UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
ý QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2004
or
o 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 0-20045
WATSON PHARMACEUTICALS, INC.
(Exact name of registrant as specified in its charter)
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Nevada |
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95-3872914 |
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(State or other jurisdiction of |
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(I.R.S. Employer Identification No.) |
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311 Bonnie Circle |
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Corona, CA 92880-2882 |
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(Address of principal executive offices, including zip code) |
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(909) 493-5300 |
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(Registrant’s telephone number, including area code) |
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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 ý No o
Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act). Yes ý No o
The number of shares outstanding of the Registrant’s only class of common stock as of May 4, 2004 was approximately 108,868,970.
WATSON PHARMACEUTICALS, INC.
TABLE OF CONTENTS
FORM 10-Q FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2004
WATSON PHARMACEUTICALS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited; in thousands, except share amounts)
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March 31, |
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December
31, |
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ASSETS |
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Current assets: |
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Cash and cash equivalents |
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$ |
449,937 |
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$ |
553,353 |
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Marketable securities |
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18,966 |
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20,368 |
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Accounts receivable, net |
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214,176 |
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211,174 |
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Inventories |
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395,788 |
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393,393 |
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Prepaid expenses and other current assets |
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36,758 |
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38,561 |
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Deferred tax assets |
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105,171 |
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106,640 |
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Total current assets |
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1,220,796 |
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1,323,489 |
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Property and equipment, net |
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435,943 |
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424,995 |
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Investments and other assets |
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44,028 |
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50,096 |
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Deferred tax assets |
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26,768 |
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27,130 |
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Product rights and other intangibles, net |
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983,521 |
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1,001,295 |
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Goodwill |
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455,595 |
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455,595 |
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Total assets |
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$ |
3,166,651 |
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$ |
3,282,600 |
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LIABILITIES AND STOCKHOLDERS’ EQUITY |
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Current liabilities: |
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Accounts payable and accrued expenses |
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$ |
209,576 |
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$ |
215,388 |
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Income taxes payable |
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40,394 |
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111,982 |
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Deferred revenue |
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7,592 |
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11,315 |
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Total current liabilities |
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257,562 |
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338,685 |
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Long-term debt |
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621,027 |
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722,535 |
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Deferred revenue |
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9,846 |
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10,767 |
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Other long-term liabilities |
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9,416 |
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9,641 |
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Deferred tax liabilities |
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149,039 |
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143,626 |
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Total liabilities |
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1,046,890 |
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1,225,254 |
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Commitments and contingencies |
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Stockholders’ equity: |
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Preferred stock; no par value per share; 2,500,000 shares authorized; none issued |
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— |
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— |
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Common stock; $0.0033 par value per share; 500,000,000 shares authorized; 108,821,900 and 108,330,300 shares outstanding |
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359 |
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357 |
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Additional paid-in capital |
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857,522 |
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841,007 |
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Retained earnings |
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1,248,373 |
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1,201,714 |
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Accumulated other comprehensive income |
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13,507 |
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14,268 |
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Total stockholders’ equity |
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2,119,761 |
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2,057,346 |
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Total liabilities and stockholders’ equity |
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$ |
3,166,651 |
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$ |
3,282,600 |
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See accompanying Notes to Condensed Consolidated Financial Statements.
1
WATSON PHARMACEUTICALS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited; in thousands, except per share amounts)
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Three
Months Ended |
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2004 |
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2003 |
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Net revenues |
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$ |
409,658 |
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$ |
336,922 |
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Cost of sales |
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196,481 |
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149,601 |
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Gross profit |
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213,177 |
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187,321 |
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Operating expenses: |
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Research and development |
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29,681 |
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22,484 |
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Selling, general and administrative |
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77,411 |
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67,659 |
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Amortization |
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17,932 |
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18,435 |
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Total operating expenses |
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125,024 |
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108,578 |
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Operating income |
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88,153 |
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78,743 |
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Other income (expense): |
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Equity in earnings (losses) of joint ventures |
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(1,579 |
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117 |
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Loss on impairment of assets |
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(891 |
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(13,042 |
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Gain on sales of securities |
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3,938 |
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1,089 |
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Gain on sale of subsidiary |
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— |
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15,676 |
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Loss on early extinguishment of debt |
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(14,006 |
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(2,807 |
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Interest income |
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1,207 |
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1,242 |
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Interest expense |
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(3,743 |
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(5,341 |
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Other income (expense) |
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(164 |
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(594 |
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Total other income (expense), net |
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(15,238 |
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(3,660 |
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Income before income taxes |
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72,915 |
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75,083 |
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