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King Pharma Posts 1Q Profit on Sales Surge
Monday May 9, 4:25 pm ET
King Pharmaceuticals Posts Profit for 1Q on Sales Surge, Reduced Wholesale Inventories


BRISTOL, Tenn. (AP) -- Branded drug maker King Pharmaceuticals Inc. said Monday its first-quarter earnings exceeded expectations on a surge in sales and reduced wholesale inventories as it continues to recover from a botched merger with a rival and restructuring.
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King's net income was $70.1 million, or 29 cents per share, for the period ending March 31, up from a loss a year ago of $104.1 million, or 43 cents a share.

When excluding special items such as charges for the failed merger with Mylan Laboratories Inc. and income from discontinued operations, the company's first quarter earnings were $76.1 million, or 31 cents a share, compared to income of $28.4 million, or 12 cents a share.

King's total revenues increased 26 percent to $368.6 million from $291.5 million for the first quarter of 2004.

A large unidentified wholesale customer informed King in January it omitted information about inventory the customer was likely to return. Since then, King has been tightening its inventory controls.

"We are very pleased with our financial results for the first quarter of 2005, which reflect the positive effect of the completion of wholesale inventory reductions for our key products," King's president and CEO, Brian Markison, said in a statement.

Analysts surveyed by Thomson Financial expected King to report earnings per share of 33 cents.

The company said the reduction in inventory accounted for the 38 percent increase of net revenue of branded products to $321.8 million from $234 million a year ago.

King was charged a net of $8.7 million from the special items it reported for the first quarter.

Those included charges of $6.9 million from a decline in fair value of the equity investment in Novavax, $3.7 million to pay professional fees associated with inquiries by the Securities and Exchange Commission and $3.3 million for fees linked to the failed merger with Mylan.

Other special items resulted in income from such sources as a decrease in reserves for returns and rebates.

King shares rose a penny to close at $9 in Monday trading on the New York Stock Exchange, where they have traded in a 52-week range of $7.50 to $17.40.

King Pharmaceuticals: http://www.kingpharm.com/





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