(Source: Business Wire)
Alcon, Inc. (NYSE:ACL) reported global sales rose 5.9 percent to $1,614
million for the third quarter of 2009, or a 9.0 percent increase
excluding the impact of foreign exchange fluctuations. Net earnings for
the third quarter of 2009 were $515 million, or $1.71 per diluted share.
Excluding the impact of a $240 million tax benefit related to the
refractive product line in 2008 and the impact of continuing expenses
related to the first quarter 2009 reduction in force, adjusted net
earnings for the third quarter 2009 would have grown 33.3 percent
compared to non-GAAP adjusted net earnings for the third quarter of 2008.
"Continued execution of our operational strategies combined with an
improved market environment drove our solid third quarter performance,"
said Kevin Buehler, Alcon's president and chief executive officer. "We
continue to achieve organic sales growth and market share growth with
contributions from multiple areas, but especially from advanced
technology intraocular lenses, glaucoma treatments and emerging markets.
We expect these factors to continue to support solid organic growth,
which, along with a more favorable currency environment, allows us to
raise our earnings outlook for the remainder of the year."
Sales Highlights
Summarized below are sales highlights for the third quarter of 2009. All
growth comparisons are for the third quarter of 2009 compared to the
third quarter of 2008. Organic sales growth rates exclude currency
impacts and acquisitions and are non-GAAP measures that are reconciled
in a table at the end of this release.
International organic sales growth was 10.1 percent (+4.5 percent
reported), with the Brazil, Russia, India and China (BRIC) nations
leading organic growth, rising 13.3 percent (+0.6 percent reported).
U.S. sales rose 7.6 percent as prescription demand improved and on
strong revenue growth in glaucoma and advanced technology AcrySof®
intraocular lenses.
Global sales of advanced technology intraocular lenses rose 37.7
percent organically (34.2 percent reported) due to U.S. market share
gains of the AcrySof® IQ ReSTOR®
+3.0 lens and broader and more frequent use of the AcrySof®
IQ Toric lens by cataract surgeons.
Global glaucoma sales increased 18.2 percent, led by a 23.6 percent
rise in global sales of the TRAVATAN® family
of products (TRAVATAN®, TRAVATAN Z®
and DuoTravTM ophthalmic solutions). Azopt®
and Azarga® ophthalmic solutions also added
to glaucoma sales growth, together rising 16.9 percent.
The launch of the Constellation® vitreoretinal
system contributed to a 19.5 percent growth of sales in the company's
vitreoretinal business.
Earnings Highlights
Summarized below are earnings highlights for the third quarter of 2009.
All growth comparisons are for the third quarter of 2009 compared to the
third quarter of 2008.
Gross profit margin was in line with management expectations at 75.3
percent compared to 77.2 percent in 2008. The decline was primarily
attributable to the impact of foreign exchange rates on costs of goods
sold in each period.
Operating profit rose 17.0 percent and operating profit margin
increased from 32.4 percent to 35.8 percent of sales. This improvement
resulted from cost management programs that reduced selling, general
and administrative expenses to 29.4 percent from 32.9 percent of
sales. Research and development expenses were 9.8 percent of sales and
were lower than 2008 due to timing differences for research projects
and licensing transactions between the two periods.
Net earnings in the third quarter of 2009 were $515 million compared
to $627 million in 2008. Excluding a $240 million tax benefit in 2008
and the impact of continuing expenses related to the first quarter
2009 reduction in force, adjusted net earnings grew 33.3 percent. This
increase was attributable to reduced operating expenses and investment
portfolio gains compared to investment losses in the third quarter
2008.
Other Highlights
On September 15, 2009, Alcon acquired the Swiss biotechnology firm
ESBATech AG providing the company with a sustainable platform of
biologic development utilizing antibody fragment technology
particularly suited to treat ocular diseases.
Alcon entered into a licensing and purchase option agreement in
October with Potentia Pharmaceuticals for POT-4 for the treatment of
age-related macular degeneration.
On October 2, 2009, the company launched brimonidine 0.15% in the
United States which is the only non-branded version of Alphagan®
P 0.15% on the market.
Alcon received approval for DisCoVisc®
viscoelastic system, the PUREPOINT laser and the Laureate®
world phaco system in Japan in the third quarter of 2009.
During the quarter Alcon received additional country approvals of Vigamox®
ophthalmic solution and the drug is now approved in a
majority of European Union countries.
The U.S. District Court for the District of Delaware issued an opinion
on October 19, 2009 finding in Alcon's favor on all claims and
defenses in the Vigamox case against Teva that was tried in March 2008.
Financial Guidance
The company reaffirmed its previously-issued sales guidance forfull
year 2009 organic sales growth to be in the mid-single digits. The
company raised its guidance for full year 2009 diluted earnings per
share on a U.S. GAAP basis to between $6.55 and $6.65 and between $6.60
and $6.70 on a non-GAAP adjusted basis (excluding restructuring charges
taken in 2009). This increase reflects the positive results year to date
and an improving market environment, partially mitigated by the
expectation of higher R&D and SG&A expenses in the remainder of the year.
Company Description
Alcon, Inc. is the world's leading eye care company, with sales of $6.3
billion in 2008. Alcon, which has been dedicated to the ophthalmic
industry for 65 years, researches, develops, manufactures and markets
pharmaceuticals, surgical equipment and devices, contact lens care
solutions and other vision care products that treat diseases, disorders
and other conditions of the eye. Alcon's majority shareholder is Nestlé,
S.A., the world's largest food company. All trademarks noted in this
release are the property of Alcon, Inc. For more information about
Alcon, visit www.alcon.com.
ALCON, INC. AND SUBSIDIARIES Condensed Consolidated Statements of Earnings (Unaudited) (in millions, except share data)
Three months ended Nine months ended
September 30, September 30,
2009 2008 2009 2008
Sales $ 1,614 $ 1,524 $ 4,784 $ 4,796
Cost of goods sold 399 348 1,168 1,161
Gross profit 1,215 1,176 3,616 3,635
Selling, general and administrative 474 501 1,414 1,512
Research and development 158 174 461 461
Amortization of intangibles 5 7 17 22
Operating income 578 494 1,724 1,640
Other income (expense):
Gain (loss) from foreign currency, net -- (10 ) (1 ) (7 )
Interest income 13 20 37 66
Interest expense (3 ) (13 ) (13 ) (45 )
Other, net 6 (42 ) 12 (52 )
Earnings before income taxes 594 449 1,759 1,602
Income taxes 79 (178 ) 210 (21 )
Net earnings $ 515 $ 627 $ 1,549 $ 1,623
Basic earnings per common share $ 1.72 $ 2.10 $ 5.19 $ 5.44
Diluted earnings per common share $ 1.71 $ 2.07 $ 5.15 $ 5.38
Basic weighted average common shares 298,875,564 299,076,483 298,734,923 298,428,116
Diluted weighted average common shares 301,894,468 302,636,080 300,856,409 301,920,346
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ALCON, INC.