic                                               393,163       427,251
Diluted                                             399,013       432,365

     Certain insignificant prior period amounts of other revenue, cost of
     sales and operating expenses have been reclassified to other income
     (expense), net to conform to the presentation for the current period. The
Note reclassifications had no impact on our previously reported net earnings
     attributable to Mylan Inc. common shareholders.

     





Mylan Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(Unaudited; in thousands)
                                March31,      December31,
                                2013           2012
ASSETS
Assets
Current assets:
Cash and cash equivalents       $ 294,421      $ 349,969
Accounts receivable, net        1,514,480      1,554,342
Inventories                     1,623,246      1,525,242
Other current assets            518,247        473,164
Total current assets            3,950,394      3,902,717
Intangible assets, net          2,105,440      2,224,457
Goodwill                        3,451,506      3,515,655
Other non-current assets        2,377,692      2,289,068
Total assets                    $ 11,885,032   $ 11,931,897
LIABILITIES AND EQUITY
Liabilities
Current liabilities             $ 2,282,370    $ 2,193,503
Long-term debt                  5,672,142      5,337,196
Other non-current liabilities   1,043,328      1,045,370
Total liabilities               8,997,840      8,576,069
Noncontrolling interest         15,716         15,110
Mylan Inc. shareholders' equity 2,871,476      3,340,718
Total liabilities and equity    $ 11,885,032   $ 11,931,897







Mylan Inc. and Subsidiaries
Summary of Revenues by Segment
(Unaudited; in millions)
                              Three Months Ended      Three Months Ended
                              March31,               Percent Change
                              2013        2012        Total     Constant
                                                                Currency ^(1)
Generics:
Third party net sales
North America                 $ 732.8     $ 767.7     (5)  %    (5)      %
EMEA                          369.9       335.6       10   %    10       %
Asia Pacific                  305.1       298.7       2    %    10       %
Total third party net sales   1,407.8     1,402.0     —    %    2        %
Other third party revenues    5.0         10.4
Total third party revenues    1,412.8     1,412.4
Intersegment revenues         0.6         0.4
Generics total revenues       1,413.4     1,412.8
Specialty:
Third party net sales         211.6       171.1       24   %    24       %
Other third party revenues    7.1         0.1
Total third party revenues    218.7       171.2
Intersegment revenues         7.9         14.6
Specialty total revenues      226.6       185.8
Elimination of intersegment   (8.5)       (15.0)
revenues
Consolidated total revenues   $ 1,631.5   $ 1,583.6   3    %    5        %

     The constant currency percent change is derived by translating third
(1)  party net sales for the current period at prior year comparative period
     exchange rates.
     Beginning with the first quarter of 2013, the Company reorganized the
     components of its Generics and Specialty segments as a result of a
     change in the way the Chief Executive Officer, who is the chief
     operating decision maker, evaluates the performance of operations,
     develops strategy and allocates capital resources. As required by the
     applicable accounting standards, financial statements issued subsequent
     to this segment reporting change are required to reflect modifications
Note to the reportable segment information resulting from the revision,
     including reclassifications of all comparative segment information.
     Accordingly, this earnings release reflects the change in segment
     reporting for all periods presented. There is no change to the Company's
     previously reported consolidated net operating results, financial
     position or cash flows.

     





Mylan Inc. and Subsidiaries
Reconciliation of Non-GAAP Financial Measures
(Unaudited; in millions)
                                                          Three Months Ended
                                                          March 31,
                                                          2013       2012
GAAP cost of sales                                        $ 938.0    $ 913.4
Deduct:
Purchase accounting related amortization                  (92.1)     (87.5)
Restructuring & other special items                       (10.9)     (2.2)
Adjusted cost of sales                                    $ 835.0    $ 823.7
Adjusted gross profit (a)                                 $ 796.5    $ 760.0
Adjusted gross margin (a)                                 49      %  48      %
                                                          Three Months Ended
                                                          March 31,
                                                          2013       2012
GAAP total operating expenses                             $ 479.6    $ 419.7
Deduct:
Litigation settlements, net                               (1.8)      (2.2)
Restructuring & other special items                       (64.3)     (25.8)
Adjusted total operating expenses                         $ 413.5    $ 391.7
Adjusted earnings from operations (b)                     $ 383.0    $ 368.3
                                                          Three Months Ended
                                                          March 31,
                                                          2013       2012
GAAP interest expense                                     $ 78.0     $ 82.4
Deduct:
Interest expense related to clean energy investment (c)   (1.5)      (1.6)
Non-cash accretion of contingent consideration liability  (7.7)      (8.2)
Non-cash interest, primarily amortization of convertible  (6.2)      (11.7)
debt discount
Adjusted interest expense                                 $ 62.6     $ 60.9
                                                          Three Months Ended
                                                          March 31,
                                                          2013       2012
GAAP other income (expense)                               $ 3.4      $ (9.8)
Add:
Clean energy investment operating results (c)             4.4        4.2
Acquisition related costs                                 0.5        —
Restructuring & other special items                       6.8        2.3
Adjusted other income (expense)                           $ 15.1     $ (3.3)



Reconciliation of cash provided by operating activities

                                                            Three Months Ended
                                                            March 31,
                                                            2013      2012
GAAP cash provided by (used in) operating activities        $  88     $ (107)
Add:
Payment of litigation settlements                           1         90
Payment of interest rate swap settlement                    —         —
Adjustments for timing of cash receipts deducted in prior   —         62
periods
Payment to Merck KGaA related to income tax benefits on     —         —
indemnified litigation
Increase in deferred revenue                                1         6
Income tax items                                            —         18
Adjusted cash provided by operating activities              $  90     $ 69



(a) Adjusted gross profit is calculated as total revenues less adjusted cost
of sales. Adjusted gross margin is calculated as adjusted gross profit
divided by total revenue.

(b) Adjusted earnings from operations is calculated as adjusted gross profit
less adjusted total operating expenses.

(c) Adjustment represents exclusion of activity related to Mylan's
investment in a clean energy partnership, the activities of which qualify for
income tax credits under section 45 of the Internal Revenue Code. Certain
prior period insignificant amounts of other revenue, cost of sales, operating
expenses and the related EBITDA and Adjusted EBITDA amounts have been
reclassified to other income (expense), net, as losses from equity affiliates.
The reclassifications had no impact on the previously reported net earnings
and diluted EPS attributable to Mylan Inc. common shareholders or adjusted net
earnings and adjusted diluted EPS attributable to Mylan Inc.



SOURCE Mylan Inc.

Website: http://www.mylan.com
Contact: Nina Devlin (Media), 724-514-1968, Kris King (Investors),
724-514-1813
 
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