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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 10-Q/A
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2000
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM ____________ TO ____________
COMMISSION FILE NUMBER: 005-52501
WARNER CHILCOTT PUBLIC LIMITED COMPANY
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
IRELAND N/A
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
LINCOLN HOUSE, LINCOLN PLACE, DUBLIN 2, IRELAND
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
353 1 662-4962
(REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes [X] No [ ]
Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date.
American Depositary Shares, representing Ordinary Shares, par value $.05
each; Ordinary Shares, par value $.05 each; 12,390,730 Ordinary Shares
outstanding at March 31, 2000.
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WARNER CHILCOTT PUBLIC LIMITED COMPANY
TABLE OF CONTENTS
PAGE NO.
--------
Part I -- Financial Information*
Item 1. Consolidated Financial Statements (unaudited)
Consolidated Balance Sheets as of March 31, 2000 and
December 31, 1999......................................... 2
Consolidated Statements of Operations for the Three Months
Ended March 31, 2000 and 1999............................. 3
Consolidated Statements of Cash Flows for Three Months Ended
March 31, 2000 and 1999................................... 4
Notes to the Unaudited Consolidated Financial Statements.... 5-10
Signatures........................................................... 11
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* Financial information is being refiled with this amendment due to a revision
of the pro forma amounts in the table contained in note 4 of the Notes to the
Unaudited Consolidated Financial Statements.
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PART I -- FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
WARNER CHILCOTT PUBLIC LIMITED COMPANY
CONSOLIDATED BALANCE SHEETS AS OF MARCH 31, 2000 AND DECEMBER 31, 1999
(IN THOUSANDS OF U.S. DOLLARS)
(UNAUDITED)
MARCH 31, DECEMBER 31,
2000 1999
--------- ------------
ASSETS
Current Assets:
Cash and cash equivalents.............................. $ 36,112 $ 50,954
Accounts receivable, net............................... 21,753 11,526
Inventories............................................ 6,135 4,025
Prepaid expense and other assets....................... 1,342 864
--------- ---------
Total current assets................................. 65,342 67,369
--------- ---------
Fixed Assets:
Equipment, furniture and fixtures, net................. 1,124 1,177
Intangible assets, net.................................... 236,484 63,865
Other assets.............................................. 8,224 51
--------- ---------
Total assets......................................... $ 311,174 $ 132,462
========= =========
LIABILITIES
Current Liabilities:
Accounts payable....................................... $ 5,733 $ 3,204
Accrued liabilities.................................... 8,722 7,438
Due to Elan Corporation, plc and subsidiaries.......... 172 262
--------- ---------
Total current liabilities............................ 14,627 10,904
--------- ---------
Other Liabilities:
Working capital facility............................... -- 12,098
Long-term debt......................................... 196,370 10,476
--------- ---------
Total liabilities.................................... 210,997 33,478
--------- ---------
SHAREHOLDERS' EQUITY
Ordinary Shares, par value $.05 per share; 50,000,000
shares authorized, 12,390,730 shares issued and
outstanding at March 31, 2000, and 12,377,034 issued
and outstanding at December 31, 1999................... 619 619
Deferred Shares, par value IRL1 per share; 30,000 shares
authorized, 30,000 shares issued and outstanding at
March 31, 2000 and December 31, 1999................... 45 45
Additional paid-in capital................................ 209,520 209,062
Accumulated deficit....................................... (109,698) (110,279)
Deferred compensation..................................... (309) (463)
--------- ---------
Total shareholders' equity............................. 100,177 98,984
--------- ---------
Total liabilities and shareholders' equity........... $ 311,174 $ 132,462
========= =========
See accompanying notes to unaudited consolidated financial statements.
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WARNER CHILCOTT PUBLIC LIMITED COMPANY
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 2000 AND 1999
(IN THOUSANDS OF U.S. DOLLARS, EXCEPT PER SHARE DATA)
(UNAUDITED)
THREE MONTHS ENDED
MARCH 31,
------------------------
2000 1999
---------- ----------
REVENUES
Branded product sales..................................... $ 14,168 $ 8,300
Generic product sales..................................... 3,367 5,566
Marketing alliance and other revenue...................... 8,544 7,182
---------- ----------
Total revenues......................................... 26,079 21,048
---------- ----------
OPERATING EXPENSES
Cost of goods sold........................................ 6,127 8,449
Selling, general and administrative....................... 12,647 12,111
Depreciation and amortization............................. 2,421 1,412
Research and development.................................. 469 841
---------- ----------
Total operating expenses............................... 21,664 22,813
---------- ----------
OPERATING INCOME (LOSS)..................................... 4,415 (1,765)
---------- ----------
OTHER INCOME (EXPENSE)
Interest income........................................... 565 539
Interest expense.......................................... (3,668) (771)
---------- ----------
Total other income (expense)........................... (3,103) (232)
---------- ----------
INCOME (LOSS) BEFORE TAXES AND EXTRAORDINARY ITEM........... 1,312 (1,997)
---------- ----------
Income taxes................................................ -- --
---------- ----------
INCOME (LOSS) BEFORE EXTRAORDINARY ITEM..................... 1,312 (1,997)
---------- ----------
Extraordinary item.......................................... (731) --
---------- ----------
NET INCOME (LOSS)........................................... $ 581 $ (1,997)
========== ==========
EARNINGS (LOSS) PER SHARE:
Basic
Income (loss) before extraordinary item................... $ 0.11 $ (0.16)
Extraordinary item........................................ $ (0.06) $ --
Net income (loss)......................................... $ 0.05 $ (0.16)
========== ==========
Diluted Income (loss) before extraordinary item............. $ 0.10 $ (0.16)
Extraordinary item........................................ $ (0.05) $ --
Net income (loss)......................................... $ 0.05 $ (0.16)
========== ==========
WEIGHTED AVERAGE ORDINARY SHARES OUTSTANDING:
Basic..................................................... 12,382,742 12,366,808
========== ==========
Diluted................................................... 12,726,250 12,366,808
========== ==========
See accompanying notes to unaudited consolidated financial statements.
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WARNER CHILCOTT PUBLIC LIMITED COMPANY
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31, 2000 AND 1999
(IN THOUSANDS OF U.S. DOLLARS)
(UNAUDITED)
THREE MONTHS ENDED
MARCH 31,
--------------------
2000 1999
--------- -------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)......................................... $ 581 $(1,997)
Adjustments to reconcile net loss to net cash (used in)
provided by operating activities
Depreciation and amortization.......................... 2,421 1,412
Amortization on senior notes........................... 33 --
Deferred financing cost write-off...................... 207 --
Stock compensation expense............................. 495 155
Changes in assets and liabilities:
(Increase) decrease in accounts receivable, prepaid
expense and other assets............................ (10,853) 11,121
(Increase) decrease in inventories................... (2,110) 2,053
Increase (decrease) in accounts payable and accrued
liabilities......................................... 3,813 (1,602)
Decrease in due to/from Elan Corporation, plc and
subsidiaries........................................ (90) (9,060)
--------- -------
Net cash (used in) provided by operating
activities...................................... (5,503) 2,082
--------- -------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of branded products from Bristol-Myers Squibb.... (175,054) --
Purchase of fixed assets.................................. (26) (54)
--------- -------
Net cash used in investing activities.................. (175,080) (54)
--------- -------
CASH FLOWS FROM FINANCING ACTIVITIES:
Working capital facility repayment, net................... (12,098) (2,200)
Proceeds from issuance of senior notes due 2008........... 196,337 --
Redemption of senior subordinated discount notes due
2001................................................... (10,476) --
Increase in other assets.................................. (8,139) --
Net proceeds from issuance of share capital -- stock
option exercises....................................... 117 --
--------- -------
Net cash provided by (used in) financing activities.... 165,741 (2,200)
--------- -------
Net decrease in cash and cash equivalents................... (14,842) (172)
Cash and cash equivalents, beginning of period............ 50,954 43,133
--------- -------
Cash and cash equivalents, end of period.................. $ 36,112 $42,961
========= =======
See accompanying notes to unaudited consolidated financial statements.
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WARNER CHILCOTT PUBLIC LIMITED COMPANY
NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(IN THOUSANDS OF U.S. DOLLARS)
1. BASIS OF PRESENTATION
The unaudited consolidated financial statements included herein have been
prepared pursuant to the rules and regulations of the Securities and Exchange
Commission for reporting on Form 10-Q. Certain information and footnote
disclosure normally included in the financial statements prepared in accordance
with generally accepted accounting principles have been condensed or omitted
pursuant to such rules and regulations. The statements should be read in
conjunction with the accounting policies and notes to the consolidated financial
statements included in Warner Chilcott Public Limited Company's (the "Company")
1999 Annual Report on Form 10-K.
The Company is an Irish public limited company with operations in Dublin,
Ireland and Rockaway, NJ, USA. The Company's financial statements include the
financial statements for Warner Chilcott Public Limited Company and all of its
subsidiaries and are prepared in U.S. dollars in conformity with United States
generally accepted accounting principles.
In the opinion of management, the financial statements reflect all
adjustments necessary for a fair statement of the operations for the interim
periods presented.
2. INVENTORIES
Inventories are valued at the lower of cost or market. Cost is determined
principally on the basis of first-in, first-out or standards that approximate
average cost.
MARCH 31, DECEMBER 31,
2000 1999
--------- ------------
Raw materials............................................... $ 17 $ 17
Finishing supplies.......................................... 19 3
Work in process............................................. 678 957
Finished goods.............................................. 5,839 3,936
------ ------
6,553 4,913
Less: Reserves for obsolescence............................. 418 888
------ ------
Inventories............................................... $6,135 $4,025
====== ======
3. DEBT
Issuance of Senior Notes Due 2008
On February 15, 2000 Warner Chilcott, Inc., the Company's wholly-owned U.S.
operating subsidiary ("WCI"), issued $200,000 of 12 5/8% senior notes due 2008
at a discount of $3,663 to yield 13% (the "Notes"). Interest payments on the
Notes are due semi-annually in arrears on each February 15th and August 15th
beginning August 15, 2000. Proceeds from the issuance of the Notes, net of the
discount and estimated transaction expenses, were approximately $188,300, and
were utilized to fund the acquisition of the three branded pharmaceutical
products from Bristol-Myers Squibb (see note 4). The Notes are included in the
Company's Balance Sheet net of the discount. The discount and transaction fees
are being amortized to interest expense over the eight-year term of the Notes.
The Notes are unconditionally guaranteed by Warner Chilcott, plc, WCI's parent
company.
On or after February 15, 2004 the Notes are redeemable at the option of
WCI, in whole or part, prior to maturity at redemption prices which decrease
annually and range from 106.3125% to 100% of the principal amount of the Notes
plus accrued interest. In addition, before February 15, 2003 up to 35% of the
aggregate principal amount of the Notes are redeemable at the option of WCI from
the proceeds of one or more public
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WARNER CHILCOTT PUBLIC LIMITED COMPANY
NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(IN THOUSANDS OF U.S. DOLLARS)
equity offerings of the Company at a redemption price of 112.625% plus accrued
interest. If the Company were to undergo a change of control, each Note holder
would have the right to require that WCI repurchase the Notes at a purchase
price equal to 101% of the principal amount plus accrued interest. The Note
indenture limits the Company's ability to incur or guarantee additional debt, as
well as pay dividends or distributions on, or redeem or repurchase, capital
stock.
Redemption of Senior Subordinated Discount Notes Due 2001
On February 14, 2000 the Company prepaid all $10,476 of the senior
subordinated discount notes outstanding at a redemption price equal to 105% of
the principal amount outstanding. The redemption premium of $524 and the
write-off of the deferred financing costs of $93 associated with theses notes
are included in the extraordinary item in the Company's Statement of Operations
for the three months ended March 31, 2000.
Amendment to Working Capital Credit Facility
On February 18, 2000 WCI prepaid all amounts outstanding under its senior
secured working capital credit facility. On February 28, 2000 WCI amended its
credit facility to reduce the maximum amount available to $10,000 from $30,000
and to extend the expiration date to February 2, 2002. Warner Chilcott, plc
unconditionally guaranteed WCI's obligation under the amended credit facility.
Other terms of the amended credit facility, provided by PNC Business Credit, are
substantially the same as the previous credit facility. The write-off of the
deferred financing costs of $114 associated with the previous credit facility is
included in the extraordinary item in the Company's Statement of Operations for
the three months ended March 31, 2000.
4. PRODUCT ACQUISITIONS
On February 15, 2000 the Company completed the acquisition of three branded
pharmaceutical products from Bristol-Myers Squibb Company ("BMS") for a purchase
price of $175,054. The products acquired were Estrace(R) cream, Ovcon(R) 35 and
Ovcon(R) 50. In connection with the acquisition, the Company entered into
transitional support and supply agreements with BMS under which BMS will supply
the Company with its requirements for Estrace(R) cream, Ovcon(R) 35 and Ovcon(R)
50 for a period of up to 10 years. The Company acquired all of the intangible
assets associated with the three products including the trademarks, regulatory
files, manufacturing know-how and other intellectual property. The acquisition
of the products is being accounted for as a purchase. Under purchase accounting,
the purchase price is allocated to the tangible and intangible assets acquired
based upon their respective fair values as of the purchase date in accordance
with Accounting Principles Board Opinion No. 16. The allocation of the purchase
price for the branded pharmaceutical products from BMS resulted in an allocation
of $168,000 to the products and $7,054 to goodwill, as there were no tangible
assets acquired. The acquired intangible assets are being amortized over 20
years, their estimated useful life.
The following unaudited pro forma information has been prepared as if the
February 2000 acquisition of the products, the issuance of the senior notes due
2008, the early redemption of senior subordinated discount notes due 2001 and
the prepayment of amounts outstanding under the working capital credit facility
(see note 3) had occurred on January 1, 1999 and does not include cost savings
expected from the transactions. The unaudited pro forma information does not
purport to represent our consolidated results of operations that would have been
achieved had the transaction to which pro forma effect is given been consummated
as the date or period indicated.
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WARNER CHILCOTT PUBLIC LIMITED COMPANY
NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(IN THOUSANDS OF U.S. DOLLARS)
THREE MONTHS ENDED MARCH 31,
--------------------------------------------
2000 1999
-------------------- --------------------
ACTUAL PRO FORMA ACTUAL PRO FORMA
------- --------- ------- ---------
Revenues.......................................... $26,079 $26,379 $21,048 $32,788
Income (Loss) before extraordinary item........... $ 1,312 $(2,535) $(1,997) $ 316
Earnings (Loss) per share -- before extraordinary
item -- Basic................................... $ 0.11 $ (0.20) $ (0.16) $ 0.03
Earnings (Loss) per share -- before extraordinary
item -- Diluted................................. $ 0.10 $ (0.20) $ (0.16) $ 0.03
5. SCHERING PLOUGH AGREEMENT
During the three months ended March 31, 2000 the Company derived 15% of its
total revenue from the promotion of certain branded pharmaceutical products on
behalf of Schering-Plough. The Company's sales force promotes these
Schering-Plough products to a targeted physician population and in turn receives
a fee based on the market performance of the products. The agreement under which
the Company promotes these products expires in December 2000 but may be
terminated sooner by either party under certain circumstances. Revenue from this
arrangement is included in the Statement of Operations under the caption
"Marketing alliance and other revenue."
6. ELAN AGREEMENTS
In March 1999 the Company reached a binding agreement with Elan
Corporation, plc ("Elan") under which Elan agreed to acquire the Company's
marketing rights to an extended-release nifedipine product. Under terms of the
agreement, as of March 31, 1999 Elan was obligated to make a non-refundable
payment, which was received, of $3,000 to the Company and such amount was
recorded as revenue in the first quarter of 1999 under the caption "Marketing
alliance and other revenue." In June 1999 the Company executed the definitive
agreement licensing the extended-release nifedipine product to Elan and received
an additional $4,000 that was recorded as revenue in the second quarter of 1999.
Under the agreement, additional license fees may be earned by the Company upon
the completion of certain milestones including FDA approval of the pending ANDA
for the product. The Company is also entitled to receive royalties based upon
revenues derived from the product. Other than the $7,000 described above, the
Company earned no additional fees or royalties under this agreement during the
year ended December 31, 1999. During the three months ended March 31, 2000 the
Company earned a milestone payment of $2,000 upon the FDA approval of the ANDA
for the product and $600 in royalty fees, both of which are included under the
caption "Marketing alliance and other revenue."
7. SALE OF VECTRIN(R)
During September 1999 the Company completed the sale of its Vectrin(R)
product line including certain inventory, samples and the related FDA approval,
and received $11,000 in cash at closing. The Company reported a pre-tax gain of
$2,744 from the sale. As part of the sale and purchase agreement, the Company is
also entitled to receive royalties and milestone payments based on certain
future events. During the three months ended March 31, 2000 the Company earned
milestone and royalty payments totaling $2,044. Both the milestone and royalty
revenues are included in the Statement of Operations under the caption
"Marketing alliance and other revenue."
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WARNER CHILCOTT PUBLIC LIMITED COMPANY
NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(IN THOUSANDS OF U.S. DOLLARS)
8. NET INCOME (LOSS) PER ORDINARY SHARE
Basic net income (loss) per ordinary share has been computed by dividing
net income available to ordinary shareholders by the weighted average number of
ordinary shares outstanding during the period. Diluted net income per ordinary
share is computed by adjusting the weighted average number of ordinary shares
outstanding during the period for all potentially dilutive ordinary shares
outstanding during the period, and adjusting net income for any changes in
income or loss that would result from the conversion of such potential ordinary
shares.
The amount of dilution attributable to share options and warrants issued by
the Company is computed under the treasury stock method and depends on the
average market price of the Company's ordinary shares for the period. For the
three months ended March 31, 2000 an additional 343,508 shares were added to the
weighted average number of ordinary shares outstanding in computing diluted
earnings per share. Net income used for computing diluted earnings per share was
the same as that used for computing basic earnings per share for the three
months ended March 31, 2000. Net loss and weighted average shares outstanding
used for computing basic and diluted loss per share for the three months ended
March 31, 1999 were the same. Stock options and warrants were not included in
the diluted calculation since the inclusion of such shares would be
antidilutive.
9. COMPREHENSIVE INCOME
In June 1997, the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standards (SFAS) No. 130, "Reporting
Comprehensive Income". Comprehensive income is defined as the total change in
shareholders' equity during the period other than from transactions with
shareholders. For the Company, comprehensive loss is comprised solely of net
loss.
10. CONTINGENCIES
The Company is involved in various legal proceedings of a nature considered
normal to its business including patent litigation, product liability and other
matters. In the event of the adverse outcome of these proceedings, resulting
liabilities are either covered by insurance, established reserves or, in the
opinion of management, would not have a material adverse effect on the financial
condition or results of operations of the Company.
11. UNITED STATES FEDERAL INCOME TAXES
The Company operates in Ireland and the United States and is subject to
various taxes on income in both jurisdictions. The Company's wholly-owned United
States subsidiary, Warner Chilcott, Inc., is a United States corporation and, as
such, is subject to United States taxation. Ultimate utilization or availability
of net operating losses and certain deferred tax assets may be limited if a
significant change in ownership occurs, as defined by rules enacted with the
United States Tax Reform Act of 1986. The Company did not accrue a liability for
Federal or State income taxes in the three months ended March 31, 2000 as a
result of the anticipated utilization of these net operating loss carryforwards.
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WARNER CHILCOTT PUBLIC LIMITED COMPANY
NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(IN THOUSANDS OF U.S. DOLLARS)
12. CONSOLIDATING SCHEDULE
Following are consolidating schedules reflecting Balance Sheet and
Statement of Operations information for the Company as of March 31, 2000, and
for the three months ended March 31, 2000 and 1999:
WARNER
WARNER CHILCOTT
CHILCOTT LABORATORIES
WARNER (BERMUDA), WARNER IRELAND ELIMINATION
CHILCOTT, PLC LTD. CHILCOTT, INC. LTD. ENTRIES CONSOLIDATED
------------- ---------- -------------- ------------ ----------- ------------
MARCH 31, 2000
BALANCE SHEET INFORMATION:
ASSETS
Cash and cash
equivalents............ $ 17 $ 6,066 $ 30,029 $ -- $ -- $ 36,112
Accounts receivable....... -- -- 20,978 775 -- 21,753
Inventories............... -- -- 6,135 -- -- 6,135
Other assets.............. 45 -- 1,297 -- 1,342
-------- -------- -------- ------ --------- --------
Total current assets... 62 6,066 58,439 775 -- 65,342
-------- -------- -------- ------ --------- --------
Long-term assets.......... -- -- 242,109 3,723 -- 245,832
Investment in
subsidiaries........... 185,594 -- -- -- (185,594) --
-------- -------- -------- ------ --------- --------
Total assets........... $185,656 $ 6,066 $300,548 $4,498 $(185,594) $311,174
======== ======== ======== ====== ========= ========
LIABILITIES AND EQUITY
Current liabilities....... $ 257 $ -- $ 14,258 $ 112 $ -- $ 14,627
Inter-company accounts.... 19,947 (15,676) (3,893) (378) -- --
Working capital
facility............... -- -- -- -- -- --
Long-term debt............ -- -- 196,370 -- -- 196,370
Shareholders' equity...... 165,452 21,742 93,813 4,764 (185,594) 100,177
-------- -------- -------- ------ --------- --------
Total liabilities and
shareholders'
equity............... $185,656 $ 6,066 $300,548 $4,498 $(185,594) $311,174
======== ======== ======== ====== ========= ========
STATEMENT OF OPERATIONS
INFORMATION:
REVENUES
Product sales............. $ -- $ -- $ 17,535 $ -- $ -- $ 17,535
Marketing alliance and
other revenue.......... -- -- 5,975 2,600 (31) 8,544
-------- -------- -------- ------ --------- --------
Total revenues......... -- -- 23,510 2,600 (31) 26,079
-------- -------- -------- ------ --------- --------
OPERATING EXPENSES
Cost of goods sold........ -- -- 6,127 -- -- 6,127
Selling, general &
admin.................. 499 6 12,105 37 -- 12,647
Depreciation and
amortization........... -- -- 2,343 78 -- 2,421
Research and
development............ -- -- 24 476 (31) 469
-------- -------- -------- ------ --------- --------
Total operating
expenses............. 499 6 20,599 591 (31) 21,664
-------- -------- -------- ------ --------- --------
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WARNER CHILCOTT PUBLIC LIMITED COMPANY
NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(IN THOUSANDS OF U.S. DOLLARS)
WARNER
WARNER CHILCOTT
CHILCOTT LABORATORIES
WARNER (BERMUDA), WARNER IRELAND ELIMINATION
CHILCOTT, PLC LTD. CHILCOTT, INC. LTD. ENTRIES CONSOLIDATED
------------- ---------- -------------- ------------ ----------- ------------
Interest income (expense),
net.................... -- 234 (3,337) -- -- (3,103)
Income taxes.............. -- -- -- -- -- --
Extraordinary item........ -- -- (731) -- -- (731)
-------- -------- -------- ------ --------- --------
NET INCOME (LOSS)...... $ (499) $ 228 $ (1,157) $2,009 $ -- $ 581
======== ======== ======== ====== ========= ========
MARCH 31, 1999
STATEMENT OF OPERATIONS
INFORMATION:
REVENUES
Product sales.......... $ -- $ -- $ 13,866 $ -- $ -- $ 13,866
Marketing alliance and
other revenue........ -- -- 3,853 3,379 (50) 7,182
-------- -------- -------- ------ --------- --------
Total revenues......... -- -- 17,719 3,379 (50) 21,048
-------- -------- -------- ------ --------- --------
OPERATING EXPENSES
Cost of goods sold........ -- -- 8,449 -- -- 8,449
Selling, general &
admin.................. 270 6 11,487 348 -- 12,111
Depreciation and
amortization........... -- -- 1,334 78 1,412
Research and
development............ -- -- 131 760 (50) 841
-------- -------- -------- ------ --------- --------
Total operating
expenses............. 270 6 21,401 1,186 (50) 22,813
-------- -------- -------- ------ --------- --------
Interest income (expense),
net.................... -- 349 (581) -- -- (232)
Income taxes.............. -- -- -- -- -- --
-------- -------- -------- ------ --------- --------
NET INCOME (LOSS)...... $ (270) $ 343 $ (4,263) $2,193 $ -- $ (1,997)
======== ======== ======== ====== ========= ========
13. SUBSEQUENT EVENT
On May 4, 2000 the Company entered into an agreement with Galen Holdings,
plc under which the Company would be acquired by Galen Holdings, plc. The
acquisition would be effected through a scheme of arrangement under the laws of
the Republic of Ireland. Under the agreement Galen Holdings, plc proposes to
issue 2.5 new Galen ordinary shares for each of the Company's ordinary shares.
The acquisition is subject to various conditions, including, among other things,
sanction by the High Court of Ireland, regulatory approval, approval by the
Company's and Galen's shareholders and Galen obtaining a listing of its shares,
in American Depositary Share form, on NASDAQ.
The proposed transaction with Galen would constitute a change of control
under the 12 5/8% senior note indenture. Accordingly, holders of the $200,000
face amount of senior notes would have the right to require that WCI repurchase
the senior notes at a purchase price equal to 101% of the principal amount plus
accrued interest (see note 3).
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Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.
WARNER CHILCOTT PUBLIC LIMITED COMPANY
(Registrant)
May 22, 2000 /s/ PAUL S. HERENDEEN
--------------------------------------------------------------
Paul S. Herendeen
Executive Vice President & Chief Financial Officer
(Principal Financial Officer)
May 22, 2000 /s/ DAVID G. KELLY
--------------------------------------------------------------
David G. Kelly
Group Vice President, Finance
(Principal Accounting Officer)
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