LAKE FOREST, Ill., July 29 Hospira, Inc. (NYSE: HSP), a leading global specialty pharmaceutical and medication delivery company, today reported results for the second quarter ended June 30, 2009. Net sales for the quarter were $957 million, and adjusted* diluted earnings per share were $0.73. (Adjusted* measures exclude certain specified items as described later in this press release and the attached schedules.)
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"Hospira delivered a very good second quarter, marked by strong sales and earnings, and significant progress toward our Project Fuel initiatives," said Christopher B. Begley, chairman and chief executive officer. "Based on our results for the first half of the year and our expectations for the remainder of 2009, we have increased our full-year adjusted earnings guidance. We remain committed to improving shareholder value through sustainable top- and bottom-line growth."
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Second-Quarter 2009 Results
The following table highlights selected financial results for the second quarter of 2009 compared to the same period in 2008:
Results under U.S. Generally Accepted Accounting Principles (GAAP) include items detailed in the schedules attached to this press release, including impairment and other asset charges of $0.33 to second-quarter 2009 GAAP diluted earnings per share related to the company's Project Fuel initiatives.
Net sales increased 6.1 percent to $957 million in the second quarter of 2009, compared to $902 million in the second quarter of 2008. Driving the growth were the results for Specialty Injectable Pharmaceuticals (SIP) and Other Pharma. SIP results benefited in part from a favorable comparison to the second quarter of 2008, which was impacted by lower-than-average wholesaler buying patterns. Partially offsetting the favorable SIP and Other Pharma results was a decline in Medication Management Systems (MMS), due to a difficult comparison to the second quarter of 2008, in which MMS generated record quarterly results.
Adjusted* income from operations increased 16.1 percent to $177 million in the second quarter of 2009, compared to $152 million in the second quarter of 2008. Driving the majority of the increase were higher sales volumes; improvements in selling, general and administrative (SG&A) expenses as a result of Project Fuel initiatives; and lower research and development (R&D) spending related to the timing of expenditures. Partially offsetting these factors was the impact of foreign exchange.
Cash Flow
Cash flow from operations for the first six months of 2009 was $236 million, compared to the $183 million generated for the same period in 2008.
Capital expenditures decreased to $78 million for the first six months of 2009, compared to $87 million for the same period in 2008, due to the continued impact of the company's tighter capital-spending controls implemented in the second half of 2008.
2009 Projections
Hospira continues to expect net sales for the year to increase approximately 4 to 6 percent on a constant-currency basis. Including the impact of foreign exchange, the company expects net sales to be flat to slightly up.
The company now expects full-year 2009 adjusted* diluted earnings per share to range between $2.70 and $2.75 per share. The reconciliation between the projected 2009 adjusted* diluted earnings per share and GAAP diluted earnings per share follows:
The company continues to project that cash flow from operations in 2009 will be in the $565 million to $615 million range. Depreciation and amortization is expected to be between $210 million and $220 million. Capital expenditures are projected to be between $155 million and $175 million.
*Use of Non-GAAP Adjusted Financial Measures
Non-GAAP financial measures used in this press release are reconciled to the most comparable measures calculated in accordance with GAAP in the schedules attached to this release.
Webcast
Hospira will hold a conference call for investors and media at 8 a.m. Central time on Wednesday, July 29, 2009. A live webcast of the conference call will be available on Hospira's Web site at www.hospirainvestor.com. Listeners should log on approximately 10 minutes in advance to ensure proper computer setup for receiving the webcast. A replay will be available on the Hospira Web site for 30 days following the call.
About Hospira
Hospira, Inc. is a global specialty pharmaceutical and medication delivery company dedicated to Advancing Wellness(TM). As the world leader in specialty generic injectable pharmaceuticals, Hospira offers one of the broadest portfolios of generic acute-care and oncology injectables, as well as integrated infusion therapy and medication management solutions. Through its products, Hospira helps improve the safety, cost and productivity of patient care. The company is headquartered in Lake Forest, Ill., and has approximately 14,000 employees. Learn more at www.hospira.com.
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including projections of certain measures of Hospira's results of operations, projections of certain charges and expenses, and other statements regarding Hospira's goals and strategy. Hospira cautions that these forward-looking statements are subject to risks, uncertainties and assumptions, many of which are beyond Hospira's control, that may cause actual results to differ materially from those indicated in the forward-looking statements. Economic, competitive, governmental, technological and other factors that may affect Hospira's operations and may cause actual results to be materially different from expectations include the risks, uncertainties and factors discussed under the headings "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" in Hospira's latest Annual Report on Form 10-K and subsequent Form 10-Qs, filed with the Securities and Exchange Commission, which are incorporated by reference. Hospira undertakes no obligation to release publicly any revisions to forward-looking statements as the result of subsequent events or developments.
In $ millions, GAAP Adjusted* except per Three Months Ended Three Months Ended share amounts June 30, June 30, ---------------- % ---------------- % 2009 2008 Change 2009 2008 Change ------ ------ ------ ------ ------ ------ Net Sales $956.9 $901.6 6.1% n/a n/a n/a Gross Profit (Net Sales less Cost of Products Sold) $346.2 $335.2 3.3% $365.8 $357.1 2.4% Income from Operations $91.1 $117.7 (22.6%) $176.7 $152.2 16.1% Diluted EPS $0.16 $0.43 (62.8%) $0.73 $0.57 28.1% Statistics (as a % of Net Sales) ------------------------------- Gross Profit (Net Sales less Cost of Products Sold) 36.2% 37.2% 38.2% 39.6% Income from Operations 9.5% 13.1% 18.5% 16.9%
SOURCE Hospira, Inc.
