| | |
| (a) | | In calculating net income or loss on an adjusted cash basis, the Company excludes from net income or loss (i) certain non-cash charges, including amortization expense and stock-based compensation expense, (ii) non-recurring charges and income, and (iii) certain other charges and income that have a significant positive or negative impact on results yet do not occur on a consistent or regular basis in its business. In determining whether a particular item meets one of these criteria, management considers facts and circumstances that it believes are relevant. Management believes that excluding such charges and income from net income or loss allows investors and management to evaluate and compare the Company’s operating results from continuing operations from period to period in a meaningful and consistent manner. Due to the frequency of their occurrence in its business, the Company does not adjust net income or loss for the costs associated with litigation, including payments made or received through settlements. It should be noted that “net income or loss on an adjusted cash basis” is not a standard financial measurement under accounting principles generally accepted in the United States of America (“GAAP”) and should not be considered as an alternative to net income or loss or cash flow from operating activities, as a measure of liquidity or as an indicator of operating performance or any measure of performance derived in accordance with GAAP. In addition, all companies do not calculate non-GAAP financial measures in the same manner and, accordingly, “net income or loss on an adjusted cash basis” presented in this press release may not be comparable to similar measures used by other companies. |
| |
| (b) | | Amortization expense of $257.2 million and $215.3 million for the year 2009 and 2008 GAAP results, respectively, including $42.1 million and $43.4 million charged to cost of sales, $4.4 million and $3.7 million charged to research and development, $209.6 million and $167.1 million charged to selling, general and administrative expense, in the respective periods, with $0.2 million charged through income (loss) from discontinued operations, net of tax, and $0.9 charged through equity earnings of unconsolidated entities, net of tax, during each of the respective periods. |
| |
| (c) | | Restructuring charge associated with the decision to close facilities of $23.4 million and $50.7 million for the year 2009 and 2008 GAAP results, respectively. The $23.4 million charge for the year ended December 31, 2009 included $9.5 million charged to cost of sales, $1.1 million charged to research and development, $6.8 million charged to selling, general and administrative expense, $0.7 million charged to interest expense and $5.3 million charged through equity earnings of unconsolidated entities, net of tax. The $50.7 million charge for the year ended December 31, 2008 included $17.9 million charged to cost of sales, $7.2 million charged to research and development, $11.3 million charged to selling, general and administrative expense, $7.1 million charged to interest expense and $7.2 million charged through equity earnings of unconsolidated entities, net of tax. |
| |
| (d) | | Compensation costs of $28.2 million and $26.4 million associated with stock-based compensation expense for the year 2009 and 2008 GAAP results, respectively, including $2.0 million and $1.5 million charged to cost of sales, $5.2 million and $4.6 million charged to research and development and $21.0 million and $20.3 million charged to selling, general and administrative. |
| |
| (e) | | A write-off in the amount of $2.0 million during the each of the years ended December 31, 2009 and 2008, respectively, relating to inventory write-ups recorded in connection with the acquisitions of Concateno plc during the third quarter of 2009 and Panbio Limited and BBI Holdings Plc. during the first quarter of 2008, respectively. |
| |
| (f) | | Acquisition-related costs in the amount of $15.9 million recorded in connection with the adoption of ASC 805,Business Combinations, on January 1, 2009. |
| |
| (g) | | A $3.4 million gain associated with management’s decision to dispose of our Diamics, Inc. operations. |
| |
| (h) | | A $1.9 million compensation-related charge recorded in connection with the acquisition of Concateno plc. |
| |
| (i) | | A $0.3 million loss recorded in connection with the deferred payment of a portion of the ACON Second Territory Business purchase price consideration to be paid with our common stock. |
| |
| (j) | | A $2.9 million net realized foreign currency gain and a $1.7 million net realized foreign currency loss during the year ended December 31, 2009 and 2008, respectively, associated with restricted cash established in connection with the acquisitions of Concateno plc during the third quarter of 2009 and BBI Holdings Plc during the first quarter of 2008, respectively. |
| |
| (k) | | $1.8 million of expense recorded in connection with fair value adjustments to acquisition-related contingent consideration obligations in accordance with ASC 805,Business Combinations. |
| |
| (l) | | A $3.2 million fair value write-down recorded in connection with an idle facility. |
| |
| (m) | | Expenses of $1.8 million ($1.1 million, net of tax) incurred in connection with the sale of our vitamins and nutritional supplements business. |
| |
| (n) | | Tax effect on adjustments as discussed above in notes (b), (c), (d), (e), (f), (g), (h), (i), (j), (k) and (l). |
| |
| (o) | | Included in the weighted average diluted common shares for the calculation of net income per common share on a GAAP basis for the year ended December 31, 2009, are dilutive shares consisting of 1,395,000 common stock equivalent shares from the potential exercise of stock options and warrants. Potential dilutive shares consisting of 3,426,000 common stock equivalent shares from the potential conversion of convertible debt securities, 386,000 common stock equivalents from the potential settlement of a portion of the deferred purchase price consideration related to the ACON Second Territory Business and potential dilutive shares consisting of 11,066,000 common stock equivalent shares from the potential conversion of Series B convertible preferred stock were not included in the calculation of net income per common share on a GAAP basis for the year ended December 31, 2009 because inclusion thereof would be antidilutive. |
| |
| (p) | | For the year ended December 31, 2008, potential dilutive shares were not used in the calculation of diluted net loss per common share under GAAP because inclusion thereof would be antidilutive. |
| |
| (q) | | Included in the weighted average diluted common shares for the calculation of net income per common share for the year ended December 31, 2009, on an adjusted cash basis, are dilutive shares consisting of 1,395,000 common stock equivalent shares from the potential exercise of stock options and warrants. Also included were potential dilutive shares consisting of 3,426,000 common stock equivalent shares from the potential conversion of convertible debt securities, 11,066,000 common stock equivalent shares from the potential conversion of Series B convertible preferred stock and 386,000 common stock equivalents from the potential settlement of a portion of the deferred purchase price consideration related to the ACON Second Territory Business. The diluted net income per common share calculation for the year ended December 31, 2009, on an adjusted cash basis, includes the add back of interest expense related to the convertible debt of $2.8 million, the add back of $23.0 million of preferred stock dividends related to the Series B convertible preferred stock and the add back of interest expense related to the ACON Second Territory Business of $0.4 million resulting in net income available to common stockholders of $255.1 million for the year ended December 31, 2009. |
| |
| (r) | | Included in the weighted average diluted common shares for the calculation of net income per common share for the year ended December 31, 2008, on an adjusted cash basis, are dilutive shares consisting of 2,188,000 common stock equivalent shares from the potential exercise of stock options and warrants and potential dilutive shares consisting of 3,411,000 common stock equivalent shares from the potential conversion of convertible debt securities. The diluted net income per common share calculation for the year ended December 31, 2008, on an adjusted cash basis, includes the add back of interest expense related to the convertible debt of $2.8 million resulting in net income available to common stockholders of $164.0 million. Potential dilutive shares consisting of 6,681,000 common stock equivalent shares from the potential conversion of Series B convertible preferred stock for the year ended December 31, 2008 were not used in the calculation of diluted net income per common share, on an adjusted cash basis, because inclusion thereof would be antidilutive. |
