On Feb. 28, Barr Pharmaceuticals (NYSE:BRL) released second-quarter earnings for the period ended Dec. 31.

  • Barr Pharmaceuticals acquired Pliva for $2.5 billion after Federal Trade Commission (FTC) approval.
  • Net sales increased by 79.4%, driven by higher sales in the oral-contraceptive portfolio, the introduction of generic Actiq, and the addition of Pliva's global product line and proprietary products.
  • Gross and operating margin were negatively affected by amortization costs from the Pliva acquisition and by a charge of $57 million inventory acquired from Pliva.
  • There was a huge rise in long-term debt, led by $2.4 billion incurred in connection with the Pliva acquisition. Barr's balance sheet is highly leveraged and could limit its flexibility in making significant future acquisitions.
  • Management forecasted EPS of approximately $3-$3.30 and total revenues to be in the range of $2.3 billion-$2.4 billion for fiscal year 2007.

(Figures in millions, except per-share data)

Income Statement Highlights

Q2 2006

Q2 2005

Change

Sales

$584.0

$325.5

79.4%

Net Profit

($390.9)

$94.9

N/A

EPS

($3.67)

$0.88

N/A

Diluted Shares

106.4

107.4

(0.9%)



Get back to basics with a look at the income statement.

Margin Checkup

Q2 2006

Q2 2005

Change*

Gross Margin

51.1%

72.7%

(21.6)

Operating Margin

(56.2%)

44.5%

(100.6)

Net Margin

(66.9%)

29.2%

(96.1)

*Expressed in percentage points.

Margins are the earnings engine. See how they work.

Balance Sheet Highlights

Assets

Q2 2006

Q2 2005

Change

Cash + ST Invest.

$914.7

$421.8

116.9%

Accounts Rec.

$533.1

$192.7

176.7%

Inventory

$452.4

$144.0

214.2%

*Doesn't include marketable securities.

Liabilities

Q2 2006

Q2 2005

Change

Accounts Payable*

$439.8

$142.0

209.7%

Long-Term Debt**

$2,679.7

$11.5

23,201%

*Includes accrued liabilities.
**Includes total debt.

Learn the ways of the balance sheet.

Cash Flow Highlights

YTD 2006

YTD 2005

Change

Cash From Ops.

$187.0

$104.8

78.5%

Capital Expenditures

$31.7

$36.0

(12.0%)

Free Cash Flow

$155.3

$68.7

126.0%



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