Forest Laboratories, Inc. Reports Fiscal First Quarter 2009 Earnings Per Share of...

Forest Laboratories, Inc. Reports Fiscal First Quarter 2009 Earnings Per Share
of $0.79, Including $0.08 per Share Charge for Agreement Termination

NEW YORK, July 22 /PRNewswire-FirstCall/ -- Forest Laboratories, Inc.
(NYSE: FRX), an international pharmaceutical manufacturer and marketer, today
announced that fully diluted earnings per share equaled $0.79 in the first
quarter of fiscal 2009. Reported earnings per share include a one-time pre-
tax charge of $44,100,000, or $0.08 per share net of tax, related to the
previously announced termination of the AZOR(TM) (amlodipine and olmesartan
medoxomil) co-promotion agreement with Daiichi Sankyo. Reported earnings per
share in the June 2007 quarter were $0.83.
(Logo: http://www.newscom.com/cgi-bin/prnh/20001011/FORESTLOGO )
Revenues for the quarter increased 4.2% to $966,844,000 from $928,274,000
in the year-ago period.
Revenues were comprised of net sales, which increased 6.1% to $893,745,000
from $842,616,000 in the prior year. Sales in the quarter included
$583,097,000 for Lexapro(R) (escitalopram oxalate), our SSRI for the treatment
of depression and anxiety in adults, an increase of 5.6% from last year.
Namenda(R), our NMDA receptor antagonist for the treatment of moderate and
severe Alzheimer's disease, recorded sales of $218,618,000 during the quarter,
growth of 14.0% from last year. The Company's newest product, Bystolic(TM) a
novel beta-blocker for the treatment of hypertension, which was launched in
late January 2008, had sales of $4,374,000. Also included in revenues was
other income of $73,099,000 which includes contract revenue of $52,383,000
from the Benicar(R) (olmesartan medoxomil) co-promotion agreement, which was
essentially flat compared to last year. The remaining component of other
income was principally interest income, which totaled $18,230,000.
Net income in the current quarter was $242,920,000 a decrease of 9.4% from
$268,162,000 in the first quarter of the prior fiscal year. Selling, general
and administrative expense increased 31.2% to $342,955,000 and included the
one-time charge of $44,100,000 related to the termination of the AZOR co-
promotion agreement with Daiichi Sankyo. Research and development spending
decreased 18.1% to $112,112,000 compared to the year-ago period, which
included product milestone development expenses totaling approximately
$28,500,000. There were no milestone expenses in the current period.
Fully diluted shares outstanding at June 30, 2008 were 307,912,000, a
reduction of approximately 14 million shares compared to the year-ago period
due mainly to the Company's share repurchase program. During the just-
completed quarter, the Company repurchased approximately 6.6 million shares
leaving an additional 9.2 million shares available for repurchase under the
existing program, which has no expiration date.
Fiscal 2009 Guidance
The Company now expects that reported fully diluted earnings per share for
the fiscal year ending March 31, 2009 will be in the range of $3.10 to $3.20,
including the one-time charge related to the termination of the AZOR co-
promotion agreement. Excluding the effect of the AZOR charge, the Company
expects adjusted fully diluted earnings per share to be in the range of $3.20
to $3.30.
Howard Solomon, Chairman and Chief Executive Officer of Forest, said: "We
are pleased with the financial performance of the Company reported this
quarter, striking the balance between delivering a meaningful level of
earnings per share and continuing to support and advancing a very significant
product pipeline while also supporting our currently marketed products
including the recently launched product, Bystolic. Our late stage pipeline
has two compounds under regulatory review at the FDA: milnacipran for the
treatment of fibromyalgia and Lexapro for the additional indication in the
treatment of adolescent depression. In addition, during the quarter the
Company reported positive results from two globally conducted, multi-center
Phase III studies of ceftaroline, a broad-spectrum cephalosporin with activity
against gram-positive bacteria, such as MRSA and gram-negative bacteria, for
the treatment of complicated skin and skin structure infections. Enrollment
continues for ceftaroline in two Phase III studies for community acquired
pneumonia and we anticipate those results in 2009."
Forest will host a conference call at 10:00 AM EDT today to discuss the
results. The conference call will be webcast live beginning at 10:00 AM EDT
on the Company's website at www.frx.com and also on the website
www.streetevents.com. Please log on to either website at least fifteen
minutes prior to the conference call as it may be necessary to download
software to access the call. A replay of the conference call will be
available until August 5, 2008 at both websites and also by dialing (800) 642-
1687 (US or Canada) or +1 706 645-9291 (International). Conference ID:
54360430.
About Forest Laboratories and Its Products
Forest Laboratories (NYSE: FRX) is a U.S.-based pharmaceutical company
with a long track record of building partnerships and developing and
delivering products that make a positive difference in people's lives. In
addition to its well-established franchises in therapeutic areas of the
central nervous and cardiovascular systems, Forest's current pipeline includes
product candidates in all stages of development and across a wide range of
therapeutic areas. The Company is headquartered in New York, NY. To learn more
about Forest Laboratories, visit www.FRX.com.
Except for the historical information contained herein, this release
contains forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995. These statements involve a number of
risks and uncertainties, including the difficulty of predicting FDA approvals,
the acceptance and demand for new pharmaceutical products, the impact of
competitive products and pricing, the timely development and launch of new
products, and the risk factors listed from time to time in Forest
Laboratories' Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, and
any subsequent SEC filings.
Contact: Frank Perier, Jr.
Senior Vice President - Finance and Chief Financial Officer
Forest Laboratories, Inc.
909 Third Avenue
New York, New York 10022
212-224-6611
Frank.Perier@frx.com

FOREST LABORATORIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

THREE MONTHS ENDED
JUNE 30,
(In thousands,
except per share amounts)

2008 2007
Revenues:
Net sales $893,745 $842,616
Contract revenue 54,153 53,377
Interest income 18,230 26,738
Other income 716 5,543
966,844 928,274

Costs and expenses:
Cost of goods sold 197,340 186,240
Selling, general and administrative 342,955 261,328
Research and development 112,112 136,908
652,407 584,476
Income before income tax expense 314,437 343,798

Income tax expense 71,517 75,636

Net income $242,920 $268,162

Net income per share:

Basic $0.79 $0.84
Diluted $0.79 $0.83

Weighted average number of shares outstanding:

Basic 307,043 319,580
Diluted 307,912 321,921

SOURCE Forest Laboratories, Inc.

Frank Perier, Jr., Senior Vice President - Finance and Chief Financial
Officer, Forest Laboratories, Inc., +1-212-224-6611, Frank.Perier@frx.com